ACKNOWLEDGEMENT

First Of All We Are Very Thankful To Allah Who

Helps
All The Mankind Without Favoritism. Then We Are
Extremely Thankful To Mam Shabana Naveed
Who
Gives Us The Opportunity To Have Our
Presentation On
Organization Environment Relations.
GROUP MEMBERS

TABASSUM YASMIN
RABIA SABIR
NAIMA ASIF
MAHAM IBRAR
Organization
Environment
Relations
Organization-
Environment Relations
Why Study Environment
Relations?
Organizational Environment
 It is a super system of which organizational systems are a part.

The Modern Perspective

 Organizational Boundary
 Inclusion & Exclusion
Environment
 Three level Analysis
a) Stakeholders
b) Conditions and Trends Input
Organizati Outpu
on ts
s
c) Global Environment
The Inter-Organizational Network
 Stakeholders
 Centrality
 Network Density
 Structural Hole Unions Regulator
y
 Supply Chain Supplier Agencies
s Customer
OR s
Speci G
al
Interes Partners
ts Competitor
s
Conditions and Trends in the
Environment of an Organization
The following host of environmental forces impinge on participants in
the environment.
Social
Secto
Physi r
Legal
cal
1. Social Sector Secto
Secto
r
r
2. Legal Sector
Netw
3. Cultural Sector Techno
logy
ork Cultur
al
Sector Sector
4. Political Sector
Econ Politic
5. Economic Sector omic
Secto
al
Secto
r r
6. Technology Sector
7. Physical Sector
Contribution of environmental Sectors to Global Complexity
and Challenge
Sector Contribution to Global Change
Technology Personal Computers
Internet and WIFI
Communication Satellites
Space Exploration
Economic Global Capital Markets
Technology Exchanges
Transnational corporations
Worldwide Trade
Political/ Legal Break down of the authority of the nation state
Erosion of territorial borders
Global Governance Institutions (E.g. UNO, WHO, World Court)
Social/ Cultural Global Media Coverage
Popular Culture (Fashion, Brands, Slang, TV, Music, Tourism)
Materialism and Consumerism
Multi Racialism and Social Media
Physical Population growth
Hazardous waste and Industrial Accidents
Disease and Food Insecurity
Genetically Modified Foods
 Environmental contingency theory
 Resource dependence theory
 Population ecology
ENVIRONMENTAL CONTINGENCY
THEORY
Major contributors
 British sociologists
 Tom Burns
 George Stalker
 American organization theorists
 Paul Lawerence
 Jay Lorsch
Environmental contingency theory

 Contingency Approach
 A management approach in which the
design of an organizations structure is tailored
to the sources of uncertainty facing an
organization
 Internal structure allows us to control extremal
environment
 Organization should design its structure to fits
its environment
Types of Environment

 StableEnvironment
 Unstable Environment
FINDINGS
Lawerence and Lorsch
 When environment is perceived as more
unstable and uncertain
 Effective organizations are less formalized, more
decentralized, and rely more on mutual
adjustment
 When environment is perceived as stable and
certain
 Effective organizations have a more centralized,
standardized and formalized structure
Burns and stalker

 They Founds that organization needs different

kind of structure to control their activities based
on the environment
 Organic structures are more effective when the
environment is unstable and changing
 Mechanistic structures are more effective in
stable environments
Mechanistic vs Organic structure
Mechanistic Structure Organic Structure
1) Individual Specialization 1) Joint Specialization
2) Highly formalized 2) Formalization is very low
3) High specialization 3) Low level of specialization
4) Narrow span of 4) Wide span of management
management
5) Vertical Communication 5) Horizontal Communication
6) Centralized decision 6) Decentralized decision making
making
Relationship between environmental
uncertainty and structure
Environmental Uncertainty
 Environmental uncertainty is defined by the
amount of complexity and the rate of change in
the organizations environment
 Complexity
Refers to the number and diversity of elements
in the environment

 Rate of change
Explains how rapidly these elements change.
Environmental Uncertainty
Perceptual and Information theory
of uncertainty
 Law of Requisite Variety
Control can be obtained only if the variety
of the controller is at least as greater as the
variety of the situation to be controlled
 Isomorphism
If the environment is simple, the organization
takes a simple form, complex environments
favor complex organizations
RESOURCE DEPENDENCE THEORY

