Chap3.pdf

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Department
Business
Course
BUS3 161B
Professor
Declineto State
Semester
Fall

Description
Chapter 3 - Organizing in a Changing Global Environment What is the Organizational Environment? 1. Environment: the set of forces surrounding an organization that have the potential to affect the way it operates and its access to scarce resources 2. Organizational Domain: particular range of goods and services that the organization produces and the customers and other stakeholders it serves ɾ Company creates domain by deciding how to manage the forces in its environment to maximize its ability to secure resources to enlarge and protect its domain The Organizational Environment Table 3.1 ɾ Specific Environment: the forces from outside stakeholder groups that directly affect an organization's ability to secure resources ▸ Customers, distributors, unions, competitors, suppliers, gov are outside stakeholders who influence company to act in certain ways ɾ General Environment: the forces that shape the specific environment and affect the ability of all organizations in a particular environment to obtain resources ▸ Economic, technological, political, international, environmental, demographic/cultural forces ▸ Economic = interest rates, state of economy, unemployment determine level of demand ▸ Political, environmental, ethical forces are influenced by the government policy towards companies and stakeholders ▸ Demographic/culture like age, education, lifestyle shape organizations customers, managers and employees Sources of Uncertainty in Environment 1. 3 Factors Causing Uncertainty - Table 3.2 ɾ Complexity: the strength, number and interconnectedness of the specific and general focus that an organization has to manage ▸ Simple to complex ɾ Dynamism: the degree to which forces in the specific and general environments change quickly over time and thus contribute to the uncertainty ▸ Stable to unstable ɾ Richness: at the amount of resources available to support an organization's domain ▸ Rich to poor Resource Dependence Theory 1. Resource dependence theory: a theory that argues the goal of an organization is to minimize its dependence on other organizations for the supply of scare resources in the environment to find ways of influencing them to make resources available Strategies for Managing Resource Dependency Symbiotic Interdependencies 1. Symbiotic: interdependencies that exist between an organization and its suppliers and distributors ɾ Reputation - Cooptation - StrategicAlliances - Merger/Takeover ɾ Range from informal to formal. The more formal, the greater the cooperation between the 2 ▸ Cooptation: strategy that manages symbiotic interdependences by neutralizing problematic forces in the specific environment ▸ Strategic alliance: an agreement that commits 2+ companies to share their resources to develop a new joint business opportunity - Long term contract, networks, minority ownership, joint ventures Competitive Interdependencies 1.
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