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The Environment and Culture of Organizations

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Amir Ijaz

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The Environment and Culture of Organizations

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Amir Ijaz
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management

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management

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13 views18 pages

The Environment and Culture of Organizations

Uploaded by

Amir Ijaz
management

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© All Rights Reserved
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You are on page 1/ 18

THE ENVIRONMENT AND

CULTURE OF ORGANIZATIONS
LEARNING OBJECTIVES

• After studying this topic, you should be able to:


1. Discuss the nature of the organizational environment and identify the
environments of interest to most organizations.
2. Describe the components of the general and task environments and discuss
their impact on organizations.
3. Identify the components of the internal environment and discuss their impact
on organizations.
4. Discuss the importance and determinants of an organization’s culture and how
the culture can be managed.
5. Identify and describe how the environment affects organizations and how
organizations adapt to their environment.
6. Describe the basic models of organizational effectiveness and provide
contemporary examples of highly effective firms.
THE ORGANIZATION’S ENVIRONMENT 

• External Environment
– General environment: everything outside an organization’s
boundaries
-economic, legal, political, socio-cultural, international, and technical
forces.
– Task environment: specific groups and organizations that affect the
firm.

• Internal Environment
– Conditions and forces present and at work within an organization
THE EXTERNAL ENVIRONMENT

• The General Environment


– The set of broad dimensions and forces in an organization’s
surroundings that create its overall context.

• Economic dimension
• Technological dimension
• Sociocultural dimension
• Political-legal dimension
• International dimension
THE INTERNAL ENVIRONMENT

•  Conditions and stakeholder forces within an organization

– Owners
– Board of directors
– Employees
– Physical work environment
HOW ENVIRONMENTS AFFECT
ORGANIZATIONS

•  Change and Complexity


– Environmental change occurs in two ways:
• Degree to which change in environment is occurring
• Degree of homogeneity or complexity of the environment

– Uncertainty
A driving force that influences organizational decisions.
HOW ENVIRONMENTS AFFECT
ORGANIZATIONS (CONT’D)

• Competitive Forces
– Porter’s Five Competitive Forces
• Threat of new entrants into the market
• Competitive rivalry among present competitors
• Threat of substitute products
• Power of buyers
• Power of suppliers
• Environmental Turbulence
– Unexpected changes and upheavals in the environment of an organization.
HOW ORGANIZATIONS ADAPT TO
THEIR ENVIRONMENTS (CONT’D) 

• Information Management in Organizations


– Boundary spanners
– Environmental scanning
– Information systems
• Strategic Response
– Maintaining the status quo, altering the current strategy, or adopting a
new strategy.
• Mergers, Acquisitions, Alliances
– Firms combine (merge), purchase (acquisition), or form new venture
partnerships or alliances with another firm.
HOW ORGANIZATIONS RESPOND TO
THEIR ENVIRONMENTS (CONT’D)

•  Organizational Design and Flexibility


– Adapting to environmental conditions by incorporating flexibility in
its structural design.
• Mechanistic firms operate best in stable environments.
• Organic firms are best suited for dynamic environments.
• Direct Influence of the Environment
– Attempting to change the nature of the competitive conditions in its
environment to suit its needs.
– Pursuing new or changed relationships with suppliers, customers, and
regulators.
THANK-YOU!

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