Schermerhorn - Chapter 21 Management, 7e Schermerhorn Prepared by Michael K. McCuddy Valparaiso...

Schermerhorn - Chapter 2 1

Management, 7eSchermerhorn

Prepared by

Michael K. McCuddy

Valparaiso University

John Wiley & Sons, Inc


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Chapter 2Environment and Diversity

Planning ahead—study questions– What is the external environment of

organizations?– What is a customer-driven organization?– What is a quality-driven organization?– What is the internal environment and

organizational culture?– How is diversity managed in a multicultural

organization?


What is the external environment of organizations?

Competitive advantage involves utilization

of a core competency that clearly sets an

organization apart from competitors and

gives it an advantage over them in the

marketplace.



Companies may achieve competitive advantage in many ways, including:

• Products

• Pricing

• Customer service

• Cost efficiency

• Quality



The general environment—all of the background conditions in the external environment of the organization including:– Economic – Social-cultural – Legal-political – Technological – Natural environment



The specific (task) environment—actual

organizations, groups, and persons with

whom an organization must interact in

order to survive and prosper.



Stakeholders in the specific environment

broadly include:

• Customers

• Suppliers

• Competitors

• Regulators



Environmental uncertainty is a lack of complete information regarding what developments will occur in the external environment.

Two dimensions of environmental uncertainty:– Complexity– Rate of change


What is a customer-driven organization?

External customers purchase the

organization’s goods or utilize its services.

Internal customers are the persons and

groups within an organization who depend

on the results of others' work to do their

own jobs.



Customer service lessons:– Protect reputation for quality products.– Treat customers right.

Assessing customer needs—what, where, and when.

Adding value—high quality, low cost, and on-time delivery.



Customer relationship management involves taking a strategic customer-centered focus in building relationships and adding value.

Supply chain management involves strategic management of all operations relating to suppliers of resources.


What is a quality-driven organization?

International Standards Organizations (ISO) certification– Indicates that a company meets a rigorous set

of quality standards

ISO 9000 – Indicates that a company has met rigorous

quality standards in all operations



Total quality management (TQM)

– Quality principles are an integral part of

organization's strategic objectives.

• Applying them to all aspects of operations

• Committing to continuous improvement

• Striving to meet customers’ needs correctly the first

time



Crosby’s “four absolutes” of management for total quality control:– Quality means conformance to standards.– Quality comes from defect prevention, not

defect correction.– Quality as a performance standard must mean

defect-free work.– Quality saves money.



Quality and continuous improvement– Deming’s basic proposition is that the cause of

quality problems may be:• Some component of the production/operations

process.

• Internal to the production/operations system itself.

– Continuous improvement • Always looking for new ways to improve upon

current performance.



Quality circles

– A group of workers who meet regularly to

discuss ways of improving quality of their

products or services.

– Can result in cost savings from improved

quality and increased customer satisfaction.



Quality and manufacturing technology:– Lean production

• Uses new technologies to streamline systems

– Flexible manufacturing• Processes can be changed quickly to produce

different products

– Agile manufacturing/mass customization• Permits quick production of individualized products



Quality and product design:– A good design has eye appeal and is easy to

manufacture with productivity.– A robust design can withstand manufacturing

fluctuations. – Design for manufacturing emphasizes lower

production costs and high-quality products.– Design for disassembly involves taking into

account how components will be recycled.


What is the internal environment and organizational culture?

Organizational culture is the system of

shared beliefs and values that develops

within an organization and guides the

behavior of its members.



Strong cultures – Commit members to do things that are in the best

interests of the organization.– Reinforce these habits.

The best organizations have strong cultures that:– Are performance-oriented– Emphasize teamwork– Allow for risk taking– Encourage innovation– Value the well being of people



Levels of Organizational Culture

– Observable culture

• What one sees and hears when walking around an

organization.

– Core culture

• Core values that influence behavior and give rise to

observable culture.



Leadership and organizational culture:– Leaders should establish and maintain

appropriate core values.– Criteria for evaluating core values:

• Relevance• Pervasiveness• Strength

– Symbolic leaders use symbols to establish and maintain a desired culture.


How is diversity managed in a

multicultural organization? Characteristics of multicultural

organizations:– Pluralism

– Structural integration

– Informal network integration

– Absence of prejudice and discrimination

– Minimum intergroup conflict



multicultural organization? Organizational subcultures

– Cultures based on shared work responsibilities and/or personal characteristics.

Common subcultures include:– Occupational– Functional– Ethnic– Racial– Generational– Gender



multicultural organization?

Diversity can be a source of competitive

advantage.

Diversity leadership approaches:

– Affirmative action

– Valuing diversity

– Managing diversity



multicultural organization?

Personal challenge of managing diversity:

– Accepting the goal of diversity maturity

Organizational challenge of managing

diversity:

– Changing organizational culture

– Changing organizational mission and practices

Schermerhorn - Chapter 21 Management, 7e Schermerhorn Prepared by Michael K. McCuddy Valparaiso...

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