Managing the Environment: Organisational Culture
This chapter examines the organisational environment in detail and the effects organisational culture has on it. We describe what is meant by ‘environment’ and identify the principal forces—both task and general—that create pressure, influence managers and thus affect the way organisations operate. Next, we discuss several methods that managers can use to help organisations adjust and respond to forces in the organisational environment. We will also need to consider the role of organisational culture and management’s importance in facilitating a positive and constructive climate from which to respond to the environment
What is the organisational environment?
The organisational environment is a set of forces and conditions outside of the organisation’s boundaries that affects the way it operates and shapes its behaviour. These forces change over time and thus present managers with opportunities and threats. To identify opportunities or threats caused by forces in the environment, it helpful for managers to distinguish between the task environment and the more encompassing general environment. The task environment is the set of forces and conditions that affect an organisation’s ability to obtain inputs and dispose of its outputs. It consists of the organisation’s suppliers, customers, distributors, and competitors, and has the most immediate and direct effect on managers. The general environment includes the wide-ranging economic, technological, socio-cultural, demographic, political and legal, and global forces that affect the organisation and its task environment.
The task environment
Suppliers are the individuals and organisations that provide the input resources needed by and organisation in order to produce its goods and services. In exchange for providing an organisation with inputs, the supplier is compensated. Inputs may include raw materials, component parts, or employees. Changes in the nature, number or type of suppliers may result in opportunities and threats to which managers must respond. Depending upon these factors, a supplier’s bargaining position may be either strong or weak. A supplier’s bargaining position is strong when: The supplier is the sole source of an input.
The input is vital to the organisation.
At a global level, managers have the opportunity to buy products from foreign suppliers or to become their own supplier and manufacture their own products abroad. It is important that managers recognise the opportunities and threats associated with managing a global supply chain.
Although the purchasing activities of global companies have become increasing complicated as a result of the development of skills and competencies in different countries around the world, the Internet often eases the process of coordinating complicated international transactions. Most large global companies utilise global outsourcing, which is the process by which organisations purchase inputs from other companies or produce inputs themselves throughout the world, for the purpose of lowering production costs and improving the quality or design of their products.
Distributors are organisations that help other organisations sell their goods or services to customers. Changes among distributors and distribution methods can create opportunities or threats for managers. The changing nature of distributors and distribution methods can also bring opportunities and threats to managers. The power of a distributor may be strengthened or weakened depending upon its size and the number of distribution options available. The structure of a country’s distribution system may serve as an opportunity or threat for a manager.
Customers are individuals and groups that buy goods and services that an organisation produces. An organisation’s success depends on its ability to respond to the needs of its customers. Changes in the number and types...
Please join StudyMode to read the full document