Introduction to Management

Nadia Khan
Lecturer Business Law
3
The
Organization’s
Culture and
Environment
2-2
Learning Outcomes
 Explain different Organizational structures
 Discuss how the external and internal environment
affects managers.
 Define what organizational culture is and why it’s
important.
 Describe how organizational culture affects managers.

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Organization defined;

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Organizational structure;

An organizational structure is a system that outlines how certain activities are directed to
achieve the goals of an organization.
These activities can include rules, roles, and responsibilities. The organizational
structure also determines how information flows between levels within the company.
Successful organizational structures define each employee's job and how it fits within the
overall system.

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Types of organizational structures

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Types of organizational structures

Types of organizational structures include functional, divisional, flatarchy, and matrix

structures. Senior leaders should consider a variety of factors before deciding which type of
organization is best for their business, including the business goals, industry, and culture of the
company.

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Functional Organizational Structure's
Definition;
A functional organizational structure is a team structure that groups employees into different
departments based on areas of expertise. This type of structure is one of the most common
types in business, especially in larger companies, where groups of employees are organized
according to the function they perform

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Functional Organizational Structure

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Divisional Organizational Structure's
Definition;
Divisional organisational structure is a structure in which various departments are created based
on products, territory or region. Each unit has a divisional manager, who is responsible for
performance and has authority over their division.

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Divisional Organizational Structure

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Flatarchy Organizational Structure's
Definition;
In a flatarchy, there are little to no levels of management. A company using this structure could
have only one manager in between its executive and all other employees. It is called a flatarchy
because it is a hybrid of a hierarchy and a flat organization.

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Flatarchy Organizational Structure

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Matrix Organizational Structure’s
Definition;
A matrix organization is a company structure where teams report to multiple leaders. The matrix
design keeps open communication between teams and can help companies create more
innovative products and services.

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Matrix Organizational Structure

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2 Explain what the
external and
internal
environment is
and why it’s
important.

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 One of the biggest mistakes
managers make today
is failing to adapt to the changing
world.
External Environment of an Organisation

T h e e x te r n a l e n v ir o n m e n t, a l s o k n o w n a s th e m a c r o e n v ir o n m e n t, i s o u t
o f th e c o n tr o l o f a n i n d i v i d u a l b u s in e s s . fa c to r s l i k e c o m p e titi o n ,
m a r k e t, e c o n o m ic , d e m o g r a p h ic , a n d e n v i r o n m e n ta l fa c to r s a l l p l a y a
r o le in th e e x te r n a l e n v i r o n m e n t o f a n o r g a n i s a tio n .

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 To succeed and thrive,
organizations must adapt and fit
External with the forces in their external
Environment environments

Factors, forces, situations, and

events outside the organization
that affect its performance.
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Components of the
External Environment

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Economy

Economic factors are determinants of a certain economy’s performance.

economy’s performance has the potential to influence a manager’s planning,
organizing, leading, and controlling:
◦ Economy affects the unemployment rate
◦ Economy affects the purchasing power of customers

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Economy
The Sharing Economy
Asset owners share with other individuals through peer-to-peer service, for a
set fee, their underutilized physical assets or their knowledge, expertise, skills,
or time.

Airbnb, Uber, Zipcar

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Political

The political and legal dimensions of the external environment include regulatory parameters
within which an organization must operate
These factors are all about how and to what degree a government intervenes in certain
industries.
Taxes, Cost of starting a business, Import fees
Technology
changes coming from the development and implementation of new technologies.
The technological force impacts the processes used in changing inputs (resources, labor,
money) to outputs (goods and services). It improves productivity and reduce costs.
The success of many organizations depends on how well they identify and respond to external
technological changes

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Demographics
◦ Demographics refers to the various characteristics of the people and social groups who make up a
society.

◦ Age, gender, spending habits and lifestyles and income are examples of commonly used
demographic characteristics.

◦ Studying demographics involves looking at current statistics and future trends

◦ Social and demographic forces have a major impact on:​
Products​, Services​, and Markets​

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Internal Environment of the Organization

The internal environment within which managers work

includes corporate culture, production technology,
organization structure, and physical facilities.

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2-2 Discuss how the
external
environment affects
managers.

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How Does External Environment Affect
Managers?
 Jobs and employment
 Assessing environmental uncertainty
 Managing stakeholder relationships

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 Jobs and employment

Changes in external conditions not only affect the types of jobs available but they also affect how
the jobs are created and managed.
Such readjustments create challenges for managers who must balance work demands with
having enough people with the right skills to do the organization’s work.
Managing Stakeholder Relationships

Stakeholders:
any constituencies in an organization’s environment
that are affected by that organization’s decisions and
actions.

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Organizational
Stakeholders

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Who are Starbucks
stakeholders?

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Exercise 1: To which type of managers
do these duties belong?
- Making sure employees are wearing the correct uniform. FRONT
- Translating large organisational goals into smaller ones. MIDDLE
- Opening and closing the store FRONT
- Setting organisation’s wide goals. TOP
- Solving issues, that stops progress in reaching goals. MIDDLE
- Monitor performance and sales and compare them with goals set. MIDDLE
- Assigning daily tasks to employees . FRONT
- Motivating and leading employees. ALL OF THEM
 Organizational Culture
organizational culture
The shared values, principles, traditions, and ways of doing things that influence the way
organizational members act
1 Culture is perceived. It’s not
something that can be physically
touched or seen, but employees
perceive it on the basis of what
they experience within the
organization.
2 Culture is shared. Even though
individuals may have different
backgrounds or work at different
organizational levels, they tend
to describe the organization’s
culture in similar terms.
Organizational Culture’s Characteristics

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Apple Vs Southwest
Airlines

Apple’s focus is product innovation (innovation

and risk taking). The company “lives and
breathes” new product development and
employees’ work behaviors support that goal.

—Southwest Airlines has made its employees a

central part of its culture (people orientation)
and shows this through the way it treats them.
Company’s Values Affect Managers’
Behavior
A strong values foundation can help a leader build a productive and resilient team, which may
improve the company's performance and increase its profitability. This can also help a manager
inspire their team to do their best work and provide a sense of direction for the organization.
Values help organizations determine a range of acceptable behaviors, defining for leaders and
employees alike which actions are encouraged and which are unacceptable. Values tell staff what
is good for the organization and what is unhealthy.

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 The Changing Workforce

Diversity is visible in age, gender, race, physical

attributes, styles of dress, and personality type.

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 Workplace Diversity

Workforce diversity:
the ways in which people in an organization are both
different from and similar to one another.

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 Types of Workplace Diversity

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 Adapting to a Changing
Workforce

 Work-life balance programs

 Contingent workforce
 Generational differences

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Conclusion
In conclusion, organizational culture and environment are
crucial factors in the success of any business. Organizations that
prioritize culture and focus on external and internal environment
and actively manage these factors, can create a positive and
productive workplace that drives innovation, attracts and retains
top talent, and sets them apart from their competitors.

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Exercise 2: in groups
Thank you!

SEE YOU ON MONDAY