PowerPoint Presentation to Accompany Management, 9/e John R. Schermerhorn, Jr. Chapter 4: Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley & Sons, Inc. Chapter 4: Environment and Organizational Culture
PowerPoint Presentation
to Accompany
Management, 9/eJohn R. Schermerhorn, Jr.
Chapter 4:
Prepared by: Jim LoPresti
University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.
Chapter 4: Environment and Organizational
Culture
Planning Ahead —
Chapter 4 Study Questions
�What is the external environment of organizations?
�What is a customer-driven organization?
Management 9/e - Chapter 4 2
organization?
�What is organizational culture?
�How is diversity managed in a multicultural organization?
Study Question 1: What is the external environment
of organizations?
� Competitive advantage is a core
competency that clearly sets an
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organization apart from competitors
and gives it an advantage over
them in the marketplace.
Study Question 1: What is the external environment
of organizations?
� Companies may achieve competitive
advantage in many ways, including:
�Products
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�Pricing
�Customer service
�Cost efficiency
�Quality
Study Question 1: What is the external environment
of organizations?
� The general environment — all of the background conditions in the external environment of the organization including:
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organization including:� Economic
� Socio-cultural
� Legal-political
� Technological
� Natural environment
Study Question 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.
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� Includes important stakeholders such as:
� Customers
� Suppliers
� Competitors
� Regulators
� Investors/owners
Figure 4.1 Stakeholder analysis of value creation for key constituencies of a business firm: an open-systems approach.
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Study Question 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.
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in the external environment.
� Two dimensions of environmental
uncertainty:
� Complexity
� Rate of change
Study Question 2: What is a customer-driven
organization?
�External customers purchase the
organization’s goods or utilize its
services.
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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 Question 2: What is a customer-driven
organization?
� Customers want:
� High quality.
� Low price.
On-time delivery.
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� On-time delivery.
� Key customer service lessons:
� Protect reputation for quality products.
� Treat customers right.
Study Question 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
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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 Question 3: What is organizational culture?
�Organizational culture is the system
of shared beliefs and values that
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develops within an organization and
guides the behavior of its members.
Study Question 3: What is organizational culture?
� Diagnostic questions for assessing cultural differences:
� How tight or loose is the structure?
� Are decisions change oriented or driven by the status quo?
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status quo?
� What outcomes or results are most highly valued?
� What is the climate for risk taking, innovation?
� How widespread is empowerment, worker involvement?
� What is the competitive style, internal and external?
Study Question 3: 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.
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� 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 Question 3: What is organizational culture?
� What is observable culture?
� What one sees and hears when walking around
an organization.
� Elements of observable culture:
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� Elements of observable culture:
� Stories
� Heroes
� Rites and rituals
� Symbols
Figure 4.2 Levels of organizational culture—
observable culture and core culture.
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Study Question 3: 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:
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� 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 Question 3: What is organizational culture?
� Important cultural values include:
� Performance excellence
� Innovation
� Social responsibility
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� Social responsibility
� Integrity
� Worker involvement
� Customer service
� Teamwork
Study Question 3: What is organizational culture?
� Value-based management:
� Describes managers who actively help
to develop, communicate, and enact
shared values.
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shared values.
� Criteria for evaluating core values:
� Relevance
� Integrity
� Pervasiveness
� Strength
Study Question 3: What is organizational culture?
� Symbolic leadership
� Symbolic leaders use symbols well to establish
and maintain a desired organizational culture.
� Symbolic leaders behave in ways that espouse
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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 Question 3: What is organizational culture?
� S-C-O-R-E-S
� How tight or loose is the structure?
� Are decisions change oriented or driven by the
status quo?
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� What outcomes or results are most highly valued?
� What is the climate for risk taking, innovation?
� How widespread is empowerment, worker
involvement?
� What is the competitive style, internal and
external?
Study Question 4: How is diversity managed in a
multicultural organization?
�Diversity:
� Describes differences among people at
work.
� How diversity is handled in the workplace
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� 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 Question 4: How is diversity managed in a
multicultural organization?
� Diversity trends in the sociocultural
environment:
� People of colors are an increasing percentage of the workforce.
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of the workforce.
� More women are working.
� People with disabilities are gaining more
access to the workplace.
� Average age of workers is increasing.
� Religious diversity of workers is increasing.
Study Question 4: How is diversity managed in a
multicultural organization?
� Characteristics of multicultural
organizations:
� Pluralism
Structural integration
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� Structural integration
� Informal network integration
� Absence of prejudice and discrimination
� Minimum intergroup conflict
Study Question 4: How is diversity managed in a
multicultural organization?
� Organizational subcultures� Cultures based on shared work responsibilities
and/or personal characteristics.
� Ethnocentrism is the belief that one’s subculture is superior to all others
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subculture is superior to all others
� Common subcultures include:� Occupational
� Functional
� Ethnic or national
� Racial
� Generational
� Gender
Study Question 4: How is diversity managed in a
multicultural organization?
� Challenges faced by minorities and
women:
� Glass ceiling
� Misunderstanding and lack of sensitivity
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� Misunderstanding and lack of sensitivity
� Sexual harassment
� Pay discrimination
� Job discrimination
� Minorities may adapt by exhibiting
biculturalism.
Figure 4.3 Glass ceilings as barriers to women and minority
cultures in traditional organizations.
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Study Question 4: How is diversity managed in a
multicultural organization?
� Diversity leadership approaches:
� Managing diversity commits to changing the
organizational culture.
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� Affirmative action commits the organization to
hiring and advancing minorities and women.
� Valuing diversity commits the organization to
education and training programs.
Figure 4.4 Leadership approaches to diversity—from
affirmative action to managing diversity.
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Source: Developed from R. Roosevelt Thomas, Jr., Beyond Race and Gender (New York:
AMACOM, 1991), p. 28.
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