Transcript Slajd 1 - Supernat

The Environment
of Organizations
dr. hab. Jerzy Supernat
Institute of Administrative Studies
University of Wrocław
The Environment of Organizations
A key element in the effective
management of an organization is:
 determining the ideal alignment
between the environment
and the organization
 working to achieve and maintain
that alignment
That is why managers must
thoroughly understand the nature
of the organization’s environment.
dr hab. Jerzy Supernat
To illustrate the importance of the environment one can consider the analogy of a swimmer crossing the river. The swimmer must
assess the current, obstacles, and distance before setting out. If these elements are properly evaluated the swimmer will arrive at
the expected point on the far bank of the river. But if the elements are not properly understood, the swimmer might end up too far
upstream or downstream. The organization is like a swimmer, and the environment is like the river. Thus, just as the swimmer needs
to understand conditions in the water, the organization must understand the basic elements of its environment in order to maneuver
properly among them.
The Environment of Organizations
The Environment of Organizations
The environment of contemporary organizations is a VUCA
environment. That is the name that the US Army War
College gave to describe environment that is:
•
volatile
•
uncertain
•
complex
•
ambiguous
dr hab. Jerzy Supernat
The Environment of Organizations
The organization’s environment:
•
external environment


•
general environment
task environment
internal environment
dr hab. Jerzy Supernat
The Environment of Organizations
General environment:
the set of broad dimensions and forces
in organization’s surroundings
that create its overall context.
Internal
environment
Task
Environment
General
environment
Task environment: specific external organizations or groups that influence
an organization.
Internal environment: conditions and forces within the organization.
dr hab. Jerzy Supernat
The Environment of Organizations
The general environment’s dimensions:
•
Political-legal
•
Economic
•
Sociocultural
•
Technological
Government regulation of business.
E.g. general economic growth, inflation, interest rates, and unemployment.
The customs, mores, values, and demographic characteristics of the society.
The methods available for converting resources into products or services.
Pest: 1. An annoying person or thing; a nuisance. 2. An injurious
plant or animal, especially one harmful to humans. 3. A deadly
epidemic disease; a pestilence.
Show me a friend in need and I’ll show you a pest.
dr hab. Jerzy Supernat
Pest.
The Environment of Organizations
The task environment includes:
•
competitors
•
customers
•
suppliers
•
regulators
•
strategic partners
dr hab. Jerzy Supernat
The Environment of Organizations
Competitors
An organization’s competitors are other organizations that compete
with it for resources. The resources that competitors vie for are:
customer money
 quality labor
 technological breakthroughs and patents
 scarce raw materials
 the right to purchase a prime piece of real estate in a growing
community

