We will discuss the Environment and Organizational Culture.
When discussing the environment, the first thing to emerge is external. Now, connected with the organization, it can be concluded that an organization has external factors. The external environment consists of two components, the special environment and the general environment:
1. Special Environment
The Special Environment includes outside forces that have a direct and immediate impact on the decisions and actions of managers and are directly relevant to the achievement of organizational goals and are unique and change with changing conditions. The elements that make up the special environment? The main ones are consumers, suppliers, competitors and pressure groups.
As has been said time and time again, organizations exist to meet the needs of consumers. It is the consumer or client who absorbs the results of the organization. This is true even for government and non-governmental organizations. Consumers’ tastes can change or they may become dissatisfied with the organization’s services or products. Of course, some organizations face much greater uncertainty caused by their customers than other organizations.
When you think of a supplier to a particular organization, you usually think of a company that provides raw materials and equipment. However, the term supplier also includes providers of financial and labor inputs. Managers strive to ensure the continuity of the required input flow at the lowest possible price. Because these inputs represent uncertainty in meaning, their unavailability or delays can significantly reduce the effectiveness of the organization. Managers usually strive to ensure a reliable and steady flow. The adoption of e-business principles and methods has changed the way organizations deal with suppliers.
All organizations have one or more competitors. Among others, Nike competes against Reebok. Adidas and Fila. Coca-cola competes against Pepsi and other soft drink companies. Non-party organizations, such as The Metropolotan Museum of Art and Girl Scout USA are also looking to win over funds, volunteers and customers. Managers must not ignore competition. If they ignore it they will pay dearly. Competitors in the form of pricing, development of new products, services offered, and the like are important environmental forces that managers must monitor and which must be prepared to respond to.
Managers must identify special interest groups that seek to influence organizational action. For example, PETA (People for the Ethical Treatment of Animals) pressured the McDonald’s Corporation for its handling of animals during the slaughter process making McDonald’s meet McDonald’s standards for processing it.
2. General Environment
General Environment includes general economic, political / legal conditions. Social culture, demographics, technology, and general conditions that may affect the organization. Changes in these areas usually do not have as much impact as the specific environment, but managers should consider them when they plan, organize, lead and control.
a. Economic Conditions
Interest rates, inflation rates, changes in spendable income, stock market indices, and the stages of the general business cycle are some of the economic factors in a general environment that can influence management practices in a particular organization. Even charitable organizations such as the United Way or the Muscular Dystrophy Association, are feeling the impact of economic factors. During an economic downturn, the public demand for the organization’s services increases, while charitable contributions to the organization usually decrease.
b. Political or Legal Conditions
Federal, state and local governments influence what organizations can or cannot do. Several federal regulations have had a significant impact. For example, the American with Disabilities Act of 1990 (ADA) was designed to make jobs and facilities more accessible to persons with disabilities as consumers or employees. Other aspects of the political / legal sector are the general condition and stability of the country in which the organization operates and the attitude of elected government officials towards business.
c. Socio-Cultural Conditions
The director of research and development at Frito Lay, a snack unit at PepsiCo Inc, is looking for a way to make his snack foods healthier. One product test is the broccoli potato chips. Why is Frito Lay looking for such a different product? Because the health ministry and consumers are increasingly concerned about the dangers of obesity and a bad diet. Managers must adapt their practices to the changing expectations of the societies in which they work. As values, habits, and tastes change, managers must change too. If the organization does business in another country, managers need to be familiar with the values and culture of that country and manage the organization in a way that recognizes and implements that particular socio-cultural aspect.
d. Demographic Conditions
Demographic conditions include the tendency of the physical characteristics of the population, such as gender, age, education level, geographical location, income, family composition, and so on. This change in characteristics enables how managers plan, manage, lead, and control.
In terms of the general environment, the most rapid changes over the past quarter century have occurred in the field of technology. We live when technology is constantly changing. Examples such as Prime Trucking Inc, and Amazon.com, use information as a competitive advantage and have embraced technologically advanced e-business systems to stay ahead of its competitors. The whole field of technology is radically changing the fundamental way organizations are structured and the way managers manage them.
By the end of this decade Nigeria will have a larger population than Russia. Ethiopia will have more population than Germany and Morocco will be denser than Canada. Globalization is one of the important factors that affect managers and organizations. Global competitors and consumer markets.
After we discuss the Environment, let’s discuss Organizational Culture.
What is Organizational Culture?
What is organizational culture? Culture is a system of shared meanings and beliefs held by organizational members that determine in large part how they act towards one another and towards outsiders. The culture represents the perception shared by the organization which determines its members must behave. In every organization there are Values, Symbols, Rituals, Myths and Practices that have developed for a long time.
Our definition of culture implies several things. First, culture is perception. Individuals perceive organizational culture based on what they see, hear or experience in the organization. Second, even though individuals may have different backgrounds or work at different levels in the organization with the same term, that is what is called the shared cultural aspect. Finally, organizational culture is a descriptive term, culture is about how members perceive the organization, not whether they like it. This culture describes not judging.
Dimensions of Organizational Culture
Research suggests that there are seven dimensions that as a whole capture the nature of organizational culture. Each of these dimensions, from low to high, is simply referred to as not a culture type (low) or a culture type (high). Assessing the organization from the seven dimensions will provide an overview of the elements that make up the organizational culture. In many organizations, one cultural dimension sometimes appears above others and usually shapes the personality of the organization and the workings of organizational members. For example, Sony Corporation is focused on product innovation. Companies “live and breathe” in new product development (results orientation), and employee work decisions, attitudes, and actions that support goals. In contrast, Soutwest Airlines makes its employees a cultural hub (people orientation).
The dimensions of the organizational culture are
a. Innovation and Taking Risks
The degree to which employees are encouraged to be innovative and to take risks.
b. Attention to Detail
The degree to which employees are expected to demonstrate accuracy, analysis, and attention to detail.
c. Result Orientation
The degree to which managers focus on results or outputs rather than on how to achieve them.
d. People Orientation
The degree to which management decisions affect the people in the organization.
e. Team Orientation
The degree to which work is organized by team rather than by individuals.
The degree to which employees are aggressive and competitive rather than cooperative.
The degree to which the decisions and actions of the organization emphasize the effort to maintain status.
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