In What Ways Does The Environment Appear to Shape Organizations - Assignment Example

In what ways does the environment appear to shape organisations? In the organisation, leaders, departments and workers have to function effectively to improve the efficiency inside the organisation, and thereby handle or control the organisation related issues that are prevalent outside the organisation. If said in another way, the issues that happen in its external environment will mainly shape how the organisation functions or functions internally. At the same time, issues that happen inside the organisation involving the employees will also shape the organisation. So, both the external environment as well as internal environment will shape the internal functioning of the organisation, thereby the employees, which will have a lot of psychological basis. Business Psychology is one of the rapidly developing business segments in which the psychology of the external environmental parameters (customers, society and other stakeholders) and importantly the psychology of the employees are comprehensively investigated. Proper awareness of the psychological dimensions of the external environment can help the organization adapting itself to the political and economic climate, as well as helping it in the areas of advertising, public relations, etc and thereby adapting itself to the main need of reaching the customers. Likewise, incorporation of psychological management of the employees in the internal environment will make the organisation adaptable to the employees, thereby making them highly motivated and productive, to come up with quality products to the fullest satisfaction of the customer. So, this paper will discuss how the external environment as well as the internal environment will shape the organisation and in a way make them adaptable to the environment. External environment With every organisation wanting to expand their reach and make an imprint in various markets, there will be enough external opportunities, strengths, etc for it, to make an impression. But, at the same time, there will also be many threats particularly political and economic hurdles in the external environment. So, when the organisation has enough opportunities, in the external environment, it can shape itself to set targets and formulate various strategies to achieve those targets and thereby beat handle the political and economic hurdles. Political issues in the external environment and how it shapes the organisation In the external environment of an organisation, the political factor will play a key in shaping the organisation. Only if the political situation is stable, with the government guaranteeing as safe environment for the firms, the firms can establish their infrastructure and carry out their operations. For example, consider a country like Pakistan or Afghanistan. Big organizations will think twice or thrice before investing in these countries because of the unstable political climate, and the resultant internal agitations and widespread prevalence of terrorism. Such countries are incapable of attracting foreign direct investment because of the negative environment they possess for the business build up. In short, healthy environment is essential for organizations to cement their bases and strategies. On the other hand, among the developing countries with huge market, China and India are believed to be the investor friendly countries, with a stable political setup, which is facilitating and indulging in economic reforms, liberalization of rules, etc. Globalization is one key environmental factor, which has brought many opportunities to the organizations, particularly Multinational Companies (MNC) to invest in an effective manner and importantly have a profitable venture. (Knowledge Management 2007).That is, the environmental factor of politics will mainly impact and shape MNCs, because as they enter foreign firms, they will be optimally regulated by the government. When these external environment acts, the organisation for their part has to incorporate certain practices, thus shaping itself in a particular way. One of the key practices, which ‘shapes’ the organisation and thereby psychological association for the organisation in the minds of the people is the recruitment function of the organisation. In MNCs particularly during foreign operations, employees will be recruited mainly from the local population. This recruitment process, apart from complying with the unwritten rule of giving maximum employment to the local population and also getting cheap labour, will benefit the MNC in many ways, particularly psychological association. (Scullion & Collings 2006).That is, this functioning of the organisation will elevate the organization’s image in the eyes of the local population. The local population will have a ‘psychological high’ that the MNC is recruiting them and providing them a career and livelihood. Also, if the MNC involve themselves in social service activities as apart of its Corporate social responsibility (CSR), the local people will welcome the MNCs and thereby form a positive psychological association. Thus, the factor of politics in the external environment will necessitate the organisation to function in a certain constructive way, thereby shaping it. Economic issues in the external environment and how it shapes the organisation Morgan (1989) has mentioned that everything exists in the context of wider environment as far as an organization is concerned. It is not possible for an organization to function properly if it neglect the characteristics of the environment is which it operates. Environment of an organization is not limited to the organization and its surrounding areas alone. In this globalised world, an economic problem in one country will not get restricted to that country, but gets spread to other countries. The economies of most of the countries in the world are directly and indirectly dependent