The document discusses the organizational environment and its importance for management. It describes two key layers of the environment - the general environment and task environment. The general environment includes political, economic, technological and socio-cultural forces outside an organization's direct control that can indirectly impact it. The task environment encompasses an organization's customers, suppliers, labor forces and competitors that it directly interacts with. Understanding how these external factors influence an organization is vital for management to effectively analyze strategic options and ensure organizational effectiveness and performance. Regular environmental scanning allows managers to set goals and design strategies to respond to changes in the unpredictable external environment.

1. The Organizational EnvironmentFundamentals of management

2. OverviewOrganizations 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.

3. ObjectivesAt the end of the lesson students should be able to:Understand the importance of the influencing forces with in an organization’s environment .Describe the general and task environments.

4. The external environment(Macro environment)

5. Political / legal

6. Economic

7. Socio-cultural

8. TechnologicalGeneral EnvironmentTask EnvironmentCustomers

9. Labour

10. Competition

11. SuppliersInternal EnvironmentEmployees

12. Management

13. CultureOrganizational environmentWe can conceptualize the organization as having two layers:The general environmentThe task environment

14. The general environmentThe general environment or macro-environment is all those forces affecting the organization indirectly. These external forces are:Political / legalEconomicTechnologicalSocio-cultural

15. Political / legal environmentThe general environment is inclusive of government regulations, laws, policies and activities designed to influence organizational performance in an indirect way.

16. Technological forcesTechnological environment includes changes in technology that affect the way organizations operate and service they provide.

17. Economic dimensions: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:Interest rates and inflationConsumer price indexMonetary and fiscal policytaxesUnemployment ratesWage ratesGDP

18. Socio culturalThe importance socio cultural factors that companies should analyze are:AgePopulation densityEducational levelsGeographical distributionCultureLifestyles

19. Task environmentThe task environment is inclusive of those sectors that have a direct working relationship with the organization. Critical variables in the tasks environment are:CustomersSuppliersLabourcompetition