Management tenth edition Stephen P. Robbins Chapter 3 Mary Coulter Organizational Culture and Environment 3– 1
Learning Outcomes Follow this Learning Outline as you read and study this chapter. 3. 1 The Manager: Omnipotent Or Symbolic? • Contrast the actions of managers according to the omnipotent and symbolic views. • Identify the two constraints on managerial discretion. 3. 2 Organizational Culture • Identify the seven dimensions of organizational culture. • Discuss the impact of a strong culture on organizations and managers. • Explain how a culture is formed and maintained. • Describe how culture affects managers. 3– 2
Learning Outcomes 3. 3 Current Organizational Culture Issues. • Describe the characteristics of an ethical culture, an innovative culture, and a customer-responsive culture. • Explain why workplace spirituality seems to be an important concern. • Describe the characteristics of a spiritual organization. 3. 4 The Environment. • List the components of the specific and general environments. • Explain the two dimensions of environmental uncertainty. • Identify the most common organizational stakeholders. • List the four steps in managing external stakeholder relationships. 3– 3
The Manager: Omnipotent or Symbolic? • Omnipotent View of Management Ø Managers are directly responsible for an organization’s success or failure. Ø The quality of the organization is determined by the quality of its managers. Ø Managers are held accountable for an organization’s performance, yet it is difficult to attribute good or poor performance directly to their influence on the organization. 3– 4
The Manager: Omnipotent or Symbolic? • Symbolic View of Management Ø Much of an organization’s success or failure is due to external forces outside of managers’ control. Ø The ability of managers to affect outcomes is influenced and constrained by external factors. v The economy, customers, governmental policies, competitors, industry conditions, technology, and the actions of previous managers Ø Managers symbolize control and influence through their action. 3– 5
Exhibit 3– 1 Parameters of Managerial Discretion 3– 6
The Organization’s Culture • Organizational Culture Ø A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other. Ø “The way we do things around here. ” v Values, symbols, rituals, myths, and practices Ø Implications: v Culture is a perception. v Culture is shared. v Culture is descriptive. 3– 7
Exhibit 3– 2 Dimensions of Organizational Culture 3– 8
Strong Versus Weak Cultures • Strong Cultures Ø Are cultures in which key values are deeply and widely held. Ø Have a strong influence on organizational members. • Factors Influencing the Strength of Culture Ø Size of the organization Ø Age of the organization Ø Rate of employee turnover Ø Strength of the original culture Ø Clarity of cultural values and beliefs 3– 9
Exhibit 3– 3 Contrasting Organizational Cultures Dimension Attention to Detail Outcome Orientation People Orientation Team Orientation Aggressiveness Stability Innovation and Risk Taking Organization A Organization B High Low Low High Low High 3– 10
Benefits of a Strong Culture • Creates a stronger employee commitment to the organization. • Aids in the recruitment and socialization of new employees. • Fosters higher organizational performance by instilling and promoting employee initiative. 3– 11
Organizational Culture • Sources of Organizational Culture Ø The organization’s founder v Vision and mission Ø Past practices of the organization v The way things have been done Ø The behavior of top management • Continuation of the Organizational Culture Ø Recruitment of like-minded employees who “fit” Ø Socialization of new employees to help them adapt to the culture 3– 12
Exhibit 3– 5 How an Organization’s Culture Is Established and Maintained 3– 13
Exhibit 3– 4 Strong Versus Weak Organizational Cultures 3– 14
How Employees Learn Culture • Stories Ø Narratives of significant events or actions of people that convey the spirit of the organization • Rituals Ø Repetitive sequences of activities that express and reinforce the values of the organization • Material Symbols Ø Physical assets distinguishing the organization • Language Ø Acronyms and jargon of terms, phrases, and word meanings specific to an organization 3– 15
How Culture Affects Managers • Cultural Constraints on Managers Ø Whatever managerial actions the organization recognizes as proper or improper on its behalf Ø Whatever organizational activities the organization values and encourages Ø The overall strength or weakness of the organizational culture Simple rule for getting ahead in an organization: Find out what the organization rewards and act accordingly. 3– 16
