MGT 121 Chapter 2
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The External Organizational Environment (p.56)
Changes in the everyday world can be understood by defining and examining components of the external environment.
Such factors includes all elements existing outside the boundary of the organization that have the potential to affect the organization.
I.e: competitors,resources,technology and economic conditions that influence the organization.
Note: External organizational environment does not include elements that are too far removed from the company that it cannot be percived like an earthquake or hurrican destroying company headquaters
The General Environment (p.56)
The general environment effects organizations indirectly. It includes social, economic, legal/political, natural and technological factors that influence all organizations about equally.
Example: Changes in federal regulations or an economic recession are part of the organization's general environment.
These events do not change the company's day to day organisations but they do affect all organizations eventually.
The Task Environment (56)
The task environment are factors that are outside of the corporations boundaries but involves things that affect the organization closely.
These generally include competitors,suppliers,customers and the labor market.
Organization internal environment (56)
This includes elements within the organization's boundaries. The internal environment is composed of current employees, management and especially corporate culture, which define employee behavior in the internal environment.
The General Environment
The general envioroment influences the organization over time but does not involve day to day transactions
- International events
- Technological events
- sociocultural events
- economic and political events
The technological dimension of the general environment
Represents the technological and scientific advancements in a specific industry as well as in society as a whole.
The technological dimension has had a strong impact on the way companies operate today.
For example: think about how the internet and computers has changed the daily operations of a large business.
I.e protected data servers,video conferencing,
Advances in technology drive competition and technology also has the ability to transform consumer expectations of an entire industry.
The International dimension of the external environment
Represents events originating in foreign countries that affect corporations.
For example China's booming economy has turned it into a huge auto market because of this car companies had to start designing their cars for Chinese consumers.
The Sociocultural Dimension of the General Environment
The sociocultural dimension represents the demographic characteristics as well as the norms, customs, and values of the general population.
Important characteristics are : geographical distribution and population density, age, and education levels.
examples of companies studying sociocultural trends and applying them include:
companies recongizing that there are a lot of old people now a days so they want create products that are senior friendly.
The Economic Dimension of the General Environment
This dimension represents the general economic health of the country or region in which the organization operates in.
This dimension is measured by looking at consumer purchasing power, the unemployment rate.
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