LESSON 3

• External environment


  Everything outside an organization's boundaries that might affect it. The uncontrollable environment.
• Internal environment


  The conditions and forces within an organization. The controllable environment.
• Dimensions of the general environment

  • Economic
  • Technical
  • Socio-cultural
• Elements of the organizational environment

  • Public pressure groups
  • Suppliers
  • Customers
  • Government
  • Labor unions
  • Competitors
• Additional dimensions of the environment

  • Political-Legal
  • International
• Elements of the task environment

  • Competitors
  • Customers
  • Suppliers
  • Regulators
• Additional elements of the task environment

  • Interest groups
  • Strategic partners
• Elements of the internal environment

  • Owners
  • Board of directors
  • Employees
  • Physical work environment
• Organizational culture


  The set of values, beliefs, behaviors, customs, and attitudes that helps the members of the organization understand what it stands for, how it does things, and what it considers important
• Organizational culture


  • It determines the "feel" of the organization
  • Its starting point is often the founder
• Managing organizational culture


  1. Understand the current culture

  2. Decide if it should be maintained or changed

  3. Walk a fine line between maintaining an effective culture and changing a dysfunctional one
• Competitive forces


  • Threat of new competitive entrants
  • Competitive rivalry
  • Threat of substitute products
  • The power of buyers
  • The power of suppliers
• Examples of environmental turbulence

  • Terrorist attacks
  • Workplace violence
  • Computer viruses
• How organizations respond to their environments

  • Information management
  • Social responsibility
  • Strategic responses
  • Direct influence
  • Organization design and flexibility
  • Mergers, takeovers, acquisitions, alliances
• Approaches to organizational effectiveness

  • Systems resources approach
  • Internal processes approach
  • Goal approach
  • Strategic constituencies