General Environment

The forces within the general environment, including politico legal, economic, technological, socio cultural and international forces, have a broad general impact on the organization. Although these forces do not always have a direct influence on the organization's daily activities, they are important for several reasons. First, forces in the general environment can evolve into significant trends with far-reaching effects. A good example is the increasing interest in protecting natural resources and preserving ecological balance. Bowing to public pressure, McDonald's in 1990 abandoned plastic foam hamburger boxes in favor of paper wrappers that may cause fewer waste-disposal problems. Although the foam boxes had been in use for 15 years, McDonald's managers were concerned that environmentally conscious customers would be alienated if the chain didn't switch.

Second, conditions created by forces in the general environment can produce an overall climate that the organization must consider. For example, food maker H.J. Heinz did well when inflation allowed it to pass along costs without hurting profits, but when inflation slowed, so did real sales growth. At the same time, Heinz found that a new emphasis on healthy life-styles was changing the food-buying habits of many people. To cope, Heinz cut its costs by 2 percent but diverted the cost savings to build new sales momentum through more efficient product development and promotion for items such as Weight Watchers foods. Finally, forces in the general environment sometimes become more direct over time, influencing the task environment.