Input - Output Model ENVIRONMENT INPUTS OUTPUTS TRANSFORMATION PROCESS FEEDBACK

Inputs People Technology Capital Equipment Materials Information

TRANSFORMATION PROCESS 2 1 4 3

Outputs Goods Services

Economic Political Technological Social-Cultural The Organization and its External Environment General / remote environments The General Environment The general environment consists of the economic, political, social, and technological conditions that can affect the management of organizations. The extent of influence of the general environment is less direct than that of the specific environment but also difficult to predict. Some general environmental factors, such as a severe economic recession, can lead to far-reaching effects on the organization. Economic Political Customer Economic Conditions Interest rates, inflation, changes in disposable income, stock market prices, and general business cycles all contribute to the general economic conditions. Recessions in one large industry can spread out to others as workers are laid off and consumers have less income to spend purchasing the products of other organizations. Political Conditions Political conditions include both the general stability of the countries in which the organization has operations and the attitudes that governments in those countries hold toward the role of business in their society. Social Conditions Each country and even area often has different social and cultural rules of conduct. Management must adapt its practices to the changing expectations of the society in which in operates. Areas of managerial decisions affected by changing social conditions includes not only the makeup of the products and services offered by the organization but its internal policies as well. In the United States, for example the changing demographics of the workforce are requiring organizations to recognize the needs of women and minority employees by adopting innovative management practices for to motivate and retain these important employee groups. Technological Conditions Innovations in technology are the most rapidly changing factor in the general environment. Technology dependent organizations can become obsolete almost overnight as innovations replace whole industries. Organization Labor Market Competitors Suppliers Technological Social-Cultural

Economic Political Technological Social-Cultural The Organization and its External Environment The General Environment The general environment consists of the economic, political, social, and technological conditions that can affect the management of organizations. The extent of influence of the general environment is less direct than that of the specific environment but also difficult to predict. Some general environmental factors, such as a severe economic recession, can lead to far-reaching effects on the organization. Economic Political Customer Economic Conditions Interest rates, inflation, changes in disposable income, stock market prices, and general business cycles all contribute to the general economic conditions. Recessions in one large industry can spread out to others as workers are laid off and consumers have less income to spend purchasing the products of other organizations. Political Conditions Political conditions include both the general stability of the countries in which the organization has operations and the attitudes that governments in those countries hold toward the role of business in their society. Social Conditions Each country and even area often has different social and cultural rules of conduct. Management must adapt its practices to the changing expectations of the society in which in operates. Areas of managerial decisions affected by changing social conditions includes not only the makeup of the products and services offered by the organization but its internal policies as well. In the United States, for example the changing demographics of the workforce are requiring organizations to recognize the needs of women and minority employees by adopting innovative management practices for to motivate and retain these important employee groups. Technological Conditions Innovations in technology are the most rapidly changing factor in the general environment. Technology dependent organizations can become obsolete almost overnight as innovations replace whole industries. Organization Labor Market Competitors Suppliers Task environments Technological Social-Cultural