UNIT 3: CONTEMPORARY VIEWS IN ORGANIZATION AND

MANAGEMENT

Content
3.0 Aims and Objectives
3.1 Introduction
3.2 New Focus on Organizational Environment
3.3 Social Responsibility and Ethics
3.3.1 Levels of Ethical Questions In Business
3.3.2 Common Morality
3.3.3 Institutionalize Ethics
3.4 Globalization and Management
3.4.1 Globalization and Competitiveness
3.4.2 Global Business Practice
3.5 Reinventing Organizations: New Trends
3.5.1 Intra Prenuership
3.5.2 Emerging Trends in Organization and Management
3.5.3 Reengineering Organization
3.5.4 Empowerment
3.5.5 Down Sizing and Out Sourcing
3.6 Culture in Organizations: Managing By Value
3.7 Organization Culture
3.8 Total Quality Management (TQM)
3.9 TQM core Concepts
3.10 Summary
3.11 Key Terms / Words
3.12 Answers to Check Your Progress Questions
3.13 Model Examination Questions

46
3.0 AIMS AND OBJECTIVES

After reading this unit you should be able to:

 understand the new focus on organization environment and describe the

impact and identify the expectation
 explain the basic principles, and concepts of social responsibility and ethics
 identify different aspects of globalization and the, importance of
competitiveness
 describe the importance of reinventing organizations, intrapreneurship,
empowerment;
 define the major elements of organizational culture and importance of multi-
culturalism
 explain total quantity management.

3.1 INTRODUCTION

In the late twentieth century new theories of organization and management has emerged.
The theories are practiced to cope up with rapidly changing global situations. The
boundary between culture and nation is getting fuzzy, the scope the intercultural
relationship is rapidly expanding the new communication related technology makes it
possible to shape our thinking of the world as a small village.

In the 1990’s and beyond new organization and management thoughts have be
introduced. To emphasis their importance to your understanding six different them has
been identified. This unit will discuss under the umbrella of dynamic engagement as
stated by stoner, Freeman and Gilbert Jr.

3.2 NEW FOCUS ON ORGANIZATIONAL ENVIRONMENT

The contemporary organization and management theory recognizes that organizations

environments are not some set of fixed and, impersonal forces. Rather, they are a
complex, dynamic, interacting and interconnected group of people. Hence, managers

47
adjust them selves to interact with the environmental forces. To understand the impact of
the environment we must remember some of the concepts we discuss in systems theory.
The basic assumptions of the systems theory is that organizations are neither self-
sufficient nor self contained. Rather they exchange resources with and are dependent
upon the environment. Organizations take inputs from the environment, transform them
into product or service, and then send them back as outputs to the environment.

The environment has both direct and indirect forces. Direct forces include suppliers,
customers, the public. The indirect force elements, such as the politics, economy, social,
technology, competitors and Natural resources, affects the situation in which an
organization operates and have the potential to become direct forces. The brief roles of
each type of elements are:

Customers – customers exchange resources, usually in the form of money, for an

organization’s product and service. A customer may be an institution or an individual.
Supplier – an individual or organization that offer resources. Every organization buys
inputs – raw materials, services, energy, equipment, and labor from the environment and
use them to produce output.
Public – any group that has actual and potential interest in or impact on an organization.
Kotler identifies such types of publics as, financial public, media public government,
citizen action public, local public, general public and internal public.

The indirect-forces affect organizations in various ways. The force may create a climate
in which the organization exist and to which it may ultimately have to respond. Rapid
change in technology, economic growth or declines change in attitude towards work are
some of the common enforcing factors. For example, today computer technology makes
possible the acquisition, storage, coordination and transfer of complex and large amount
of information about individuals, operations and other firms use information technology.
The highly interactive forces are grouped by Faney and Narayanan into four broad
groups of factors that influence the organization and must be considered by mangers:
Political, Economic, Social and Technology (PEST).

48
Political forces – are variables that may influence an organization’s activities as a result
of the political process or climate. The government policy may inhibit or encourage the
organizations and management freedom to act or move forward. The government agency
may adapt a rigorous or a lenient stance toward the management.

Economic forces – include economic conditions and trends are critical to the success of
an organization. Wage, prices change by suppliers and competitors, government fiscal
policy affect both the cost of production and the market conditions under which they are
sold.

Social forces – includes demographics, social value, culture, lifestyle changes. Makeup
of the population has undergone major changes since ever. Major corporations in
Western world have set a special program to help their employee deal with eleder care
services. Social value underline all other indirect forces and determine all the choices that
people make in life.

