Management and

Organization
2023-2024 Fall
6th week

Understanding Management’s Context

This week
1. What is in the general or macro environment
of organizations?
2. What are key elements and issues in the
specific or task environment of organizations?
3. How do organizations accomplish innovation?
4. What are the emerging issues of sustainability
and the environment?
 Learning Dashboard

1. The General or Macro Environment

1. Economic conditions
2. Legal-political conditions
3. Sociocultural conditions
4. Technological conditions
5. Natural environment conditions
2. The Specific or Task Environment
1. Stakeholders and value creation
2. Competitive advantage
3. Uncertainty, complexity, and change
 Learning Dashboard

3. Environmental and Innovation

1. Types of innovations
2. The innovation process
3. Disruptive innovation and technology
4. Environment and Sustainability
1. Sustainable development
2. Sustainable business
3. Human sustainability
 The General or Macro Environment

The general or macroenvironment — all of the background

conditions in the external environment of the organization
including:

Economic
health of the economy

Legal-political
philosophy/objectives of political party running the government

Socio-cultural
norms, customs, social values

Technological
development and availability of technology

Natural environment
nature and conditions of environment
Sample elements in the general environments of
organizations
 The General or Macro Environment

Economic conditions
• overall health of economy in terms of financial markets,
inflation, income levels, and job outlook
• Offshoring – outsourcing of jobs to foreign locations
• Reshoring – return of jobs from foreign locations
• Economic conditions have social consequences!
 The General or Macro Environment

Legal-political conditions
• laws and regulations, government policies, and the
objectives of political parties
• vary from one country to the next
• Internet censorship - deliberate blockage of public access to
information posted on the Internet
 The General or Macro Environment

Sociocultural conditions
• diversity issues relating to educational opportunity, access
to technology, housing/job options
• norms, customs, demographics, and societal values
• Generational cohorts -- people born within a few years of
one another and who experience somewhat similar life
events during their formative years
 The General or Macro Environment

• Technological conditions
• social media, features and “apps” on smart phones
• brings both opportunities and problems
• work-life balance
 The General or Macro Environment

• Natural environment conditions

• nuclear plant failure, oil spill, hurricane
• “carbon neutral,” “green”, “sustainability”
• Sustainable business – meets both the needs of
customers and protects the natural environment
How the External Environment Affects Managers

• Jobs and employment

As any or all external environmental conditions (economic, demographic,
technological, globalization, etc.) change, one of the most powerful
constraints managers face is the impact of such changes on jobs and
employment—both in poor conditions and in good conditions.

• Assessing environmental uncertainty

Environmental uncertainty refers to the degree of change and complexity in
an organization’s environment. The amount of uncertainty found in that
environment can affect organizational outcomes.

• Managing stakeholder relationships

Stakeholders are any constituencies in the organization’s environment that
are affected by an organization’s decisions and actions. These groups have a
stake in or are significantly influenced by what the organization does, and
they can infl uence it in return.
 The Specific or Task Environment

The specific (task) environment - actual organizations, groups, and

persons with whom an organization interacts and conducts business
Members of the specific or task environment are often described as
stakeholders
• Includes important stakeholders such as:

Customers Suppliers Competitors Regulators Owners

Managing stakeholder relationships
Multiple stakeholders in the environment of an organization
 The Specific or Task Environment?

• Competitive advantage
• a core competency that clearly sets an organization apart
from competitors and gives it an advantage over them in
the marketplace
• Companies may achieve competitive advantage in many
ways, including:
• Costs,
• quality,
• delivery,
• flexibility
 The Specific or Task Environment

• Environmental uncertainty
• a lack of complete information regarding what exists and
what developments may occur in the external environment
• The more uncertain the environment, the harder it is to
analyze environmental conditions and predict future states
of affairs.

