Business Organisation,

Environment, Culture:
PPM 3:2020-22
Dr A Jagan Mohan Reddy
SIBM, SIU, Hyderabad
Introduction
What is Organization?
 An organization is a group of people who work together.
 Organizations exist because people working together can
achieve more than a person working alone- TEAM.
“A social unit of people that is structured and managed to meet
a need or to pursue collective goals”.
Types of Business Organizations: 
Sole Proprietorship, Partnership,Pvt.& Public Limited companies.
Company’s form affects:
 How They are taxed; legal liability.
 Costs of formation.
 Operational costs.
a. Sole Proprietorship
 Simplest and most common form of business ownership.
 Business owned and run by someone for their own benefit.
Advantages of Sole Proprietorship:
 All profits are subject to the owner.
 There is very little regulation for proprietorships
 Flexibility in running the business.
Disadvantages:
 Owner is 100% liable for business debts ; No difference between
personal & business Y.
 Ownership is difficult to transfer.
b. Partnership : both owners invest & are both 100% liable
for business debts.
 Do not require a formal agreement.
Public Sector and Private Sector
A comprehensive industrial policy was formulated in
1956,with the following objectives:IPR,1956
(i) Development of machine-building industries.
(ii) Increase in rate of industrial development.
A. Public Sector: 17 industries,e.g.,arms and ammunition, atomic
energy, iron and steel, heavy machinery, mineral oil, coal etc.
B. Public-cum-private sector: Aluminium, machine tools, drugs,
chemical fertilizer, road and sea transport, mines and minerals .
C. Private sector: Not covered in A and B
 Private Sector is also gaining importance-owned, managed and
controlled by individuals.
 Public sector - enterprises fully or partly owned owned and
managed by Government.
Private vs. Public Company:
 Privately held companies are owned by its founders, management,
or a group of private investors.
 Public company is a company that has sold all or a portion of itself
to the public via an initial public offering (IPO).
 Shareholders have a claim to part of the company's assets and
profits.
 Advantage of Private companies is that management doesn't have
to answer to stockholders and isn't required to file disclosure
statements with the SEBI.
 However, a private company can't dip into the public capital
markets and must turn to private funding.
 Public companies can tap the financial markets by selling stock
Difference Between Vision and Mission
 A vision statement focuses on tomorrow and what an organization
wants to ultimately become.
 A mission statement focuses on today and what an organization
does to achieve it- Action Oriented Statement.
 One doesn’t work without the other, because having purpose and
meaning are critical for any business.
 Mission statement drives the company.
 It is what you do/the core of the business, and from it come the
objectives and finally, what it takes to reach those objectives. It
also shapes your company’s culture.
In other Words, Mission Statement questions look like:
 What do we do?
 Whom do we serve?
 How do we serve them? are vital in directing goals.
 Microsoft Vision: A computer on every desk and in every home.
 LGs Mission: Life is Good(LG).
 IKEA: To create a better everyday life for the many people.
 Nordstrom: Giving customers most compelling shopping
experience possible.
Organizational Environment
 Forces or institutions surrounding an organization that affect
performance, operations, and resources.
 Orgn effectiveness: Managers need to understand environment.
 Environmental factors: Internal and external environments.
A.Internal Environment
 Conditions, events,within org. that influence choices, activities.
 Employee behavior, the organization's culture, mission statement,
and leadership styles.
B. External Environment of Organization
Factors outside or org. :Elements of the external environment.
Org. has no control over external environment .
The external environment can be subdivided into 2 layers: the general
environment and the task environment.
Organizational Culture(OC):
underlying beliefs, assumptions, values and ways of interacting that
contribute to unique social & psychological environment of org.
Includes an organization’s expectations, experiences, philosophy, as well
as the values that guide members behavior.
Culture is based on shared attitudes, beliefs, customs,written &
unwritten rules that have been developed over time and are considered
valid.
Culture also includes the organization’s vision, values, norms, systems,
symbols, language, assumptions, beliefs, and habits.
Simply stated, OC is “the way things are done around here”.
Building Company Culture:
Step 1: Define what you want your company culture and values to
look like?
To build a Successful Company Culture, you have to answer three
core questions:
 Why does our company do what it does (i.e. Why do we exist)?
 What do we believe (i.e. what are our values)?
 Where do we want to go with the company (i.e. what is our vision
for the company)?
Step 2: Look at what your culture is like now – and if you need to
make changes.
 If you are worried about the energy level in a team (perhaps they
are too laid back) make a deliberate decision to hire people with
more energy or come with a program to change the mindset.
Step 3: Identify (or hire) someone who will be your people person
 Hiring the right kind of personalities and backgrounds has a huge
effect on how a company operates culturally.
 One thing that can really help make a difference in the early
stages of culture building: Your People Person.
Step 4: Invest time in building your talent brand
 Your talent brand is what your employees think, feel, and share
about your company as a place to work,e.g,ATP.
Step 5: Optimize your hiring process to ensure you are bringing in
the right people.
 Make sure candidates appreciate your culture and values:
 Optimize your interviews and use your interview team to cover as
much ground as possible
 Prioritize attitude over skills and experience
Step 6: Find ways to constantly reinforce your core values
 Having programs and initiatives in place that regularly reinforce
the core values.
 Reinforcing the central tenants of your culture is key to keeping
your culture thriving,e.g.,Premji-Fudging of TA bill.
Step 7: Measure if your culture is effectively attracting and
engaging talent
How to actually measure whether you culture is one that people
buy into and like being a part of?
 Employee Engagement Surveys, Employee Referral Rates,
Voluntary Turnover Rates, and Employee Ratings and review
sites.
 These measures tell company is on the right track with respect
to creating the kind of employee experience we want to create.
Organizational Objectives
 Vision-Mission-Objectives /Goals.
 Organizational objectives of a company focus on its
long range intentions.
 Provides useful Guidance For Employees.
 Short-term, Medium & Long-term goals that an organization seeks
to accomplish.
 Organizational Policies & Allocation of Organizational R’s.
 Long range intentions for operating & its overall business
philosophy-Guidance for Employees .
Why to Have Objectives in Any Organizations?
 All organizations exist to achieve certain goals.
 To make these goals effective and efficient objectives are
important
Objectives have the following Importance:-
1. Direction:
 Guidelines - all activities are directed towards achieving such
objectives
 Without seeing the target, a manager would be like a
blindfolded archer - expending useless effort and creating
havoc.

2. Legitimacy:
 Help to have legal existence and to continue its operations.
 This legal status improves the image of the organisation among
the customers and competitors.
3.Coordination:
 Triggers the efforts of managers /subordinates.
In selling effective goals managers help members at all levels of the
organisation to understand how they can best active their own goals
by directing their behaviour towards the goals of the organisation".
-McGregor
4. They form Standards:
 Objectives form standards for the organizations.
 They become measuring points of the achievements or failures of
organizations.
5. They are Motivators:
 People at all level are motivated to achieve goals set through
objectives.
 They kindle the enthusiasm and spirits of employees at all levels.
“Clarity of vision is the key to achieving your objectives.”
Tom Steyer
Points Covered:
 Organisation- group working together 
 Types : Proprietary, Partnerships, Private & Public  Ltd Companies
 IPR of 1956: three types 
 Strategic Management Process
 Mission: what, whom & how to serve.
 Orgn. Environment: internal & external 
 Orgn. Culture : values, beliefs etc.,Building Company Culture ;
 Organisational Objectives & why important?