Technology force – factors that create new know-how (knowledge), new product or
process, as well as advance in science, that may affect an organizations activity. The level
of technology in a society or a particular industry determines to a large extent what
product or services will be produced, what equipment will be used and how the operation
of an organization will be managed.

Managers should monitor the environment forces for early warning signs of changes that
will latter affect their organizations activities.

Information about environmental forces comes from many sources: industry’s grapevine,
managers in other organizations, the data generated by an organizations only activities:
government report; trade journals, general financial and business publications, on-line
computer data bank services and others.

Therefore, the contemporary management emphasizes that managers must not only pay
attention to their own concern, but also understand what is important to other managers
both within their organizations and at other organizations. Managers should interact with
other managers to create jointly the condition under which their organization will prosper

49
or struggle. The contemporary management theory developed by Michael Porter in
relation to competitive strategy mentions that managers can influence conditions in an
industry when they interact as rivals, buyers, suppliers and so on. The other variations on
the contemporary theory is that managers should place ecological concerns.

Currently the concerns about damaging the natural environment have taken on new
importance. Pollution come in many forms. There are hazardous subsauces which are
used as cooling fluids in electric power transformers. Chlorinated solvents are a major
concern as contaminants to drinking water. Pesticides accumulates in the environment
over time. Lead, found in pipes, and asbestos, used in earlier construction are both toxic.
Hazardous waste such as nuclear waste and toxic chemicals are by products of industry.

The global warming as a result of change in the climate poses a severe threat to life.
Chlorofloura carbons are released into the atmosphere, chlorine molecules resulting in the
degradation of the ozone layer surrounding the earth. There are also other environmental
problems such as shortage of water supply, increasing population and lack of food
security.

As you can see from the above mentioned natural environment rated problems that the
managers face to day are unprecedented. The challenge is clear. Managers today must
reinterpret what they should do, in response to natural environment.

Some organizations have taken on active roles in promoting environmental awareness.

Some managers chosen merely to adhere to the legal requirement, while other go so far as
to assert environmental values through their organization’s products and marketing.

How do organizations respond to the natural environment? The following points are
suggested.

(a) Managers may use strategic planning and organizational design to adjust to the
environment.
 Recycling of organization waste and products
 At least by obeying laws, rules and regulations about the natural environment
without legal challenge

50
  Encourage and involve stakeholders on environmental issue such as
 Paying attention to recyclable materials in consumer packages
 Educating employee on environmental issue
 Participate in community effort to clean up the physical environment and
 Appealing to investors to invest in green companies.
 Organizations should experiment and adapt environmental value.

(b) Organizations should not exploit the earths resources for own gain-and not involve in
non-renewable, non sustainable fashion.

(c) Managers should respect the earth planet. They should not also treat animals in a cruel
manner or use them for unimportant experimentation such as cosmetics testing.

3.3 SOCIAL RESPONSIBILITY AND ETHICS

Many organization decisions involves knotty problems where organizational interest

affect the interest of others. The stock market scandal, the corruption between business
and government, the possibilities and consequences of new technology and increasing
interplay of different culture and just some of the issues that have brought questions
about the social responsibility and ethics of business organization to the forefront.
Today there are many people who manage the organizations with social responsibility
and ethics in mind.

Organizations donate, provide education and social service to the community set aside a
certain portion of their return for charity work.

Government regulations provide some ground rules for managers but they do not answer
some pressing questions in regard to social responsibility and responsiveness.

Where does an organization social responsibility begin? Where does it end? To answer
these questions we need to take a closer look at different views of social responsibility.

In 1899, Andrew Carnegie, founder of joint American steel corporation, published a book
called the Gesbel of wealth. Carnegie view was based on two principles. The charity
principle and the stewardship principle.

51
The charity principle required the more fortunate members of society to assist the less
fortunate member including the unemployed; the hand capped, the sick and the elderly.

The stewardship principle,

principle, drived from the Bible, require business and wealthy
individual to view themselves as the stewards or caretakers of their property.

Carnegie’s idea was that the rich hold their money “in trust” for the rest of society and
can use it for any purpose that society deems legitimate. However, he also saw it as the
role of business to multiply society’s wealth by increasing its own, through prudent
investments of the resources under its stewardship.

There are many examples of the application of these principles today. The charity
principle could be such as many corporations give cash to individual church relief efforts.

