Presentation on theme: "Organizational Environment"— Presentation transcript:
1Organizational Environment Organizational environment: set offorces surrounding an organizationMay affect its operation and access to scarce resourcesOrganizational domain: the rangeof goods and services that the organizationproduces, and the customers and otherstakeholders whom it serves
2Demographic / Cultural Forces The Organizational EnvironmentInternational ForcesDemographic / Cultural ForcesPolitical ForcesCustomersDistributorsSuppliersOrganizationUnionsGovernmentCompetitorsEnvironmental ForcesTechnological ForcesEconomic ForcesGeneral ForcesSpecific Forces
3Two Women Boxing Environment Domain InitiallyNowDomainWhat aspects of their environment require adaptation within their organization?
4Sources of Environmental Uncertainty complexity, dynamism, and richnessAs the environment becomes morecomplex, less stable, and poorer, thelevel of uncertainty increases.
5Organization TheoryContingency theory: to manage its environment effectively, an organization should design its structure to fit its environment.Fit with environment determines success.
6Dealing with Uncertainty When the environment is unstable and uncertain, organizations are more effective if their structures are:Less formalizedMore decentralizedMore reliant on mutual adjustment
12Transaction Cost Theory Transaction costs: the costs of negotiating, monitoring, and governing exchanges between peopleTransaction costs are low when:Exchanges are nonspecificUncertainty is lowThere are many possible exchange partners
13Transaction Cost Theory Organizations adopt increasingly formal linkage mechanisms with their exchange partners as transaction costs increase.These mechanisms also carrybureaucratic costs within the organization.
14A Few Good MenDescribe the environment for American military organizations.What is their purpose?List their resource dependencies.