Understanding Organizational Culture, Social Responsibility, and Evolution
Organizational culture encompasses enduring behavioral guidelines that shape its functions. These functions include:
- Transmitting a sense of identity to members of the organization.
- Facilitating greater commitment.
- Reinforcing the stability of the social system.
- Providing recognized and accepted approaches to decision-making.
Social Responsibility in Business
Prior to the 1960s, social responsibility was not a prominent concern. However, social activists of that era began to question the purely economic objectives of business ventures. Today, managers face daily decisions with a social responsibility dimension, encompassing areas such as philanthropy, pricing, employee relations, resource conservation, product quality, and safety. There are two primary viewpoints on this:
Economic Viewpoint
The economist Milton Friedman is a notable proponent of this view. He argues that shareholders have only one concern: financial income. Therefore, the sole responsibility of management is to maximize profits.
Socioeconomic Viewpoint
This perspective asserts that times have changed, along with expectations of business. It posits that the social responsibility of management extends beyond profit to include protecting and improving the welfare of society.
Arguments For Social Responsibility:
- Public expectations
- Long-term profit
- An ethical obligation
- Public image
- A better environment
Arguments Against Social Responsibility:
- Violation of the pursuit of maximum profits
- Dissemination of purposes
- Costs
- Too much power
- Lack of public support
Evolution of Organizations Over Time
The creation of an organization is not spontaneous; it originates from defined objectives and arises from specific demands of people. Organizations are born with well-defined objectives that change as they grow and develop. There are different stages in the life of an organization. Initially, the foundation is essential. People may disagree about the meaning of the organization and its overall objectives, but they begin to work, sharing responsibilities.
Once this difficult stage of building is overcome, the organization tends to develop by accelerating the management cycle: purchase-production-sale-collection-payments-purchasing…
Accelerating the management cycle means that the more times the cycle is performed in a given period, the more likely it is to enhance the economic success of the enterprise. This acceleration depends on the market’s response, i.e., accepting its value proposition and buying products and services.
Any organization reaches maturity when it achieves maximum sales. Growth and development do not exceed this level. This is evident in monthly sales figures. A company declines when it encounters a market that is no longer growing and may begin to decrease or disappear, or may remain stagnant.
At times of change, crises can occur for many reasons, including:
- When market needs are not properly interpreted.
- When organizations are not satisfied.
- When people within organizations are not satisfied.
These situations motivate a reassessment and an adequate evaluation of the situation to make the best decision.