ThreeOrganizational Culture and the Environment The Constraints 1. INTRODUCTION.Managers must be aware that organizational culture and organizational environments will influence both the way an organization is managed as well as its effectiveness. In this chapter, both organizational culture and organizational environment are explored in order to understand the complexities involved with each.2.THE MANAGER: OMNIPOTENT OR SYMBOLIC?Two positions on the role that managers play in an organization’s su ccess or failure have been proposed.The omnipotent view of management says that managers are directly responsible for the success or failure of an organization. This view of managers as omnipotent is consistent with the stereotypical picture of the take-charge executive who can overcome any obstacle in carrying out the organization’s objectives. When organizations perform poorly, someone must be held accountable. Ac cording to this view, that “someone” has been management.The symbolic view of management takes the view that much of an organization’s success or failure is due to external forces outside managers’ control. 1.What managers do affect greatly are symbolic outcomes.2. Organizational results are influenced by factors outside the control of managers: economy, market changes, governmental policies, competitors’ actions, the state of the particular industry, the control of proprietary technology, and decisions made by previous manager in the organization. 3. The manager’s role is seen as creating meaning out of randomness, confusion, and ambiguity. 4. According to the symbolic view, the actual part that management plays in the success or failure of an organization is minimal.Reality suggests a synthesis. In reality, managers are neither helpless nor all powerful. Instead, it’s more logical to look at the manager operating within constraints imposed by the organization’s culture and environment. (See Exhibit 3.1.)3.THE ORGANIZATION’S CULTURE.Just as individuals have a personality, so, too, do organizations. We refer to an organiza tion’s personality as its culture.A. Organizational culture is a system of shared meaning and beliefswithin an organization that determines, in large degree, how employeesact. This definition implies:1. Individuals perceive the organizational culture on the basis ofwhat they see, hear, or experience within the organization2. Organizational culture is shared by individuals within theorganization.anizational culture is a descriptive term. It describes rather thanevaluates.4. Seven dimensions of an organization’s culture have beenproposed (see Exhibit3.2):a. Innovation and risk taking (the degree to whichemployees are encouraged to be innovative and takerisks)b. Attention to detail (the degree to which employees areexpected to exhibit precision, analysis, and attention todetail)c. Outcome orientation (the degree to which managersfocus on results or outcomes rather than on thetechniques and processes used to achieve thoseoutcomes)d. People orientation (the degree to which managementdecisions take into consideration the effect on peoplewithin the organization)e. Team orientation (the degree to which work activitiesare organized around teams rather than individuals)f. Aggressiveness (the degree to which people areaggressive and competitive rather than easygoing andcooperative)g. Stability (the degree to which organizational activitiesemphasize maintaining the status quo in contrast togrowth)5. Exhibit 3.3describes how the cultural dimensions can becombined to create significantly different organizations.B. Strong vs. Weak Cultures.1.Strong cultures are possessed by those organizations in whichthe key values are intensely held and widely shared.2. Whether an organization’s cultur e is strong, weak, or somewherein between will depend on organizational factors such as size,age, employee turnover rate, and intensity of original culture.3. A culture will have increasing impact on what managers do as itbecomes stronger.4. Most orga nizations have moderate to strong cultures. There’shigh agreement on what’s important, what defines “good”employee behavior, and so forth.5. Studies of organizational culture have shown various results.One found that employees in firms with strong cultures weremore committed to their firm than employees in firms with weakcultures. Organizations with strong cultures also used theirrecruitment efforts and socialization practices to build employeecommitment. And an increasing body of research suggests thatstrong cultures are associated with high organizationalperformance.C.The original source of an organization’s culture is usually a reflection of thevision or mission of the organization’s founders. It results from the interaction between the foun ders’ biases and assumptions and what the first employees subsequently learned from their own experiences.D. How an Organization’s Culture Continues.1.Once a culture is in place, practices help maintain it.2.Hiring practices reflect the culture in terms of fit.3.Actions of top executives.4.Employees adapt to an organization’s culture throughsocialization—where new employees learn the organization’sway of doing things.5.Exhibit 3.4summarizes how an organization’s culture isestablished and maintained.E. How Employees Learn Culture.1.Culture is transmitted principally through stories, rituals,material symbols, and language.2. Organizational stories are one way that employees learn theculture. These stories typically involve a narrative of significantevents or people.3. Rituals are repetitive sequences of activities that express andreinforce the key values of the organization, what goals are mostimportant, which people are important, and which areexpendable.4. The use of material symbols is another way in which employeeslearn the culture, learn the degree of equality desired by topmanagement, and find out who is important and the kinds ofbehavior that are expected and appropriate.5. Finally, language is often used to identify members of a culture.Learning this language indicates members’ willingness to acceptand preserve the culture. This special lingo acts as a commondenominator that unites members of a given culture.F.How Culture Affects Managers. Because the organizational cultureestablishes constraints on what managers can and cannot do, it’s particularly relevant.1. The link between corporate values and managerial behavior isfairly straightforward.2. The culture conveys to managers what is appropriate behavior.3. A n organization’s culture, particularly a strong one, constrains amanager’s decision-making options in all managerial functions.