Another view is that it is in the enlightened self-interest of organization to be socially

responsible or at least responsive to social forces. For instance, for years Dayton-Hudson
has belong to “the 5% club” – a group of companies that donate 5 percent of their pretax
profit to charity. Dayton-Hudson’s positive community image helped it get an anti-take
over law passed by state legislative when it was in danger of a takeover.

In 1979 Archie Carroll combined the philosophical ideas of social responsibility and
social responsiveness into a single theory of corporate social action called corporate
social performance. According to this theory, the erena of social responsibility debates is
shaped by economic (support free enterprise) legal principle (publics right to a safe
workplace and ethical principle (equal employment opportunity). Together these
principles create a social contract “between business and society that permits companies
to act as moral agents.

What is Ethics? Ethics is defined as moral rule that people apply in making decision.
Other defined as the study of how our decisions affect other people.

3.3.1 Levels of Ethical Questions in Business

According to Stonner and Freeman and Gilbert most ethical questions fall into one or
more of four categories: Societal, Stakeholder, Internal policy or Personal.

52
1. Societal level: -
Managers should ask Ethical questions about the basic institution in the society.
Organizations wishing to do business still face a complex set of issues as political,
economic and social change; the situation can still present an ethical conundrum for
many companies. Another societal level question concern the merits of political system
of the country. Is the existing political economic system a just system for allocating
resources? What role should government play in regulating the marketplace?

Societal-level questions usually represents an ongoing debate among major competing

institutions. Andrew Carnegie worked at this level when he argued that the proper role of
a business such as his own steel corporation was to apply the principle of charity to assist
the poor and unfortunate.

2. Stakeholders level
The second level of questions concern stakeholders: - suppliers, customers, shareholders,
and the rest. At this level managers should ask questions how a company should with the
external groups affected by its decisions, as well aw how the stakeholders should deal
with the company.

Some of the stakeholders issue are organizations obligation to inform customers about the
potential dangers of its products, obligation to suppliers and to the communities where it
operates. Therefore managers should ask how they should attempt to decide such matters.

3. Internal policy level

The third level of ethical question concerns nature of the organization’s relation with its
employees. What kind of employee contract is fair? What are the obligation of the
organization to the working force? What right do employee have? Hence, layoffs, work
rule, motivation leadership are ethical concerns.

4. Personal level
At personal level manager are expected to ask questions how they should treat one
another within an organization. Some of the question that deal at this level refers with the
day-to-day issues of life in any organization. Should we be honest with one another;

53
whatever the consequences? Do we have the right to look at other people primarily as
means to our ends?

3.3.2 Common Morality

Common morality refers to some of ethical principle that govern ordinary ethical
problems. These are the principles we live by most of time. Stoner, Freeman and Gilbert
Jr. identify the following principles

Promise keeping
Every one want to have some assurance that other people will do what they say. Without
the simple convention of promise keeping; social interaction and business would be
impossible. Every moral theory thus asserts; at the very least, that human beings should
keep most of their promises most of the time.

Non malevolence
If you constantly worry about your basic physical safety, you will be much less willing to
trust other people. You will not also be willing to engage in dealings that might involve
disputes with them. The moral theories requires that most people; most of the time,
refrain from harming other human being. Hence, among other things right and duties
provides ways of preventing violent conflict.

Some of the exception to this principle is that, we allow police to use forces, to subdue
criminals and we let people defend themselves when they are attacked without causes.
But morality requires us to avoid violence in settling disputes.

Mutual Aid:
According to the principle of mutual aid, individuals should help one another if the cost
of doing so is not great. Human communities are sustained by the recognition that people
depend on each other and help each other. Actions such as blood donation is a good
example

54
Respect for person:
This principle requires us to regard other people as ends in themselves not as mere means
to our own ends. Treating human being as ends involves regarding their feeling, interest,
beliefs emotions as legitimate and taking them seriously.

Respect for property

Respect for property principle emphasizes that we should get the consent of others before
using their property. If you think of people as owning their own bodies, respect for
property is a corollary of respect for individuals. For example, the common ethical
problem is the issue of copyright holders. We should respect for copyright holders and
their copyright as property.

3.3.3 Institutionalizing Ethics

To ensure ethically sound decisions, manager’s should institutionalize the process of

decision making. Means of institutionalized ethical policy includes

Corporate code of ethics – organizations may create a code of ethics that require and
prohibit specific practice. All employee are expected to display their codes. Employee
who violate those codes should be dismissed, demote or reprimand.

