Chapter 2 Understanding Managements Context Constraints and Challenges

Chapter 2 Understanding Management’s Context: Constraints and Challenges

The Manager: Omnipotent or Symbolic? v. Omnipotent view of management: ØThe dominant view in management theory and society in general is that managers are directly responsible for an organization’s success or failure. v. Symbolic view of management: ØThe view in management theory that much of an organization’s success or failure is due to external forces outside managers’ control

The Manager: Omnipotent or Symbolic v. The Omnipotent View: ØGood managers anticipate change, exploit opportunities, correct poor performance and lead their organizations ØWhen profits are up, credit goes to manager and he gets reward or bonuses ØWhen profits go down, managers are blamed and fired ØExample: Sports team coaches

The Manager: Omnipotent or Symbolic v. The Symbolic View: ØCompany performance depends on external factors like § Economy § Customers § Government § Competitors § Industry conditions ØExample: Cisco Systems: When performance went down analysts blamed their acquisition strategies and customer service

The External Environment: Constraints and Challenges v. Economic v. Global v. Political/ Legal v. Social/ Cultural v. Technological v. Demographics

The External Environment: Constraints and Challenges v. Economic Environment: ØGlobal Economic Recession § Job cutting § Lack of credits available to fund business activities § Example: General Motors (GM) got bankrupted due to economic condition. In such situation managers will not be blamed. Thus it became a symbolic view ØEconomic Inequality § Widening Income Gap § Example: RMG sector protest in BD

The External Environment: Constraints and Challenges v. Demographic Environment: ØBaby Boomers: (1946 -1964) § Very large in population, that’s why they are called boomers § They changed educational system, entertainment and lifestyle ØGeneration Y: (1978 -1994) § Changed technology and clothing style ØGeneration Z or Post Millennial (2000 -present): § Also called i-generation § Brought up with technologies ØExample: Kindle vs ipad or Nexus/ Sony Walkman vs ipod/ Facebook employees

How the External Environment Affects Managers v. Jobs and Employment: ØRecession: Lost millions of jobs ØMany companies prefer freelancers ØExample: Current political instability of BD v. Assessing Environmental Uncertainty: ØDynamic Environment: When environment changes frequently and unpredictably. Example: Music industry ØStable environment: When change is minimal and expected/predictable. Example: US departmental stores: tend to have low sales from December to January

How the External Environment Affects Managers v. Assessing Environmental Uncertainty: ØEnvironmental Complexity: Fewer competitors, customers, suppliers means less complex environment. Example: Unilever vs Diamond world v. Managing Stakeholder Relationship: ØStakeholders: Constituencies in the organization's environment that are affected by an organization’s decisions and actions ØManaging stakeholders can lead to: § § § Successful innovations Predictability of the environmental changes Greater degree of trust among stakeholders Greater organizational flexibility Higher organizational performance

Organizational Culture v. Organizational Culture means shared values, principles, traditions, and ways of doing things that influence the way organizational members act v. Culture isØA perception: Can’t be physically touched or seen ØDescriptive: Can’t be expressed in one word ØExample: Public University vs NSU v. Organizational Subculture: ØExample: NSU English Department vs Finance Dept.

Strong and Weak Culture v. Strong cultures are those in which the key values are deeply held and widely shared and have a greater influence on employees ØExample: Google culture v. Weak cultures are those in which the key values are only limited to few people (mostly the top management) and don’t have much influence on the employees ØExample: Stardust and Persona

Strong Versus Weak Culture

How Employees Learn Culture v. Stories v. Rituals: Example: Award ceremony v. Material Art and Symbols: Feel of the environment of a workplace v. Language

Current Issues in Organizational Culture v. Creating an Innovative Culture ØChallenge and involvement – Are employees involved in, motivated by, and committed to long-term goals and success of the organization? Ø Freedom – Can employees independently define their work, exercise discretion, and take initiative in their day-to-day activities? Ø Trust and openness – Are employees supportive and respectful to each other? Idea time – Do individuals have time to elaborate on new ideas before taking action?

Current Issues in Organizational Culture v. Creating an Innovative Culture Ø Playfulness/humor – Is the workplace spontaneous and fun? Ø Conflict resolution – Do individuals make decisions and resolve issues based on the good of the organization versus personal interest? Ø Debates – Are employees allowed to express opinions and put forth ideas for consideration and review? Ø Risk-taking – Do managers tolerate uncertainty and ambiguity, and are employees rewarded for taking risks?

Current Issues in Organizational Culture v. Creating a Customer Responsive Culture

Current Issues in Organizational Culture v. Spirituality and Organizational Culture Øworkplace spirituality: It’s a culture in which organizational values promote a sense of purpose through meaningful work taking place in the context of community ØCharacteristics of Cultural Spirituality: § Strong sense of purpose § Focus on individual development § Trust and openness § Employee empowerment § Toleration of employee expression