Major contributors
 American organization theorists
 Jeffrey Pfeffer
 Gerald Salancik
Resource dependence theory

Analysis of the interorganizational

networks can help the organization
understand the
power/dependence relationships
that exist between it and other
network actors.
Recourse dependence theory

 This theory argues that the goal of an

organization is to minimize its dependence on
other organizations for the supply of scarce
resources.
 To find ways of influencing these organizations to
make resources available.
 Organizations develop various strategies to
manage their resource dependencies and
control their access to scarce resources.
Applying resource dependence
theory
Managing power/dependence
Pfeffer and Salancik suggest prioritizing
dependence elements according to:
 Criticality
The estimate of the importance of a particular
resource.
 Scarcity
The estimate of resource availability
Power and dependence

 An organization depends on resources

controlled by the environment

 The environment therefore has power over an

organization and can influence decision
making.
Dependence management
strategies
 Vertical integration
 Horizontal integration
 Developing personal relationships
 Establishing formal ties with other firms
 Lobbying
 Marketing
Theory of Population ecology

 “A theory that seeks interest in the patterns of

success and failure among all the
organizations that compete within a given
resource pool, called an ecological niche”
 population ecology assumes that
dependency gives the environment
considerable power over the organization.
 It focuses the bulk of its attention on the
environment.
Major Contributors

 British Naturalist
 Charles Darwin’s
 American Organization Sociologists
 Micheal Hannan
 John Freeman
 Howard Aldrich
 Glen Carroll
Charles Darwin’s principles of
evolution
 variation, selection, and retention
variation, selection, and retention

 American organization sociologists Michael Hannan,

John Freeman, Howard Aldrich, and Glen Carroll
applied Darwin’s theory to organizations.

 Variation occurs primarily through entrepreneurial

innovation and adaption to change in environment.
 Selection occurs as organizations that best fit the
needs and demands of their ecological niche are
supported with resources.
 Retention means that resources are continuously fed
to the organization to sustain in short run and long run
interests.
Symbolic environmental analysis

 symbolic perspective views the environment as

a social construction arising from and in
enactment, cognitive mapping, and sense
making processes.
 Environments emerge from inter subjectively
shared symbolism and beliefs about the
environment and by expectations set in motion
by these symbols and beliefs.
Institutional theories
 American sociologists Paul DiMaggio and
Woody Powell presented this idea.
 They argued that ‘organizations compete not
just for resources and customers, but for
political power and institutional legitimacy, for
social as well as economic fitness.
Major Contributors

American sociologists Paul

DiMaggio
 Woody Powell
Three institutional pressures by Paul
DiMaggio and Woody Powell
 coercive institutional pressures; When the
pressure to conform to expectations comes
from governmental regulations or laws.
 normative institutional pressures; When
conformity pressure comes from cultural
expectations.
 mimetic institutional pressures; copying the
structures and practices of successful
organizations.
Neo-institutionalism
“Theory that focuses on developing a sociological view of
institutions — the way they interact and the way they
affect society”
 Scott defined institutionalization as ‘the process by
which actions are repeated and given similar meaning
by self and others’.
 Public outcry against unethical business practices not
only threatens an institution’s survival, it can kill the
institution outright. For example, in the late 1990s Enron
(US), Arthur Anderson (US), and Parmalat(italy).
The enacted environment

 when decision makers respond to their

perceptions, they enact the environment they
imagine and anticipate.
 Karl Weick stated assumption that, regardless of
belief in the existence (or not) of an objectively
real environment, conditions in the environment
cannot be separated from perceptions of those
conditions.
Equivocality and ambiguity
concept
 Equivocality:
According to Karl Weick, humans equivocate when they
multiply perceived possibilities that they then use to
enact contradictory realities, which in turn promote
further equivocation.
 Ambiguity:
James March and Johan Olsen argued for defining
organizational ambiguity as: ‘a strategy for suspending
rational imperatives toward consistency [to help
organizations] explore alternative ideas of possible
purposes.
Unified Diversity

