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MGHB02H3 (269)
Chapter 15

Chapter 15 - Environment, Strategy and Technology

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Department
Management (MGH)
Course
MGHB02H3
Professor
Joanna Heathcote
Semester
Summer

Description
Chapter 15Environment Strategy and Technology The External Environment of OrganizationsExternal environmentevents and conditions surrounding an organization that influence its activitiesie OPEC oil embargo 911 terrorist attack SARS outbreak recessionOrganizations as Open Systemsopen systemssystems that take inputs from the external environment transform some of them and send them back into the environment as outputsinputs transformationoutputsinputs include capital materials information peopleoutputs include various gstransformation processes may be physical intellectual or emotionalComponents of the External EnvironmentThe general economywhen an economic downturn occurs competition for reaming customers increase org might postpone needed capital improvementsCustomerssuccessful firms are highly sensitive to customer reactions org change in response to customer demandsSupplierssupply shortages can cause severe difficulties now companies work closely with suppliers on the basis of quality and reliable delivery Competitorssuccessful org devote considerable energy to monitoring the activities of competitors org in hypercompetitive environments become flexible to respond quickly to changesSocialpolitical factorschanges in public attitudes toward ethnic diversity proper age for retirement or proper role of big business affects themTechnologyrefers to the ways of doing thingsInterest groupsparties or organizations other than direct competitors that have some vested interest in how an organization is managedInterest groups might make competing or conflicting demands on an orgEnvironmental uncertaintyEnvironmental uncertaintya condition that exists when the external environment is vague difficult to diagnose and unpredictableUncertainty depends on the environments complexity and its rate of changeSimple environmentinvolves relatively few factors and these factors are fairly similar to each otherComplex environmentcontains a large number of dissimilar factors that affect the organization ie collegeStatic environmentcomponents of this environment remains fairly stable over timeDynamic environmentin constant state of change which is unpredictable and irregular Simplestatic provoke the least uncertainty wile dynamiccomplex provokes the mostRate of change has more influence than complexity on uncertainty staticcomplex is more certain than dynamicsimpleAs uncertainty increase cause and effect relationships become less clear and agreeing on priorities becomes more difficult because more information must be processedAnother aspect is the amount of resources it contains some environments are more munificent than others and all are dependent on their environments for resources1
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