Ethics committee.
committee. The company creates specific group to enforce the policy.

Ombudsman: an officer will be assigned or appointed to investigate decision from an

ethical point of view.

Ethical traing program: workshop, seminar and discussion program is organized in

which employee thrash out hypothetical moral problems. The program helps to sensitize
employees to ethical issues, broaden and deepen employee awareness of code directives,
and underscore the commitment of the company to its ethical principles.

Social audit – Report describing a company’s activities in a given area of social interest,
such as environment protection, workplace safety or community involvement.

55
3.4 GLOBALIZATION AND MANAGEMENT

At this point we will discuss briefly the global environment for organizations and
management. We will describe the meaning of globalization and the related idea of
competitiveness; consider the central role of government in global business and why and
how organizations internationalize their business.

Globalization is a term that describe the transition of social political, economic and
cultural interconnectedness across the global. It also describe the shrinking of the world-
whereby the local becomes global and the global determines the local.

The phenomenon of globalization that affect managers currently are:

 Managers now operate in much closer proximity than ever before

 Telecommunications technology allow people around the world to share voice,
video and facsimile information in minutes
 The increasing technological and managerial capabilities of people around the
global creates closeness
 The increase of locating and integrating the organizations operations across
several international boundaries
 The growing new, open attitude about practicing management internally and
willingness to develop the capabilities for participating in the global economy.

3.4.1 Globalization and competitiveness

Competitiveness is defined as relative standing of one competitor against others (Stoner,

Freeman and Glibert Jr.) competitiveness is an idea that applies in a number of different
setting. Competitiveness has become a prominent business and government concern in
the era of global business as a contest among nations.

Micheal Porter; a renowned expert on competition has observed that while many people
are talking about competitiveness among nations; they do not always use the same
criteria of competitiveness. Two, different competitiveness criteria are useful in
understanding globalization and management. These criteria both involve relative

56
standing, but differ in terms of their time perspective: Looking forward or looking back.
[Stoiner, Freeman and Gilbert Jr].

A. Relative standing today, looking forward:

This criterion of competitiveness refers to a nation’s preparedness for future competitive
interactions. To be competitive in this sense is to have a chance to win upcoming
contests. Several measures of this criterion are commonly discussed in business and
political circles today. Some of these measures of the nation’s preparedness in the future
are:

 Cost of labor in relation to lower wage rate in other countries

 The extent in which the international trade barrier is relaxed
 The educational level of a notion’s workforce.
(Literacy rate, skilled and trained man-power)

A nation lower cost of labor, international trade barrier and higher educational level is
prepared to attract new investors.

B. Relative standing today from the past to today: -

This criteria of competitiveness refers to use a benchmark for the past performance. To
be competitive in this sense is to have succeeded in attaining a certain favorable ranking.
The most common measure of this criterion is a nation’s:
 Share of a global market of a particular product
 Standard of living

A nation could be called competitive if per capital income, healthcare services, and life
expectancy are favorable for its citizens relative to what citizens in other nations can
expect to experience.

3.4.2 Global Business Practice

Managers cannot simply transform their organization into global participant overnight. It
takes time and careful deliberation to establish a global position. We will discuss the
possible paths how company go internationally.

57
The globalization of business has resulted in relationship among managers whose culture
and traditions differ.

Thus, it is unrealistic to expect global business relationships to involve without

considerable effort and adaptation.

How companies go international:

international: more commonly an organization proceeds through
several stages of international where each stage represents a wax of conducting business
with closer proximity and contact of customers in other countries.

Exporting: the selling of domestically produced goods in foreign markets. At is stage

internationalization have only passive dealing with foreign individuals and organization.
A company may have content with filling overseas orders that comes in without any
serious selling effort on its part. Agents and brokers may act as go-between for
companies at this stage of international.

Company deal directly- company deal with their overseas interests through third party or
assign domestic employee regularly travel aboard on business.

The company may have a direct hand in importing exporting and perhaps producing its
goods and services abroad. At this stage managers may face a possibility of establishing
formal contractual relationships with mangers
In the other countries. The following possibilities may be sought:

Licensing – the selling of rights to market brand name products or use patented processes
or copyright materials.

Franchises: – a special type of license in which a company sells a package that contains
a trademark, equipment, material, and managerial guidelines.
Although licensing and franchises give corporations access to foreign revenues their role
in management is limited. To gain a greater say in management organization have to turn
to direct investment.

