Schermerhorn Mgmt9 Ch04

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


organization apart from competitors

and gives it an advantage over

them in the marketplace.


of organizations?

� Companies may achieve competitive

advantage in many ways, including:

�Products


�Pricing

�Customer service

�Cost efficiency

�Quality


of organizations?

� The general environment — all of the background conditions in the external environment of the organization including:


organization including:� Economic

� Socio-cultural

� Legal-political

� Technological

� Natural 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

Figure 4.1 Stakeholder analysis of value creation for key constituencies of a business firm: an open-systems approach.



of organizations?

� Environmental uncertainty is a lack of

complete information regarding what

exists and what developments may occur

in the external environment.


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.


services.

� Internal customers are the persons

and groups within an organization

who depend on the results of

others' work to do their own jobs.


organization?

� Customers want:

� High quality.

� Low price.

On-time delivery.


� On-time delivery.

� Key customer service lessons:

� Protect reputation for quality products.

� Treat customers right.


organization?

� Customer relationship management

establishes and maintains high standards of

customer service in order to strategically

build lasting relationships with and add value


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


develops within an organization and

guides the behavior of its members.


� Diagnostic questions for assessing cultural differences:

� How tight or loose is the structure?

� Are decisions change oriented or driven by the status quo?


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?


� 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.


� What is observable culture?

� What one sees and hears when walking around

an organization.

� Elements of observable culture:


� Elements of observable culture:

� Stories

� Heroes

� Rites and rituals

� Symbols

Figure 4.2 Levels of organizational culture—

observable culture and core culture.



� What is the core culture?

� Underlying assumptions and beliefs that influence behavior and contribute to the observable culture.

Core culture and values:


� 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.


� Important cultural values include:

� Performance excellence

� Innovation

� Social responsibility


� Social responsibility

� Integrity

� Worker involvement

� Customer service

� Teamwork


� Value-based management:

� Describes managers who actively help

to develop, communicate, and enact

shared values.


shared values.

� Criteria for evaluating core values:

� Relevance

� Integrity

� Pervasiveness

� Strength


� Symbolic leadership

� Symbolic leaders use symbols well to establish

and maintain a desired organizational culture.

� Symbolic leaders behave in ways that espouse


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.


� S-C-O-R-E-S

� How tight or loose is the structure?

� Are decisions change oriented or driven by the

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 4: How is diversity managed in a

multicultural organization?

�Diversity:

� Describes differences among people at

work.

� How diversity is handled in the workplace


� How diversity is handled in the workplace

reflects the organization’s culture.

� Respect and inclusion.

� Disrespect and exclusion.

� A potential source of competitive

advantage.



� Diversity trends in the sociocultural

environment:

� People of colors are an increasing percentage of the workforce.


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.



� Characteristics of multicultural

organizations:

� Pluralism

Structural integration


� Structural integration

� Informal network integration

� Absence of prejudice and discrimination

� Minimum intergroup conflict



� 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


subculture is superior to all others

� Common subcultures include:� Occupational

� Functional

� Ethnic or national

� Racial

� Generational

� Gender



� Challenges faced by minorities and

women:

� Glass ceiling

� Misunderstanding and lack of sensitivity


� 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.




� Diversity leadership approaches:

� Managing diversity commits to changing the

organizational culture.


� 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.


Source: Developed from R. Roosevelt Thomas, Jr., Beyond Race and Gender (New York:

AMACOM, 1991), p. 28.

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