Organizational Environment

Topics: Strategic management, Environment, Organization Pages: 6 (1521 words) Published: October 16, 2008
b. Organizational Environment
Organizational Environment: those forces outside its boundaries that can impact it. Forces can change over time and are made up of Opportunities and Threats. (7)
The Organizational environment refers to the forces that can make an impact. Forces made up opportunities and threats. Organizations do not exist in isolation. It works with the overall environment. Scholars have divided these environmental factors into two main parts as.

Internal Environment
External Environment (8)
c. Internal Environment
The internal environment consists of the inherent competencies of the firm and the structure of its internal systems and processes. It is imperative for the organization to conduct an internal analysis to obtain a clear picture regarding its strengths and weaknesses. This helps the organization to design suitable strategies towards leveraging its strength to gain sustainable competitive advantage in the market. (9)

The internal environment plays a crucial role in the strategic management process of the organization. It is a direct reflection of what the organization can do in the event of a business-related exigency. The organization’s core competencies help sustain it in the long run in the face of competition. (10)

The internal environment may also include a Mission statement that tells you the fundamental purpose of the organization. It concentrates on the present. It defines the customer and the critical processes. It informs you of the desired level of performance. (11)

An organization's mission statement describes what the organization stands for and why it exists. It explains the overall purpose of the organization and includes the attributes that distinguish it from other organizations of its type.

Effective mission statements lead to effective efforts. In today's quality-conscious and highly competitive environments, an effective mission statement's purpose is centered on serving the needs of customers. A good mission statement is precise in identifying the following intents of a company:

Customers — who will be served
Products/services — what will be produced
Location — where the products/services will be produced
Philosophy — what ideology will be followed
Organizational cultures
The organizational culture is an organization's personality. The culture of an organization distinguishes it from others and shapes the actions of its members. Four main components make up an organization's culture:

Values are the basic beliefs that define employees' successes in an organization.
The second component is heroes. A hero is an exemplary person who reflects the image, attitudes, or values of the organization and serves as a role model to other employees.
Rites and rituals, the third component, are routines or ceremonies that the company uses to recognize high-performing employees. The honorees are meant to exemplify and inspire all employees of the company during the rest of the year.

The final component, the social network, is the informal means of communication within an organization. This network carries the stories of both heroes and those who have failed. It is through this network that employees really learn about the organization's culture and values. Resources

Resources are the people, information, facilities, infrastructure, machinery, equipment, supplies, and finances at an organization's disposal. People are the paramount resource of all organizations. Information, facilities, machinery equipment, materials, supplies, and finances are supporting. (12) d. External Environment

The other division of the environment, is the external environment which refers to the major elements, forces and aspects outside the organization units that have the potential of significantly impacting on the likely success of the organization (13)

The external environment refers to all relevant forces outside the firm’s boundaries, factors to which managers...
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