Enterprise Leadership 700252 Enterprise Leadership Week Three Lecture

Enterprise Leadership: 700252 Enterprise Leadership Week Three Lecture CHAPTER 3 MANAGING THE EXTERNAL ENVIRONMENT AND ORGANISATIONAL CULTURE 1

Learning outcomes 3. 1 Contrast the actions of managers according to the omnipotent and symbolic views. 3. 2 Identify the factors in an organisation’s specific and general environments. 3. 3 Discuss the constraints and challenges facing managers in today’s external environment. 3. 4 Discuss the characteristics and importance of organisational culture. 3. 5 Explain the sources of an organisation’s culture, and describe how it is transmitted to employees. 3. 6 Describe some current issues in organisational culture.

The Manager: omnipotent or symbolic? Omnipotent view: The view that managers are directly responsible for an organisation’s success or failure. Symbolic view: The view that much of an organisation’s success or failure is due to external forces outside managers’ control.

Reality suggests a synthesis In reality, managers are neither helpless nor all-powerful. But their decisions and actions are restricted by both internal and external constraints. • External constraints come from the organisation’s environment. • Internal constraints arise from the organisation’s culture.

Defining the external environment The external environment refers to factors and forces outside the organisation that potentially can affect its performance. The external environment is made up of two components, the: • specific environment: those external forces that have a direct impact on managers’ decisions and actions and are directly relevant to the achievement of the organisation’s goals • general environment: broad external conditions that may affect the organisation.

The specific environment includes those external forces that have a direct impact on managers’ decisions and actions and are directly relevant to the achievement of the organisation’s goals. The main forces that make up the specific environment are: • customers • suppliers • competitors • pressure groups.

The general environment includes: • economic • political/legal • sociocultural • demographic, • technological • global conditions.

Components of external environment

External environment: constraints and challenges There are three ways in which the environment constrains and challenges managers: 1. jobs and employment; 2. environmental uncertainty 3. stakeholder relationships

External environment: jobs and employment • Changes in external conditions affect not only the types of jobs that are available, but also how those jobs are created and managed. • Many employers are using flexible work arrangements to meet work output demand. Work tasks may be done by freelancers hired to work on an as-needed basis, or by temporary workers who work full-time but are not permanent employees, or by individuals who share jobs.

External environment: assessing environmental uncertainty Environments differ by their degree of environmental uncertainty, which is determined by two dimensions: 1. Degree of change: If the components in an organisation’s environment change frequently, it is called a dynamic environment. If change is minimal, it is called a stable environment. 2. Environmental complexity: The number of components in an organisation’s environment and the extent of the knowledge that the organisation has about those components.

Environmental uncertainty matrix

External environment: managing stakeholder relationships Stakeholders are any constituencies in the organisation’s external environment that are affected by the organisation’s decisions and actions. https: //www. youtube. com/watch? v=VHGTs. Ewb. OJY

Organisational stakeholders

Organisational culture: constraints and challenges An organisation, too, has a personality, which we call its culture. And that culture influences the way employees act and interact with others. An organisation’s culture can make employees feel included, empowered and supported, or it can have the opposite effect.

What is organisational culture? Organisational culture: The shared values, principles, traditions and ways of doing things that influence the way organisational members act. The original source of an organisation’s culture usually reflects the vision or mission of its founders.

Dimensions of organisational culture

Strong versus weak cultures Strong cultures – cultures in which the key values are intensely held and widely shared – have a greater influence on employees than do weak cultures. Although all organisations have a culture, not all cultures have an equal impact on employees’ behaviour and actions. The stronger a culture becomes, the more it affects the way managers plan, organise, lead and control.

Strong versus weak cultures

Workforce diversity and inclusion https: //www. youtube. com/watch? v=IAp. S 3 YQBKV 4

How an organisation’s culture is established and maintained An organisation must help employees adapt to its culture through a process called socialisation. This is a process that has many benefits. Socialisation helps new employees learn the organisation’s way of doing things.

Where culture comes from and how it continues Employees ‘learn’ an organisation’s culture in a number of significant ways. • Stories – a narrative of significant events or people, including such things as the organisation’s founders, rule breaking, rags-to-riches successes, and reactions to past mistakes. • Rituals – repetitive sequences of activities that express and reinforce the key values of the organisation, what goals are most important and which people are important. • Material symbols – convey to employees who is important, the degree of equality desired by top management, and the kinds of behaviour (for example, risk taking, conservative, cost-conscious, participative, and so on) that are expected and appropriate. • Language – once learned, this language acts as a common denominator to unite members of a given culture.

Examples of managerial decisions affected by culture

About ethics Should organisations protect whistleblowers? What would you do if you discovered that your boss or your entire organisation is engaged in unethical practices? Strong organisational cultures encourage free expression of controversial views, protect employees with formal grievance procedures, and provide mechanisms whereby employees can anonymously report unethical practices to senior management. Others, however, regard whistleblowing as the ultimate demonstration of disloyalty. Whistleblowing embarrasses managers and can put one’s job or entire career on the line.

Current organisational culture issues facing managers How have these organisations achieved such reputations? Their organisational cultures have played a crucial role. Let us look at four current cultural issues managers should consider: 1. creating an innovative culture 2. creating a customer-responsive culture 3. creating a culture that embraces sustainability 4. the relationship between workplace spirituality and organisational culture.

1 - Creating an innovative culture According to Swedish researcher Goran Ekvall, an innovative culture would be characterised by the following: • Challenge and involvement: Are employees involved in, motivated by and committed to the long-term goals and success of the organisation? • Freedom: Can employees independently define their work, exercise discretion and take initiative in their day-to-day activities? • Trust and openness: Are employees supportive and respectful of each other? • Idea time: Do individuals have time to elaborate on new ideas before taking action? • Playfulness/humour: Is the workplace spontaneous and fun? • Conflict resolution: Do individuals make decisions and resolve issues based on the good of the organisation versus personal interest? • Debates: Are employees allowed to express their opinions and put forth their ideas for consideration and review? • Risk taking: Do managers tolerate uncertainty and ambiguity, and are employees rewarded for taking risks?

2 - Creating a customer-responsive culture What does a customer-responsive culture look like? A Company (Harrah’s Casino) research showed that customers who were satisfied with the service they received increased their gaming expenditures by 10 per cent, and those who were extremely satisfied increased their gaming expenditures by 24 per cent! five characteristics of customer-responsive cultures ?

3 - Creating an organisational culture that embraces sustainability A study of some of the world’s most sustainable companies found seven distinguishing qualities that are critical for an organisation wanting to develop a culture that supports sustainability. These are: • deeply ingrained values • strategic positioning • top management support • systematic alignment • metrics • holistic integration • stakeholder engagement.

4 - Spirituality and organisational culture Workplace spirituality: A culture where organisational values promote a sense of purpose through meaningful work that takes place in the context of community. Spiritual organisations tend to have five cultural characteristics: • strong sense of purpose • focus on individual development • trust and openness • employee empowerment • tolerance of employee expression.

Enterprise Leadership: 700252 Next week –Pre-read Chapter 4 – Managing in a global environment –Review lectures 1 - 3 30