on the U.S.’s economy and with liberalization happening everywhere, the negative effects in USA will be felt everywhere including in UK. UK has been under the negative influence of recession for an extended period, with its negative effect felt in all sectors of economy. Although many countries are on the verge of recovering from recession, it is confirmed that the UK is the only G20 nation still in recession, even sending the pound tumbling to a two-month low against the dollar, with sterling dipping below the $1.60 level. (Elliott 2009). With these worst case scenarios and negative impacts, many UK companies as well as MNCs are facing problems, and this has lead to the organisations shaping in new ways. As, this environmental factor of economic recession shapes the organisation, they had to indulge in certain practices, which is positively as well as negative impacting the organisation, particularly from the psychological perspective. Many companies are suffering losses and as a result of it several companies are adapting or opting for retrenchment strategy. Cost cutting would have to eventually result in job cutting. Lay offs have become a common thing these days with companies, with the expendable employees livelihood and importantly psychological motivation destructed. Many reputed organizations have quietly cut the salaries and other fringe benefits to their employees, again affecting the psychological motivation. People are the most valuable asset of any organization, and as many have found to their peril, exaggerated redundancy of staff or the mismanagement of people leads to certain disaster (Dicker 2003). Organisations have upper hand these days and are exhibiting psychological dominance in various aspects. The organisations now knows that if an employee leaves the job he/she will go jobless as other companies also can’t employee them. So, we can say that due this environmental factor, organisations have shaped into ‘meaner’ ones. However, when viewed from another perspective, because of this environment, organisations have shaped into ‘safer and strategic players’. Instead of going of extreme job cuts, the organisations have cut salaries, raising them when there are favourable situations. Many organizations even today have not touched the employees’ salaries as part of their retrenchment and psychological motivation strategy. They look at other options to cut costs and manage recession particularly in the operational and non-human or ‘non-psychology’ areas. Several multinational companies have successfully done it to perfection. Organisations have shaped into broad minded ones and being empathetic with the problems of the employees. Customer centric issues in the external environment and how it shapes the organisation Customer is the ‘king’ of any business. Any organization will be able to survive and crucially succeed only if it can entice the prospective customers and thereby build a strong customer base. Enticing can be effectively done by the organization and its marketing department through various marketing strategies particularly advertising. Advertising is one of the core organisation functions and as it is done on the basis of the environment, it also shapes the organisation. That is, advertising should be done as per the characteristics of the environment in which the organization is operating. Even if the organisation is engaged in the manufacturing of same products in different countries, they need to formulate separate advertisements for each country, region or locality in which it operates, thereby shaping itself in particular ways. For example, cricket star Sachin Tendulkar might be a good brand ambassador for an international company operating in India. But he may not succeed as a brand ambassador in China, where cricket is not popular. In China the company needs to appoint Jackie Chan like celebrities in order to convey their message properly to the people. Even in India itself, there are more than 28 states, each have different culture and language. Although Sachin have a pan-India appeal, it would be better to go local centric celebrities and ad campaigns. In short, advertisements and brand development strategies should be custom made for each location even if the organization market same products in different locations of the same country. When common people view or hear advertisements, firstly the logic will not matter because the human mind will not look for the features of the product or services offered in advertisements, but will look at the emotional message and how they celebrity it conveys. When the emotional message of the advertisement reaches and entices the viewer’s mind, then only the viewer will look at the features that give benefits to them and make the eventual purchase. The authors Heath, Brandt & Nairn tested the emotional aspect of the advertisement using the Watzlawick et al.s theory and Cognitive Emotive Power Test (CEP). The test or experiment was conducted through online, both in United States and the United Kingdom. The results showed that it is the “emotional creative content in advertising that builds strong brand relationships”. (Heath, Brandt & Nairn, 2006, p.416). A product can reach the viewers or prospective customer’s mind, only if emotional elements are integrated into, and this can done only by having local-centric communication. Thus, it is clear, when the organisation wants to focus on the key external element of customer, they need to shape themselves according to the demographic of the customer base. Internal factors In an organisation, the internal environment will mainly be composed of the physical infrastructure or setup and importantly the employees. These two aspects have a direct psychological basis and only impact the environment, thereby shaping the organisation. Shaping of the organisation not only involves the shaping or changing of the organisational processes, but also shaping of the physical environment. That