BU398 Chapter Notes - Chapter 4: Interlocking Directorate, High Tech, Business Intelligence

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30 Jan 2013
Monday, January 28, 2013
The External Environment
The Environmental Domain
Organizational environment: all elements that exist outside the boundary
of the organization with potential to affect it
Domain: chosen field of action, territory the organization stakes out for
itself, defines those external sectors with which the organization will interact
to accomplish its goals
Sector: (subdivision) of the external environment that contain similar
- industry
- raw materials
- human resources
- financial resources
- market
- technology
- economic condition
- government
- sociocultural
- international
Task Environment
Sections with which the organization interacts directly and that have
a direct impact on the organization’s ability to achieve it’s goals
Industry, raw materials, market sectors, human resources,
international sectors
General Environment
Sectors that might not have a direct impact on the daily operations of
a film but will indirectly influence it
Government, sociocultural, economic conditions, technology,
financial resources
Environmental Uncertainty
Uncertainty: decision makers do not have sufficient information about
environmental factors, and they have a difficult time predicting external
Simple-Complex Dimension
Deals with environmental complexity, which refers to heterogeneity, or the
number and dissimilarity of external elements relevant to an organization’s
The more external factors, more organizations in a company’s domain, the
greater complexity
Simple environment is when an organization deals with and is influenced by
only a few similar external elements
Stable-Unstable Dimension
Refers to how dynamic the environment is
Stable: remains the same over a period of months or years, or experiences
predictable changes
Unstable: environmental elements shift abruptly and unexpectedly
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