ORGANIZATION AND ENVIRONMENT Chapter 3 Mary Jo Hatch

ORGANIZATION AND ENVIRONMENT Chapter 3 Mary Jo Hatch

Figure 3. 1 The Organization in its Environment ENVIRONMENT Inputs ORG Outputs

Organizational Environment Modernist theory, the environment … lies outside the boundary of the organization. ( )ﺩﺭ ﺑیﺮﻭﻥ ﺍﺯ ﻣﺮﺯ ﻫﺎی ﺳﺎﺯﻣﺎﻥ ﻗﺮﺍﺭ ﺩﺍﺭﺩ provides the organization with resources and absorbs its products and services. imposes constraints upon and demands adaptation from the organization.

Organizational Environment Symbolic-Interpretivists suggest environments … are social constructions ( )ﺳﺎﺧﺘﺎﺭ ﻫﺎی ﺍﺟﺘﻤﺎﻋی ﻫﺴﺘﻨﺪ. ﺑﺮ ﻣﺒﻨﺎی ﺗﺼﻮﺭ ﻣﺪیﺮیﺖ ﺳﺎﺧﺘﻪ ﻣی ﺷﻮﻧﺪ organizational members construct environmental features they think are significant. different organizations construct their environments differently based on management’s interpretation.

Organizational Environment Postmodernists see environment as… Fragmented ( )ﺗکﻪ Boundaryless ( )ﺑﺪﻭﻥ ﻣﺮﺯ image-driven ( )ﻣﺒﺘﻨی ﺑﺮ ﺗﺼﻮیﺮ

Modernist Levels of the Environment Interorganizational network ( )ﺷﺒکﻪ ﺑیﻦ ﺳﺎﺯﻣﺎﻧی General environment ( )ﻋﻤﻮﻣی International environment ( )ﺑیﻦ ﺍﻟﻤﻠﻠی

Interorganizational network ( )ﺷﺒکﻪ ﺑیﻦ ﺳﺎﺯﻣﺎﻧی NETWORK Regulatory Unions Agencies Suppliers Figure 3. 2 ORG Special interests Customers Partners Competitors

Managing the Environment Buffering ( )ﺿﺮﺑﻪ گیﺮی Protecting the internal organizational environment from environmental shocks. Example: Material, labour, or capital shortages.

Managing the Environment Boundary Spanning ( )ﺩیﺪﻩ ﺑﺎﻧی – Environmental monitoring activities. – Representing the organizational interests to the environment. • • Public relations Advertising Sales Recruiting efforts

Stakeholder theory ﺫی ﻧﻔﻌﺎﻥ Organizations operate under a social contract that guarantees certain rights to those who have a stake in the organization’s activities or outcomes. Those attending to stakeholder demands will be more successful.

Interorganizational Network Stakeholders: Any actor that affects or is affected by the organization. ﻫﺮ ﻓﺮﺩ یﺎ گﺮﻭﻫی کﻪ ﺭﻭی ﺳﺎﺯﻣﺎﻥ ﺗﺎﺛیﺮ گﺬﺍﺭ ﺑﻮﺩﻩ ﻭ یﺎ ﺳﺎﺯﻣﺎﻥ ﺑﺮ آﻦ ﺗﺎﺛیﺮ ﻣی گﺬﺍﺭﺩ Network actors: Investors, competitors, employees, media, suppliers, distributors, government, the physical environment, etc.

Figure 3. 3 Interorganizational Network

General Environment Culture Political Figure 3. 4 GENERAL ENVIRONMENT Social Legal Network ORG Physical Economy Technology

Some trends in the General Culture Environment Pluralism Legal Surveillance ﻧﻈﺎﺭﺕ ﺟﻤﻊ گﺮﺍیی Political Terrorism ﺗﺮﻭﺭیﺴﻢ TASK ENV global warming گﺮﻣﺎیﺶ ﺟﻬﺎﻧی ORG Economy Globalization Social Diversity ﺗﻨﻮﻉ Physical Technology Broadband پﻬﻨﺎی ﺑﺎﻧﺪ ﺟﻬﺎﻧی ﺳﺎﺯی

GENERAL TASK ORG GENERAL TASK ORG ORG GENERAL TASK Figure 3. 5 INTERNATIONAL ENVIRONMENT ORG GENERAL TASK ORG

International Environment The economic, political, sociocultural, legal, technological, and physical interconnections that allow for permeable borders between nations.

Table 3. 1 Contribution of Environmental Sectors Sector Contribution to Global Change Technology Personal computers, internet, digital cameras, cell phones, etc. Economic Global capital markets, technology exchanges, worldwide trade, etc. Political/Legal Breakdown of nation-state authority, erosion of territorial borders ( )ﺗﻀﻌیﻒ ﻣﺮﺯﻫﺎی ﺳیﺎﺳی , etc. Social/Cultural Global media coverage, popular culture, consumerism ( )ﻣﺼﺮﻑ گﺮﺍیی , etc Physical Population growth, loss of biodiversity ( ﺍﺯ ﺩﺳﺖ ﺭﻓﺘﻦ ﺗﻨﻮﻉ )ﺯیﺴﺘی , global warming, etc.

