Chapter 3

Influence of the External Environment and

the
Organization’s Culture
Presented By
Saad Abid
Sidra Khalid
Rimsha Sabir
Noor ul Huda
Uzeruddin
 OMNIPOTENT & SYMBOLIC VIEW OF MANGEMENT

• Omnipotent View
• Symbolic View
• DIFFERENCES
• REALITY SUGGESTS A SYNTHESIS
1. Omnipotent View:
The traditional view of managers is that they have virtually unlimited control over
the organization and its purpose, functions and operations and therefore they alone
are responsible for all its success and failures. This view is called omnipotent view of
management.

Examples:
 Small Businesses: In small businesses, the owner or manager is often seen as
having total control over the success or failure of the business. They are
responsible for making all the important decisions, setting goals and objectives, and
directing the actions of the employees. The owner or manager is seen as the key
figure who determines the overall success of the business.
 Sports Teams: In sports, the coach is often seen as having complete control over
the success or failure of the team. They are responsible for making critical
decisions, developing game plans, and directing the actions of the players. The
coach is seen as the heroic leader who inspires and motivates the team to achieve
their goals and win games.
2. 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.

Examples:
 Non-Profit Organizations: In a non-profit organization that depends heavily on
external funding and support. Even if the managers make the best decisions
possible, the success of the organization will depend on the ability to attract donors
and engage the community.
 Hospitals: A hospital that places a strong emphasis on patient-centered care.
While managers may set policies and guidelines around patient care, the success
of the hospital in delivering high-quality care will depend on the ability of employees
to embrace and embody this patient-centered philosophy.
 DIFFERENCES
OMNIPOTENT VIEW
• Managers are directly responsible for an
organization’s success or failure.
• The quality of the organization is
determined by the quality of its
managers
• The performance of managers
influences the organization goals
• The ability of managers is to gain
success and failure by their good or bad
performance
SYMBOLIC VIEW
• Managers are not directly responsible for
an organization’s success or failure.
• The whole control is not on managers, so
the quality of the organization is not
determined by the quality of its managers
• The performance of managers is not
influences the organization goals
• The ability of managers to affect
outcomes is influenced and limited by
external factors
 REALITY SUGGESTS A SYNTHESIS

In reality, neither the omnipotent nor the symbolic view of management is entirely
accurate.
A synthesis of these views suggests that while managers have a critical role in shaping
the organization's performance, they must also take into account external factors and
be adaptable to changes in the environment. Managers should focus on creating a
strong organizational culture that aligns with the organization's goals and mission
while remaining responsive to changes in the environment.
 THE EXTERNAL ENIVIRONMENT:
• ENVIRONMENT:
• Constraints and challenges
• ENVIRONMENTAL UNCERTINITY:
• Dimension of environmental uncertainty:
• ENVIRONMENTAL UNCERTANITY MATRIX
ENVIRONMENT:
Institutions or forces that are outside the organization and
potentially affect the organizations performance.
ENVIRONMENTAL UNCERTINITY:
The environmental uncertainty refers to the degree of change and
degree of complexity in an organization.
 Dimension of environmental uncertainty
There are two dimensions of environmental uncertainty,
1)Degree of change (Stable and dynamic).
2)Degree of complexity (Complex and simple).
ENVIRONMENTAL UNCERTANITY MATRIX
• The first dimension of uncertainty is the degree of change. If the components in an
organization’s environment change frequently, it’s dynamic environment. If change is
minimal, it's stable one. A stable environment might be one with no new competitors,
few technological breakthroughs by current competitors.
For instance zippo manufacturing, best known for its zippo lighters, faces a relatively
stable environment , with few competitors and little technological change .The main
external concern for the company is probably the declining numbers of tobacco smokers
and the increased popularity of e –cigarettes, which rely on lithium batteries rather than
fire.
In contrast ,the recorded music industry faces a dynamic (highly uncertain and un
predictable ) environment. Digital formats and music-downloading sites turned the
industry upside down and brought high levels of uncertainty .And now, music streaming
services such as spotify and pandora have added doubt to the equation.
• The second dimension of uncertainty describes the degree of
environmental complexity, which looks at the number of components in
an organization’s environment and the extent of the knowledge that the
organization has about those components. An organization with fewer
competitors, customers, suppliers, government agencies, and so forth
faces a less complex and uncertain environment. Organizations deal with
environmental complexity in various ways.
For example, the Hasbro toy company simplified its environment by
acquring many of its competitors ,like parker brothers and Milton Bradley.
 Organizational Environment
• Monitring the General Environment
• The Specific Environment or Task
Environment
• Managing the Enviroment
 General Environment:
The General Environment includes everything outside the
organization. Managers must consider these factors while making
their plans. It includes a number of different components.
• Economic
• Political-legal
• International
• Technological dimension
• Sociocultural
• Global
• Demographic
• Economic Dimension :
Increase and decrease in intrest rate, inflation change in national
income, Unemployment, business fluctuations can affect managment practices
in organization.Manager must take decision related to its business while
considering economic conditions
• Political/legal Dimension:
National and local as well as international law can affect
managment decision. Each corporation is working under the state of
government law, so they must follow the rules and regulations. Government
decision related to the trade may affect the management decision or an
organization such as America ban on trade with libyan and iraq, many american
now can’t sell their product to these countries which affect their businesses.
• International Dimensions:
International dimension, organization are affected by or involved in business
in other countries. Even firms that sell products in only one country may be affected by foreign
competition at home, and they may use raw materials or production equipment imported from
abroad. The international dimension also has implications for non-profit organizations.
• International Competition.
• Major Operations .
• Significant ownership
• Technological :
Technological dimension of an organization, managers look at methods available for
converting resources into products and services. Although technology is applied within the
organization, the forms and availability of that technology come from the general environment.
• Increase emphasis on robotics.
• Improved computer assisted design techniques.
• More efficient operating systems.
• Sociocultural :
The sociocultural dimension includes customs, moral values, and demographic
characteristics of the society in the organization functions. Sociocultural processes are
important because they determine the products, services and standards of conduct that the
society is likely to value.
• Global :
Global conditions are changing , terrorism, natural disaster increase day by day. Manager
take decision acorrding to the situation around the globe.
• Demographic:
Study of human population characteristics such as age, gender, education, income,
occupation and family size, change in these charachterstics may effect managers action
plans, organiztion leading and controlling functions. Organization must make their strategies
acorrding to customer characteristics.
Specific Environment or Task Enviroment
Specific Environment is the part of the
external environment that is directly
relevent to the organization in
acheving its goal. Also called: Task
Environment.
• Competitors
• Customers
• Suppliers
• Government
• Pressure Groups
• Supplier:
Manager seek needed input at lowest price. Supplier provide raw material to produce products
and services. Delay or shortage of raw material can affect managers decisions and actions.
• Customers:
Organization exist to meet customers need. Customers needs and taste can change and they
become dissatisfied with organization’s product and services, so managers need to change
their strategics according to customers need and wants.
• New products and services

