1. Outline the major elements of an organization's general environment? Which of these elements do you think is the most challenging for businesses today? (5%)
A segment of the external environment that reflects broad conditions and trends in societies, where the organization operates is called general environment of an organization. Major elements of general environment include political factors, economic factors, social factors, and technological factors (Sanchez 2012). It is important for an organization to be aware of what happens in its general environment to maintain its competitiveness. The reason for this is that organization’s competitive environment can be substantially impacted by the trends and changes in general environment. These changes are sometimes called fractures, discontinuities, or tipping points (Schermerhorn, Davidson, Poole, Simon, Woods & Chau 2011). PEST analysis is a useful tool for scanning the environment to determine different changes brought about by different factors (Sanchez 2012).
Political factor generally implies the effects of government policies such as government stability, government regulation, and its taxation policy. Disposable income, interest rate, inflation, unemployment rates, exchange rates, and gross domestic product (GDP) are key economic factors that influence general environment of any organization (Sanchez 2012). The problem with economic factors is that they are very ambiguous and inconsistent. Cultural changes in the environment constitute social or socio-cultural factors. Technology is state of knowledge of the society, which tends to evolve over a period of time. It influences an organization in terms of enhancing or destroying its competence in the industry. The speed with which new discoveries in the technology field are introduced and supersede the existing technology also influences the environment. Dynamics of an industry is greatly influenced by technological factors of the environment (Schermerhorn et al. 2011).
The ways in which products are produced and distributed as well as the ways of profit generation are economic elements of the organization. There are two types of economic systems: capitalist economy and socialist economy (Sanchez 2012). In capitalist economy, market forces govern the economic activity, and means of production are privately owned by individuals. In socialist economy, the means of production are owned by the state, and the state coordinates economic activity. It is a challenge to have either of these economies, and so most of the countries rely on a hybrid economy, having elements of both capitalistic and social systems.
Characteristics of a certain society also impact general environment of an organization. These include values, norms, attitudes, beliefs, behaviors, and demographic trends. Demand for products of an organization can be greatly impacted by these factors. International events also impact organization’s general environment because developments of certain countries sometimes directly impact operations of the organization (Holgate, Abbott, Kamenou, Kinge, Parker, Sayce, Sinclair, & Williams 2012).
The most influential factors among these are economic factors for the obvious reason that they fluctuate to a great extent. A strong economy will definitely strengthen most of the organizations. There are certain economic factors that influence certain types of organizations, while other factors influence other types of organizations. Organizations in the manufacturing sector, for example, will benefit more if there is an appreciation in the exchange rates.
2. Explain the difference between customer-driven organizations and quality-driven organizations (5%)
As the name indicates, in a customer driven organization, customer is given the utmost importance. The philosophy for such organizations is that "if you take care of your customers well, the success will automatically follow" (Holgate et al. 2012). Most organizations that claim to be customer-driven are found to be actually product-driven. Such organizations might need structural changes to make them customer-driven. Business strategy of a customer-driven organization is to provide the best customer experience using the right tactics and methods (Schermerhorn et al. 2011). Customer-driven organization tries to understand the customer better and uses different techniques to add value to the organization. Customer-driven organization relies on determining customer needs and taking every step to meet these needs as its strategy to expand its business. Attracting more customers, selling more to the existing customers, and keeping them longer is what is needed to ensure growth of any business, and this is ensured by becoming a customer-driven organization (Cretu & Brodie 2009). They also ensure that customer expectations are met by regular brand assessment and development. Branding and marketing strategies of a customer-driven organization should be in place to meet these expectations right. An integrated marketing approach through different media such as e-mail, phone, or web is also needed for a customer-driven organization to reach its customers effectively (Cretu & Brodie 2009). Product promotion can be performed in this type of organization through effective interaction between the organization and customers, and technology should be effectively used to ensure effective communication between them.