Joint Venture: - It is an option in which domestic and foreign companies share the cost
of developing new products or building production facilities in a foreign country. A joint
venture may be the only way to enter certain countries where, by law, foreigners cannot

58
own a business. In other situations, joint ventures let companies pool technological
knowledge share the expense and risk of research that may not produce marketable
goods.

Global strategic partnership. By forming alliances among international companies,

they can strengthen their ability to compete globally. Firms that forge these strategic
alliance will try either to assume “leadership as a low cost suppliers” or to come forward
with the best possible products or services, or both.

3.4.3 Applying Japanese Approach Abroad

Some express serious doubts about applying western /American management practice in
other countries. Some observers have become very excited about the effectiveness of
Japanese practices. The study of “Japanese management” enjoy significant popularity in
the 1980’s.

William G. Ouchi is among, those who have studied Japanese business in the hope that it
might provide solution to some American problems. Table 3:1 lists some of the
characteristics he noted that distinguish Japanese organization’s from American ones.

Table 3:1 characteristics of Japanese and American organizations

Japanese organizations  American organizations
Life time employment  Short term employment
Slow evaluation and promotion  Rapid evaluation and promotion
Non-specialized career paths  Specialized career path
Implicit control mechanism  Explicit control
Collective decision making  Individual responsibly
Whoilisitc concern  Segmented concern

Sources: William G. Ouchi. Theory Z. (mass: Addison-Wesley 1981) p. 58

The difference in organizational characteristics are associated with differences in

managerial behavior. Naturally, there are wide variations in how individual Japanese
managers act. Yet there are a number of ways in which the average Japanese manager

59
appears to differ from the average American manager. Overall, Japanese managers seem
to be more concerned with the longer-term implications of their decisions and actions and
more willing to make current sacrifices for future benefits.

Check your progress

Exercise 1

1. List the natural environment challenges

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
2. Discuss the basic principles of Andrew Carnegies.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
3. Explain the meaning and importance of competitiveness in Globalization context.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

3.5 REINVENTING ORGANIZATIONS: NEW TRENDS

Many organizations are undergoing changes, managers wrestle with questions about
products, markets, organizational forms; global competitive pressures, and so on. The
story of organizations today is the story of managers inventing and reinventing
organizations. Managers are concerned with what happens once organization members
settle into routines for dealing in relationship with one another, as well as relationships
with customers, suppliers and others outside the organization. Organizational routines
and experiences inevitably set precedents that can become difficult to change if the need
arises.

Howard Schultz lives with this realization everyday. It is no wonder then that they are
concerned with the possibility of lethargy and stagnation in their organizations. It can

60
take considerable effort by managers and their organizational colleagues just to keep up,
or cope, with the changes in the world around them. What that could mean warns Peter
Senge, is that organizational members can become so preoccupied with coping that they
have no energy left to create new ideas, products and relationships.

Senge distinguishes between adaptive learning in the organization, and generative

learning. Adapting learning is coping with change while, generative learning in the
organization deals with creativity coming from a joint effort among organizational
members. Generative learning can lead to much greater team work and more effective
organizations.

3.5.1 Intrapreneurship

Recently “innopreneurship has been used to describe what others call intrapreneurship;
still others refer to “internal corporate venturing. What does interapreneurship mean? It is
a corporated entrepreneurship whereby an organization seeks to expand by exploring new
opportunities through new combinations of its existing resources [Stoner, Freeman, and
Gilbert Jr.]

Many companies have lost the entrepreneurial spiral they start with. As they have grown
larger, their ability to be innovative and flexible may have been stifled by the very size
and success of the organization. But large established corporations can find ways of
keeping up and competing with smaller more nimble companies.

The simplest principle in developing intrapreneur is by encouraging employee to think an

entrepreneur and give them a freedom and flexibility to peruse their innovative project
without bogging down in bureaucratic inertia.

Intra prenurship requires attention from top management. The following are important to
support intrapreneurship.
a. Explicit goal for intraprenurial process with a given organization
b. A system of information exchange between all level of managers and employee
specifically intrapreneures
c. An emphasis on individual responsibility and accountability

61
 d. Reward for creative effort and innovation

No matter what you call it; the central idea is that managers must be capable of
reinventing the pattern of relationship that makes up their organization.

3.5.2 Emerging trends in organization and management

As discussed earlier, the world has been undergoing massive social, political, economic
and technological changes. At each turn, these changes have put pressure on business
organizations to chance and develop to meet new circumstances. The ways that business
organization have adapted in order to remain competitive in their respective market: have
given rise to ever more analysis that are complex and theories of organizations and their
management.

