Organizational

Culture and
Environment
UNIT - 2

Ganesh Ter 11/21/2023 1

The manager: omnipotent or
symbolic ?
 According to the omnipotent(Having unlimited
power) view, managers are directly
responsible for an organization's success or
failure. omnipotent view of managers is
that the manager is all-knowing. She or he has
total control over the organizations mission and
operations. That is, the manager is the
visionary who steers all aspects of the
organization. Thus, she or he is individually
responsible for the performance of the
organization.
 Contd…
SYMBOLIC VIEW: Symbolic
view of management is the
view that managers have
only a limited effect on
substantive organizational
outcomes because of large
number of factors outside
their control.
Organizational culture
 It is the set of values that helps
its members understand what the
organization stands for, how it
does things and what it considers
important.
 In every organization there are
systems of values, symbols,
observation, and practices that
have evolved over time.
Concept of environment
Keith Davis, “ business environment
is the aggregate of all conditions,
events and influences that surround
and affect it.”
Business organizations establish,
operate and grow in society
surrounded by components of
surroundings, they cannot perform
in isolation.
Contd…
 Business environment consists of
all components of the
surroundings of a business
organization which affect or
influence its operations and
determine its effectiveness.
 Environment is classified into two
types : internal and external
environment. It supplies input to
the business and receives output.
Specific or task environment
 Thisenvironment consists
of specific organizations or
groups that influence
an organizations performance.
 Suchenvironment have a direct
and immediate impact on the
managerial decision and
directly affect the
achievement of organizational
goals.
 Components of specific or task
environment

Customers Suppliers

Competito Governme
rs nt
Customers

- Customers are the

one who pay for
goods and services.
- They create
uncertainties to the
organization as
their taste and
preferences might
change over a
period of time
Suppliers

Suppliers are the

parties and
institutions that
supply materials
and machines
and other
resources to the
organizations.
 Competitors

 Competitors are the

organizations that compete with
the organization for resources.
 Business cannot avoid
competitors.
 Therefore, a manager of the
organization should have the
ability to forecast customer's
demand and develop new
strategies to increase market
share.
 Government

 Government is concerned with

regulating new rules and
regulations for the well being
and welfare of the society.
 All business organizations
need to perform their business
activities within the rules and
regulations enacted by the
government.
Pressure
groups

 Pressure groups are

special interest
groups, which may
also create problems
and difficulties in
business.
 It consists of labor
unions , human
right activists etc.
 It consists of
commercial banks,
finance companies,
insurance companies
etc.
 They can affect the
organization with
their short and long
term credit policies.
Strategic allies

 Itrefers to the joint venture of two or

more companies to work together.
 Ithelps to get expertise from another
companies to gain new business ideas
and knowledge.
General environment

 General environment refers to the broad

external conditions that may affect business
activities of an organization.
 It is also known as macro environment.
 It is uncontrollable and requires proper
monitoring of the components to adapt on the
basis of emerging changes.
 Components of General
Environment

Political and
Economic
Legal
Environment
Environment

Socio-Cultural Technological
Environment Environment
Political and  Political environment refers to
Legal the government regulations and
Environment legal system for business.
 It includes following :
Constitution
Constitution is the fundamental law
acceptable to all the peoples in a
nation. It defines a frame work
within which business
organizations have to perform.
→ Political philosophy
Political philosophy is an ideology that a state
has adopted.
- There are three ideologies : democratic ,
socialism and mixed.
- In democratic, more emphasis is given to
private sectors in business activities and in
socialism the state holds all the economic
activities .
- In mixed philosophy both state and private
sectors are involved in business..
→ political parties
Political parties are the group having certain
political philosophy.
→ political institutions
It consists of legislative, executive
and judiciary.
 Legislature enact rules, regulations and laws
where as executive implement them.
 And judiciary ensures whether rules
and regulations are effectively implemented
or not.
Legal institutions
 These institutions are different
levels of courts consisting of
District courts, Appeal courts and
supreme court.
 These institutions provide
judgment and define unclear laws
and regulations.
  Economic environment refers to all factors
Economic which give shape and form to economic
environment activities .
 It indicates the system of producing and
distributing goods and services.
 It consists of following :
- Economic system
- Economic policies
- Economic condition
- Capital market and globalization
→Economic system
Economic system represent the foundation
of economic environment of the country .
It is the economic philosophy adopted by
the government and has a long term
impact in the economy of the nation.
→ Economic policies
Economic policies are the guidelines
adopted by the government for the
prosperity of nation.
→ Economic conditions
Economic conditions focus on economic
strength and weaknesses of the nation.
→ Capital market
Capital market involves banks including
central bank, financial companies etc. the
development of capital market shows the
economic environment of nation
→ Globalization
It concentrates on free flow of goods and
services throughout the world.
Socio  It includes all the social
cultural forces within which a
environment business operates. It
includes :
- Demography
Demography focuses on the
composition of population in
the country. It consists of
size and distribution of
population, age
groups ,migration etc.
Lifestyle

It is the pattern and

living standard of
the people. It
includes income,
fashion, education
etc.
 Contd…
 Social values and institutions
Social values are the beliefs and norms of the society.
Social institutions involve basic components of society
like family, reference group and social class.
 Religion
Religion is the belief and trust that people have accepted.
It differentiates attitude and behavior of people.
language

It is the medium of expressing

views, ideas, knowledge etc.
Technological
environment
 Technology refers to the
systematic application of
knowledge to convert
input into outputs.
 It focuses on machines
and equipment,
transmission of
information etc.
 Components of
Technological
environment:

- Nature of technology
It is whether the technology is
manual or automatic.
In manual ,low initial
investment is needed and
the operating cost is more.
And in automatic
technology, initial
investment is high but
operating cost is high.
-Pace of technology change
It involves the fact that technology is dynamic and
ever changing process.
- Technology transfer
The technology can be transferred from advanced
countries to the developing countries.
- Research and development budget
It is essential for organization to spend a certain
amount of budget in research and development
work.
Influences on management
 Whether you are a manager or not,
influence management is always front
and center a basic competency
everyone needs. Influence is simply
the power to get your work done in
an organization. Nobody has the
formal authority to achieve what is
necessary, not even with those who
report to them.
Importance…
 Ithelps in Achieving Group
Goals - It arranges the factors
of production, assembles and
organizes the resources,
integrates the resources in
effective manner to achieve
goals. It directs group efforts
towards achievement of pre-
determined goals.