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Environment defined
Environment is defined as everything outside an organizations boundaries
The general environment encompasses condition that may have an impact on the organization but their relevance is not overtly clear
The specific environment is that part of an enviornment that is directly relevant to the organization in achieving its goals consists of critical constituents Includes customers, suppliers, competitors, govt regulatory agencies, labour unions etc Domain refers to the claim that the organization stakes out for itself with respect to the range of products or services offered and markets served
It identifies the organizations niche Eg Reva Electric Car and Maruti Suzuki
Complex
Stable
DEGREE OF CHANGE
Dynamic
Complex
Stable
DEGREE OF CHANGE
Dynamic
DEGREE OF HOMOGENEITY
Complex
Stable
Dynamic
DEGREE OF CHANGE
ORGANIC ORGANIZATION
Organic organizations are relatively flexible and adaptable. They rely on lateral communication rather than vertical communication. Influence is based upon expertise and knowledge rather than on authority of position. Responsibilities are defined loosely rather than rigid job definitions. Emphasis is on exchanging information rather than on giving direction.
MECHANISTIC ORGANIZATION
Mechanistic structures are characterized by high complexity, formalization and centralization. They perform routine tasks, rely heavily on programmed behaviors, and are relatively slow in responding to the unexpected.
Environmental uncertainty
Characteristic Task Definition Mechanistic Rigid Organic Flexible Lateral Low Expertise Diverse
PLACID-RANDOMIZED ENVIRONMENTS
This environment is relatively unchanging. Therefore, environmental uncertainty is low. Environmental demands are distributed randomly, and change slowly. Managerial decision making does not give much attention to the environment.
Employees state insurance corporation
PLACID-CLUSTERED ENVIRONMENT
Environment changes slowly, but threats are clustered, not random. The forces in the environment are linked, and pose a higher threat than randomized changes. These organizations use long-range planning and forecasting to learn as much as possible about their environments. Structures will tend to be centralized. Public sector units
DISTURBED-REACTIVE ENVIRONMENTS
A more complex environment than either placid one. Many similar organizations seeking similar ends. One or more may be large and have ability to influence the environment.
TURBULENT-FIELD ENVIRONMENTS
The most dynamic of the environments and has the highest level of uncertainty associated with it. Environmental elements are increasingly organized and interrelated. Major, dynamic shifts can occur in the environment as one, or a small group of large companies change the rules of competition. Here planning is not effective. Telecommunications
STRUCTURAL IMPLICATIONS
Emery and Trist did not recommend specific structural configurations associated with each environmental type. However, the two placid environments should be responded to with mechanistic structures, whereas the disturbed and turbulent environments require more organic structures.
As the environment becomes more volatile, increasing flexibility is needed to cope with or manage the uncertainty that increases.
STRUCTURE VS ENVIRONMENT
ENVIRONMENT AND ORGANIZATION DESIGN CHARACTERISTICS Environment Simple Stable Complex II Low Many High High I Design Characteristics Low Few High Low Funct./ Mech. Funct./ Mech. w/T/T.F. Product/ Organic Matrix & Combos
Degree of Degree of Quad- Decentral- Span of Formal- Complexity Design Change Complexity rant ization Control ization Strategy
Simple
Dynamic
III
High Few
Low
Low
Complex IV
High
Many
Low
High
Limitations of Population-Ecology View The theory ignores managerial motives and abilities Management can choose the domains or niches it wants to compete in and, especially in the long-term, change its domain This view has limited application to large and powerful organizations This is applicable best to the small and powerless business organizations
Implications
More stable the environments, the harder it is for new organizations to enter and compete The truly ineffective organizations are not studied because they died too soon