Impact of Environment and Cultural
Variables on Organization Structure and
Style
Facilitator and Course Coordinator:
Vinayshil Gautam PhD, FRAS(London)
(Founder Director IIM K; Leader Consulting Team IIM S)
A Al_Sager Chair Professor and First Head,
Management Department, IIT D
Chairman, DKIF
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TOPICS COVERED
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External Environment
First Tier
General Economy
Suppliers
Customers
Competition
Second Tier
Political Legal Forces
Technology
International Forces
Customs/Cultures
Socio Cultural Forces
Internal Environment
Managers
Values
Ethics
Workers
Work Ethics
Work Values
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Open System
General system approach
Property of Dynamic Homeostasis
Goal Oriented Growth
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External Environment
There are two types of forces:
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First Tier
Second Tier
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First Tier
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General Economy
Suppliers
Customers
Competition
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Second Tier
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Technology
Customs/Cultures
Political Legal Forces
International Forces
Socio Cultural Forces
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Technology
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Defining technology
Types of technology
Technology and structure
Interaction of technology and culture
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Defining Technology
 Technology of work refers to the process by
which an organization converts input
(knowledge, skills and techniques) to outputs.
 Technology must be developed in conjunction
with the resources needed for capturing and
retaining the customer.
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Role of Organizational Technology
Inputs
TRANSFORMATION
PROCESS
(technology)
People
Materials
Equipment
Money
Plant and facility
Output
product
service
job satisfaction
profits
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Types of Technology
 Based on work of Thompson’s and Perrow, the
three kinds of technologies are Mediating
Technologies, Long Linked Technologies and
Intensive Technologies
 Their categorization is based on task
interdependence, identifying low, medium and
high levels of interdependence needed to
perform tasks.
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Types of Technology
 Mediating Technologies
This type of technology is low interdependence,
which is to say that the different parts of the
whole organization are relatively independent of
each other. Few demands are placed on
coordination of the parts, cooperative decision
making, and the like. This type of technology is
best suited for bureaucratic structure with high
standardization as the dominant integrator.
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Types of Technology
 Long Linked Technologies
Characterized by moderate interdependence,
technologies with sequential interdependence are
typified by auto assembly plants or school cafeterias.
Because these technologies demand coordination
among the parts, management needs to plan ahead.
A bureaucratic structure with planning is best suited for
this technology.
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Types of Technology
 Intensive Technologies
The third type of technology, reciprocal interdependency,
has the greatest amount of task interdependency. It
makes the greatest demand on managerial decision
making and communication/coordination.
Examples of organization using this type of tech include
construction firms, mental health clinics and hospitals.
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Thompson’s Classification By Task
Interdependence
Mediating
Pooled
interdependence
Commercial
bank
Long
linked
Sequential
interdependence
Assembly line
automobile
Intensive
Reciprocal
interdependence
General hospital
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Technology and Structure :By Perrow
Based on Degree of
Non routine ness
Task Variety
Task Coping Difficulty
Task Variability
Task Coping
Difficulty
High
Low
Few Exceptions
Many Exceptions
Craft Work
Non Routine Work
Routine
Engineering
Engineering
Technology
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Technology and Structure
 The key dimensions on which differing technologies rest
are routine ness and interdependence. Technology
seem to be a determinant of structure but perhaps not
the major one.
 Routine ness technologies do seem to be associated
with low complexity. The greater the routine ness, the
less training is required by incumbents . Thus,
organization with routine technology need high
formalization at the technology’s core.
 Routine technology goes with centralization if
formalization is low; otherwise, with high formalization
and routine technology we can easily have a
decentralized structure.
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How new technologies are affecting
Organizations and Work Flow
 New information technologies are radically transforming
organizational structure and strategy.
 Staff members find themselves using a much more
elaborate network of communication that includes both
personal contacts and task related interactions.
 Power based on hierarchical position was replaced by
power based on competency as demonstrated
throughout the system.
 The job of members became more flexible and the time
available for getting work done increased.
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Technology
 Technology and individual
 Technology and group
 Technology and Industrial relation
Technology and organization structure study by J
Woodward
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Culture
 What is culture
 Common elements of culture
 Determinants of Culture
 Dimensions of culture
 Characteristics of culture
 How cultures are analyzed?
 Maintaining the culture
 Organization cultures and effectiveness
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What is culture
Culture is a pattern of basic assumptionsinvented, discovered or developed by a given
group as it learns to cope with its problems of
external adaptations and internal integration-that
has worked well enough to be considered
valuable and to be taught to the new members.
-Edger Schein.
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Common Elements of Culture
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Beliefs, values and attitudes
Artifacts
Language
Behavior patterns
Norms of behavior
Ethical codes
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Determinants of organizational culture
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History and ownership
Size
Technological base
Goals and Objectives
The state of environment
Organizational members
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Dimensions / Typology of Culture
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Harrison / Handy Typology
Power Culture
Role Culture
Task Culture
Person Culture
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Deal and Kennedy Typology
Tough-guy, macho culture
Work-hard/play hard culture
Bet-your company culture
Process Culture
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Harrison / Handy Typology
Harrison suggested four types of organizational
culture called power, role, task and person.