As customers are becoming more aware of what they want and how they want it, quality has become an important criterion when they make their purchases (Holgate et al. 2012). When they are buying a product or getting a service, they want the best quality possible. So organizations are realizing that if they want to satisfy their customers, they have ensure superior quality of the product or the service they are providing. In order for customers to become aware of the quality of the product or service, organizations often get certified to make customers trust their product or service (Cretu & Brodie 2009). One such quality certification is ISO certification standards set by the International Organization for Standardization in Geneva, Switzerland. This has been adopted as a benchmark of quality by many countries worldwide. ISO 9000 certification is a bench mark for world-class company that has attained quality assessment of all its operations by external auditors (Cretu & Brodie 2009).
Quality-driven organizations are actually customer-driven as they serve customers better by giving them products or services of higher quality. In this era, where technology plays an important role in everything, many of these organizations make use of technology to produce higher quality products and to serve customers better. Product design and development processes have been able to exploit technology for their own benefit to create better products. The gap between the customer and the organization was reduced through the use of technology in a quality-driven organization.
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3. Provide a suitable definition for a “multicultural organisation” and explain why an inclusive environment is in an organizations best interest? (5%)
Organizations are made up of people, and people are different and unique in different ways. This diversity is often used to strengthen the organizations. There are different factors such as gender, age, ethnicity, race, personality, physical ability, sexual orientation, religious beliefs, family status, experience, and culture that differentiate people from others to make them unique (Schermerhorn et al, 2011).
Multicultural organization is the one that can accommodate any individual regardless of any factor mentioned above based purely on the person’s ability to perform the given task. Multicultural organizations enjoy many benefits over others, but they have to face certain challenges as well to operate in the way they do being a multicultural organization (Holgate etc. 2012).
The company should respect and take pride in the diversity that it has and should try to exploit this for the benefit of the organization. Multicultural organizations can benefit in multiple ways because of their cultural diversity (Schermerhorn et al. 2011). Multicultural organizations benefit from different and broader perspectives of their employees that come from diverse backgrounds by creating a broader coverage for the organization in the global marketplace. Problem-solving capabilities are greatly improved in a multicultural organization as there are different perspectives that can be analyzed to solve the problems. This can also aid in the decision-making process. More innovative ideas can be brought into the organization from people with diverse backgrounds (Behfar, Kern, & Brett 2006). There is also room for personal development of employees as they can learn from different cultures. Tolerance and acceptance of employees will also be greatly improved in a multicultural organization. They will also be able to increase flexibility in their interaction, personal behavior, and communication with others. A multinational organization will be able to serve and operate in different countries better if it employs people from those countries as well. The language barrier that poses big challenges for organizations operating in different countries, especially in countries where English, the global language, is not very popular. Multicultural organizations get a competitive advantage over others if they employ people who speak languages of those countries (Behfar, Kern & Brett 2006). They can also help others understand the culture of the country they operate in to make things easier (Schermerhorn et al 2011).
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Discrimination and language barrier that exist in a multicultural organization can also create challenges for the organization. If employees of the company do not speak the same language, it can create huge communication problems and room for discrimination (Holgate et al. 2012). This can be addressed by increasing awareness in the company about different cultures. Lack of proper communication can also create problems in building a team rapport among team members that work together. Poor communication can lead to many other problems that can become a great challenge for the organization, which impacts the performance (Behfar, Kern & Brett 2006). Most of these problems faced by multicultural organization can be easily rectified if all employees, even if they come from different cultures, can speak the same language (Holgate et al. 2012).
4. What is meant by the ‘glass ceiling’? Discuss the implications for members of minority groups? (5%)
Existence of differences in an organization is what diversity brings in. However, if these differences are not equally distributed among different levels in the organization, it can create bigger problems such as minority issues and discrimination (Schermerhorn et al. 2011).
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People of color, people speaking different languages, women, or people with disabilities can become a minority group in an organization. These groups of people could be subjected to discrimination by the majority group in the organization. There can be direct discrimination, when these minority groups are treated unfairly or badly because of their differences. There can also be indirect discrimination, when certain policy or regulation of the organization makes these minority groups not eligible to participate in firm's activities or make them not comply with the requirement (Schermerhorn et al. 2011). Gender discrimination is a common form of discrimination faced by women, especially in developing countries (Caroleo, Giannelli, & Pastore 2010). Even though the scenes are changing or have changed in the recent years, it is still a sad fact that women face discrimination. They are not able to attain the same job level as men, even if they possess the same or even better talent and skill. They also receive lower pay compared to their male counterparts.
