How General Environment Affects Organizations

Topics: Subprime mortgage crisis, Demographics, Subprime lending Pages: 8 (2504 words) Published: November 10, 2008
In this essay, I will make an abstract of the definition about “General environment”. With examples behind to support my points in defining “General environment”. Moreover, I will list out the challenges provided by several types of general environment factors that make difficulties to managers. I will choose an organization (Cathay Pacific) to be an example to describe the elements that may exist in its general environment. Of course, related references will be provided to backup the points.

Assignment aims and objectives:
This assignment aims to define “General environment”. Also to point out the challenges that “General environment” provides for managers. And then, choose an organization as I selected Cathay Pacific, to describe the elements that may exist in Cathay’s general environment. Through the above findings, better knowledge about general environment in management point of view will be learned. Such as what is general environment; what is the relationship between general environment and an organization; what challenges that general environment provides for managers; what kinds of general environment that an organization is facing; how those general environments affect an organization; helpfully helps to find out how to tackle the challenges provided by general environment.

Main body: Define the general environment
The general environment consists of all conditions in the external environment that form a background context for managerial decision making. In other words, general environment is the outer layer that is widely dispersed and affected organizations indirectly (Schermerhorn, 2008), (Jones, 2008), (Bateman, 2002), (Richard, 2008), (Bateman, 2007), (Robbins, 2007), (Williams, 2008). Typical external environmental issues include Economic conditions, Social- cultural conditions, Political and legal conditions, Technological conditions and Demographic conditions (Jones, 2008).

Economic conditions stand for health of the economy in terms of inflation, income levels, customer purchasing power, gross domestic product (economy growth), unemployment, job outlook and also the interest rate. Because organizations today are operating in a global environment, the economic dimension has become exceedingly complex and creates enormous uncertainty for managers. The economies of countries are more closely tied together now (Richard, 2008). Such as the economic recession and decline of consumer confidence in the United States happens in 2000s has affected economies and organizations around the world. Another example is, economic problems in Asia and Europe also have had a tremendous impact on companies and the stock market in United States. That implies, the economic condition of the countries all around the world is interdepend.

Social-cultural condition includes the norms, customs, social values on such matters as human rights, trends in education and related social institutions...etc that a society emphasizes. In other words, it is the pressures emanating from the social structure of a country or society or from the national culture (Jones, 2008). Generally there are two dimensions of sociocultural force, they are social structure and national structure. Social structure stands for the arrangement of relationships between individuals and groups in society. National culture is set of values that a society considers important and the norms of behavior that are approved or sanctioned in that society. Effective managers would be sensitive to differences between societies and adjust their behaviors accordingly can anticipate shifts in the customer base and labor markets that affect their organizations. These and other differences in general environment factors are especially noticeable internationally. External conditions vary significantly from one country and culture to the next, and managers must understand these differences. Like many large firms, the pharmaceutical giant Merck derives a...
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