Daft (2013) Chapter 4

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Contemporary management/leadership issue.
Discuss what is the most critical issue facing management in contemporary organizations. Indicate the reasons for choosing this issue; establish its significance both in an academic and a practical sense. This paper should be 3-4 pages long, written with headings (and subheadings if appropriate), citing significant course material to support your rationale and discussion.  Chapter 4: The External Environment (Daft 146)

All organizations face tremendous uncertainty in dealing with events in the external environment and often have to adapt quickly to new to new competition, economic turmoil, changes in consumer interests, or innovative technologies The Organization’s Environment

* Environment includes everything inside and outside the organization * Organizational environment: everything that exists outside the organization and can affect all/part of the organization * The environment of an organization can be understood by analyzing it’s domain—the chosen environmental field of action * Domain defines the organization’s niche and defines those external sectors with which the organization will interact to accomplish its goals * There are 10 sectors, or subdivisions, for each industry 1. Industry: competitors, industry size and competitiveness, related industries 2. Raw Materials: suppliers, manufacturers, real estate services 3. Human Resources: labor market, universities, training schools, unions 4. Financial Resources: stock markets, banks, savings and loans, private investors 5. Market: customers and clients, potential users of products and services 6. Technology: science, computers, information technology, techniques of production 7. Economic Conditions: recession, unemployment rate, inflation rate, growth, economics 8. Government: city, state, federal laws and regulations, taxes, court system, political processes 9. Sociocultural: age, values, beliefs, education, religion, work ethic, green movement 10. International: entry into overseas markets, foreign customs, regulations, exchange rate

* Task Environment
* The task environment includes sectors with which the organization interacts directly and that have a direct impact on the organization’s ability to achieve its goals. * The task environment usually includes the industry, raw materials, and market sectors; and sometimes the human resources and international sectors. * General Environment

* The general environment includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it * The general environment includes government, sociocultural, economic conditions, technology, and financial resources sectors. These sectors affect all organizations eventually * International Environment

* The international sector can directly affect many organizations and it has become increasingly important * International events can influence all the domestic sectors of the environment as well The Changing Environment

* The 2 essential ways the environment influences organizations: -the need for information about the environment
-the need for resources from the environment
* Determining an organization’s environmental uncertainty means focusing on sectors of the task environment * The total amount of uncertainty felt by an organization is the uncertainty accumulated across relevant task environment sectors * Organizations must cope with and manage uncertainty to be effective * Uncertainty means that decision makers do not have sufficient information about environmental factors, and they have a hard time predicting external changes * Uncertainty increases the risk of failure for organizational responses and makes it hard to compute the costs and probabilities associated with decision alternatives

* Simple-Complex Dimension
* The simple-complex dimension concerns...
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