The organizational environment

48,952 views

Published on

Organizations do not exist in a vacuum. They are constantly being affected by external forces which determine an organization’s effectiveness and performance. Therefore, it is imperative for the management of any organization to examine components of their firm’s external and internal environments to understand the dynamic and far-reaching changes that are occurring. This presentation focuses on the environmental factors that companies need to analyze for developing strategic options.



At the end of this tutorial students should be able to:

Understand the importance of the influencing forces with in an organization’s environment .
Describe the general and task environments.

Published in: Business, Technology
4 Comments
27 Likes
Statistics
Notes
No Downloads
Views
Total views
48,952
On SlideShare
0
From Embeds
0
Number of Embeds
21
Actions
Shares
0
Downloads
1,342
Comments
4
Likes
27
Embeds 0
No embeds

No notes for slide

The organizational environment

  1. 1. The Organizational Environment<br />Fundamentals of management<br />
  2. 2. Overview<br />Organizations do not exist in a vacuum. They are constantly being affected by external forces which determine an organization’s effectiveness and performance. Therefore, it is imperative for the management of any organization to examine components of their firm’s external and internal environments to understand the dynamic and far-reaching changes that are occurring. This presentation focuses on the environmental factors that companies need to analyze for developing strategic options. <br />
  3. 3. Objectives<br />At the end of the lesson students should be able to:<br />Understand the importance of the influencing forces with in an organization’s environment .<br />Describe the general and task environments.<br />
  4. 4. The external environment<br />(Macro environment)<br />
  5. 5. <ul><li>Political / legal
  6. 6. Economic
  7. 7. Socio-cultural
  8. 8. Technological</li></ul>General Environment<br />Task Environment<br /><ul><li>Customers
  9. 9. Labour
  10. 10. Competition
  11. 11. Suppliers</li></ul>Internal Environment<br /><ul><li>Employees
  12. 12. Management
  13. 13. Culture</li></li></ul><li>Organizational environment<br />We can conceptualize the organization as having two layers:<br />The general environment<br />The task environment<br />
  14. 14. The general environment<br />The general environment or macro-environment is all those forces affecting the organization indirectly. These external forces are:<br />Political / legal<br />Economic<br />Technological<br />Socio-cultural<br />
  15. 15. Political / legal environment<br />The general environment is inclusive of government regulations, laws, policies and activities designed to influence organizational performance in an indirect way. <br />
  16. 16. Technological forces<br />Technological environment includes changes in technology that affect the way organizations operate and service they provide.<br />
  17. 17. Economic dimensions:<br />These forces are most likely to affect an organization’s production of goods and services and results in the general state of both domestic and world economy. The components are:<br />Interest rates and inflation<br />Consumer price index<br />Monetary and fiscal policy<br />taxes<br />Unemployment rates<br />Wage rates<br />GDP<br />
  18. 18. Socio cultural<br />The importance socio cultural factors that companies should analyze are:<br />Age<br />Population density<br />Educational levels<br />Geographical distribution<br />Culture<br />Lifestyles <br />
  19. 19. Task environment<br />The task environment is inclusive of those sectors that have a direct working relationship with the organization. Critical variables in the tasks environment are:<br />Customers<br />Suppliers<br />Labour<br />competition<br />
  20. 20. Labour<br />Labour markets include the people available for hire. <br />Every organization needs well-trained and qualified workers.<br />Research shows the workers with high level of competencies, knowledge, and training increases the overall performance of the organization.<br />
  21. 21. Customers<br />Customers are the final purchasers of a good or service.<br />A study of customers will help managers determine what are the customers’ needs and wants to be satisfied.<br />Analysis of customer profiles allows the organization to develop it organizational strategy and structure in order to deliver a particular good or service that best suits the needs of the customer.<br />
  22. 22. Suppliers<br />Suppliers are peoples and organizations who provide raw materials the organization uses to produce its output.<br />A supplier’s pricing strategy does affect the organization’s level of revenue earned.<br />
  23. 23. Competition<br />Competitors are other organizations in the same industry or type of business providing goods and services to the same set of customers. <br />
  24. 24. Internal environment<br />The internal environment consists of employees, management and the shared organizational culture.<br />Analysis of the internal environment allows top management to assess the strengths and weakness of the organization. <br />This assessment has implications for human resource management policy, procedure, employee training and development.<br />
  25. 25. Importance of the organizational environment<br />The unpredictability of the external environment can render an organization ineffective and consequent demise. Careful environmental scanning by management is significant and has implications for planning. It is at this point that managers are able to set goals and design strategy and justify their decisions for taking what ever they see necessary. Not one can be certain; but it is better to be safe than sorry. <br />
  26. 26. What forces in an organizational environment do you see influencing the hotel industry in your country?<br />

×