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Organizational Environment

Importance of Organizational environment


Organizations are open systems

Need for response to the environment changers.

What is Organizational Environment


Organizational environment is any individuals, groups, organizations and dimensions or forces that influence on organizational activities

Types of organizational environment


Two types of Org. environment 1. Internal environment 2. External environment - Task environment - General environment Diagramme

Internal Environment
Conditions and forces within the organizations
Owners Board of Directors Employees Culture

External Environment
Every things outside of organization that might affect on it

1. Task Environment 2. General Environment

Task Environment
The specific organizations or groups that affect the organization - Competitors - Customers - Suppliers - Regulators - Strategic Alliances - Labour Unions

General Environment
The set of broad dimensions and forces in an organizations surroundings that create its overall context Need for adopting to those changers
Economic Dimension Technological Dimension Socio cultural Dimension Political Legal Dimension International Dimension

Exercise
Analyze task and general environment of your own organization

Five forces Model


Poter introduced five forces to determine competitive situation of organization
Threat of new entrants Direct competitors Threat of substitute products Bargaining power of buyers Bargaining power of suppliers

Response to Environment changers


Information management Mergers and acquisitions Direct influences Organization design and flexibility Strategic responses Social responsibility

Social Responsibility
The obligation of an organizations to solve its problems and take action that enhance best interest of both society and the business. Major Areas
Organizational constituents Natural environment General social welfare

Organizational Culture
Set of values that helps the organizations employees understand which actions are considered acceptable and which unacceptable Dominant Culture and Sub culture Formal and informal culture

Cultural characteristics
Observed behavioral regularities Norms Dominant values Rules and regulations Philosophy Organizational climate

Factors influence to the type of culture


History of organization Size of organization The technology available The goals and objectives of an organization Environment in which organization operates.

Models for culture


Charles handy contribution

Deal and kennedy on culture

Charles handy contribution


He identified 04 types of culture
Power culture
Centralization of power around leader and whole organization dominated by central power source Rules, regulations and autocratic controls are less important Success is judged by the end results and focus heavily on delivery of targets Popular in small organizations and private sector charismatic organization Depicted as web

Charles handy contribution


Role Culture
Depend heavily on hierarchy of organization and strength of the business function Works are done in rational basis and logic Workers are expected to performed only up to required level. Over achievement is discourage Positions are more important than person Rules, regulations and autocratic controls are very important Specialization is highly expected Mostly exist in government organizations Depicted as Greek temple

Charles handy contribution


Task culture
More focus is given to job or Projectoriented activities Depend highly on the extent of expert power possessed by the employees Positional power is less significant Team work encourage that individual work Emphasis results through team work Mostly exist in manufacturing and advertising firms Depicted as net

Charles handy contribution


Person culture
Each individual is center point of organization and whole organization exist to serve each individual who works within it. Organization totally dependent upon individuals. Minimum emphasis on structure and positions. Individuals interest dominate the organizational interest most of the time Mostly exist in professional service organization. Depicted as galaxy of individual strars.

Deal and kennedy on culture


Tough-guy macho culture- find a mountain and climb it Mgt
consultants, surgeons, police etc

Work hard/play hard culture find a need and fill it e.g.


Computer companies, retail stores etc

Bet you company culture slow and steady wins the race
Investment banks, architecture companies etc

Process culture Its not what you do its the way that you do
it e.g. banks, insurance companies, financial services etc.

Questions and Discussion