© 2010 Dorling Kindersley India Pvt. Ltd. All rights reserved.© 2010 Dorling Kindersley India Pvt. Ltd. All rights reserved.

PowerPoint Presentation by Rajeesh Viswanathan

Jansons school of Business

PowerPoint Presentation by Rajeesh Viswanathan

Jansons school of Business

Organization Theory

Structure, Design, and Applications

Organization Theory

Structure, Design, and Applications

Third Revised EditionThird Revised Edition

Stephen P. Robbins and Mary MathewStephen P. Robbins and Mary Mathew

C H A P T E R

13C H A P T E R

13PART IV: APPLICATIONS: CONTEMPORARY ISSUES IN

ORGANIZATION THEORYPART IV: APPLICATIONS: CONTEMPORARY ISSUES IN

ORGANIZATION THEORY

Managing the EnvironmentManaging the Environment

After reading this chapter, you should be able to: Explain why management seeks to control its organization’s

environment. Compare internal and external environmental control

strategies. Describe the most comprehensive action management can

take when faced with an unfavorable environment. Define environmental scanning. Identify several techniques for buffering the organization

from the input side. Explain how organizations smooth out fluctuations in the

environment. Describe when an organization would apply rationing. Differentiate between co-opting and coalescing. List reasons for the popularity of interlocking directorates. Explain the role of political action committees in helping

industries manage their environment.

Every organisation – regardless of the industry it’s in or or whether its profit seeking or not for profit – faces some degree of environmental uncertainity.

This is because no organisation is completely able to generate internally all the resources it needs to sustain itself

Managers can do to lessen the impact of the environment on the organisation’s operations by managing the environmenteg: Potamkin case

Why managers try to control the environment? They don’t like uncertainties. They don’t like depending on other

organisations. They want an autonomous and predictable

environment

Managers have two general strategies to lessen the environmental uncertainities Internal strategy :- they respond by adapting

and changing their actions to fit the environment.

External strategy:- They attempt to alter the environment to fit better with the organisations capabilities

Internal Strategies External Strategies

Domain Choice AdvertisingRecruitment ContractingEnvironmental scanning CooptingBuffering CoalescingSmoothing LobbyingRationingGeographic dispersion

Domain choice:When faced with uncertainity, the best comprehensive decision a management can take is to choose a domain with less uncertainity. If a management cant change to a more favourable environment, it might choose to broaden its strategy to take a generalistic form.

Recruitment:Recruitment of the right people can lessen the influence of the environment on any organisation.

Environmental scanning:This entails scrutinising the environment to identify actions by competitors, government, unions and the like, that might impinge on the organisation’s operations.

Buffering:This reduces the possibility that the organisation’s operations will be disturbed by insuring supplies and absorption of outputs. It provides benefits by reducing the environmental certainties

Smoothing:This seeks to level out the impact of fluctuations in the environment. The organisations that use this technique include telephone companies, retail stores,car-rental agencies magazines and sports teams.

Rationing:When uncertainty is created by way of excess demand, management may consider rationing products or services; that is to allocate the system based on some priority system.

Geographic dispersion:To lessen the location induced uncertainity, organisations can move to a different community or lessen risk by operating in multiple locations

Advertising:It’s a device used by the management to reduce its dependance on fickle consumers and new alternatives offered by the competition, i.e brand loyalty has lessened its dependance on consumers.

Contracting:It protects the organisation from changes in quantity or price on either the input or output side.

Coopting:The organisation may resort to coopting their uncertainties by absorbing those individuals or organisations in the environment that threaten their stability.

Coalescing:This allows companies to improve their competitive posture. This is the process of combining with one or more organisation by mergers.

Lobbying:This is using influence to achieve favourable outcomes. This is widely used by organisations to manage its environment.

Analyse the source of uncertainty Select a strategy that the organisation

can implement Implement the strategy properly.