Exhibit 3– 6 Managerial Decisions Affected by Culture • Planning • The degree of risk that plans should contain • Whether plans should be developed by individuals or teams • The degree of environmental scanning in which management will engage • Organizing • How much autonomy should be designed into employees’ jobs • Whether tasks should be done by individuals or in teams • The degree to which department managers interact with each other 3– 17
Exhibit 3– 6 Managerial Decisions Affected by Culture (cont’d) • Leading • The degree to which managers are concerned with increasing employee job satisfaction • What leadership styles are appropriate • Whether all disagreements—even constructive ones—should be eliminated • Controlling • Whether to impose external controls or to allow employees to control their own actions • What criteria should be emphasized in employee performance evaluations • What repercussions will occur from exceeding one’s budget 3– 18
Organization Culture Issues • Creating an Ethical Culture Ø High in risk tolerance Ø Low to moderate aggressiveness Ø Focus on means as well as outcomes • Creating an Innovative Culture Ø Challenge and involvement Ø Freedom Ø Trust and openness Ø Idea time Ø Playfulness/humor Ø Conflict resolution Ø Debates Ø Risk-taking 3– 19
Exhibit 3– 7 Creating a More Ethical Culture • Be a visible role model. • Communicate ethical expectations. • Provide ethics training. • Visibly reward ethical acts and punish unethical ones. • Provide protective mechanisms so employees can discuss ethical dilemmas and report unethical behavior without fear. 3– 20
Organization Culture Issues (cont’d) • Creating a Customer-Responsive Culture Ø Hiring the right type of employees (those with a strong interest in serving customers) Ø Having few rigid rules, procedures, and regulations Ø Using widespread empowerment of employees Ø Having good listening skills in relating to customers’ messages Ø Providing role clarity to employees to reduce ambiguity and conflict and increase job satisfaction Ø Having conscientious, caring employees willing to take initiative 3– 21
Exhibit 3– 8 Creating a Customer-Responsive Culture 3– 22
Spirituality and Organizational Culture • Workplace Spirituality Ø The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community. • Characteristics of a Spiritual Organization Ø Strong sense of purpose Ø Focus on individual development Ø Trust and openness Ø Employee empowerment Ø Toleration of employees’ expression 3– 23
Benefits of Spirituality • Improved employee productivity • Reduction of employee turnover • Stronger organizational performance • Increased creativity • Increased employee satisfaction • Increased team performance • Increased organizational performance 3– 24
Defining the External Environment • External Environment Ø Those factors and forces outside the organization that affect the organization’s performance. • Components of the External Environment Ø Specific environment: external forces that have a direct and immediate impact on the organization. Ø General environment: broad economic, sociocultural, political/legal, demographic, technological, and global conditions that may affect the organization. 3– 25
Exhibit 3– 9 The External Environment 3– 26
Exhibit 3– 10 Important Legislation • Occupational Safety and Health Act of 1970 • Consumer Product Safety Act of 1972 • Equal Employment Opportunity Act of 1972 • Worker Adjustment and Retraining Notification Act of 1988 • Americans with Disabilities Act of 1990 • Civil Rights Act of 1991 • Family and Medical Leave Act of 1993 • Child Safety Protection Act of 1994 • U. S. Economic Espionage Act of 1996 • Electronic Signatures in Global and National Commerce Act of 2000 • Sarbanes-Oxley Act of 2002 • Fair and Accurate Credit Transactions Act of 2003 3– 27
How the Environment Affects Managers • Environmental Uncertainty Ø The extent to which managers have knowledge of and are able to predict change their organization’s external environment is affected by: v Complexity of the environment: the number of components in an organization’s external environment. v Degree of change in environmental components: how dynamic or stable the external environment is. 3– 28
Exhibit 3– 11 Environmental Uncertainty Matrix 3– 29
Stakeholder Relationships • Stakeholders Ø Any constituencies in the organization’s environment that are affected by the organization’s decisions and actions • Why Manage Stakeholder Relationships? Ø It can lead to improved organizational performance. Ø It’s the “right” thing to do, given the interdependence of the organization and its external stakeholders. 3– 30
Managing Stakeholder Relationships 1. Identify the organization’s external stakeholders. 2. Determine the particular interests and concerns of the external stakeholders. 3. Decide how critical each external stakeholder is to the organization. 4. Determine how to manage each individual external stakeholder relationship. 3– 31
Exhibit 3– 12 Organizational Stakeholders 3– 32