(See Exhibit3.5.)4.CURRENT ORGANIZATIONAL CULTURE ISSUES FACING MANAGERS.Four current cultural issues managers should consider:A.Creating an Ethical Culture. (See Exhibit3.6 for suggestions on howmanagers can create a more ethical culture).1. Content and strength of an organization’s culture influence itsethical climate and ethical behavior of its members.2. Strong organizational culture will exert more influence onemployees than a weak one.3. An organizational culture most likely to shape high ethicalstandards is one that’s big in risk tolerance, low to moderate inaggressiveness, and focuses on means as well as outcomes.B.Creating an Innovative Culture1. What does an innovative culture look like? Swedish researcherGoran Ekvall provides these characteristics:a. Challenge and involvementb. Freedomc. Trust and opennessd. Idea timee. Playfulness/humorf. Conflict resolutiong. Debatesh. Risk-takingB.Creating a Customer-Responsive Culture1. What does a customer-responsive culture look like? Research showsthe following six characteristics that are routinely present: (seeExhibit3.7for managerial actions to make their cultures morecustomer responsive).a. Type of employeeb. Few rigid rules, procedures, and regulationsc. Widespread use of empowermentd. Good listening skillse. Role clarityf.Employees who are conscientious in desire to pleasecustomersB.Spirituality and Organizational Culture1. Workplace spirituality is the recognition that people have an innerlife that nourishes and is nourished by meaningful work that takesplace in the context of community.2. Five cultural characteristics evident in spiritual organizationsa. Strong sense of purposesb. Focus on individual developmentc. Trust and opennessd. Employee empowermente. Toleration of employee expression5. THE ENVIRONMENT.The impact of the external environment on a m anager’s actions and behaviors cannot be overemphasized. There are forces in the environment that play a major role in shaping man agers’ endeavors.A. The environment is defined as outside institutions and forces outsidethe organization that potentially affect an organization’s performance.1. The specific environment is that part of the environment thatincludes the constituencies that are directly relevant to theachievement of an organiza tion’s goals.a. The specific environment is unique and changes withconditions.b. It also varies depending on the niche the organizationserves with respect to the range of products or services itoffers and the markets it serves.c. The main constituencies include customers, suppliers,competitors, and pressure groups.1) Suppliers include firms that provide materialsand equipment as well as providers of financialand labor inputs. Managers seek to ensure asteady flow of the needed materials, equipment,financial, and labor inputs at the lowest possibleprice.2) Customers are the reasons that organizationsexist, as they absorb the outputs. They obviouslyrepresent potential uncertainty, particularly iftheir tastes and desires change.3) Competitors cannot be ignored. They’re animportant environmental force to monitor andrespond to. Most organizations have one ormore competitors.4) Pressure groups also cannot be ignored bymanagers. Changes in social and politicalmovements influence the power that thesepressure groups have on organizations.2. The general environment includes the broad economic,political/legal, sociocultural, demographic, technological, andglobal conditions.a. Economic conditions include interest rates, inflationrates, changes in disposable income, stock marketfluctuations, and the general business cycle, amongother things.b. Political/legal conditions include the general politicalstability of countries in which an organization doesbusiness and the specific attitudes that elected officialshave toward business. Federal, state, and localgovernments can influence what organizations can andcannot do (See Exhibit3.9for a listing of significantlegislation affecting businesses.)c. Sociocultural conditions include the changingexpectations of society. Societal values, customs, andtastes can change, and managers must be aware of thesechanges.d. Demographic conditions, including physicalcharacteristics of a population, such as gender, age, levelof education, geographic location, income and familycomposition, can change, and managers must adapt tothese changes.e. Technological conditions include the changes that areoccurring in technology.f. Global factors include global competitors and globalconsumer markets.B. How the Environment Affects Managers.Environments are not all the same. They differ in the amount of environmental uncertainty, which is defined as the degree of change and complexity in an organi zation’s environment. (See Exhibit3.10.)1. Degree of change is measured as dynamic or complex. If thecomponents in an organization’s environment change frequently,it’s a dynamic environ ment. If change is minimal, theenvironment is called a stable one.2. The other dimension of uncertainty relates to the degree ofenvironmental complexity, which is defined as the number ofcomponents in an organiza tion’s environment and the extent ofan organization’s knowledge about its environmentalcomponents.3. If the number of components is minimal and there’s minimalneed for sophisticated knowledge, the