Chapter 2
Understanding Management’s Context:
Constraints and Challenges
The Manager:
Omnipotent or Symbolic?
Omnipotent view of management:
The dominant view in management theory and
society in general is that managers are directly
responsible for an organization’s success or
failure.
Symbolic view of management:
The view in management theory that much of an
organization’s success or failure is due to external
forces outside managers’ control
The Manager: Omnipotent or
Symbolic
The Omnipotent View:
Good managers anticipate change, exploit
opportunities, correct poor performance and lead
their organizations
When profits are up, credit goes to manager and
he gets reward or bonuses
When profits go down, managers are blamed and
fired
Example: Sports team coaches
The Manager: Omnipotent or
Symbolic
The Symbolic View:
Company performance depends on external
factors like
Economy
Customers
Government
Competitors
Industry conditions
Example: Cisco Systems: When performance
went down analysts blamed their acquisition
strategies and customer service
The External Environment:
Constraints and Challenges
Economic
Global
Political/ Legal
Social/ Cultural
Technological
Demographics
The External Environment:
Constraints and Challenges
Economic Environment:
Global Economic Recession
Job cutting
Lack of credits available to fund business activities
Example: General Motors (GM) got bankrupted
due to economic condition. In such situation
managers will not be blamed. Thus it became a
symbolic view
Economic Inequality
Widening Income Gap
Example: RMG sector protest in BD
The External Environment:
Constraints and Challenges
Demographic Environment:
Baby Boomers: (1946-1964)
Very large in population, that’s why they are called
boomers
They changed educational system, entertainment and
lifestyle
Generation Y: (1978-1994)
Changed technology and clothing style
Generation Z or Post Millennial (2000-present):
Also called i-generation
Brought up with technologies
Example: Kindle vs ipad or Nexus/ Sony Walkman
vs ipod/ Facebook employees
How the External Environment
Affects Managers
Jobs and Employment:
Recession: Lost millions of jobs
Many companies prefer freelancers
Example: Current political instability of BD
Assessing Environmental Uncertainty:
Dynamic Environment: When environment changes
frequently and unpredictably. Example: Music
industry
Stable environment: When change is minimal and
expected/predictable. Example: US departmental
stores: tend to have low sales from December to
January
How the External Environment
Affects Managers
Assessing Environmental Uncertainty:
Environmental Complexity: Fewer competitors,
customers, suppliers means less complex
environment. Example: Unilever vs Diamond world
Managing Stakeholder Relationship:
Stakeholders: Constituencies in the organization's
environment that are affected by an organization’s
decisions and actions
Managing stakeholders can lead to:
Successful innovations
Predictability of the environmental changes
Greater degree of trust among stakeholders
Greater organizational flexibility
Higher organizational performance
Organizational Culture
Organizational Culture means shared values,
principles, traditions, and ways of doing things
that influence the way organizational members
act
Culture isA perception: Can’t be physically touched or seen
Descriptive: Can’t be expressed in one word
Example: Public University vs NSU
Organizational Subculture:
Example: NSU English Department vs Finance
Dept.
Strong and Weak Culture
Strong cultures are those in which the key
values are deeply held and widely shared and
have a greater influence on employees
Example: Google culture
Weak cultures are those in which the key
values are only limited to few people (mostly the
top management) and don’t have much
influence on the employees
Example: Stardust and Persona
Strong Versus Weak Culture
How Employees Learn Culture
Stories
Rituals: Example: Award ceremony
Material Art and Symbols: Feel of the
environment of a workplace
Language
Current Issues in Organizational
Culture
Creating an Innovative Culture
Challenge and involvement – Are employees
involved in, motivated by, and committed to long-term
goals and success of the organization?
Freedom – Can employees independently define
their work, exercise discretion, and take initiative in
their day-to-day activities?
Trust and openness – Are employees supportive
and respectful to each other? Idea time – Do
individuals have time to elaborate on new ideas before
taking action?
Current Issues in Organizational
Culture
Creating an Innovative Culture
Playfulness/humor – Is the workplace spontaneous
and fun?
Conflict resolution – Do individuals make decisions
and resolve issues based on the good of the
organization versus personal interest?
Debates – Are employees allowed to express
opinions and put forth ideas for consideration and
review?
Risk-taking – Do managers tolerate uncertainty and
ambiguity, and are employees rewarded for taking
risks?
Current Issues in Organizational
Culture
Creating a Customer Responsive Culture
Current Issues in Organizational
Culture
Spirituality and Organizational Culture
workplace spirituality: It’s a culture in which
organizational values promote a sense of purpose
through meaningful work taking place in the
context of community
Characteristics of Cultural Spirituality:
Strong sense of purpose
Focus on individual development
Trust and openness
Employee empowerment
Toleration of employee expression