Later Handy reworked describing four cultures
using simple pictograms and making reference
to Greek mythology.
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Power Culture
(The Web)
Advantages
 Ability to react quickly
Disadvantages
 Not feasible for large and complex
organizations
 Cant adjust to change in
Leadership
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Role Culture
(Greek Temple)
Advantages
 Reliance on formal rational rules
 It generate economies of scale
Disadvantages
 Inability to innovate and adapt
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Task Culture
(Lattice)
Advantages
Emphasizes technical expertise rather
than formal authority
Disadvantages
 Creates high level of stress and conflicts
 Management controls problems
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Person Culture
(Cluster)
 Advantages
Existence of organizations for individuals
 Disadvantages
Difficult to Manage
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Deal Kennedy Typology
Speed of Feedback
High
Slow
Fast
Bet Your Company
Tough
Guy/Macho
Process
Work Hard/
Play Hard
Degree
of
Risk
Low
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The Deal and Kennedy typology
The tough-guy, macho culture
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High risk, rapid feedback culture
Focus on speed and the short-term
Places enormous pressure on individual
Burn-out is a a common problem
Internal competition, tension and conflict are normal
Tend to have high turnover of staff
Example: Xerox, McDonald’s
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The Deal and Kennedy typology
The work-hard/play-hard culture
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Low-risk, quick-feedback culture.
Highly dynamic and customer-focused.
Tendency for volume to displace quality.
Pursue ‘quick-fix’ solutions when things go wrong.
Examples: Silicon Valley companies, IT companies
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The Deal and Kennedy typology
Bet-your-company culture
 High risk, low feedback
 Focused primarily on the future, decision making tends
to be top-down.
 Respect of authority and technical competence.
 Strength to deal with the high-pressure decisions
 Good at producing high quality inventions and scientific
breakthroughs.
Examples: Boeing, Shell
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The Deal and Kennedy typology
The process culture
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Low-risk, slow-feedback culture
Focus on how to do rather than what to do.
Orderly, punctual and attend to details.
Emphasis on job titles and formality.
Effective when dealing with known predictable
environment
 Unable to react quickly, lack of vision and creativity.
Examples: banks, insurance companies, civil services.
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Characteristics of culture
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Innovation and risk taking
Outcome orientation
Team orientation
Stability
Aggressiveness
Dominant values
Attention to detail
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How cultures are analyzed
Weather forecast type by Harry C Miller
 Trade winds
The organization's purpose
 Temperature
The hotness or coldness of morale
 Ceiling level
The level of desire, commitment and energy for organizational goals.
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Maintaining the culture
 By group processes
 By constant reinforcement of core values and
beliefs
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Organization cultures and effectiveness
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Reactive Organization
Responsive Organization
Proactive Organization
Interactive Organization
Inspired Organization
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Internal Environment
 Managers
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Values
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Theoretical values
Economic values
Aesthetic values
Social values
Political values
Religious values
Ethics
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Comparison of Managerial Values
Phase 1
Profit Maximizing
Management
Phase 2
Trusteeship
Management
Phase 3
Quality of Life
Management
Raw self interest
Self interest
Contributor's interest
Enlightened self interest
Contributors interest
Society’s interest
What's good for me is
good for my country
What's good for GM is
good for our country
What’s good for society
is good for our company
Profit maximizer
Profit satisfier
Profit is necessary but
Money and Wealth are
most important
Money is important but
so are people
People are more
important
Let buyer beware
Let us not cheat the
customer
Let the seller beware
Labor is commodity to
be bought and sold
Labor has certain rights
which need to be
recognized
Employee dignity has to
be satisfied
Economic Values
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Comparison of Managerial Values
Technology Values
Technology is very
important
Technology is important
but so are people
People are more
important than
technology
Employee personal
problems must be left at
home
Employee have needs
beyond their economic
needs
Hire the person as a
whole
manage business as he
please
Recognize the value of
group participation
Group participation is
fundamental to success
Minority groups are
inferior
Minority groups have their Minority group members
place in the society
are people are you and I
are
Social Values
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Comparison of Managerial Values
Political Values
Government which
govern lest is the best
Government is a
necessary evil
Business and government
must cooperate to solve
society's
Environmental Values
Environment controls the
destiny of man
Man can control and
manipulate environment
We must preserve the
environment in order to
lead a quality life
Aesthetic values are okay
but not for us
We must preserve our
aesthetic values and we
will do our part.
Aesthetic Values
Aesthetic values?? What
are they?
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Internal Environment
 Workers
 Work ethics
Consists of the beliefs people have about their jobs
and about carrying them out.
 Work values
Work ethic in some degree is accepted by most
workers. There are differences between the age
groups.
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Bibliography
Name Of The
Book
Author
Publication
House
Date & Place
of Publication
Organizational
Culture
Andrew Brown
Pitman
Publications
Great Britain,
1995
Organization
Management
Prof. Vinayshil
Gautam
Class Notes
New Delhi
Designing
Effective
Organizations
T. Elaine
Gagne & David
K. Banner
Sage
Publications
U.S.A, 1995
Management
Process &
Organizational
Behaviour
Amrik Singh
Sudan &
N.Kumar
Anmol
Publications
New Delhi,
2003
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Thank You
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