INVIRONMENT EXPLAIN EXTERNAL INVIRONMET

Environments have direct impact in the way of organization structure and its activities when the environment is dynamic and heterogeneous. It is usually to establish functional department with in the organization to deal with special set of environment inputs and outputs.

DEFINATION

“The term environment refers to institutions or forces that are output the organization and potentially affect the organization performance”

SOME WRITERS SAY

“Just take this universe and subtract from if the subset that represent the organization and reminder is environment”

In this section we will identify some of the critical environment forces that affect management and how they constrain managerial discretion.

DEFINING THE EXTERNAL ENVIRONMENT

“Output institutions or forces that potentially affect an organization’s performance”

The external environment is making up of two components

• The specific environment
• The general environment

THE SPACIFIC ENVIRONMENT OR TASK ENVIRONMENT

William R.Dill

“The more specific force which are relevant of the decision making and transformations process of the individual’s organization”

S.P ROBBINS

“The part of the environment that is directly relevant to the achieve of an organization’s goals”

Each organization specific environment is unique and changes with conditions. For instance times and Roles both make watches but their specific environment differ because they operates in distinctly different market niches”

FACTIORS OF SPLECIFIC ENVIRONMENT

Following are the main factors

Supplier

Supplier mean these firms and persons who supply raw material, equipment, product part and finance and labor inputs.

But in the term of suppliers also includes provides of finance and stock holders, banks, insurance companies, pension funds and other similar organization are needed to ensure a continuous supply of money.

CUSTOMERS

Organization exists to meet the needs of customers. It’s the customer or client who absorbs the organization’s output. They exist to provide services and we are reminded especially at election time. That we indicate by our votes how satisfied we are as customers.

One the other hand, customers absorb the product. Some firms feel great uncertainty from customer than other due to change in behavior, taste and thinking.

COMPETITORS

All organizations have one or more competitors. Although the U.S postal service has a monopoly on mail service, it competes with FedEx, Ups and other forms of communication such as Telephone, email and fax. Nike competes against Reebok, Adidas and Fila among other.

Coca-cola competes against Pepsi and other soft drinks companies. So competitors may be in term of pricing, quality and services and new product. The management should keep in mind and frame policies that efficient.

GOVERNMENT

Organization spends a lot of money and time to meet the requirement of government.

Today, organizations have to set up treatment plant of their waste material, which are dangerous.

Now management can never fire an employee with out any particular reason. It is due to approved unions and employee may go to court.

PRESSURE GORUPS

Managers must recognize the special –interest groups that attempt to influence the actions of organizations.

For instance, PETA’s pressure on MeDonald’s to stop buying beef from one of its supplier until it met MeDonald’s standards for processing cattle. And it would be an unusual week if we did not read that environment or human rights activities were picketing’ boycotting or threatening some organization in order to get manager to change some decision or action.
THE GENERAL OR SOCIAL ENVIRONMENT
“The general environment broad economic, political or legal, sociocultural, demographic, technological, and global condition that may affect the organization”
Changes in any of these areas usually do not have as large an impact as the specific environment has, but managers must consider these areas as they plan, organize, lead and control.
ECONOMIC CONDITION Interest rates inflation, changes in disposable income, stock market fluctuation, and the stage of general environment that can affect management practices in an organization. These are major factors that disturb the activities of an organization.

For example, when organization is n need of capital or loan and rate of interest is high that it will create problem for business.

POLITICAL CONDITION

Generally, a political condition is the stability of a country in which as organization operates and attitude that elected governmental officials hold toward business.

In the United State, for example organizations have generally operated in a stable political environment. Manager should attempt to forecast major political changes in the countries in which they operate because these political conditions can influence decisions and action, laws and court decisions, however have put increasing limits on what employee may do.

SOCIAL CONDITION

Manager should adopt the policies keeping in view the changing taking place around it. As values, customers, taste and behavior of people change, the management must change itself in both product and offering service.

GLOBAL

Globalization is one of the important factors, which effect the organizations and management. Due to small and large-scale international organization, the numbers of competitors have been increased.

If there is war in one part of the worlds, it will disturb the economy of the world.

TECHNOLOGICAL CONDITIONS

Now it is technology development era. An organization which keeping in view of the changes itself that will remain in process of business.

We can use the technology in order to stay ahead from competition and by reducing the cost of product. Now automatic machine are working where something ago workers are standing to operate.

EDUCATION

Now people are more educated they know what is right and wrong from them. If an organization is making a low quality product, people will not purchase even if it price will low.

On the other hand, now today specialization in every filed is possible. If one organization acquiring the service of specialization people that organization which unable to hire the services and it is due to knowledge through education.

LEGAL CONDITIONS

Legal conditions such as formation process, taxes roles and control of organization create problems. Such as sometime, due to increase in taxes and limitation on the activities of organization.

NATURAL RESOURCES OR CLIMATE

Sometime due to change in natural resources disturb the activities of organization. For example due to unhealthy climate cotton crop is not too good and the whole organization relating to use the raw material of cotton will disturb.