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 isA 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