The term "glass ceiling" was coined by The Wall Street’ Journal two decades ago. The term referred to invisible barriers that women face in their workplace (Schermerhorn et al. 2011). The word ‘ceiling’ signifies that women are blocked from advancing in their carriers and ‘glass’ tells that the ceiling is not always discernible. Even when the world has advanced so much, it is still a reality that women encounter barriers in their carrier path because of their minority status. This term ‘glass ceiling’ is also being used to describe the barriers faced by other minority groups as well.
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A recent study in the United States revealed that women earn only 81 cents for every dollar that a man makes even when both are equally qualified (Caroleo, Giannelli, & Pastore 2010). This is despite Equal Pay Act of 1963, which requires employers to provide equal pay for both men and women for similar jobs performed in similar conditions. In American workforce, women constitute 46.5% of the total workforce, but only account for about 8% in the top executive positions (Caroleo, Giannelli, & Pastore 2010). This does not mean that women do not move up the career ladder to attain the top position in an organization, but it is a reality that they have to work harder to achieve what men can achieve even when they are paid less. There are certain jobs that women choose because of flexibility that allows them to cope with work and home responsibilities better. Therefore, they reinforce the stereotype that there are certain jobs that suit women and there are certain jobs that do not.
Same or different sets of barriers exist for other minority groups such as people with disabilities, people of color, people from certain religious backgrounds, etc. A multicultural organization will be able to better accept such differences and set an example for others to follow (Caroleo, Giannelli, & Pastore 2010). Highlighting the achievements of individuals in these minority groups despite their status can make others believe in themselves and motivate them to achieve more.
5. Explain the ways in which a diverse workplace contributes to the organizational culture? (5%)
Even though culture alone cannot be held responsible for what happens in an organization, it definitely can have a major impact on how employees behave in an organization and also on the overall performance of the organization (Schermerhorn et al. 2011). A diverse workplace where people from different backgrounds work together, creates a very flexible, tolerant, and welcoming culture in the organization.
Any organization, where people are hired regardless of their age, race, origin, gender, or any such factors, but purely based on their qualification and knowledge needed to perform the task is expected to have a diverse workplace. The organization must have people from different countries, preferably speaking a common language, different genders, age, and ethnic backgrounds working together to contribute to the success of the organization (Schermerhorn et al. 2011).
If to analyze ‘organizational culture’, it is possible to distinguish between two levels of culture such as observable culture and core culture. Observable culture is what is visible to everyone through how people behave in an organization and even through what they wear to work (Gomez-Mejia, Balkin, & Cardy 2008). It displays the elements of daily organizational life through people who work in the organization. In a diverse workplace it is possible to see vast difference even in how people dress to work. Such variety, if it does not suit the organizational culture, can be controlled through introducing formal dress code in the organization.
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In a diverse workplace, tolerance and acceptance level of the employees is found to be really high. People are more open to new ideas and are also found to be more innovative. Different backgrounds and origin of people will contribute towards creating a ‘globalization’ image for the organization, which is essential especially for a multinational organization. When there are no other hiring criteria apart from qualification and skill, there is a wide and vast talent pool of employees where the organization can find professionals with a better chance of getting the right people for the right job. A diverse workplace contributes to the creation of a better image and reputation for the organization, especially among external stakeholders (Schermerhorn et al. 2011). It reflects organization’s acceptance of the changing world and marketplace. Having a diverse workplace also helps serve customers from different backgrounds with different needs. The language barriers that sometimes become a challenge for multinational organizations can be addressed by hiring people from different nations. Understanding cultures of different regions or nations becomes easier when employees in the organization come from that region or country. It also helps in making the overall operation of the organization easier (Gomez-Mejia, Balkin, & Cardy 2008). It is also an opportunity for employees to learn, understand, and appreciate the culture of different regions/nations from their colleagues. An organization with a diverse workplace becomes more attractive for the resource pool as there is equal opportunity for everyone. Respecting individual differences will benefit the organization by creating a competitive edge, and the productivity will increase as well. It also promotes equality among employees, creating a better harmony among them.