Legal Culture Network Physical Political Social Figure 3. 6 GLOBAL ENVIRONMENT Economy Technology

Environmental Contingency Theory Resource Dependence Theory Population Ecology

Environmental Contingency Theory ( )ﺗﺌﻮﺭی ﺍﻗﺘﻀﺎیی Successful organizations match their internal structure to environmental characteristics (dynamic or stable). . ﺳﺎﺯﻣﺎﻥ ﻫﺎی ﻣﻮﻓﻖ ﺳﺎﺧﺘﺎﺭ ﺩﺍﺧﻠی ﺧﻮﺩ ﺭﺍ ﺑﺎ ﻭیژگی ﻫﺎی ﻣﺤیﻂ ﻭﻓﻖ ﻣی ﺩﻫﻨﺪ (Burns & Stalker, Lawrence & Lorsch)

Environmental Contingency Theory Stable Environments • • Routine activities ( )ﻓﻌﺎﻟیﺘﻬﺎی ﻣﻌﻤﻮﻝ Strict lines of authority ( )ﺧﻄﻮﻁ ﺩﻗیﻖ ﻗﺪﺭﺕ Distinct areas of responsibility ( )ﻣﻨﺎﻃﻖ ﻣﺘﻤﺎیﺰ ﻣﺴﺌﻮﻟیﺖ Rapidly Changing Environments • Flexibility ( )ﺍﻧﻌﻄﺎﻑ پﺬیﺮی • Application of skill where needed • ( )ﺍﺳﺘﻔﺎﺩﻩ ﺍﺯ ﻣﻬﺎﺭﺕ ﻫﺎی کﻪ ﺩﺭ ﻣکﺎﻥ ﻣﻮﺭﺩ ﻧیﺎﺯ • Changing work patterns ( )ﺗﻐییﺮ ﺍﻟگﻮﻫﺎی کﺎﺭ

Environmental Contingency Theory Information Perspective on Uncertainty is experienced by individuals when they make decisions, rather than in the environment itself. ﻋﺪﻡ ﺍﻃﻤیﻨﺎﻥ ﻧﺎﺷی ﺍﺯ ﻣﺤیﻂ ﺍﺳﺖ یﺎ ﻓﺮﺩ؟

Fig. 3. 7 Environmental Uncertainty Rate of change low ( )ﺩﺭﺟﻪ ﺗﻐییﺮﺍﺕ high Low uncertainty Moderate uncertainty High uncertainty Complexity ( )پیچیﺪگی high

Fig. 3. 8 Links Between Conditions low Rate of change high Needed information is known and Available. Constant need for new information. Information Overload. Not known what information is needed. Complexity high

Responding to Uncertainty The Law of Requisite Variety ( ﻻﺯﻡ )ﻗﺎﻧﻮﻥ ﺗﻨﻮﻉ (General Systems Theory) For one system to deal effectively with another it must be of the same or greater complexity. ﺑﺮﺍی ﺍﺭﺗﺒﺎﻁ ﻣﻮﺛﺮ ﺑیﻦ یک ﺳیﺴﺘﻢ ﺑﺎ ﺳیﺴﺘﻤی ﺩیگﺮ ﻻﺯﻡ ﺍﺳﺖ ﺗﺎ ﻫﺮ ﺩﻭ ﺳیﺴﺘﻢ ﺍﺯ پیچیﺪگی ﺗﻘﺮیﺒﺎ یکﺴﺎﻧی ﺑﺮﺧﻮﺭﺩﺍﺭ ﺑﺎﺷﻨﺪ Isomorphism ( )ﻫﻤﺮیﺨﺘی The organization takes on the same form as its environment.

Resource Dependence Theory ( )ﺗﺌﻮﺭی ﻭﺍﺑﺴﺘگی ﺑﻪ ﻣﻨﺎﺑﻊ Analysis of the interorganizational network can help the organization understand the power/dependence relationships that exist between it and other network actors.

Power and Dependence ﻗﺪﺭﺕ ﻭ ﻭﺍﺑﺴﺘگی An organization depends on resources controlled by the environment. The environment therefore has power over an organization and can influence decision making.

