THE EXTERNAL ENVIRONMENT
Reflects an open systems view of the organisation
Task Environment vs. General Environment
Task Environment
o Stakeholders with direct impact on operations and performance
Customers
Competitors
Suppliers
Labour market (new dimension)
o Porter’s 5 Forces
Industry rivalry
Supplier power
Potential entrants
Buyer power
Threat of substitutes
General Environment (PEST)
o Indirect and don’t impact organisation daily
o Social, demographic and economic factors
Political-Legal
Economic
Socio-cultural
Technological
Natural (new dimension)
Environmental Uncertainty
Managers know what goal they wish to achieve but information about
alternatives and future events is incomplete
Coping with uncertainty strategies:
o Adapt the organisation to changes in the environment
Forecasting and planning
Inter-organisational partnerships
Mergers and joint ventures
E.g.
o Influence the environment to make it more compatible with
organisational needs
Advertising and public relations
Political activity
Trade associations
E.g.
ORGANISATIONAL PLANNING
Mission and Vision statements
Long time-horizon, broad specificity
Mission – why do we exist as an organisation?
Vision – what do we aspire to achieve in the future?
Communicate meaning and values to external stakeholders
Give meaning to day-to-day activities, ideally inspiring employees
Broadens employee’s view of organisation, facilitating coordination
Strategic Goals and Plans
Tactical Goals and Plans
Organisational Goals and Plans
PROS CONS
Goals and plans provide a source of Goals and plans can create a false
motivation and commitment sense of certainty
Goals and plans guide resource Goals and plans may cause rigidity in
allocation a turbulent environment
Goals and plans are a guide to action Goal and plans can get in the way of
intuition and creativity
Goals and plans set a standard of
performance
Planning grants organisations
legitimacy, independently of whether
or not planning is effective
Planning programs managers’ time
(making sure they don’t forget to think
about the future)
Planning in a turbulent environment
Scenario planning
Crisis management planning
Decentralised emergent planning
GOAL SETTING
Effective Goals
Specific
Measurable
Achievable
Realistic
Timely
Management by Objectives (MBO)
Method of management where managers and employees define goals
for every department/project/person and use them to monitor
subsequent performance
Involves employees in decision-making processes
4 step approach
1. Set goals
2. Develop actions plans
3. Review progress
4. Appraise overall performance
PROS CONS
Focuses manager and employee People may cut corners, ignore
efforts on activities that will lead to potential problems or behave
goal attainment unethically just to meet targets
Can improve performance at all
company levels
Improves employee motivation
Aligns individual and departmental
goals with company goals
STRATEGY FORMULATION
MANAGERIAL DECISION MAKING
ORGANISATIONAL STRUCTURES
ORGANISATIONAL CULTURE
Culture
Set of key values, beliefs, understandings, norms members of an
organisation share
1. Artifacts (visible)
Reflect behavioural aspects easily seen but not readily
understood
Office layout, symbols, slogans, ceremonies
E.g. Google uses open workspaces to promote
entrepreneurial thinking
2. Expressed values and beliefs (invisible)
Discerned from how people explain and justify what they
do
E.g. Google’s ’10 things’ express the declared and
expected culture formed by senior management
3. Underlying assumptions and deep beliefs (invisible)
Unconscious beliefs surrounding behaviour
‘The way things are done around here’
Environment and Culture
Adaptability culture
o
Achievement culture
Involvement culture
Consistency culture
MANAGING CHANGE AND INNOVATION
LEADING IN ORGANISATIONS
TEAMWORK IN ORGANISATIONS
Teams
Self-interest – fear of personal loss; e.g. comfort, power
PROS CONS
Enhances performance and Some tasks are better performed by
organisational agility individuals
Improved innovativeness Artificial if no meaningful common
purpose
Speed of responses to unanticipated Ineffective if not consistent with
problems/changing environmental culture, strategy and reward system
conditions
Employee productivity and Time consuming and prone to conflict
engagement
Resistance to change (teamwork reform)
Self-interest – fear of personal loss; e.g. comfort, power
Lack of understanding and trust
Uncertainty
Disagreement over goals, proposed benefits of change
Culture/identity
Kotter’s 8 step framework (teamwork reform)
Creating climate for change
1. Increase urgency
2. Build guiding teams
3. Get the vision right
Engaging and enabling the organisation
4. Communication for buy-in
5. Enable action
6. Create short-term wins
Implementing and sustaining the change
7. Don’t let up
8. Make it stick
Team effectiveness
Team conflict
o Task conflict
Stimulates identification and analysis of diverse ideas