Terms to Know • omnipotent view of management • symbolic view of management • organizational culture • strong cultures • socialization • • • workplace spirituality external environment specific environment general environmental uncertainty • environmental complexity • stakeholders 3– 33
Management tenth edition Stephen P. Robbins Chapter 4 Mary Coulter Managing in a Global Environment 4– 34
Learning Outcomes Follow this Learning Outline as you read and study this chapter. 4. 1 What’s Your Global perspective? • • Define parochialism. Contrast ethnocentric, polycentric, and geocentric attitudes towards global business. 4. 2 Understanding The global Environment • Describe the current status of the EU, NAFTA, ASEAN and other Regional Trade Allowances. • Discuss the role of the WTO. 4– 35
Learning Outcomes 4. 3 Doing Business Globally • Contrast multinational, multidomestic, global, transnational, and born global organizations. • Describe the different ways organizations can go international. 4. 4 Managing In A Global Environment. • Explain how the global legal-political and economic environments affect managers. • Discuss Hofstede’s five dimensions for assessing cultures. • Describe the challenges of doing business globally in today’s world. 4– 36
Learning Outcomes 4. 4 Managing In A Global Environment. • Explain how the global legal-political and economic environments affect managers. • Discuss Hofstede’s five dimensions for assessing cultures. • Describe the challenges of doing business globally in today’s world. 4– 37
The Global Marketplace • Opportunities and Challenges Ø Coping with the sudden appearance of new competitors Ø Acknowledging cultural, political, and economic differences Ø Dealing with increased uncertainty, fear, and anxiety Ø Adapting to changes in the global environment Ø Avoiding parochialism 4– 38
What’s Your Global Perspective? • Parochialism Ø Is viewing the world solely through one’s own eyes and perspectives. Ø Is not recognizing that others have different ways of living and working. Ø Is a significant obstacle for managers working in a global business world. Ø Is falling into the trap of ignoring others’ values and customs and rigidly applying an attitude of “ours is better than theirs” to foreign cultures. 4– 39
Adopting a Global Perspective • Ethnocentric Attitude Ø The parochialistic belief that the best work approaches and practices are those of the home country. • Polycentric Attitude Ø The view that the managers in the host country know the best work approaches and practices for running their business. • Geocentric Attitude Ø A world-oriented view that focuses on using the best approaches and people from around the globe. 4– 40
Regional Trading Agreements • The European Union (EU) Ø A unified economic and trade entity v Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, Germany, Austria, Finland, and Sweden • North American Free Trade Agreement (NAFTA) Ø Eliminated barriers to free trade (tariffs, import licensing requirements, and customs user fees) v United States, Canada, and Mexico 4– 41
Exhibit 4– 1 European Union 4– 42
Regional Trading Agreements • • U. S. -Central America Free Trade Agreement (CAFTA) Free Trade Area of the Americas Southern Cone Common Market (Mercosur) Association of Southeast Asian Nations (ASEAN) Ø Trading alliance of 10 Southeast Asian nations • African Union • South Asian Association for Regional Cooperation (SARRC) 4– 43
Exhibit 4– 2 ASEAN Members Source: Based on J. Mc. Clenahen and T. Clark, “ASEAN at Work, ” IW. May 19, 1997, p. 42. 4– 44
The World Trade Organization (WTO) • Evolved from the General Agreement on Tariffs and Trade (GATT) in 1995. • Functions as the only global organization dealing with the rules of trade among nations. • Has 149 member nations and 32 observer governments. • Monitors and promotes world trade. 4– 45
Different Types of International Organizations • Multinational Corporation (MNC) Ø Maintains operations in multiple countries. • Multidomestic Corporation Ø Is an MNC that decentralizes management and other decisions to the local country. • Global Company Ø Is an MNC that centralizes its management and other decisions in the home country. 4– 46
Different Types of International Organizations (cont’d) • Transnational Corporation (Borderless Organization) Ø Is an MNC that has eliminated structural divisions that impose artificial geographic barriers and is organized along business lines that reflect a geocentric attitude. 4– 47
Exhibit 4– 3 How Organizations Go Global 4– 48
Other Forms of Globalization • Strategic Alliances Ø Partnerships between and organization and a foreign company in which both share resources and knowledge in developing new products or building new production facilities. • Joint Venture Ø A specific type of strategic alliance in which the partners agree to form a separate, independent organization for some business purpose. • Foreign Subsidiary Ø Directly investing in a foreign country by setting up a separate and independent production facility or office. 4– 49
