Running head: THE CHANGING ENVIRONMENT OF ORGANIZATIONS 1
THE CHANGING ENVIRONMENT OF ORGANIZATIONS 2
The Changing Environment of Organizations
The Changing Environment of Organizations
The environment of business changes rapidly. Top managers should understand and consider the changes of the business environment. Increasing globalization of management and organizations are among the primary causes of changes. The growth of international business has occurred due to dramatic advance of communication and transportation, international business expansion in order to increase the markets, business competitiveness, and due to moving into international markets to control and reduce costs.
Cross-Cultural Differences and Similarities
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In terms of gender observations, the specialists in the field of international management singled out five cultural differences and similarities. First, behavior within organizations varies across cultures. Second, the major cause of behavioral variations in organizational setting is culture itself. The set of shared values that helps people in organization or helps society understand, which type of behavior is acceptable or unacceptable, is referred to as a culture. Third, organizations and their structures are alike, regardless of causes and consequences of behavior within an organizational setting. Fourth, the same person behaves differently in various cultural settings. Fifth, cultural diversity is an important synergetic source of reaching organizational effectiveness.
In terms of specific cultural issues, behaviors and attitudes differ due to beliefs and values that characterize one definite country. The categories of the Dutch researcher Geert Hofstede summarize cultural differences among several countries. The power distance and individualism/collectivism continuum are the two primary dimensions. Individualism displays the fact that an individual within a culture defines himself primarily as an individual, not as a part of some group or organization. At the workplace, a person from an individualistic culture is more concerned with his/her personality rather than with the work group. At the same time, for this person, an individual task is more important than relationships. Hiring and promotion are based on rules and skills.
Tight social networks characterize collectivism. People try to base their identities on the group or organization, to which they belong. At the workplace, links between coworkers and employers are more like family relationships, in which a relationship itself is more important than tasks and individuals. Group membership is the basis of hiring and promotion. Power distance or orientation to authority is the extent to which a person accepts as adequate an abnormal distribution of power.
Masculinity and uncertainty avoidance should be mentioned among other cultural dimensions. Uncertainty avoidance (or preference for stability) means the extent to which individuals feel threatened by unfamiliar situations and prefer to stay in unambiguous and clear situations. Masculinity (also known as materialism or assertiveness) is the extent to which social dominant values emphasize aggressiveness and the acquisition of money together with other possessions in the opposition to human concerns, relationships between people, and the quality of life in general.
Additionally, the framework of cultural dimensions includes long-term versus short-term orientation. Long-term orientation covers those values that are oriented toward the future, a distant payoff, thrift, and persistence. Short-term orientation is based on values that are focused on the present and the past, including respect for social obligations and traditions.
Managerial Behavior across Cultures
The behavior of both employees and managers is based on individual cultural variations. Other differences include managerial beliefs concerning organizational power and the role of authority. For example, Japanese managers value the most experience and expertise, while Swedish managers view themselves as problem solvers and facilitators.
Diversity and Business
Important differences and similarities that exist among the employees of organizations are represented by workforce diversity. In terms of workforce diversity, a manager should understand and consider the differences and similarities of employees within the organization. Unfortunately, people are often stereotyped. A generalization about an individual or a group of individuals based on definite traits is referred to as a stereotype. The manager who stereotypes workers ignores individual differences and makes rigid judgments about others, not taking into account the situation and individual peculiarities. In its turn, a stereotype can lead to a prejudice toward others. Prejudice is a judgment about some person that reinforces beliefs about inferiority and superiority, which can result in an exaggerated opinion about one group and a diminished opinion about another one. The system of management that is based on prejudices and stereotypes does not fulfill the needs of a diverse workplace, which leads to lower morale, reduced productivity, and decreased creativity.
Dimensions of Diversity
Diversity in the workforce covers all the issues of differences and similarities among employers within the organization and helps to get the benefits from all different and similar traits among coworkers. The primary dimensions of diversity include either inborn factors or those that influence early socialization in an extraordinary manner (age, gender, race, ethnicity, sexual orientation, physical and mental abilities). Secondary dimensions of diversity combine factors that are personally valuable and compare individuals to others to some extent (geographical location, parental status, work experience, and religious beliefs). Employment statistics claims that the workforce segments will increase in the future. The number of working women will get higher, and the age ranges will extend. In terms of global workforce diversity, companies should learn to adjust to the changing workforce.
The Value of Diversity
Assimilation is a process by means of which representatives of a minority group are forced to learn the ways of the majority group. For example, they are obliged to speak only one language. Within the organization, assimilation is aimed at perpetuation of false prejudices and stereotypes, which can result in communicative and decision-making tension between workers, lower productivity and employment opportunity, as well as lower morale among the workers.
Valuing diversity puts an end to the assumption that every person who does not belong to the dominant group must assimilate. Within the organization, valuing diversity is economically and financially right, not mentioning personal advantages for representatives of the minority groups.
Technology and Business
Methods that are used to produce both intangible services and physical goods are referred to as technology. Technological change drives other forms of organizational change. Manufacturing is a form of business that aims at combining and transforming resources into tangible outcomes that are sold to others. A service organization transforms its resources into an intangible production and creates place and time utility for its customers.
Technology and Competition
For some firms, technology is the basis for competition, especially for those that intend to become the technology leader. However, keeping the leading technological position is challenging due to rapid development of technology. Another challenge is to meet constant demands concerning the decreasing cycle time. In terms of informational technology, the following changes should be mentioned: more flexible operations and work sites, leaner organizations, improved management systems and processes, as well as less personal communication.
Ethics and Corporate Governance
New Employment Relationships
Knowledge workers are individuals who add value to organizations by means of their knowledge. They need highly specialized training, as well as compensation and related policies. Outsourcing is the practice to hire other organizations to do work that was previously performed by the firm itself, which helps to concentrate on the core activities.