environment is classifiedas simple. If there are a number of components, they are notsimilar, and there is a high need for sophisticated knowledge, theenvironment is complex.4. Because uncertainty is a threat to organizational effectiveness,managers try to minimize itC. The more obvious and secure an organization’s relationships becomewith external stakeholders, the more influence managers will have overorganizational controls.1. Stakeholders are any constituencies in the organization’sexternal environment that are affected by, or have a vestedinterest in, the organization’s de cisions and actions. (SeeExhibit3.11 for an identification of some of the most commonones.)2. Stakeholder relationship management is important for tworeasons:a. It can lead to improved predictability of environmentalchanges, more successful innovation, greater degrees oftrust, and greater organizational flexibility to reduce theimpact of change.b. It is the “right” thing to do, because organizations aredependent on external stakeholders as sources of inputsand outlets for outputs and should be considered whenmaking and implementing decisions.3. Stakeholder relationships are managed using four steps:a. Identify external stakeholdersb. Determine the specific interests of each stakeholdergroupc. Decide how critical these interests are to theorganizationd. Determine what specific approach managers should useto manage each relationship based on criticalness ofstakeholder and environmental uncertainty.1. Refer to Exhibit 3.3. How would a first-line manager’s job differ in these twoorganizations? How about a top-level manager’s job?In Organization A, there’s strong attention to detail and little innovation and risk taking. Teamwork would not be encouraged, and employees would be viewed asa means to an end. Strict controls would be placed on workers, and taskachievement would be most important. The supervisor would not have much latitude and would do things “by the book.”In Organization B, innovation and risk taking are highly encouraged.The supervisor would have more autonomy in how to achieve goals. Employees would be given the opportunity to provide input, and a team approach is used.People are viewed as important contributors. T he supervisor’s job would be more like that of a coach, encourager, and facilitator.2. Describe an effective culture for (a) a relatively stable environment and (b) adynamic environment. Explain your choices.An effective culture for a relatively stable environment would likely emphasize outcomes such as quality and productivity and have strong attention to detail. It wouldn’t need to have high levels of innovation and risk taking or aggressiveness.On the other hand, an effective culture for a dynamic environment would likely emphasize aggressiveness, innovation and risk taking, and team orientation. To stay on top of the continual environmental changes, this organization’s culture would need to celebrate work behaviors that kept the organization on top.3. Classrooms have cultures. Describe your class culture using the sevendimensions of organizational culture. Does the culture constrain your instructor? How?Answers to this question will vary. Have students look at the seven dimensions of organizational culture described in the text and rate them from high to low for the class. One point you might want to explore is what role the instructor plays in establishing the culture of the classroom. Then, relate this to what role a manager might play in establishing the culture of an organization or organizational unit.4. Can culture be a liability to an organization? Explain.A culture in which the organization exits (or the organization’s culture) could bea liability in extreme cases. In a global environment one can see where thiscould have an impact. For example, if the society (and organizational cultures) discriminates against certain ethnic groups or on the basis of gender or engages in exploitation of workers, this could create a backlash from consumers in other nations (see for example Reebok and Nike’s troubles regarding manufacturing in emerging nations).5. Why is it important for managers to understand the external forces that areacting on them and their organization?The external environment consists of many factors that have an impact on the organization. Political and legal factors (government regulations), demographics (that can affect labor supply), technological improvements, and other factors directly affect the management of the organization including planning and decision-making.6.“Businesses are built on relationships.” What do you think this statementmeans? What are the implications for managing the external environment?Organizations depend on their environment and their stakeholders as a source of inputs and a recipient of outputs. Good relationships can lead to organizationaloutcomes such as improved predictability of environmental changes, more successful innovations, greater degrees of trust among stakeholders, and greater flexibility in order to act to reduce the impact of change. Also, relationship management and the maintaining of good relationships have been proven by many researchers to have an effect on organizational performance. The high-performing companies tend to consider the interests of all major stakeholder groups as they make decisions.7.What would be the drawbacks to managing stakeholder?The term boundary spanner refers to the fact that managers must span (bridge) the boundary between the organization and its environment. When managers are being boundary spanners, or are utilizing stakeholder management or stakeholder partnering, the boundaries of the organization are going to become more flexible and permeable. This could lead to or ganizational information being “leaked” or known outside of the organization. And, in addition, these relationship management techniques all require mangers’ time, which can be a very limited commodity to begin with.。
