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BOH4M Unit 1: Management Fundamentals Ms. Schirk
CHAPTER 4: ENVIRONMENT,
ORGANIZATIONAL CULTURE, AND
DIVERSITY
Management - Chapter 2 2
PLANNING AHEAD — CHAPTER 3 STUDY QUESTIONS
Ø What is the external environment of organizations?
Ø What is a customer-driven organization? Ø What is a quality-driven organization? Ø What is organizational culture? Ø How is diversity managed in a multicultural
organization?
STUDY QUESTION 1: WHAT IS THE EXTERNAL ENVIRONMENT
OF ORGANIZATIONS?
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§ Competitive advantage: a core competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace. § Ability to do something better than one’s
competitors.
STUDY Q.1: WHAT IS THE EXTERNAL ENVIRONMENT OF ORGANIZATIONS?
§ The general environment: all of the background conditions in the external environment of the organization.
§ Includes factors that are: § Economic § Socio-cultural § Legal-political § Technological § Natural environment
STUDY Q.1: WHAT IS THE EXTERNAL ENVIRONMENT OF ORGANIZATIONS?
§ The specific (task) environment: actual organizations, groups, and persons with whom an organization interacts and conducts business.
§ Includes important stakeholders such as: § Customers § Suppliers § Competitors § Regulators § Investors/owners
STUDY Q.1: WHAT IS THE EXTERNAL ENVIRONMENT OF ORGANIZATIONS?
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§ Figure 4.1— Open systems approach to stakeholder analysis of value creation for key constituencies of a business firm
STUDY Q.1: WHAT IS THE EXTERNAL ENVIRONMENT OF ORGANIZATIONS?
§ Environmental uncertainty is a lack of complete information regarding what exists and what developments may occur in the external environment.
§ Two dimensions of environmental uncertainty: § Complexity § Rate of change
STUDY Q.1: WHAT IS THE EXTERNAL ENVIRONMENT OF ORGANIZATIONS?
§ Figure 4.2 – Dimensions of uncertainty in organizational environments
STUDY Q.1: WHAT IS THE EXTERNAL ENVIRONMENT OF ORGANIZATIONS?
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STUDY QUESTION 2: WHAT IS A CUSTOMER DRIVEN ORGANIZATION?
§ External customers purchase the organization’s goods or utilize its services.
§ Internal customers are the persons and groups within an organization who depend on the results of others' work to do their own jobs.
STUDY Q.2: WHAT IS A CUSTOMER-DRIVEN ORGANIZATION?
§ Figure 4.3 The importance of external and internal customers
STUDY Q.2: WHAT IS A CUSTOMER-DRIVEN ORGANIZATION?
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§ Customers want: § High quality. § Low price. § On-time delivery.
§ Key customer service lessons: § Protect reputation for quality products. § Treat customers right.
STUDY Q.2: WHAT IS A CUSTOMER-DRIVEN ORGANIZATION?
§ Customer relationship management establishes and maintains high standards of customer service in order to strategically build lasting relationships with and add value to customers.
§ Supply chain management is the strategic management of all operations relating to an organization’s resource suppliers.
STUDY Q.2: WHAT IS A CUSTOMER-DRIVEN ORGANIZATION?
STUDY QUESTION 3: WHAT IS A QUALITY DRIVEN ORGANIZATION?
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§ Quality organizations understand and respond to customer expectations of quality products and services
§ Total quality management (TQM): § Quality principles are an integral part of
organization’s strategic objectives. § Applying them to all aspects of operations. § Committing to continuous improvement. § Striving to meet customers’ needs by doing
things right the first time.
STUDY Q.3: WHAT IS A QUALITY-DRIVEN ORGANIZATION?
§ Crosby’s “four absolutes” of management for total quality control: § Quality means conformance to standards. § Quality comes from defect prevention, not defect
correction. § Quality as a performance standard must mean
defect-free work. § Quality saves money.
STUDY Q.3: WHAT IS A QUALITY-DRIVEN ORGANIZATION?
§ Quality and continuous improvement § W. Edwards Deming emphasized: § Constant innovation. § Use of statistical methods. § Training in the fundamentals of quality
assurance.
STUDY Q.3: WHAT IS A QUALITY-DRIVEN ORGANIZATION?
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§ Quality and continuous improvement (continued): § Continuous improvement: § Seeking ways to improve on current
performance. § Quality circles: § A small group of workers who meet regularly to
discuss ways of improving quality.
STUDY Q.3: WHAT IS A QUALITY-DRIVEN ORGANIZATION?