Managing in A Global Environment • The Legal Environment Ø Stability or instability of legal and political systems v Legal v Fair procedures are established and followed and honest elections held on a regular basis Ø Differences in the laws of various nations v Effects on business activities v Effects on delivery of products and services 4– 50
The Economic Environment • Economic Systems Ø Free market economy v An economy in which resources are primarily owned and controlled by the private sector. Ø Planned economy v An economy in which all economic decisions are planned by a central government. • Monetary and Financial Factors Ø Currency exchange rates Ø Inflation rates Ø Diverse tax policies 4– 51
The Cultural Environment • National Culture Ø Is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. Ø May have more influence on an organization than the organization culture. 4– 52
Exhibit 4– 4 What Are Americans Like Americans are very informal. Americans are direct. Americans are competitive. Americans are achievers. Americans are independent and individualistic. Americans are questioners. Americans dislike silence. Americans value punctuality. Americans value cleanliness. Sources: Based on M. Ernest (ed. ), Predeparture Orientation Handbook: Foreign Students and Scholars Planning to Study in the United States (Washington, DC: U. S. Information Agency, Bureau of Cultural Affairs, 1984), pp. 103– 05; A. Bennett, “American Culture Is Often a Puzzle for Foreign Managers in the U. S. , ” Wall Street Journal, February 12, 1986, p. 29; “Don’t Think Our Way’s the Only Way, ” The Pryor Report, February 1988, p. 9; and B. J. Wattenberg, “The Attitudes behind American Exceptionalism, ” U. S. News & World Report, August 7, 1989, p. 25. 4– 53
Hofstede’s Framework for Assessing Cultures Individualism versus Collectivism Long-Term versus Short-Term Orientation Achievement versus Nurturing Power Distance Culture Uncertainty Avoidance 4– 54
Exhibit 4– 5 Hofstede’s Five Dimensions of National Culture (1) Individualistic — people look after their own and family interests Collectivistic — people expect group to look after and protect them Individualistic United States, Canada Australia Collectivistic Japan Mexico, Thailand (2) High power distance—Accepts wide differences in power, great deal of respect for those in authority Low power distance—Plays down inequalities: employees are not afraid to approach nor are in awe of the boss High power distance Mexico, Singapore, Low power distance Italy, Japan United States, Sweden 4– 55
Exhibit 4– 5 Hofstede’s Five Dimensions of National Culture (3) High uncertainty avoidance—Threatened with ambiguity and experience high levels of anxiety Low uncertainty avoidance— Comfortable with risks; tolerant of different behavior and opinions High uncertainty avoidance Italy, Mexico, France Low uncertainty avoidance United Kingdom Canada, United States, Singapore (4) Achievement—Values such as assertiveness, acquiring money and goods, and competition prevail Nurturing—Values such as relationships and concern for others prevail Achievement United States, Japan, Mexico Canada, Greece Nurturing France, Sweden 4– 56
Exhibit 4– 5 Hofstede’s Five Dimensions of National Culture (5) Long-term orientation—People look to the future and value thrift and persistence Short-term orientation — People value tradition and the past Short-term thinking Germany, Australia, Long-term thinking China, Taiwan, Japan United States, Canada 4– 57
Exhibit 4– 6 GLOBE Highlights Source: M. Javidan and R. J. House, “Cultural Acumen for the Global Manager: Lessons from Project GLOBE, ” Organizational Dynamics, Spring 2001, pp. 289– 305. Copyright © 2001. Reprinted with permission from Elsevier. 4– 58
Global Management in Today’s World • Challenges Ø Openness associated with globalization Ø Significant cultural differences (e. g. , Americanization) Ø Adjusting leadership styles and management approaches • Risks Ø Loss of investments in unstable countries Ø Increased terrorism Ø Economic interdependence 4– 59
Terms to Know • • • • parochialism ethnocentric attitude polycentric attitude geocentric attitude European Union (EU) Euro North American Free Trade Agreement (NAFTA) Association of Southeast Asian Nations (ASEAN) World Trade Organization (WTO) multinational corporations (MNCs) multidomestic corporation global company transnational or borderless organization • • • • born globals global sourcing exporting importing licensing franchising strategic alliances joint venture foreign subsidiary market economy command economy national culture GLOBE wikis blogs 4– 60
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