3.5.3 Reengineering the organizations

A widely publicized recent theory to reinventing organizations is the practice of

“reengineering the corporation” as Michael Hammer and James Campy explained in their
book, Reengineering involves a significant reassessment of what a particular organization
is all about.

Hammer and Campy disclosed that organizations contained to stagnate when

organizational members including managers focus on their own jobs and departments
rather than on the large pattern of relationship in which they work and influence the live
of others. Reengineering involves redefining process as a pattern of relationship
connecting organizational members with people outside the organization.

According to Hammer, “Reengineering means radically rethinking and redesigning those

process by which we create for customers and do work. He lists
 Speed
 Quality of service and
 Overhead costs as today’s important competitive issues that reengineering can
address. Further more, he argues that the hallmark of a really successful company
is its willingness to abandon what has been successful in the past. There is no
such thing as a “permanently winning formula.”

62
3.5.4 Empowerment

Reengineering implies that organizations are shifting patterns of relationships, not fixed
entities like machines and buildings. Tom Peters has studied dozens of cases where
organizational members are empowered to create new ideas and products and
relationship. Empowerment as others call it “liberation management”, comes from
flexible organizations and, more importantly, a management attitude biased toward
creative human effort.

Much effort in recent years has gone into making routine jobs more rewarding by
redefines such jobs to include greater legitimate and exert authority. The term
empowerment in some other companies had clearly indicated as what managers are trying
to do in job redesign decision. Job enlargement and job enrichment are two empowering
ways to redesign jobs.

3.5.5 Down sizing and outsourcing

Down sizing sometimes called rightsizing in the process of radically reducing the
workforce of a company and cutting labor costs. The purpose of downsizing is to make
the organization learner, more flexible more able to adapt to future changes and more
competitive as cost saving are reflected in lower prices and/or increased profit.

There are many techniques of cutting staff members, but we can identify three main
approaches common to most downsizing exercises
a. Business process reengineering – scrutinizing every aspect of the working
practices and systems. The purpose is to remove all non-essential or duplicated
activities and to retrain and multi-skill the workforce to remove any restrictive
practice.
b. Application of technology. Such as automation and robotics tics in industrial
areas, combination of computing and telecommunications in clerical and
administrative areas, (on line banking or direct insurance devices)
c. Contracting out to an appropriate external provides any internal activity or
service function, such as transport, catering or security can constructed out to

63
 external organization. This option is workable if the provider firm is able to
supply the service more efficiently,
efficiently, cheaply and competitively.

3.6 CULTURE IN ORGANIZATIONS: - MANAGING BY VALUE

The way people interact in an organization and the basic assumptions they make are part
of the organizations culture. Becoming a member of an organization entails being part of
its culture. Today’s organization face the challenge of adopting and organizational culture
that is not only flexibility, but also sensitive to the many culture differences that
organization members face both within and between societies. Many people are more
sensitive to the need to appreciate differences of race, gender, physical abilities, sexual
orientation and ethnic identity.

3.6.1 Organizational culture

Organizational culture refers to a system of shared meaning. Culture implies the

existence of certain dimension or characteristics that are closely associated and
interdependent.

Edgar Schein has defined culture as, “a pattern of shared basic assumptions that a group
learned as it solved its problems of external adaptation and internal integration, that has
worked well enough to be considered valid and, therefore, desirable to be thought to new
members as the correct way to perceive, think and feel in relation to those problems”.

Culture, therefore, is how an organization has learned to deal with its environment. It is a
complex mixture of assumptions, behaviors, stories, myths, metaphors, and other ideas
that fit together to define what it means to work in a particular organization.
When we say that there is a culture of safety, culture of service, culture of innovation, we
are saying that people at each of these organizations has learned a particular way to deal
with a lot of complex issue.

The result of the Harvard study indicate that culture has a strong and increasing impact
on the performance of organizations. The study had four main conclusions.

64
(i) Corporate culture can have a significant impact on a firm’s long term economic
performance
(ii) Corporate culture will probably be an even more important factor in determining the
success or failure of firms in the next decade.

(iii) Corporate cultures that inhibit strong long-term financial performance are not rare,
they develop easily, even in firms that are full reasonable and intelligent people.

(iv) Although tough to change corporate cultures can be made more performance
enhancing.
3.6.2 Basic elements of culture

A dominant culture is expressed in various levels. Schein suggests that culture exists on
three levels: artifacts, espoused values and underlying assumptions.

