Organizational Culture & Enviroment

Omnipotent managers = managers are directly responsible for success or failure of an organization.

Omnipotent view sees managers as all powerful and they are the direct cause of an organization’s success or failure. The view refers to being all powerful and managers are all knowing and all seeing. The examples for omnipotent managers are Japanese manager. When a Japanese firm is involved in scandal or a disaster, the CEO typically resigns and some even commit suicide.

But in reality, managers are not all powerful. There are forces that are outside the influence of managers. For example, in finance we have the efficient-market-hypothesis. The hypothesis says that stock prices tend to reflect everything know about the economy and any given company. Based on this hypothesis, no individual is going to be able to beat the market. On the other hand, the Wall Street analysts think that any successes beyond average advances are attributed to luck.

As a conclusion, managers do have some influence over organizational success or failure but they are neither impotent nor all powerful.


Organizational culture

Every organization has a culture. Cultures in organizations are defines the proper ways things are to be done. Every organizational has certain characteristics it prefers in employees. It rewards certain behaviours and penalizes others. These employees characteristics, rituals, practices, rewards and penalties differ from organization to organization.

Organization’s cultures tend to be stable and unchanging because of the way people hired and socialized into an organization. New employees will selected by looking at who will fit into the organizations. Once hired, they are given orientations and training that shapes them even more into the type of employee the organization wants. Organizations tend to select, attract and retain people with common characteristics. The common characteristics will act as a major barrier to change and keep cultures stable and unchanging over time.

How can we know what organization’s culture is like? There are few things that we can do to learn about a potential organizational culture;

1. Observe the physical surroundings - by paying attention to signs, pictures, and style of dress, length of hair, office furnishings and arrangements.
2. With whom did you meet? - are you going to see your immediate supervisor, potential colleagues, managers from other department, senior executives and so forth.
3. How would you characterize the style of the people you met? - are they casual, formal, serious or jovial?
4. Does the organization have formal rules and regulations set out in a personnel policy manual? If so, how detailed are these policies?
5. Ask questions of people with whom you meet. Don’t afraid to ask a same question of different people to check of their degree of agreement.

Stability of culture can be good and can be bad. The stability is good when organization faces a relatively unchanging environment. A stable culture acts as a social glue that holds the organization together by providing appropriate standards for what employees should say and do. A stable culture is negative when organization faces a dynamic environment. In such cases, the culture restricts and limits the ability of the organization to adapt. It acts as a major barrier to change.

Strong cultures can limit new ideas and change if the culture is risk-aversive and is intolerant of conflict. Some strong cultures are effective at stimulating new ides and encouraging dissenting voices. But from observation and collecting data, suggest there are far more strong cultures that inhibit such behaviours.

Managers who are not fit in the organization’s cultures don’t tend to last very long. The organization isn’t likely to reward managers who are seen as misfits. And as these managers become aware of the incongruence, their satisfaction decreases and they begin to look for other opportunities in other organizations.


Organization’s environment

A manager assesses who is in his/her environment by determining who outside the organization can affects its performance. Look at customers, suppliers, competitors, government agencies, media and special interest groups. The organizations will find out who among these outsiders will create environmental uncertainty (degree of change and complexity in the organization’s environment). For example Boston University (private school) and University of Massachusetts (public school). Both university are located within 5 miles of each other and both are at Boston. For Boston Uni., it relies on alumni and friends for its financial resources, but for U-Mass relies on state legislature for much of its budget. From this examples, we find that the outsiders that can affects Boston Uni. and U-Mass perfomances is the alumni and the state legislature respectively.