Fig. 3. 9 Applying Resource Dependence Theory Capital inputs Knowledge & equipment inputs ( )ﺳﺮﻣﺎیﻪ (investors) ( )ﺩﺍﻧﺶ ﻭ ﺍﺑﺰﺍﺭ (technology sector) Raw material inputs Outputs Org ( )کﺎﻻ یﺎ ﺧﺪﻣﺎﺕ (customers) ( )ﻣﻮﺍﺩ ﺍﻭﻟیﻪ (suppliers) Labor inputs ( )ﻧیﺮﻭی ﺍﻧﺴﺎﻧی (employees)

Managing Power/Dependence Pfeffer and Salancik suggest prioritizing dependence elements according to : Criticality ( )ﺑﺤﺮﺍﻧی The estimate of the importance of a particular resource Scarcity ( )کﻤیﺎﺑی The estimate of resource availability

Other Dependence Management Strategies ﺍﺳﺘﺮﺍﺗژی ﻫﺎی ﻣﺪیﺮیﺖ ﻭﺍﺑﺴﺘگی • Vertical integration ( )یکپﺎﺭچگی ﻋﻤﻮﺩی • Horizontal integration ( )یکپﺎﺭچگی ﺍﻓﻘی • Developing personal relationships • ( )ﺗﻮﺳﻌﻪ ﺭﻭﺍﺑﻂ ﺷﺨﺼی • Establishing formal ties with other firms ( )ﺗﺸکیﻞ گﺮﻭﻩ ﻫﺎی ﺭﺳﻤی ﺑﺎ ﺩیگﺮ ﺳﺎﺯﻣﺎﻥ ﻫﺎ • Lobbying ( )ﻻﺑی • Marketing ( )ﺑﺎﺯﺍﺭیﺎﺑی *Your job as a manager: find the right mix of counter-dependencies you can create with those on whom you depend for critical, scarce, non-substitutable resources.

Population Ecology ﺑﻮﻡ ﺷﻨﺎﺳی ﺟﻤﻌیﺖ Organizations within an ecological niche are competitively interdependent and compete for survival. Study how & why some organizations survive. چﺮﺍ ﺩﺭ ﺑﻌﻀی ﺍﺯ ﻣﺤیﻂ ﻫﺎی ﺧﺎﺹ ﺑﻌﻀی ﺍﺯ ﺳﺎﺯﻣﺎﻥ ﻫﺎﻧﺴﺒﺖ ﺑﻪ ﺩیگﺮﺍﻥ ﻣﻮﻓﻘﺘﺮﻧﺪ • Variation ( )ﺗﻨﻮﻉ – ﺷکﻞ گیﺮی • Selection ( )گﺰیﻨﺶ • Retention ( )ﺑﻘﺎﺀ • Operation at the level of the environment

Population Ecology The portion of the environment studied by population ecology is an ecological niche. Consisting of the resource pool upon which a group of competitors depends. *Your job as a manager is to help your firm find a pool of resources over which it can compete successfully with other firms for its survival.

Darwin and Organizations Darwin’s survival of the fittest principle helps to explain the dynamics of populations of organizations: Variation: Entrepreneurial innovation that gives birth to new organizations as well as adaptation of existing firms. Selection: Organizations that best fit the needs and demands of their niche are supported with resources. Retention: Organizational survival and fitness are maintained through the flow of resources.

Domain of Institutional Theory Legal Cultural TASK ENV Physical Political Domain of Resource Dependence Theory Economic Social Technological Domain of Pop Ecology Theory

Institutional Theory ( )ﺗﺌﻮﺭی ﻧﻬﺎﺩی The Enacted Environment ( )ﻣﺤیﻂ ﻭﺿﻊ ﺷﺪﻩ Ambiguity Theory ( )ﺗﺌﻮﺭی ﺍﺑﻬﺎﻡ

Institutional Theory (Selznick) Organizations adapt to both the values of the internal groups and external society

Institutional Theory (Di. Maggio & Powell) An organization is institutionalized by the following contexts: 1. Technical, Economic, or Physical e. g. production and exchange of goods in a market 2. Social, Cultural, Legal, or Political e. g. conforming to norms, values, rules, and beliefs upheld by society.

Institutional Pressures Coercive: Pressure to conform that comes from the government in the form of rules or laws. Normative: Pressure from cultural expectations. Mimetic: The desire of one organization to look like another. Usually used as a response to uncertainty.

Social Legitimacy ( )ﻣﺸﺮﻭﻋیﺖ ﺍﺟﺘﻤﺎﻋی Institutional environments reward organizations for adopting acceptable practices and structures. Without this acceptance, organizations can be driven out of business. Your job as a manager is to to help your firm mimic practices indicated by the institutional environment through coercion or normative expectation in order to ensure its social legitimacy.

Fig. 3. 10 Social Legitimacy as an Organizational Resource Inputs • raw materials • labor • capital • equipment • social legitimacy Transformation Process Outputs

Enacted Environment ( )ﻣﺤیﻂ ﻭﺿﻊ ﺷﺪﻩ The conditions of the environment cannot be separated from managers perceptions of those conditions. When decision makers respond to their perceptions they enact the environment they anticipated. (Weick)

Ambiguity Theory ( )ﺗﺌﻮﺭی ﺍﺑﻬﺎﻡ Encouraging multiple interpretations of goals, vision, and actions to produce different strategies.

Avoiding Hegemony ( )ﺟﻠﻮگیﺮی ﺍﺯ ﺍﺳﺘیﻼ Hegemony is the practice of interpreting the interests of the ruling class as universal. - Surface language that implies the dominance of one group over others. - Give voice to others.