schermerhorn - chapter 21 chapter 2 environment, diversity and competitive advantage 4 planning...

Schermerhorn - Chapter 2 1

Chapter 2Environment, Diversity and Competitive

Advantage Planning Ahead

– What is the environment of organization?– What are the challenges of managing diversity?– What is a customer-driven organization?– How is information technology changing the

workplace?– Why is organizational learning important?


External Environments of Organizations What is Competitive Advantage also

called Distinctive Advantage?– Utilization of a core competency that clearly

sets an organization apart from its competitors and gives it an advantage over them in the marketplace


External Environments of Organizations What is Competitive Advantage/ Distinctive

Advantage? An advantage that is not easily copied Or understood by your competitors.– Companies may achieve it in many ways including

• products

• pricing

• customer service

• cost efficiency

• Quality

• Intellectual Capital


External Environments of Organizations The General or Societal Environment - all

of the background conditions of the organization including:– Economic – Social-cultural – Legal-political – Technological – Natural environment (Weather threats in SE)


External Environments of Organizations The Specific Environment. This is called your

Industry Environment in strategy - actual organizations, groups, persons with whom an organization must interact in order to survive and prosper– Stakeholders

– Customers (Create demand and demand curves)– Suppliers (Part of your SC (Supply Chain)– Competitors (Direct and Indirect Competitors)– Regulators (Each industry has regulations and regulators)– Interest groups should be added. They include community,

labor groups, MADD. harmed individuals, society.


How is diversity managed in a multicultural organization Characteristics of multicultural organizations:

– Pluralism

– Structural integration (glass ceiling)

– Information network integration

– Absence of prejudice and discrimination• Discrimination could be against any group of individuals

• Prejudging is pervasive

– Minimum inter-group conflict


How is diversity managed in a multicultural organization? Organizational subcultures

– Cultures based on shared work responsibilities and/or personal characteristics, ways of thinking and artifacts.

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


Organizational Culture

A term used to explain an organizations culture. Cultures include: ways of thinking and acting

and all physical manifestations of culture: Way of thinking: customer comes first, be

positive Way of acting: unfriendly, professional,

ethically Physical manifestations: awards, ceremonies,

size of office, etc. (Culture and graduation ceremony)


How is diversity managed in a multicultural organization? Diversity can be a source of competitive

advantage or disadvantage. Wal-Mart Diversity leadership approaches:

– Affirmative action (Affirmative Action Plan)

– Valuing diversity

– Managing diversity;• How do you manage diversity in NBA?

• How do you manage diversity in a department store?

• How do you manage diversity in Big Four Accounting Firm?


How is diversity managed in a multicultural organization? Personal challenge of managing diversity:

– Accepting the goal of diversity maturity

Organizational challenge of managing diversity:– Changing organizational culture– Changing organizational mission practices


Customer-Driven Organizations

Customers and Operations Management Remember organizations have internal as well

as external customers. Internal customers coordinate with each other in transformation process– Operations

• activities and decisions through which organizations transform resource inputs into product outputs

– output of products can be goods or services



Customer and Quality Operations– International Standards Organizations

(ISO), Geneva Switzerland• ISO 9000 certification

– provides customers with assurance that a set of solid quality standards and processes are in place

– increasingly necessary to compete internationally



Total Quality Management– Malcolm Baldrige National Quality Award

• established in the U.S. in 1987• benchmark of excellence in quality achievements• criteria include

– quality values are incorporated into day-to-day management– workers are trained in quality techniques– products are as good as or better than its competitor

–Read article on Malcolm Baldrige http://www.findarticles.com/p/articles/mi_m1038/is_n4_v37/ai_15636464


Winners of MBQA (Malcolm Balridge Quality Award) Given in manufacturing, service and small

businesses Motorola, Ritz Carlton, St. Luke’s of K.C.Note quality in production company, service

organization Motorola went for 10 and then 100 times

improvement in quality in two succeeding years


Eight Guiding Principles of TQM and MBQA

Formulate a vision of Quality Have Top Management’s Complete Support Focus on Customer needs (focus groups, internal and

external customers) Use Planning and Implementation for TQM program.

(Benchmark) Train Employees to Use SPC tools (process charts, Six

Sigma, simple math) Empower Employees (Ritz Carlton) Recognize and Reward Employees (quality culture) Make Continuous Improvement an Ongoing Process



Quality and Continuous Improvement– Continuous

Improvement• Always looking for

new ways to improve upon current performance


Information Technology Utilization Information Needs of Organizations

– Information• data made useful for decision making

– intelligence

– public


Information Technology Utilization Information Systems and Networks

– technology to collect, organize, and distribute data in such a way that they become meaningful as information


Information Technology Utilization Information Systems and Networks

– Management Information Systems (MIS)• specifically designed to use IT to meet the

information needs of managers in daily decision-making


Information Technology Utilization Chief Information Officer (CIO)

– oversees all aspects of computer, information and telecommunications systems

– central role in strategic decision-making


Information Technology Utilization Intranets

– networks of computers that use special software to allow persons working in various locations of the same organization to share databases and communicate electronically

Enterprise-wide networks– move information quickly and accurately from

one point to another within an organization


Information Technology Utilization Extranets

– Internet networks that use the public Internet to allow communication between the organization and elements in its external environment

– Electronic Data Interchange (EDI) allows companies to communicate electronically with one another (hardwired arrangement). Hi speed net has made much of EDI less used.


Information Technology Utilization What is a Learning Organization?

– a company that is able to continuously change and improve based on the lessons of experience

– able to change due to the people, values and systems


Information Technology Utilization Organizational Learning

– mental models

– personal mastery

– systems thinking

– shared vision

– team learning


Information Technology Utilization Knowledge Management

– processes through which organizations develop, organize and share knowledge to achieve competitive advantage• Chief Knowledge Officer (CKO)

– energizes learning processes

– manages organizations intellectual assets

schermerhorn - chapter 21 chapter 2 environment, diversity and competitive advantage 4 planning...

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