• New methods of marketing

• More discriminating customers all have added uncertain to how business relate to their customers.
• Competitors:
All organinzation whether they are profit and non profit organization have competitors. Manager
has to provide superior value to the customer and mantain its organization performance better
than their competitors.
• Government :
Federal State, and local government influence what organization can and cannot do.
Organisations with the power to regulate, impose rules on, or otherwise affect an organization's
policies and procedures.
• Pressure Groups:
Manager must consider the special interest group that influence action in organizations i.e
PETA
(People for the ethical treatments of animals) puts pressure on Mcdonalds over its handling
animals during slaughter process.
 Managing the Environment
As we have seen, Organization are not self-contained or self-sufficient. They
interact with and are influenced by their environment. Organizations depend on
their environment as a source of inputs and as a recipent of its
outputs.Organizations must ao abide by the laws and regulations and respond
to groups that challenge the organization’s actions. However, while the
environment constrains managers. it certainly dosen’t tie their hands. An
organization and its environment exchange information between themselves.
Organizations need information about the external environment for planning,
decision-making and control purposes. Hence, they analyze the environment's
variables along with studying their behavior and changes.
 Organizational Culture

• Organizational Culture
• Dimensions of Organizational Culture
• Strong Versus Weak Cultures
• Establishing and Maintaining Culture
 Organizational Culture:
The shared values, principles, traditions, and the ways of doing
things that influence the way organizational members act and
interact with each other.
 Organizational culture can make employees feel included,
empowered, and supported or it can have the opposite
effect.
 Organizational Culture: continued
 Researchers suggests that there are seven
dimensions that describe an organization's
culture.
 All organizations have cultures, but not all cultures
equally influence employees' behaviors and
actions.
Dimensions of Organizational Culture
 Organizational Culture: continued
• Strong and Weak cultures:
• Strong culture: organizational cultures in which the key
values are intensely (deeply) held and widely shared.
Have greater influence on employees than do weaker
cultures.
• As more employees accept the organization's values, the
greater their commitment to those values.
Strong Versus Weak Cultures
 WEAK CULTURE

STRONG CULTURE
Establishing and Maintaining Culture
 1- philosophy of organization’s founders: Its usually
reflects the vision of the founders.
 2- Selection criteria: certain organizational practice
helps maintain the culture, ex: during the employees
selection process, managers judge job candidates not
only on job requirement but also on how well they might fit
into the organization.
 3- Top managers: also have a major impact on the
organization’s culture. Top managers establish norms that
can have positive effect on employees behavior, the
actions of top managers can also lead to undesirable
outcomes.
 4- socialization: the process that helps employees to
adapt organization’s culture, helping them to learn the
way of doing things, understand the culture and become
enthusiastic and knowledgeable with customers.
HOW EMPLOYEES LEARN CULTURE
HOW CULTURE AFFECTS MANAGERS
 HOW EMPLOYEES LEARN CULTURE
• Employees learn an organisation’s culture in a number of
ways.
• The most common are,
• Stories
• Rituals
• Material symbols
• Language
• Stories: Typically contain a narrative of significant events
or people including such things as the organisation’s
founders, rule breaking, reaction to the past mistakes etc..
• Rituals: Corporate rituals are repetitive sequences of
activities that express and reinforce the important values
and goals of the organization.
• “Mary kay cosmetics annual award ceremony for its sales
representatives.
• Material Artifacts and Symbols: When you walk into different
businesses do you get a feel for what type of work environment it is, formal,
casual, fun or serious etc..
Material symbols convey to employees who is important what is important and
the kind of behaviour that are expected and appropriate.
• Language: Different acronyms and jargons are used in the
organizations.
At build a bear workshop stores employees are encouraged to use a
sales technique called “strive for five” in which they work to sell each
customer five items.
 HOW CULTURE AFFECTS MANAGERS
Culture can have significant impacts on managers.
• Communication styles: Culture can influence how managers
communicate with their teams.
• Leadership style: Culture can also influence a manager's leadership
style.
• Decision-making: Culture can also impact how managers make
decisions.
• Work-life balance: Culture can also influence how managers approach
work-life balance.
• Team dynamics: Culture can also impact team dynamics.