Environment: Culture, Ethics, and Social Responsibility

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Environment Culture, Ethics, and Social
Responsibility
Chapter 2
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Learning Outcomes
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Learning Outcomes (contd)
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The Internal Environment

• Management and Culture
• Organisational culture
• The shared values, beliefs, and assumptions of
  how its members should behave.
• Mission
• A organisations purpose or reason for being
• Top managements responsibility to develop a
  mission with clear measurable objectives.
• States the unique advantage the firm offers to
  customers that differentiates it from its
  competitors.
• Is relevant to all stakeholders interests.

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Mission Statement University of the Western Cape
The University of the Western Cape is a national
university, alert to its African and
international context as it strives to be a place
of quality, a place to grow. It is committed to
excellence in teaching, learning and research, to
nurturing the cultural diversity of South Africa,
and to responding in critical and creative ways
to the needs of a society in transition. Drawing
on its proud experience in the liberation
struggle, the university is aware of a
distinctive academic role in helping build an
equitable and dynamic society.
Exhibit 21
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Internal Environment Components
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Internal Environment Means and Ends
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The Internal Environment (contd)

• Resources
• Human resources
• Physical resources
• Financial resources
• Informational resources
• Systems Process
• The method used to transform inputs into outputs.
• Process components
• Inputs Transformation Outputs Feedback

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The Systems Process
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The Internal Environment (contd)

• Quality
• Comparing actual use to requirements to determine
  value.
• Customer value
• The purchasing benefits used by customers to
  determine whether or not to buy a product.
• Total Quality Management (TQM)
• Focusing the organisation on the customer to
  continually improve product value.

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The Internal Environment (contd)

• Structure
• The way in which resources are grouped to
  effectively achieve the organisations mission.

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Organisational Culture

• Learning the Organisations Culture
• Heroes Stories Slogans Symbols
• Ceremonies
• Three Levels of Culture
• Level 1 Behaviour is the visible level
  of cultural influence.
• Level 2 Values and beliefs are evident in
  actions.
• Level 3 Assumptions are values and beliefs that
  are deeply ingrained.

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Three Levels of Culture
Exhibit 25
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Organisational Culture (contd)

• Strong Cultures
• Have employees who unconsciously know the shared
  assumptions consciously know the values and
  beliefs and agree with them.
• Benefit from easier communications and
  cooperation unity of direction and consensus.
• Danger is becoming stagnate.
• Weak Cultures
• Have employees who do not behave as expected and
  do not agree with the shared values.

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Organisational Culture (contd)

• Managing, Changing, and Merging Cultures
• Symbolic Leaders
• Leaders who articulate a vision for the
  organisation and reinforce the culture through
  slogans, symbols, and ceremonies.
• Learning Organisations
• Organisations with cultures that value sharing
  knowledge to adapt to the changing environment
  and continuously improve.
• Strong adaptive cultures are created through
  leadership and open sharing of knowledge and
  information.

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Cultural aspects of LO

• Flat decentralised organisation
• Information system which gives direct and
  explicit feedback
• Rewards systems that support learning
• A good system for evaluating performance
• A management style that supports action,
  initiative and risk-taking
• Tolerance for different views and for uncertainty
  mistakes
• Emphasis on reflection and critical questioning
• A homogeneous organisational culture facilitating
  exchange and acceptance of knowledge

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Why become a Learning Organisation?

• We want superior performance competitive
  advantage
• For customer relations
• To avoid decline
• To improve quality
• To better understand risks diversity
• For our personal spiritual well-being
• To increase our ability to manage change
• For an energised, committed workforce
• For independence liberty
• Because the times demand it

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More reasons for a Learning Organisation

• It is more fun to work in Learning Organisations
  (LO)
• LO gives people hope that things can be better
• LO provides playground for creative ideas
• LO provides safe place to take risks with new
  ideas and behaviours
• Everyone's opinions are valued

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The Organisational Environment
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The External Environment

• 1 Customers
• Their needs decide what products businesses
  offer.
• 2 Competition
• Competitors business practices often have to be
  duplicated to maintain customer value.
• 3 Suppliers
• Poor quality suppliers mean poor quality products.

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The External Environment (contd)

• 4 Labour Force
• Quality labour is needed to produce quality
  products.
• 5 Shareholders
• The board of directors monitors management and
  provides direction for the organisation.
• 6 Society
• Businesses are pressured by societal forces to
  behave in an acceptable manner.

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The External Environment (contd)

• 7 Technology
• Firms must stay current on technology to stay
  competitive and provide customer value.
• 8 Economy
• Economic activity has both short and long-term
  effects on an organisations ability to provide
  customer value.
• 9 Government
• Policies, rules and regulations affect what, how
  much, and how business is conducted.

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The External Environment (contd)

• Chaos and Interactive Management (Ackoff)
• Reactive managers
• Make changes only when forced to by external
  factors.
• Responsive managers
• Try to adapt to the environment by predicting and
  preparing for change before it occurs.
• Interactive managers
• Design a desirable future and invent ways of
  bringing it about by trying to prevent, not
  prepare, for threats and to create, not exploit,
  opportunities.

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Business Ethics

• Simple Guides to Ethical Behaviour
• Golden Rule
• Do unto others as you would want them to do unto
  you.
• Four-Way Test
• Is it the truth?
• Is it fair to all concerned?
• Will it build goodwill and better friendship?
• Will it be beneficial to all concerned?
• Stakeholders Approach to Ethics
• Creating a win-win situation for all stakeholders
  so that everyone benefits from the decision.

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Business Ethics (contd)

• Managing Ethics
• Codes of ethics
• State the importance of conducting business in an
  ethical manner and provide guidelines for ethical
  behaviour.
• Top management support and example
• The responsibility of top management to develop
  codes of ethics, train employees, and lead by
  example.
• Enforcing ethical behaviour
• Whistle-blowers should not suffer negative
  consequences.

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Summary Code of Ethics of Exxon Company, USA
Exhibit 27
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Reorganisation and Social Responsibility

• Downsizing
• The process of cutting organisational resources
  (e.g. human resources) to get more done with less
  as a means of increasing productivity.
• Reengineering
• The radical redesign of work in a systematic
  manner to combine fragmented tasks into
  streamlined processes that save time and money by
  requiring fewer workers and far fewer managers.

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