Part – Two

The Environment Context of Management

The Environment & Culture of Organizations, Chapter - 3

Organizational Environment: The organizational environment is the set of forces

surrounding an organization that have the potential to affect the way it operates and its access
to scarce resources. The organization needs to properly understand the environment for
effective management.

Scholars have divided these environmental factors into two main parts as

 Internal Environment
 External Environment

Internal Environment: The internal environment consists of the organization's owners,

board of directors, regulators, physical work environment and culture. In the internal
environment include strength and weakness of an organization.
Such as Trade union, Management, Current employee, Share holders.

External Environment: In the external environment include opportunities and threats of an

organization. In the external environment include legal, physical economic, technology,
social, political, culture. The external environment consists of two layers. They are:

1) Task Environment: 2) General Environment.

Task Environment: Task environment is composed of the specific dimensions of the

organization's surrounding that are very likely to influence of the organization. It also
consists of five dimensions: Competitors, Customers, Employees, Strategic Planners and
suppliers.

General Environment: General environment is composed of the nonspecific elements of the

organization's surrounding that might affect its activities. It consists of five dimensions:
Economic, Technological, Socio-cultural, Political-Legal and International.

Organizational Culture is a system of shared beliefs and values that develop within an
organization and guide the behavior of its members

“The way we do things around here.” Basic assumptions, values, norms

Dimensions of Organizational Culture

How Employees Learn Culture

 Stories - a narrative of significant events or people

 Rituals - repetitive sequences of activities
 Material symbols – essential in creating an organization’s personality
 Language - unique terminology or jargon

How Culture Affects Managers?

 Plan - degree of risk that plans should contain

 Organize - degree of autonomy given to employees
 Lead - degree of concern for employees, style of leadership
 Control - what criteria to use when evaluating performance
 The Ethical & Social Environment, Chapter – 4

Individual Ethics in Organizations

Ethics

– An individual’s personal beliefs regarding what is right and wrong or good and bad.

Ethical Behavior

– “Eye of the beholder” or behavior that conforms to generally accepted social norms.

Examples of Unethical Behavior

– “Borrowing” office supplies for personal use, “Surfing the Net” on company time.
– Filing falsified or inflated business expense reports.

Managerial Ethics
A Guide for Ethical Decision Making

Social obligation When a firm engages in social actions because of its obligation to meet
certain economic and legal responsibilities.

Social responsiveness When a firm engages in social actions in response to some popular
social need

Social responsibility A business’s intention, beyond its legal and economic obligations, to
do the right things and act in ways that are good for society

Areas of Social Responsibility

– Stakeholders
– The natural environment
– The general social welfare
Arguments for and Against Social Responsibility
Evaluating Social Responsibility

Evaluating responses to questionable legal or ethical conduct

– Initiate an immediate follow-up response to events?

– Seek punishment for those involved?
– Engage in delay or cover-up tactics?