PowerPoint Presentation to Accompany Chapter 4 of

Management, 8/e

John R. Schermerhorn, Jr .

Prepared by: Michael K. McCuddy Valparaiso University Published by: John Wiley & Sons, Inc.

Planning Ahead — Chapter 4 Study Questions  What is the external environment of organizations?

 What is a customer-driven organization?

 What is a quality-driven organization?

 What is organizational culture?

 How is diversity managed in a multicultural organization?

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Study Question 1: What is the external environment of organizations?

 Competitive advantage is a core competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace.

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Study Question 1: What is the external environment of organizations?

 Companies may achieve competitive advantage in many ways, including: • Products • Pricing • Customer service • Cost efficiency • Quality Management 8/e - Chapter 4 4

Study Question 1: What is the external environment of organizations?

 The general environment

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all of the background conditions in the external environment of the organization including: – Economic – – Socio-cultural Legal-political – – Technological Natural environment Management 8/e - Chapter 4 5

Study Question 1: What is the external environment of organizations?

 The specific (task) environment

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actual organizations, groups, and persons with whom an organization interacts and conducts business.

 Includes important stakeholders such as: – Customers – Suppliers – Competitors – Regulators – Investors/owners Management 8/e - Chapter 4 6

Study Question 1: What is the external environment of organizations?

 Environmental uncertainty is a lack of complete information regarding what exists and what developments may occur in the external environment.

 Two dimensions of environmental uncertainty: – Complexity – Rate of change Management 8/e - Chapter 4 7

Study Question 2: What is a customer-driven organization?

 External customers purchase the organization’s goods or utilize its services.

 Internal customers are the persons and groups within an organization who depend on the results of others' work to do their own jobs.

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Study Question 2: What is a customer-driven organization?

 Customers want: – High quality.

– Low price.

– On-time delivery.

 Key customer service lessons: – Protect reputation for quality products.

– Treat customers right.

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Study Question 2: What is a customer-driven organization?

 Customer relationship management establishes and maintains high standards of customer service in order to strategically build lasting relationships with and add value to customers.  Supply chain management is the strategic management of all operations relating to an organization’s resource suppliers.

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Study Question 3: What is a quality-driven organization?

 Total quality management (TQM) – Quality principles are an integral part of organization’s strategic objectives.

• Applying them to all aspects of operations.

• Committing to continuous improvement.

• Striving to meet customers’ needs by doing things right the first time.

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Study Question 3: What is a quality-driven organization?

 Crosby’s “four absolutes” of management for total quality control: – Quality means conformance to standards.

– Quality comes from defect prevention, not defect correction.

– Quality as a performance standard must mean defect-free work.

– Quality saves money.

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Study Question 3: What is a quality-driven organization?

 Quality and continuous improvement – W. Edwards Deming emphasized: • • Constant innovation.

Use of Statistical methods.

• Training in the fundamentals of quality assurance.

– Continuous improvement • Seeking ways to improve on current performance.

– Quality circles • A small group of workers who meet regularly to discuss ways of improving quality.

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Study Question 3: What is a quality-driven organization?

 Quality and manufacturing technology: – Lean production • Uses new technologies to streamline systems.

– Flexible manufacturing • Processes can be changed quickly to produce different products or modifications of existing ones.

– Agile manufacturing/mass customization • Permits quick production of individualized products. Management 8/e - Chapter 4 14

Study Question 3: What is a quality-driven organization?

 Quality and product design: – A good design has eye appeal and is easy to manufacture with productivity.

– Design for manufacturing emphasizes lower production costs and high-quality results.

– Design for disassembly involves taking into account how components will be recycled. Management 8/e - Chapter 4 15

Study Question 4: What is organizational culture?

 Organizational culture is the system of shared beliefs and values that develops within an organization and guides the behavior of its members.

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Study Question 4: What is organizational culture?

 Diagnostic questions for assessing cultural differences: – – How tight or loose is the structure?

Are decisions change oriented or driven by the status quo?

– – – What outcomes or results are most highly valued?

What is the climate for risk taking, innovation?

How widespread is empowerment, worker involvement?

– What is the competitive style, internal and external?

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Study Question 4: What is organizational culture?

 Strong cultures: – Commit members to do things that are in the best interests of the organization.

– – Discourage dysfunctional work behavior.

Encourage functional work behavior.

 The best organizations have strong cultures that: – Are performance-oriented.

– Emphasize teamwork.

– – – Allow for risk taking.

Encourage innovation.

Value the well being of people.

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Study Question 4: What is organizational culture?

 What is observable culture?

– What one sees and hears when walking around an organization.

 Elements of observable culture: – Stories – Heroes – Rites and rituals – Symbols Management 8/e - Chapter 4 19

Study Question 4: What is organizational culture?

 What is the core culture?

– Underlying assumptions and beliefs that influence behavior and contribute to the observable culture.

 Core culture and values: – Strong cultures have a small but enduring set of core values. – Commitment to core values is a key to long term success.

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Study Question 4: What is organizational culture?

 Important cultural values include: – Performance excellence – Innovation – Social responsibility – Integrity – Worker involvement – Customer service – Teamwork Management 8/e - Chapter 4 21

Study Question 4: What is organizational culture?

 Value-based management: – Describes managers who actively help to develop, communicate, and enact shared values.

– Criteria for evaluating core values: • Relevance • Integrity • Pervasiveness • Strength Management 8/e - Chapter 4 22

Study Question 4: What is organizational culture?

 Symbolic leadership – Symbolic leaders use symbols well to establish and maintain a desired organizational culture.

– Symbolic leaders behave in ways that espouse organization’s values.

– Symbolic leaders: • • • Use language metaphors.

Highlight and dramatize core values and observable culture.

Use rites and rituals to glorify performance.

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Study Question 5: How is diversity managed in a multicultural organization?

 Diversity: – Describes differences among people at work.

– How diversity is handled in the workplace reflects the organization’s culture.

• Respect and inclusion.

• Disrespect and exclusion.

– A potential source of competitive advantage.

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Study Question 5: How is diversity managed in a multicultural organization?

 Characteristics of multicultural organizations: – Pluralism – Structural integration – Informal network integration – Absence of prejudice and discrimination – Minimum intergroup conflict Management 8/e - Chapter 4 25

Study Question 5: How is diversity managed in a multicultural organization?

 Organizational subcultures – Cultures based on shared work responsibilities and/or personal characteristics.

 Common subcultures include: – – – – – – Occupational Functional Ethnic or national Racial Generational Gender Management 8/e - Chapter 4 26

Study Question 5: How is diversity managed in a multicultural organization?

 Challenges faced by minorities and women: – Glass ceiling – Misunderstanding and lack of sensitivity – Sexual harassment – Pay discrimination – Job discrimination  Minorities may adapt by exhibiting biculturalism.

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Study Question 5: How is diversity managed in a multicultural organization?

 Diversity leadership approaches: –

Affirmative action

commits the organization to hiring and advancing minorities and women.

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Valuing diversity

commits the organization to education and training programs.

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Managing diversity

commits to changing the organizational culture.

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