The External Environment
All outside factors that may affect an organization make up the external environment. The external environment is divided into two parts: ●
Directly interactive: This environment has an immediate and
firsthand impact upon the organization. A new competitor entering the market is an example.
Indirectly interactive: This environment has a secondary and more distant effect upon the organization. New legislation taking effect may have a great impact. For example, complying with the
Americans with Disabilities Act requires employers to update their facilities to accommodate those with disabilities.
Directly interactive forces
Directly interactive forces include owners, customers, suppliers, competitors, employees, and employee unions. Management has a responsibility to each of these groups. Here are some examples: ●
Owners expect managers to watch over their interests and provide a return on investments.
Customers demand satisfaction with the products and services they purchase and use.
Suppliers require attentive communication, payment, and a strong working relationship to provide needed resources.
Competitors present challenges as they vie for customers in a marketplace with similar products or services.
Employees and employee unions provide both the people to do
the jobs and the representation of work force concerns to
Indirectly interactive forces
The second type of external environment is the indirectly interactive forces. These forces include sociocultural, political and legal, technological, economic, and global influences. Indirectly interactive
forces may impact one organization more than another simply because of the nature of a particular business. For example, a company that relies heavily on technology will be more affected by software updates than a company that uses just one computer. Although somewhat removed, indirect forces are still important to the interactive...
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