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Understanding Organizational Environment

This document discusses organizational environment. It defines an organization as a deliberate arrangement of people to accomplish a specific purpose, consisting of elements like purpose, people, and structure. The organizational environment refers to the set of forces surrounding an organization that can affect how it operates and access to resources. The business environment consists of internal and external sub-environments. Environmental analysis monitors these environments to identify threats and opportunities that may influence the organization's goals. Both specific forces that directly affect resource obtaining and general forces that shape the specific environment are important to consider. Sources of environmental change include globalization, quality evaluation, environmentalism, ethics, and the internet revolution.

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19 views12 pages

Understanding Organizational Environment

This document discusses organizational environment. It defines an organization as a deliberate arrangement of people to accomplish a specific purpose, consisting of elements like purpose, people, and structure. The organizational environment refers to the set of forces surrounding an organization that can affect how it operates and access to resources. The business environment consists of internal and external sub-environments. Environmental analysis monitors these environments to identify threats and opportunities that may influence the organization's goals. Both specific forces that directly affect resource obtaining and general forces that shape the specific environment are important to consider. Sources of environmental change include globalization, quality evaluation, environmentalism, ethics, and the internet revolution.

Uploaded by

Dhruv_Chandra_4057
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

ORGANIZATION

ENVIRONMENT

By –
Ankit Upadhyay
Ankit Jaiswal
Ankit Chauhan
Arif Chaudhary
WHAT IS AN ORGANIZATION?
Organization
Organization is a deliberate arrangement of people to
accomplish some specific purpose
elements of definition
•each organization has a distinct purpose

•each organization is composed of people

•all organizations develop some deliberate

structure

today’s organizations have adopted:


•flexible work arrangements

•open communications

•greater responsiveness to changes


ORGANIZATIONAL ENVIRONMENT

 The organizational environment is the set of


forces surrounding an organization that
have the potential to affect the way it
operates and its access to scarce resources.

 The environment of business is the 'aggregate


of conditions, events and influences that surround and
affect it.
COMPONENTS OF THE BUSINESS
ENVIRONMENT
 Different environmental variables exist internally and
externally to the business enterprise
 Environmental variables have a positive or negative
influence on the enterprise
 Business environment consists of two sub-environments:
 Internal (micro) environment
 External environment

 Mutual relationships exist between these environments


The Organizational Environment

International Forces

Demographic / Cultural Political Forces


Forces
Customers Distributors

Suppliers Organization Unions

Government Competitors

Environmental Technological Forces


Forces
Economic Forces

General Forces Specific Forces


6- 5
ENVIRONMENTAL ANALYSIS
 Environmental analysis is the process of monitoring an
organizational environment to identify both present and future
threats and opportunities that may influence the firm's ability
to reach its goals.

 As the environment becomes more complex, less stable, and


poorer, the level of uncertainty increases.

 Contingency theory states that in order to


manage its environment effectively, an
organization should design its structure
to fit with its environment.

 A poor fit between structure and environment


leads to failure, a close fit leads to success
The environment consists of specific and general forces.

 Specific forces directly affect an organization’s


ability to obtain resources.

 General forces shape the specific environment


and affect the ability of all organizations in
a particular environment to obtain resources.
Specific environment –
It includes those constituencies that have a direct and
immediate impact on managers’ decisions and actions is
unique to each organization, including:

customers - absorb organization’s output


suppliers - provide material and equipment
competitors - influence of Internet
pressure groups - special-interest groups
 The environment consists of
specific and general forces.

 Specific forces directly affect an organization’s


ability to obtain resources.

 General forces shape the specific environment


and affect the ability of all organizations in
a particular environment to obtain resources.
 General environment –
It includes the broad conditions that may affect
organizations.


Economic conditions - interest rates, changes in
disposable income, and stage of the business
cycle


Legal conditions -
substantial expense entailed to meet regulations
limit choices available to organizations
 Political Conditions
• general stability of country
• attitudes of governmental officials toward
business


Technological conditions

 Global conditions - increasing number of


global competitors and consumer markets
SOURCES OF ENVIRONMENTAL
CHANGE

 Globalization

 The evaluation of product quality

 Environmentalism

 Ethical Reawakening

 Internet revolution

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