MGT701 MG MBA503-Week 3

The Environment and Corporate Culture Dr Sardana Islam Khan

Learning Objectives
Describe the nature and dimensions of the general and task environments Clearly explain how environmental states have been conceptualised in management theory Explain how organisations are able to shape and be influenced by the external environment Understand corporate culture and provide relevant examples Discuss the relationship between corporate culture and organisational performance

Organisational Culture
Culture: The set of values that helps an organisations stakeholders understand what it stands for, how it does things and what it considers important more in later slides Culture defies objective measurement or observation. Culture plays a major role in shaping the behaviour of managers.

Importance of Culture
Links to organisational identity, reputation and aspirations. Cultures are rarely uniform across an organisation. Culture can shape overall effectiveness and long-term success.

Organisational environments
Conceptualisations of environment:

How can the business environment be described? Enables structured comparisons

Classifying the rate of change of environments Has implications for the way functions are undertaken (planning, leading, organising, controlling)

Environmental states:

Organisational environments
All elements existing outside the organisations boundaries that have the potential to affect the organisation Levels of environment:
A general context:
macro-level forces

An inter-organisational network (task environment):

Also called the meso-level or specific environment

An intra-organisational network:
Internal environment Culture

The general environment

The layer of the external environment that affects the organisation indirectly:
International pressures Political/legal factors Economic factors Technological advancements Educational conditions (labour market) The natural environment Socio-cultural influences.

These factors are do not directly change day-to-day operations, but do affect all organisations eventually.

The task environment

A layer of the external environment that directly influences the organisations operations and performance:
Customers Competitors Suppliers Public pressure groups Regulators (Government, at Federal, State and Local level) Labour markets.

Consists of the organisations stakeholders.

Different environmental states

We also need to be able to characterise the state of the environment:

The internal environment

Organisational culture has been defined as a:
system of shared meaning widely held amongst all employees that determines how employees act (to a large degree).

Organisational culture refers to the collective beliefs, values and assumptions that:
organisational members have in common makes the organisation different from other organisations.

WATCH THIS
http://www.youtube.com/watch?v=4MqiHurbexE

Culture: the iceberg metaphor

Visible
behaviour

Not visible
perceptions attitudes values beliefs

Cultural Types
Work by Sonnerfeld (1988) identified 4 types of culture:
Sporting Team:
o o Talent, innovation and performance are rewarded Characterised by loyalty, commitment and adherence to group standards Promote from within, progressive and incremental achievement Career for life (long term associations) Knowledge rewarded, technical mastery basis for advancement Offers little job security, no opportunity for growth or advancement

Club Culture:
o

Academy Culture:
o o

Fortress Culture:
o

Sub-Cultures
Common to groups of people with similar values and beliefs Typically based on shared work responsibilities and personal characteristics:
Occupational sub-cultures Functional sub-cultures Generational sub-cultures.

How can culture be transmitted?

Culture can be conveyed in several different ways all by visible means:
Stories, slogans Rituals or ceremonies Material symbols Language Heroes or gurus

But, how can managers transmit core assumptions and beliefs (the invisibles)?

Managing Organisational Culture

Managing culture is essential but difficult. Steps involved include:
First understand the determinants of culture. Decide if the culture needs to be maintained or changed. If the culture is to be maintained reinforce it with symbols, ceremonies, reward and modelling. If it is to be changed be clear about how. External change agents may help.

Next week
Managing in a Global Environment