It is important to remember that competition takes place not only
among organizations offering the same products but also between
organizations offering substitute products.
dr hab. Jerzy Supernat
The Environment of Organizations
Customers
A second dimension of the task environment is customers,
or anyone who pays money to acquire an organization’s
products or services. It is useful to distinguish among:
• individual customers
•
institutional customers
Dealing with customers has become increasingly complex
in recent years. E.g. organizations face critical differences
among customers as they expand internationally.
dr hab. Jerzy Supernat
The Environment of Organizations
Suppliers
Suppliers are organizations that provide resources for
other organizations.
dr hab. Jerzy Supernat
The Environment of Organizations
Regulators
Regulators are elements of the task environment that
have the potential to control, legislate, or influence an organization’s policies and practices. There are two important kinds of regulators:
•
regulatory agencies (created by the government)
interest groups (organized by its members to attempt to
influance organizations)
•
dr hab. Jerzy Supernat
The Environment of Organizations
Strategic partners
Strategic partners / strategic allies are two or more organizations that work together in joint ventures or other
partnerships.
Strategic partnerships help organizations:
• get from other organizations the expertise they lack
spread risk and open new market opportunities (indeed,
most strategic partnerships are actually among international firms)
•
dr hab. Jerzy Supernat
The Environment of Organizations
The internal environment (in the case of business organization) consists of:
•
owners
•
board of directors
•
employees
•
physical work environment
•
organization’s culture
dr hab. Jerzy Supernat
The Environment of Organizations
Owners
The owners of a business are the people who can claim
property rights to that business.
Owners can be a single individual who establishes and
runs a small business, partners who jointly own the business, individual investors who buy stock in a corporation
(stockholders), or other organizations (institutional investors).
dr hab. Jerzy Supernat
The Environment of Organizations
Board of directors
A corporate board of directors is the governing body elected by a corporation’s stockholders charged with overseeing the general management of the organization to
ensure that it is being run in a way that best serves the
stockholders’ interests.
dr hab. Jerzy Supernat
The Environment of Organizations
Employees
Of particular interest to managers today is the changing nature
of the workforce as it becomes increasingly more diverse in
terms of gender, age, ethnicity, and other dimensions.
Workers are also calling for more job ownership – either partial
ownership in the business or at least more say in how they
perform their jobs.
Another trend in many organizations is the increased reliance
on temporary workers (temps) or part-time workers.
dr hab. Jerzy Supernat
The Environment of Organizations
Physical work environment
Physical work environment is the actual physical environment of the organization and the work that people do.
Some organizations have their facilities in downtown skyscrapers. Others
locate in suburban or rural settings…
Some facilities have long halls lined
with traditional offices. Others have
modular cubicles with partial walls
and no doors…
dr hab. Jerzy Supernat
The Environment of Organizations
Organization’s culture
Terrance E. Deal, Allan A. Kennedy
Organizational culture is the set of values, beliefs, behaviors, customs, and
attitudes that helps the members of
the organization understand what it
stands for, how it does things, and
what it considers important.
dr hab. Jerzy Supernat
The Environment of Organizations
Edgar H. Schein
The organizational culture (or the culture
of a group) is a pattern of shared basic
assumptions that the group learned as it
solved its problems of external adaptation
and internal integration, that has worked
well enough to be considered valid and,
therefore, to be taught to new members
as the correct way to perceive, think, and
feel in relation to those problems.
dr hab. Jerzy Supernat
The Environment of Organizations
Edgar H. Schein considers organizational culture the foundation for all
organizational success. According to him the culture is also what is
most difficult to change in the organization. He defines three levels of
organizational culture.
The most visible level is behavior and artifacts. This is the observable
level of culture, and consists of behavior patterns and outward manifestations of culture: perquisites provided to executives, dress codes, level of
technology utilized (and where it is utilized), and the physical layout of
work spaces. All may be visible indicators of culture, but difficult to interpret. Behavior and artifacts also may tell us what a group is doing, but
not why.
Artifacts
Espoused values
and beliefs.
Basic underlying
assumptions and values.
Values underlie and to a large extent determine behavior, but they
are not directly observable, as behaviors are (conscious goals
and strategies). There may be a difference between stated and
operating values.
Underlying assumptions grow out of core values, until they
become taken for granted and drop out of awareness.
Basic assumptions form around deeper dimensions of human existence such as the nature of humans, human relationships and activity, reality and truth.
dr hab. Jerzy Supernat
The Environment of Organizations
Multiculturalism
Organizational culture is embedded in the surrounding
societal context (social culture), an invisible, intangible
force that drives the organization. When the people who
belong to an organization represent different cultures,
their differences in values, beliefs, behaviors, customs,
and attitudes pose unique opportunities and challenges
for managers. These broad issues are generally referred
to as multiculturalism.
A related area of interest is diversity.
dr hab. Jerzy Supernat
The Environment of Organizations
Diversity
Diversity exists in a community of people when its members differ
from one another along one or more important dimensions. These
differences can obviously reflect the multicultural composition of a
community.
In the business world, however, the term diversity per se is more
generally used to refer to demographic and other differences among a
people within a culture, namely differences in:
• gender
• age
• ethnicity
• religious beliefs
• marital status (single parents, dual-career couples)
• sexual orientation
• dietary preferences
dr hab. Jerzy Supernat
The Environment of Organizations
Managing diversity and multiculturalism
Individual strategies (four basic attitudes of individuals)
• understanding
• empathy
• tolerance
• willingness to communicate
Organizational approaches
Esp. formulated in organization’s mission statement.
• organizational policies
E.g. making organization’s important committees diverse.
• organizational practices
• diversity and multicultural training
• organizational culture
dr hab. Jerzy Supernat
The Environment of Organizations
How environments affect organizations:
 James D. Thompson’s perspective
 Michael E. Porter’s perspective
dr hab. Jerzy Supernat
The Environment of Organizations
James D. Thompson: The environment can be described along two dimensions: its degree of
homogeneity and its degree of change. These two dimensions interact to determine the level of
uncertainty faced by the organization. Figure below illustrates a simple view of the four levels of
uncertainty defined by different levels of homogeneity and change.
complex
H
O
M
O
G
E
N
E
I
T
simple
Y
stable
Moderate
uncertainty
Most
uncertainty
(complex but stable
environment)
(complex and dynamic
environment)
Least
uncertainty
Moderate
uncertainty
(simple and stable
environment)
(simple but dynamic
environment)
CHANGE
dynamic
dr hab. Jerzy Supernat
The Environment of Organizations
Michael E. Porter suggests that managers view the environment of their organizations in terms of five competitive forces:
•
threat of new entrance
•
power of suppliers
•
power of buyers
•
threat of substitutes
•
competitive rivalry
The extent to which new competitors can easily enter a market.
The extent to which suppliers have the ability to influence potential buyers.
The extent to which buyers of the products have the ability
to influence the suppliers.
The extent to which alternative products may supplant or diminish
the need for existing products.
The nature of the competitive relationship between dominant firms
in the industry.
According to Michael E. Porter the object of formulating competitive
strategy is to find a position where the organization can best defend
itself against these forces, or can influence them in its favor.
dr hab. Jerzy Supernat
The Environment of Organizations
How organizations adapt to their environments:
•
information management
•
strategic response
•
mergers, acquisitions (takeovers), and partnerships
•
organization design and flexibility
•
direct influence
•
social responsibility
A boundary spanner; environmental scanning;
information systems.
Maintaining the status quo, altering strategy a bit, or adopting
an entirely new strategy.
Mechanistic vs. organic design.
Vertical integration; advertising; lobbying.
dr hab. Jerzy Supernat
Concluding Remark
The environment is everything that isn’t me.
Albert Einstein
dr hab. Jerzy Supernat