BA 5201 Organization and Management Organizational environment Instructor: Ça ğ rı Topal 1
Organizational environment Things outside of the organization’s boundaries Source of opportunities and threats Local, regional, national, and global levels Task environment: the specific parts of the environment that mostly affect a given organization 2
Environmental sectors 1. Industry 2. Culture 3. Law and politics 4. Economy 5. Technology 6. Human resources 7. Physical resources 8. Consumers and clients 3
Industry sector Competitors, substitute products, the ease or difficulty of entering and leaving the industry, and relations between buyers and suppliers Threats from new entrants or barriers to entry Substitutability threat Competitive rivalry 4
Cultural sector Values, norms, traditions, and artifacts of a society Guide for consumer behaviors Especially important with the increasing globalization of business and exposition to different nations and cultures 5
Legal and political sector Government, political, and legal processes Taxation and regulation Government spending Employment laws and minimum wage levels Foreign policy 6
Economic sector Market, planned, and mixed economic systems Allocation of resources and distribution of goods and services General economic conditions The most dynamic sector 7
Technology sector Specific skills, knowledge, tools, and abilities necessary to complete a job at the individual, group, and organizational Whether work is done by individuals or groups and how individuals or groups are organized Source of technological innovations 8
Human resources sector Source of human inputs Levels of education and training, wage and benefit standards, presence or absence of unions, and worker attitudes Trends Part-time, temporary, or contract workers Educated and flexible,workforce Different cultural backgrounds 9
Physical resources sector Physical resources Raw materials Concentration of resources and suppliers’ bargaining power Physical conditions such as climate, geography, and location 10
Consumer and client sector The main group for which organizations exist Characteristics of consumers and clients Very large or very few clients or many suppliers and buyers’ bargaining power 11
Complexity, turbulence, munificence Environmental complexity: the number and relatedness of environmental elements that affect an organization Environmental turbulence: the change and dynamism in the sectors of an organization’s environment Environmental munificence: the abundance or scarcity of resources, and the capacity of the environment to support organizations 12