The first level of organization culture is artifacts. It refers to the things that comes
together to define a culture and reveal what the culture is about to those who pay
attention to them.

They include products, services, and even behavior pattern of the members of an
organization: Artifacts are the things that one sees, hears and feels when one encounters
a new group with an unfamiliar culture. Artifacts are every-where, and we can learn
about a culture by paying attention to them. Think about some of the artifacts at your
organization. Is there a certain way that people dress? Do you have weekly regular staff
meeting? Do you appraise the worker every year? Unity University College use
continuous evaluation system. Which can be a good example of artifact. All of these and
many others will define in part the artifacts of the organization culture.

The second level of culture is espoused values.

values. Values are things worth doing, or the
lessons for doing what we do. Espoused values are the reason that we give for doing what
we do. New members learn these espoused values, and learn their meaning in the
organizational context.

65
The third level of organizational cultures is Basic assumption.
assumption. These are being that the
organization members take for granted it prescribes “the right way to do things” at an
organization, often through un spoken assumptions.

Multiculturalism: How to manage Diversity

Most often, multiculturalism refers to cultural factors such as ethnicity, race, gender,
physical ability and sexual orientation, but some times age and other factors are added.
Multiculturalism is defined by Stoner as applied to the workplace, the view that there are
many different cultural backgrounds and factors that are important in organizations, and
that people from different back grounds can coexist and flourish within an organization.
Todays workforce is multicultural. A mix of people from many different culture;
ethnicities and lifestyles. If orngaization are to adapt to this reality they must better
understand multicultralism and its impacts.

3.7 QUALITY: TOTAL QUALITY MANAGEMENT

Organizations must pay attention to quality in order to be come or remain successful.

Most managers are paying attention to quality. Quality is a complex concept that has
become on of the most universally appealing in all of management theories. However,
there is no one universal definition of quality. Quality is considered as a sense of
appreciation that some things better than something else. It is changeable and varies by
facts of human activity.

Nonetheless, “Quality” as it is used in management means more than the informal

definition of a better than average product at a good price.

3.7.1 Total Quality Management TQM

Marshall Sasnkin and Kenneth Kiser have attempted to define Total Quality Management
(TQM), though they admit that their definition does not capture all of the necessary
elements or core concepts of true understanding.

“Total Quality Management (TQM) means that the organization culture is defined by and
supports the constant attainment of customer satisfaction through an integrated system of

66
tools, techniques, and training. This involves the continuous improvement of organization
process, resulting in high quality products and services.”

Today, however, effective managers consider productivity and quality as two sides of the
same coin-one that can increase profit and build customer loyalty.

All managers should be thinking about how every organization process can be conducted
to provide. Product that are responsive to tougher and tougher consumer and competitive
standard. Strong and lasting relationships can be fruitful by products of a “quantity”
frame of mind and satisfaction through an integrated system. It involves constant
improvement of organizational process resulting in high quality products.
3.7.2 TQM Core concepts:

The five main concepts are identified by James Stoner, Edward Freneman and Daniel
Gilbert. The core concepts provide the main ideas that can be applied to any TQM
methods. The core concepts are

A. System Approach
TQM approach depends on understanding organization as systems. The three main
systems for which managers are responsible: the socio-cultural, the managerial and the
technical system.

Parts of the system must work to support each other. People must cooperate for the good
of the whole system or else sub optimization occurs. When the part of the organization do
not support other parts, then the organization cannot focus on total quality management.
A task of management involves having everyone focus on the system aim.

(i) Socio-cultural system – refers is the set of beliefs and the resulting behavior that are
shared throughout the organization. Organization should implement their quality
initiatives by trying to change the cultural system.

(ii) Technical system – it is composed of such factors as the technologies used and the
physical infrastructure and the capital investment necessary for an organization to
achieve its goals.

67
(iii) Management system – it refers to the process through which an organization manger
its human and physical resources and assets these includes setting goal, policy
development, strategic formulation etc. continuous quality improvement and worker
improvement translate in smaller quality departments. The responsibility for improving
quality is given to everyone from workers on the factory floor to senior executives. Total
Quality Management requires that workers incorporate attention to quality at every step
in the operational process and that mangers seek out root causes of variation.

B. Tools of TQM
Statistical quality control, fishbone diagram and benchmarking are some of the common
tools used that serve as a key insight of quality management.