• Two dimensions of environmental uncertainty:

• Degree of complexity
• Rate of change
Dimensions of uncertainty
 Organizational Culture
Organizational culture: the shared values, principles, traditions, and
ways of doing things that influence the way organizational members act.
• how “things are done around here.”
• Culture is a perception. It’s not something that can be physically
touched or seen, but employees perceive it on the basis of what they
experience within the organization.
• It’s concerned with how members perceive the culture and describe it,
not with whether they like it.
• Even though individuals may have different backgrounds or work at
different organizational levels, they tend to describe the organization’s
culture in similar terms.
Dimensions of Organizational Culture
 Organizational Culture
Strong Cultures Weak Cultures
• Values widely shared • Values limited to a few people—
• Culture conveys consistent usually top management
messages about what’s • Culture sends contradictory
important messages about what’s
• Most employees can tell stories important
about company history or • Employees have little
heroes knowledge of company history
• Employees strongly identify with or heroes
culture • Employees have little
• Strong connection between identification with culture
shared values and behaviors • Little connection between
shared values and behaviors
 How Employees Learn Culture
• Stories
• Organizational “stories” typically contain a narrative of significant events or
people including such things as the organization’s founders, rule breaking,
reactions to past mistakes, and so forth.
• Rituals
• Corporate rituals are repetitive sequences of activities that express and
reinforce the important values and goals of the organization.
• Material artifacts and symbols
• The layout of an organization’s facilities, how employees dress, size of offices,
the elegance of furnishings, so on.
• Language
• Over time, organizations often develop unique terms to describe equipment,
key personnel, suppliers, customers, processes, or products related to its
business.
 How Culture Affects Managers
They’re not written down. It’s unlikely they’ll even be spoken. But
they’re there, and all managers quickly learn what to do and not do in
their organization. For instance, you won’t find the following values
written down, but each comes from a real organization:
• Look busy even if you’re not.
• If you take risks and fail around here, you’ll pay dearly for it.
• Before you make a decision, run it by your boss so that he or she is
never surprised.
• We make our product only as good as the competition forces us to.
• What made us successful in the past will make us successful in the
future.
• If you want to get to the top here, you have to be a team player.
 How Culture Affects Managers
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
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
 Environment and Innovation

•Innovation - process of putting new ideas

into practice
•Business innovations
• Product innovation
• Process innovation
• Business model innovation
 Environment and Innovation
• Social business innovations – find ways to use business models to
address important social problems

• Although the tendency is to view innovation in the business and

economic context, it’s important to remember that it applies equally
well when we talk about the world’s social problems—poverty,
famine, literacy, diseases—and the general conditions for economic
and social development.
 Environment and Innovation
The innovation process:
Step 1: Imagining
Step 2: Designing
Step 3: Experimenting
Step 4: Assessing
Step 5: Scaling

Reverse innovation – innovation can come from any

level in the organization or location
 Environment and Innovation
• Disruptive innovation – creates products/services that become
so widely used that they largely replace prior practices and
competitors
• Historical examples include;
• cellular phones that disrupted traditional landlines
• e-retailers are now disrupting fixed-place stores
• online gaming and movie streaming businesses that are disrupting the
“buy and own” models
 Environment and Sustainability

• Sustainability – commitment to protect the rights of present and future

generations as co-stakeholders of present-day natural resources
• Th is commitment applies to everything from the air we breathe and
water we consume, to the spaces we inhabit, to the human labor that
gives life to our best-loved devices and smart phones.
 Environment and Sustainability

• Sustainable development
• makes use of environmental resources to support
societal needs today while also preserving and
protecting them for future generations
• “forms of progress that meet the needs of the present
without compromising the ability of future generations
to meet their needs.”
 Environment and Sustainability

• Environmental capital – natural

resources used to sustain life and
produce goods and services for
society
• Land renew,
recycle,
• Atmosphere conserve,
• Water and preserve.
• Minerals
 Environment and Sustainability
Triple Bottom Line: Three P’s of organizational performance

Profit

Planet People
 Environment and Sustainability

• Sustainable business – operates in ways that meets the needs

of consumers while protecting the environment
• Sustainable/green innovations – help reduce an organization’s
negative impact; enhance positive impact
 Environment and Sustainability

• Human sustainability – concern for the effect of management

practices on employee physical and psychological well-being
• Health and wellness programs
• Stress management
• Minimizing work-family conflict
• Control over work
• Fair wages and opportunities