§ Quality, technology, and design: § Lean production: § Uses new technologies to streamline systems.
§ Flexible manufacturing: § Processes can be changed quickly to produce
different products or modifications of existing ones.
§ Agile manufacturing/mass customization: § Permits quick production of individualized
products.
STUDY Q.3: WHAT IS A QUALITY-DRIVEN ORGANIZATION?
§ Quality and product design: § A good design has eye appeal and is easy to
manufacture with productivity. § Design for manufacturing emphasizes lower
production costs and high-quality results. § Design for disassembly involves taking into
account how components will be recycled.
STUDY Q.3: WHAT IS A QUALITY-DRIVEN ORGANIZATION?
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STUDY QUESTION 4: WHAT IS ORGANIZATIONAL CULTURE?
§ Organizational culture is the system of shared beliefs and values that develops within an organization and guides the behavior of its members.
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
§ How to read an organization’s culture (SCORES) S - How tight or loose is the structure? C - Are decisions change oriented or driven by the
status quo? O - What outcomes or results are most highly
valued? R - What is the climate for risk-taking, innovation? E - How widespread is empowerment, worker
involvement? S - What is the competitive style, internal and
external?
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
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¡ Figure 4.4 Levels of organizational culture—observable culture and core culture.
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
§ Strong cultures: § Commit members to do things that are in the best
interests of the organization. § Discourage dysfunctional work behavior. § Encourage functional work behavior.
§ The best organizations have strong cultures that: § Are performance-oriented. § Emphasize teamwork. § Allow for risk taking. § Encourage innovation. § Value the well being of people.
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
¡ What is observable culture? § What one sees and hears when walking around an
organization. § Elements of observable culture: § Stories: retold oral histories and tales about
significant events in the organization’s development
§ Heroes: people whose accomplishments and deeds are publically praised
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
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¡ Elements of observable culture (continued): § Rites and rituals: ceremonies and meetings that
celebrate important occasions and accomplishments
§ Symbols: use of special language and non-verbal expressions to communicate key themes
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
¡ What is the core culture? § Underlying assumptions and beliefs that influence
behavior and contribute to the observable culture. ¡ Core culture and values:
§ Strong cultures have a small but enduring set of core values.
§ Commitment to core values is a key to long-term success.
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
§ Important cultural values include: § Performance excellence § Innovation § Social responsibility § Integrity § Worker involvement § Customer service § Teamwork
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
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§ Value-based management: § Describes managers who actively help to develop,
communicate, and enact shared values. § Criteria for evaluating core values: § Relevance: supported by key performance
objectives § Integrity: provide clear, consistent ethical
anchors § Pervasiveness: feel engaging to all members § Strength: accepted by all those involved
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
§ Symbolic leadership § Symbolic leaders use symbols to establish and
maintain a desired organizational culture. § Symbolic leaders behave in ways that espouse
organization’s values. § Symbolic leaders: § Use language metaphors. § Highlight and dramatize core values and
observable culture. § Use rites and rituals to glorify performance.
STUDY Q.4: WHAT IS ORGANIZATIONAL CULTURE?
STUDY QUESTION 5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL
ORGANIZATION?
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§ Diversity: § Describes differences among people at work. § How diversity is handled in the workplace reflects
the organization’s culture. § Respect and inclusion. § Disrespect and exclusion.
§ A potential source of competitive advantage.
STUDY Q.5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL ORGANIZATION?
§ Characteristics of multicultural organizations: § Pluralism § Structural integration § Informal network integration § Absence of prejudice and discrimination § Minimum intergroup conflict
STUDY Q.5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL ORGANIZATION?
§ Organizational subcultures § Cultures based on shared work responsibilities
and/or personal characteristics. § Common subcultures include: § Occupational § Functional § Ethnic or national § Racial § Generational § Gender
STUDY Q.5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL ORGANIZATION?
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§ Figure 4.5 Glass ceilings as barriers to women and minority cultures in traditional organizations.
STUDY Q.5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL ORGANIZATION?
§ Diversity leadership approaches: § Advancing action commits the organization to hiring
and advancing minorities and women. § Valuing diversity commits the organization to
education and training programs. § Managing diversity commits to changing the
organizational culture.
STUDY Q.5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL ORGANIZATION?
§ Figure 4.6 Leadership approaches to diversity—from affirmative action to managing diversity.
STUDY Q.5: HOW IS DIVERSITY MANAGED IN A MULTICULTURAL ORGANIZATION?