 Eric Eisenberg, an American communication

theorist claimed that by strategically
encouraging multiple interpretations of goals
and vision, managers can produce unified
diversity.
 American organization theorist Deborah
Meyerson provided an example of unified
diversity in her study of the ambiguities
confronted by hospital social workers.
Post Modernism &
Organization-
Environment
Relations
 contents
 ENACTMENT THEORY
 INDUSTRIALIZATION
 PHRASES OF INDUSTRIALIZATION
 POST INDUSTRIALIZATION
 STAKEHOLDER THEORY
 COMPARISON OF INDUSTRIALISM & POST INDUSTRIALISM
 HEGEMONY
Overview
Postmodernism is very instrumental in understanding
management& organizational environment relations.
Postmodernism view of organization- environment-
relationship is most often based on the concept of chaos
& complexity.
From a complexity theories point of view, the boundary
between organization and environment becomes blurred.
It helps to create a good work environment & promote
the development of organizations as it gives to more
rounded approach to problem solving & decision-making.
ENACTMENT THEORY IN POSTMODENISM
 Definition
 Enactment theory is that members of organization
can’t separate themselves as an individual.
 How they think about meaning they impose on
themselves, other actors & the environment.
 Once we recognize our role as social constructors of
reality, we can free ourselves from situations we do
not like by deconstructing distasteful social
constructions.

 It policies the concept of legitimacy from

Institutional theory & borrows the agency of
enactment theory
INDUSTRIALIZATION
 Industrialization is the concept of industrial
development at different levels.

 Postmodern organization take ad their

departure point the history of industrialism from
which organization theory emerged.
Phrases of Industrialization
 1st phrase of industrialization

 It got started in the British textile industry where collections of

machines tended by feeders & by maintenance & repair
worker were all located in a single place.

 In this, factory system grew out of the use of machines to

extend & enlarge the productivity of work.

 Gender relations in factories generally reflected gender

relations in society.
 2nd phrase of Industrialization
 2nd phrase of industrial development roughly began in 1850s
& 1860s.
 According to Burns, the increased technical complexity
demand parallel growth in systems of social organization &
bureaucracy.
 Burns, attracted the attention of sociologists whose ideas
founded organization theory.
 For instance, Weber & Max predicted that industrialization
would create a new middle class of managers, clerical
workers & professionals who would be employed in large
hierarchical organizations.
 3rd phrase of Industrialization

 In 3rd phrase CAPITALISTISM’S dependence on economic growth

leads to
1. Enhanced sensitivity to consumer & new techniques for
simulating consumption.
2. The internationalization of firms in search of new market
3. New technological developments that increasingly occurs
within industrial firms via research and development activities.
 According to American futurist Alvin Toffler in his book Future
shock, a good way to envision the significance of social
transformation initiated by computer and telecommunications .
Post Industrialism
 Idea if post industrialization was originated from
assumption that changes referred to are objectively real.
 American sociologist Danial Bell gave new developments
the name POST INDUSTRIALISM ion 1973 book ‘’The
Coming of Post- Industrial Society’’
 Another correlate of post- industrialization, initially
remarked by American futurist John Naisbitt in his book
Megatrends,
 Is the abandonment of hierarchies in favor of
communication networks with a consequent shift from
vertically to horizontally structured organization
Stakeholder Theory
 A theory of post industrialism I which organizational
management & business ethics that addresses morals &
values in managing an organization.
 Post industrialism include joint ventures, strategic alliances
& virtual organizations.
 One distinguishing feature of post industrial is
Boundarylessness.
 Their boundaries with environment are transparent
 Boundaries between internal group also disappear to be
made between departments, hierarchical position.
 American ethics professors R. Edward Freeman applies
stakeholder theory in corporate governance.
Comparison of modernism & postmodernism

Postmodernism is more instrumental than modernism

in promoting & developing ideas that could create a
good environment to increase the growth and
development of any organization.
This is due to fact that it enables us to critically-
reflexive practitioners in understanding how
ideologies & assumptions, organizational structure&
processes can silence and marginalize group &
individuals.
Hegemony
 The moral of postmodern theory – avoid
hegemony
 Hegemony is the form of domination in which the
interests of ruling class becomes the status quo
through unquestioning acceptance.
 A key to applying the postmodern perspective
lies in noticing how language is used to construct
reality & define identity and then challenging.
 According to postmodernists, there is great need
to challenge dominant conceptualization pf
environment.