is, organisations will shape their physical environment for the psychological upliftment of the employees, giving channels for mental as well as physical interaction, and importantly motivation. Need for stress-free environment shapes the organisation With stressed mind, the employees will be hard-pressed to use his/hers physical and mental part, to work effectively for the organization. Stressed mind in the sense, due to the poor match between work load and the capabilities, resources etc of the worker, the mind of the worker could be become disoriented leading to the damaging of workers biological, psychological or social systems. According to the Selye Stress theory, when an individual is going through first stage of stress, he/she will have an "alarm reaction," with his/hers body preparing oneself to "fight or flight”. (Gabriel). Stress, anger and turmoil at workplace have the effect of creating more toxic work environments (Musacco, 2009, p.51). So, the stress levels of the employees should be kept at bare minimum for the benefit of the employees. Another environment related issue that could stress the employees and could impact their motivation is the lack of communication channels. In any organization, there will hierarchical structures, with the management and the employees separated both physically and mentally. This separation particularly the absence of mental communication and interaction will affect the motivation level of the employees. As part of shaping the organisation, mental communication and interaction has to be developed by the leader and the management with the employees, as it can increase motivation to high level and thereby decrease the stress levels. Thus, when the organisation changes or modifies its physical environment for good communication and psychological motivation of the employees, it can shape in a particular way Effective communication channels can be established by focusing on the physical environment of the organization. For that, the best option the leader may consider is going for an open-office layout. That is, cubicles may be preferred instead of offices with doors. Because, in an office set up where team work will have prominent place, face to face interaction in the case of cubicles would bring in more ideas, than one calling other into a closed room and having a closed discussion. “A Cornell University study finds that small-scale, team-oriented offices with few Dilbert-like panels are more effective work environments than private, closed offices because they more readily foster communication, cohesiveness and organizational learning among co-workers” (Lang, 2002). Also as part of the need for communicable and motivational environment, symbols such as private offices, special dining rooms for executives, and personal parking spaces could be curbed down. According to the Perception and equity theories, individuals will also get stressed out, if they perceive themselves as under rewarded or if don’t receive the benefits they are entitled to. These symbols are negative part of hierarchy and could impede communication channels, and so organisations will shape an communication friendly environment accordingly. “…a firm understands its environment and fashions a response to that environment at the macro level” (Boyacigiller, Goodman, Phillips, 2003, p.321). Even though, it is not always possible to work in a stress free environment, particularly in today’s competitive world, the strategy should be to keep the stress level to bare minimum. Along with shaping the physical environment, the organisation should shape itself to provide rewards, incentives, promotions and importantly appreciation to the deserving and hard working employees. This will increase the motivational levels, and thereby reduce the stress levels to as minimum as possible Conclusion Organizational psychology has progressed a lot for the last couple of decades. Management Gurus have realized that the study of internal and external environmental psychology is important for the organization for sustaining the growth. As discussed above, mainly political and economic issues in the external environment will impact the organisation both in the positive and in the negative direction. When these issues impact, they will modify their functioning mainly involving their employees and their psychological aspects. When the organisation manages these situations, they will shape in a particular way. Likewise, in the internal environment, organisations will change certain physical structures to psychologically uplift the employees, thereby shaping the organisations. References Boyacigiller. NA., Goodman. RA. and Phillips. ME 2003, Crossing Cultures: Insights from Master Teachers, Routledge, London. Dicker, L, 2003, Employee Relations: How to Build Strong Relationships with Your Employees, Allen & Unwin, Sydney. Elliott, L 2009, UK recession longest and deepest since war, says ONS, viewed on April 24, 2010 http://www.guardian.co.uk/business/2009/dec/22/britain-still-in-recession Gabriel, G, Hans Selye: The Discovery of Stress, viewed on April 24, 2010 http://www.brainconnection.com/topics/printindex.php3?main=fa/selye Heath, R, Brandt, D & Nairn, A 2006, Brand Relationships, Journal of Advertising Research, Vol. 46, No. 4. Lang, S.S. 2002, Open-style offices rather than Dilbert-like panels foster team spirit and innovation, according to Cornell workplace study viewed on April 24, 2010 http://www.news.cornell.edu/releases/Feb02/offices.best.ssl.html Knowledge Management 2007, Importance of Environment, viewed on April 24, 2010 http://knowmgt.blogspot.com/2007/07/importance-of-environment.html Misirian, N, Positive Psychology at Work, viewed on April 24, 2010 from http://www.psychologyforbusiness.com/articles_alternative2.htm Morgan, G 1989, Creative Organization Theory: A Resourcebook, Sage Publications, Inc. Scullion, H & Collings, D. G., 2006, Global Staffing, Routledge, London. Read More