(i) Statistical quality control

W. Edwards Deming is widely acknowledged for his contributions to the reemergence of
post-war Japan. Deming went to Japan in 1950 and lectured on the statistical process
control techniques that had been invented by William Shewhart, a friend of Demings and
others at Bell Laboratories. Statistical control methods help measures variation and
continuously improving work process before the final inspection stage to prevent the
production of flowed products.

(ii) Fishbone diagram

Many Japans leaders played key roles in systematizing ideas about quality. Kaoru
Ishikawa, serious of important contributions to his native Japan. He is recognized for
contributing to the emergency of quality circle where workers meet to discuss
suggestions for improvements.

Japanese success with quality occurred because managers learned over time to take the
workers suggestion seriously and to allow them to be implemented. Isnikawa, also
popularized a way of diagramming how various factors determine a good or bad outcome
in the fishbone diagram. Fishbone diagram also referred as the cause and effect diagram
helps to show possible causes of a problem.

68
(iii) Benchmarking
A tool use to compare your own products and processes against the very best in the world
or in the nation. Various companies use benchmarking to improve the quality of their
products and customer services rather than solving problems.

C. Focus on customers
Joseph Juran defined quality as “fitness for use” the ability of a product or service to
satisfy a customers real needs. By focusing on real needs, Juran believes managers and
workers can concentrate their effort were it really matters. Customer satisfaction pays. If
customer needs are not the starting point, using the tools of quality may result in products
and services that no on wants to buy. Hence, TQM focus to establish a program whose
primary goal is the measurement of customer satisfaction and provide a product or
service the satisfies customers real expectations.

D. Role of Management
TQM implies that when there is a quality problem it begins on the board room and in the
offices of the senior managers and others who do not take quality seriously enough.
Many mangers begin with the assumption that where is a quality problem, the workers or
some individual (manager or worker is to bleme. One of the hallmarks of a TQM
approach is the questioning that assumes, the cause of a particular failure in quality can
be identified. As a result, management cannot do its Jobs. Probably the most famous of

69
all Deming’s sayings is that 85 percent of an organization’s problems come from the
systems and 15 percent from the workers.

 Mangers should ensure that quality issues are placed first on all executive board
meeting agenda.
 Managers should receive comprehensive quality training

E. Employee participation
Without empowered employee TQM will not go very far. Empowerment stands for
substantial change that businesses are implementing. It means letting employees make
decisions at all levels of an organization without asking for approval from mangers. The
idea is quite simple the people who actually do a job, whether it is running a complex
machine or providing simple services are in the best position to learn how to do that job
the best way. Therefore, when there is a chance to improve the job or the systems of
which a job is a part, people should make those improvements without asking for
permission.

Most employees believed that quality was the responsibility of the quality department. To
change this attitude top management empowered rank and file workers with the authority
and tool necessary to improve quality. Quality should be everyone’s job.

Check your progress exercise 2

1. What does globalization mean?

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
2. Discuss importance of reinventing organizations
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
3. Explain how employees can be involved in pursuing quality.

70
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
4. Define the following terms
a. Intrapreneurship
b. Organizational culture
c. Total quality management

3.8 SUMMARY

The contemporary view of organization and management unfolds a set of challenge to the
way we think about organizational management on the early periods of twenty first
century.

The contemporary approach recognizes that an organization’s environment is not some

set of fixed, impersonal forces rather; it is a complex dynamic web of people interacting
with each other. Managers should pay close attention to the values that guide people in
their organization that the world is at their doorstep. Manager should continually search
for ways to unleash the creative potential of their employee and themselves. Further more
manager must recognize that the various perspectives and values that people of different
cultured backgrounds bring to the organization are not only a fact of life but a significant
sources of contribution.

Finally, all managers should be thinking about how every organizational process can be
conducted to provide products and services, that are responsible to tougher and tougher
customer and competitive standards.

3.9 KEY TERMS/WORDS

 Social responsibility
 Ethics
 Empowerment
 Culture
 Benchmarking

71
  Down sizing
 Competitiveness
 Re engineering
 Quality circle

3.10 ANSWERS TO CHECK YOUR PROGRESS QUESTIONS

Exercise 1
1. 3.2
2. 3.3
3. 3.4.1
Exercise 2
1. 3.4
2. 3.5
3. 3.7.2
4. A. 3.5.1
B. 3.6.1
C. 3.7

3.11 MODEL EXAMINATION QUESTIONS

1. Why is Intraprenueurship important

2. What is enlightened self-interest?
3. How can employee be encouraged to pursue quality?

72