Enhance decision acceptance and relationships within
team
o Relationship conflict
Consumes time and energy
Limits information processing
Damages effective communication and cooperation
o No conflict is a red flag – risks of group think
MOTIVATION
Motivation
Forces wither within or external to a person that arouse enthusiasm
and persistence to pursue a certain course of action
o Intrinsic
Desire to perform a behaviour of its own sake, rewarding
in itself (purpose, fulfilment, enjoyment)
o Extrinsic
Desire to perform a behaviour to acquire material/social
rewards or to avoid punishment (pay, praise, status)
CONTENT THEORIES OF MOTIVATION
Pink’s Drive Theory
Three innate factors that motivate people
o Autonomy
Self-sufficient to direct our own lives
o Mastery
Self-improvement to learn and create new things
o Purpose
Self-esteem and drive to do better by ourselves
Herzberg Two Factor Theory
Hygiene factors
o Don’t motivate but must be met to prevent dissatisfaction
o Factors that meet people’s basic needs
o Pay rise doesn’t motivate as workers can come to expect further
pay rises in the future – become an expectation and are taken
for granted
Motivators
o Factors that can lead to psychological growth of workers,
increasing satisfaction and performance
o Challenge, responsibility, recognition
Managers should provide hygiene factors sufficient to meet basic
needs, then used motivators to meet higher-level needs and propel
employees towards greater achievement and satisfaction
Maslow Hierarchy of Needs
People are motivated more than just money, need to be satisfied with
lower level needs before progressing to higher level needs
1. Psychological
2. Safety
3. Belongingness
4. Esteem
5. Self-actualisation
McClelland Acquire Need Theory
Certain types of needs are acquired during an individual’s lifetime
o Achievement
o Affiliation
o Power
Individuals generally develop a dominant bias towards one of the three
needs, dependent on early life experiences
PROCESS THEORIES OF MOTIVATION
Adam’s Equity Theory
Focuses on individuals’ perception of how fairly they are treated in
relation to others
Compare input/output ratio with relevant others
Motivation depends on individuals’ perception of how fairly they are
treated relative to others
Perceived inequity creates tension within individuals that motivate them
to bring inequity in balance
o Change work effort, change outcomes, change perceptions
(cognitive distortions), leave the job
Cognitive distortions – egocentric bias, fundamental
attribution error
Equity sensitivity can vary across contexts and individuals
Vroom’s Expectancy Theory
Motivation depends on individuals’ expectations about their ability to
perform tasks and receive desired rewards
Based on the relationship among the individual’s effort, performance
and the desirability of outcomes associated with high performance
Motivational audit questions:
o Effort to Performance (E-P) expectancy
Will putting the effort result in high performance?
If not:
Does the employee have the ability (skills and
resources) to reach the performance goal
Is the performance goal well defined?
o Performance to Outcome (P-O) expectancy
Will successful performance lead to (greater) rewards?
If not:
Are rewards contingent on performance levels?
Is the P-O link well understood/trusted
Are rewards fairly allocated?
o Valence
Do the rewards justify the effort?
If not:
Are the rewards adequate?
Do the rewards reflect the employee’s
needs/values
Content theories stress employees are driven by a diverse set of basic
and complex needs, managers should satisfy higher-order needs, not
everyone has the same needs/values requiring customisation of
incentives offered
Process theories suggest we should pay attention to the beliefs,
perceptions and calculations involved in employees’ decisions as to
whether to exert effort or not
COMUNICATION IN ORGANISATIONS
Communication
Process by which information is exchanged and understood by two or
more people, usually with intent to motivate or influence behaviour
Permeates every function of management
Barriers to Communication
Communication fidelity
o Correspondence between the intention and understanding
Source may withhold or filter information – seen more
favourably by receiver, out of fear or desire to please
Encoding/decoding problem (semantics, jargon, medium)
– culture shapes meanings
Receiver may be overloaded, focusing selectively – basis
of interests, background, experience, attitudes
Feedback may be insufficient to verify fidelity
Low context vs. High context interaction
Low context
o Verbal, explicit, direct
o Means to exchange information
o Task-focused
High context
o Non-verbal, implicit, indirect
o Means to engage someone
o Relationship-focused
STRATEGIC HUMAN RESOURCE MANAGEMENT AND MANAGING
DIVERSITY
BUSINESS ETHICS SUSTAINABILITY AND CORPORATE SOCIAL
RESPONSIBILITY
