Organizational Culture & Environment

1. Organizational Culture & Environment

2. THE ENVIRONMENT

3. Principle elements of a business organization’s environment Macroenviroment 2. External environment Microenvironment 1. Internal environment

4. Types of Business Environment 1. Internal environment => all functions within a firm 2. External environment => all forces and events outside organization affect on its activities • Macro environment: not immediately affect firm’s activities • Micro environment: directly affect the firm’s activities

5. External Environment • Factors and forces outside the organization that affect the organization’s performance • There are 2 main components: • Specific Environment • General Environment

6. Specific Environment (Direct or Micro Environment) • Includes external forces that directly impact managers’ decision and actions and are directly relevant to the achievement of organization’s goals

7. Main Forces of Specific Environment • Customers • Suppliers • Competitors • Pressure Groups

8. General Environment (Macro Environment) • Includes broad factors affect not only one specific organization but they also affect other organizations involve with those environment, thus managers must take these environment into consideration when they do planning, organizing, leading, and controlling

9. General Environment Factors • Economic Conditions • Political/Legal Conditions • Sociocultural Conditions • Demographic Conditions • Technological Conditions • Global Conditions

10. General Environment Factors • Economic Conditions: GDPgrowth rate, interest rate, inflation rate, exchange rate, minimum wage rate, etc. • Political/Legal Conditions • Sociocultural Conditions • Demographic Conditions • Technological Conditions • Global Conditions

11. General Environment Factors • Economic Conditions • Political/Legal Conditions: political stability, corruption, government policy, labor law, tax law, environment law, etc. • Sociocultural Conditions • Demographic Conditions • Technological Conditions • Global Conditions

12. General Environment Factors • Economic Conditions • Political/Legal Conditions • Sociocultural Conditions: social value, life style, educational standard, language literacy, health concern, social problems, etc. • Demographic Conditions • Technological Conditions • Global Conditions

13. General Environment Factors • Economic Conditions • Political/Legal Conditions • Sociocultural Conditions • Demographic Conditions: gender, age, educational level, geographic location, income, etc. • Technological Conditions • Global Conditions

14. General Environment Factors • Economic Conditions • Political/Legal Conditions • Sociocultural Conditions • Demographic Conditions • Technological Conditions: telecommunication technology, alternative energy technology, technology development and transfer, etc. • Global Conditions

15. General Environment Factors • Economic Conditions • Political/Legal Conditions • Sociocultural Conditions • Demographic Conditions • Technological Conditions • Global Conditions: WTO, IMF, international conflict, FTA, trading blocs, etc.

16. Internal Environment • Includes internal factors drive organization to its goals which consist of: • System • Internal stakeholders • Facility • Organizational culture

17. Internal Environment Factors 1. System: functions or departments within organization i.e. system of marketing, operation, human resources, accounting, finance, and information • Manager must concern: goal and plan of each system within org. thoroughly, resources are needed for each system, and how well each system coordinate to each other.

18. Internal Environment Factors (Con’t) 2. Internal stakeholders: shareholders, board of directors, employees • Manager must clearly understand: role, responsibility, and expectation of each stakeholder within organization [*Board of directors is a group of people elected by the owners of a business entity who have decision-making authority, voting authority, and specific responsibilities which in each case is separate and distinct from the authority and responsibilities of owners and managers of the business entity] Source: http://en.wikipedia.org/

19. Internal Environment Factors (Con’t) 3. Facility: equipments, tools, building, plant, location • Manager need to provide proper facilities are needed for employees and also need to concern with the budget are provided by organization 4. Organizational culture

20. ORGANIZATIONAL CULTURE

21. What is organizational culture? • The shared values, principles, traditions, and ways of doing things that influence the way organizational member act. • The specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.* *Source: http://en.wikipedia.org/wiki/Organizational_culture

22. Organizational Culture Sample • Symbols

23. Organizational Culture Sample • Stories It was first established in the King Chulalongkorn (Rama V) period and was established to be the higher education institution in the King Vajiravudh (Rama VI) period.

24. Organizational Culture Sample • Rites & Ceremonies WaiKru Ceremony & New Students Welcoming Activities

25. Organizational Culture Sample • Values Seniority system among students and staff.

26. Organizational Culture Sample • Beliefs Members in CU believe in virtues of the King Chulalongkorn (Rama V) and Thai royal families.

27. Organizational Culture Sample • Norms First year student uniform: Male: CU Necktie Female: White shoes & socks

28. 7 Dimensions of Organizational Culture • Attention to detail: need to provide detailed data to support the decision making ? • Outcome orientation: focus on results (ends) or processes or methods (means) ? • People orientation: all decision making concerns effect on people in organization ? • Team orientation: work teams or individuals ? • Aggressiveness: competitive working environment or cooperative ? • Stability: focus on maintaining the current org. status ? • Innovation and risk taking: encourage creative decision and adapt to change ?

29. Strong Versus Weak Cultures

30. Importance of Strong Culture • Employee are more loyal. • High organizational performance. (If values are clear and widely accepted, employees know what they’re supposed to do & what’s expected of them  they can act quickly to take care of problems.)

31. However,… • Strong culture might prevent employees from trying new approaches, especially when conditions are changing rapidly.

32. Managerial Decisions Affected by Culture • Planning • The degree of risk plan should contain • Whether plans should be developed by individuals or teams

33. Managerial Decisions Affected by Culture (Con’t) • 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

34. Managerial Decisions Affected by Culture (Con’t) • Leading • The degree to which managers are concerned with increasing employee job satisfaction • What leadership styles are appropriate

35. Managerial Decisions Affected by Culture (Con’t) • Controlling • Whether to impose external controls or to allow employees to control their own actions • What criteria should be emphasized in employee performance evaluations

36. Social Responsibility and Managerial Ethics

37. External Stakeholders and Corporate Responsibilities Source: Based on the Caux Round Table’s Principles for Business. The principles are printed in Business Ethics magazine, 52 S. 10th St. #110, Minneapolis, MN 55403.

38. What could be the impact of not being a social responsible organization?