PowerPoint Presentation to Accompany Chapter 4 of

Management, 8/e
John R. Schermerhorn, Jr.
Prepared by: Michael K. McCuddy Valparaiso University Published by: John Wiley & Sons, Inc.

Planning Ahead Chapter 4 Study Questions

What is the external environment of

organizations? What is a customer-driven organization? What is a quality-driven organization? What is organizational culture? How is diversity managed in a multicultural organization?
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Study Question 1: What is the external environment of organizations?

Competitive advantage is a core

competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace.

Management 8/e - Chapter 4

Study Question 1: What is the external environment of organizations?

Companies may achieve competitive

advantage in many ways, including:

Products

Pricing
Customer service Cost efficiency Quality
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Study Question 1: What is the external environment of organizations?

The general environment all of the

background conditions in the external environment of the organization including:

Economic Socio-cultural Legal-political Technological Natural environment
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Study Question 1: What is the external environment of organizations?

The specific (task) environment actual

organizations, groups, and persons with whom an organization interacts and conducts business.
Includes important stakeholders such as:
Customers Suppliers Competitors Regulators Investors/owners
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Study Question 1: What is the external environment of organizations?

Environmental uncertainty is a lack of complete

information regarding what exists and what developments may occur in the external environment.
Two dimensions of environmental uncertainty:
Complexity
Rate of change
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Study Question 2: What is a customer-driven organization? External customers purchase the

organizations goods or utilize its services. Internal customers are the persons and groups within an organization who depend on the results of others' work to do their own jobs.
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Study Question 2: What is a customer-driven organization?

Customers want: High quality. Low price. On-time delivery.
Key customer service lessons: Protect reputation for quality products. Treat customers right.
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Study Question 2: What is a customer-driven organization?

Customer relationship management establishes

and maintains high standards of customer service in order to strategically build lasting relationships with and add value to customers.
Supply chain management is the strategic

management of all operations relating to an

organizations resource suppliers.
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Study Question 3: What is a quality-driven organization?

Total quality management (TQM)
Quality principles are an integral part of organizations strategic objectives.
Applying them to all aspects of operations. Committing to continuous improvement.

Striving to meet customers needs by doing things

right the first time.
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Study Question 3: What is a quality-driven organization?

Crosbys four absolutes of management

for total quality control:

Quality means conformance to standards. Quality comes from defect prevention, not defect correction. Quality as a performance standard must mean defect-free work. Quality saves money.
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Study Question 3: What is a quality-driven organization?

Quality and continuous improvement W. Edwards Deming emphasized:
Constant innovation. Use of Statistical methods. Training in the fundamentals of quality assurance.

Continuous improvement
Seeking ways to improve on current performance.

Quality circles
A small group of workers who meet regularly to discuss ways of improving quality.
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Study Question 3: What is a quality-driven organization?

Quality and manufacturing technology: Lean production
Uses new technologies to streamline systems.

Flexible manufacturing
Processes can be changed quickly to produce different products or modifications of existing ones.

Agile manufacturing/mass customization

Permits quick production of individualized products.
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Study Question 3: What is a quality-driven organization?

Quality and product design:
A good design has eye appeal and is easy to

manufacture with productivity. Design for manufacturing emphasizes lower production costs and high-quality results. Design for disassembly involves taking into account how components will be recycled.
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Study Question 4: What is organizational culture?

Organizational culture is the system of

shared beliefs and values that develops within an organization and guides the behavior of its members.

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Study Question 4: What is organizational culture?

Diagnostic questions for assessing cultural

differences:
How tight or loose is the structure?

Are decisions change oriented or driven by the status quo? What outcomes or results are most highly valued? What is the climate for risk taking, innovation? How widespread is empowerment, worker involvement? What is the competitive style, internal and external?
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Study Question 4: What is organizational culture?

Strong cultures: Commit members to do things that are in the best interests of the organization. Discourage dysfunctional work behavior. Encourage functional work behavior. The best organizations have strong cultures that: Are performance-oriented. Emphasize teamwork. Allow for risk taking. Encourage innovation. Value the well being of people.
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Study Question 4: What is organizational culture?

What is observable culture?
What one sees and hears when walking around an organization.

Elements of observable culture:

Stories Heroes

Rites and rituals

Symbols
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Study Question 4: What is organizational culture?

What is the core culture?

Underlying assumptions and beliefs that influence behavior and contribute to the observable culture. Core culture and values: Strong cultures have a small but enduring set of core values. Commitment to core values is a key to longterm success.
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Study Question 4: What is organizational culture?

Important cultural values include:
Performance excellence Innovation

Social responsibility
Integrity Worker involvement

Customer service
Teamwork
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Study Question 4: What is organizational culture?

Value-based management:
Describes managers who actively help to develop, communicate, and enact shared values.

Criteria for evaluating core values:

Relevance Integrity

Pervasiveness
Strength
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Study Question 4: What is organizational culture?

Symbolic leadership
Symbolic leaders use symbols well to establish and maintain a desired organizational culture. Symbolic leaders behave in ways that espouse organizations values. Symbolic leaders:
Use language metaphors.

Highlight and dramatize core values and observable culture.

Use rites and rituals to glorify performance.
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Study Question 5: How is diversity managed in a multicultural organization?

Diversity:
Describes differences among people at work. How diversity is handled in the workplace reflects the organizations culture.
Respect and inclusion. Disrespect and exclusion.

A potential source of competitive advantage.

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Study Question 5: How is diversity managed in a multicultural organization?

Characteristics of multicultural

organizations:
Pluralism

Structural integration
Informal network integration Absence of prejudice and discrimination Minimum intergroup conflict
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Study Question 5: How is diversity managed in a multicultural organization?

Organizational subcultures Cultures based on shared work responsibilities and/or personal characteristics. Common subcultures include: Occupational Functional Ethnic or national Racial Generational Gender
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Study Question 5: How is diversity managed in a multicultural organization?

Challenges faced by minorities and women:
Glass ceiling Misunderstanding and lack of sensitivity Sexual harassment Pay discrimination Job discrimination

Minorities may adapt by exhibiting biculturalism.

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Study Question 5: How is diversity managed in a multicultural organization?

Diversity leadership approaches:
Affirmative action commits the organization to hiring and advancing minorities and women. Valuing diversity commits the organization to education and training programs. Managing diversity commits to changing the organizational culture.
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