External Environment and Organization's Strategy

Topics: Strategic management, International Standard Book Number, Bicycle Pages: 8 (2342 words) Published: May 30, 2012

The world seems to be changing ever faster, with the innovation of technological, economic and political forces reverberating around the world everyday. In the 21st century, management is becoming one of the leading key words on most of search engines such as Google, Yahoo, Go.com, Business.com, WebCrawler…Times are turbulent, and for managers trying to successfully run their organizations, not only do they have to master the technical skills but also make precise decisions at the right times and build up the appropriate strategies to achieve organizational goals. That is to say strategy is undoubtedly crucial for organization’s success, so what is strategy? Strategy refers to the plan of action that prescribes resources allocation and other activities for dealing with the environment and helping the organization attain its goals. As can be seen, environment is what strategy has to deal with, thus, it is worth considering carefully. In this assignment, external environment factors and its relationship with organization’s strategy will be discussed in details that including two layers – the general environment and the task environment. (Managing the External Environment: Strategic Perspective ISBN 10: 0803986297 ISBN 13: 9780803986299

Publisher: SAGE Publications Ltd
Date published: 1991)


First of all, an "environment" is the whole of surrounding things. Furthermore, the external environment of organizations consists of the general environment and the task environment. The general surroundings that affect the organization indirectly, its factors do not directly change day – to – day operations, but do affect all organizations eventually are: international pressures, political/legal factors, economic factors, technological advancements, educational conditions, the natural environment and socio – cultural influences. Besides, the task environment is the layer that directly influences the organization’s operations and performance includes: customers, suppliers, competitors, public pressure groups, regulators and labor markets. The diagram below is designed to illustrate my understanding about external factors that influence the organization. (Insights: Readings in Strategic Management

Michael A. Hitt , Robert E. Hoskisson, R. Duane Ireland, Timothy B. Palmer ISBN 0314207732 (0-314-20773-2)
Publisher: West Pub Co)

Trends in the economic area can have obvious implications for the farm business. A strength and value of the Vietnam Dong relative to other currencies can increase Vietnam export demand. There appear Export quotas of Vietnamese products such as: textile, agricultural cargos are in upward trend. This in turn can lead to lower commodity prices and farm incomes for everyone in the industry. Rising incomes of consumers in other countries is another example. With increased income, these consumers will improve their diets. This in turn can lead to an increase in demand for animal protein sources and likely increased exports of meat products. (Environmental factors and ecological processes in Boreal Forests – Gordon Bonan and Herman Shugart – Annu. Rev. Ecol. Syst. 1989. 20:1 – 28)

Changes in technology can also have a great impact. The evaluation and adoption of production technologies is an aspect of technological change familiar to business managers. However, other technological changes such as in information technology can lead to important changes for various businesses. For instance, the development of precision agriculture, the use of the Web to gather information or order supplies, and the increased ease with which we can communicate with farmers in other parts of Vietnam or the world are changing the farm business. (Grand Corporate Strategy and Critical Functions: Interactive Effects of Organizational Dimensions by Kyamas A. Palia, Michael A. Hitt , R. Duane Ireland, Yezdi H. Godwalla ISBN 0275908763 (0-275-90876-3)

Publisher: Greenwood Publishing Group,...
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