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3
The Environment of Organizations and Managers
Learning Objectives
After studying this chapter, you should be able to:
Discuss the nature of the organizational environment and identify the environments of interest to most organizations. Describe the components of the general and task environments and discuss their impact on organizations. Identify the components of the internal environment and discuss their impact on organizations. Identify and describe how the environment affects organizations and how organizations adapt to their environment. Discuss the meaning of and approaches to organizational effectiveness.
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Chapter Outline
The Organizations Environments The External Environment
The General Environment The Task Environment
OrganizationalEnvironment Relationships
How Environments Affect Organizations How Organization Adapt to Their Environments
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Internal Environment
Conditions and forces present and at work within an organization
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Technological dimension
Regulators
Owners Customers Employees Physical environment Board of directors Culture Economic dimension
Politicallegal dimension
Strategic partners
Suppliers
Internal environment Task environment General environment Copyright by Houghton Mifflin Company. All rights reserved.
Sociocultural dimension
External environment
Figure 3.1
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McDonalds
Sociocultural Dimension Demographic shifts in number of single adults and dual-income families Growing concerns about health and nutrition
Figure 3.2
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Strategic partners (allies) who are in a joint venture or partnership with the organization.
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Regulators Food and Drug Administration Securities and Exchange Commission Environmental Protection Agency
McDonalds
Figure 3.3
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Least uncertainty
Moderate uncertainty
Moderate uncertainty
Most uncertainty
Source: Adapted from J.D. Thompson, Organizations in Action. Copyright 1967 by McGraw-Hill. Reprinted by permission of McGraw-Hill Companies. Copyright by Houghton Mifflin Company. All rights reserved.
Figure 3.4
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Environmental Turbulence
Unexpected changes and upheavals in the environment of an organization.
Copyright by Houghton Mifflin Company. All rights reserved. 313
Competitive rivalry
Competitive rivalry between firms in an industry.
Power of buyers
Extent to which buyers influence market rivals.
Power of suppliers
Extent to which suppliers influence market rivals.
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Social responsibility
The Organization
Strategic response Direct influence
Figure 3.5
Copyright by Houghton Mifflin Company. All rights reserved. 315
Strategic Response
Maintaining the status quo, altering the current strategy, or adopting a new strategy.
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Transformation
Inputs
Organizational System
Feedback
Outputs
and satisfies the strategic constituents in the environment, . . . (Strategic constituencies approach)
Figure 3.6
Copyright by Houghton Mifflin Company. All rights reserved. 319
Source: Americas Most Admired Companies, Fortune, February 21, 2000, pp. 108 110; The Business Week 50, Business Week, March 27, 2000, pp. 123125.
Table 3.1
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