Understanding Management's Context:: Constraints and Challenges

Understanding
Management’s
Context:
Constraints and
Challenges
Copyright
Copyright © 2014 Pearson©Education,
2012 Pearson Education,
Inc. publishing as Prentice Hall 2-1
Inc. Publishing as Prentice Hall
The Manager:
Omnipotent or Symbolic?
• Omnipotent View of Management - the
view that managers are directly
responsible for an organization’s success
or failure. (managers get fired if not
successful)
• Symbolic view of Management - the
view that much of an organization’s
success or failure is due to external
forces outside managers’ control.
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Exhibit 2-1
Constraints on Managerial Discretion
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Exhibit 2-2
Components of External Environment
• Interest World econ
rates
• Age
race
gender
• Innovations Values, attidut
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The Economic Environment
• Global economic recession - began with

US home mortgage and soon affected
businesses as credit markets collapsed. It
didn’t take long for these economic
troubles to spread worldwide.
• Economic inequality - As economic
growth has languished and sputtered,
social discontent over growing income
gaps has increased
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The Demographic Environment
• Baby Boomers - those individuals born

between 1946 and 1964
• Gen Y (or the “Millennials”) - those
individuals born between 1978 and 1994.
• Post-Millennials - the youngest identified
age group, basically teens and middle-
schoolers
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How the External Environment
Affects Managers
• Jobs and employment - As external
environmental conditions one of the most
powerful constraints managers face is the
impact of such changes on jobs and
employment
• Examples: US Gov’t Sequestration/Budget
Cuts; World-wide economy issues;
Political Unrest in Middle-East; Social
Media
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Managing Stakeholder
Relationships
• Stakeholders - any constituencies in the
organization’s environment that are
affected by an organization’s decisions
and actions.
• Note: Very important management

principle to understand; likely quiz
question
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Exhibit 2-4 Organizational Stakeholders
Keys to a Manager’s Success
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Managing Stakeholder Relationships
Example: Large company layoff
1. Identify the organization’s external

stakeholders.
2. Determine the particular interests and
concerns of external stakeholders.
3. Decide how critical each external
stakeholder is to the organization.
4. Determine how to manage each individual
external stakeholder relationship.
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Management Situation
• Situation: You are the President of a U.S.

Defense company in Melbourne, Florida.
Due to “Sequestration”, the normal
government funding for your company has
been reduced by 40% and you are
therefore required to lay-off 40% of your
employees in the next 60 days.
• Question: Who are the “Stakeholders” that
should be informed of your layoff plans?
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What Is Organizational Culture?
• Organizational Culture - The shared

values, principles, traditions, and ways of
doing things that influence the way
organizational members act.
• Strong Cultures - Organizational cultures
in which key values are intensely held and
widely shared.
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Exhibit 2-5
Dimensions of Organizational Culture
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Exhibit 2-7
Strong Versus Weak Cultures
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Where Does Culture Come From?
• Organization founder (e.g.

Steve Jobs, Howard
Hughes)
• Vision and mission (e.g.
Tesla auto)
• Past practices (bench mark
• Top management behavior
(e.g. incentives)
• Socialization - The
process that helps
employees adapt to the
organization’s culture.
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What culture would you like to be
apart of?
• Apple? Google? Why?
• Duke University basketball team? Why?
• Lexus of Melbourne? Why?
• Ritz Carlton Hotels? Why?
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Spirituality and Organizational
Culture
• Workplace Spirituality - a culture where
organizational values promote a sense of
purpose through meaningful work that takes
place in the context of community
• Characteristics of a Spiritual Organization
– Strong sense of purpose (My “work family”)
– Focus on individual development
– Trust and openness
– Employee empowerment (Sharing of vacation days)
– Toleration of employees’ expression
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Understanding

• Innovations Values, attidut

• Global economic recession - began with

• Baby Boomers - those individuals born

• Note: Very important management

1. Identify the organization’s external

• Situation: You are the President of a U.S.

• Organizational Culture - The shared

• Organization founder (e.g.

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