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Chapter 4

Chapter 4; The External Environment.docx

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Steve Risavy

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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 elements - industry - technology - raw materials - economic condition - human resources - government - financial resources - sociocultural - market - 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 changes Simple-Complex Dimension  Deals with environmental complexity, which refers to heterogeneity, or the number and dissimilarity of external elements relevant to an organization’s operations  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 Monday, January 28, 2013 Framework Simple, stable environment Simple, unstable environment  Low uncertainty  Great uncertainty  Few external elements  Rapid changes, unexpected  Few external elements, but hard to predict Complex, stable environment Complex, unstable environment  Uncertainty  Greatest uncertainty  Large number of elements  Large number of elements need to be scanned, analyzed,  Frequent shifts, react strongly to organizational initiatives Adapting to Environmental Uncertainty Positions and Departments  Complexity and uncertainty in external leads to more positions, leading to complexity in the internal; open system Buffering and Boundary Spanning  Buffering roles: absorb uncertainty from the environment, typical approach  Recent change to using no buffers to encourage open communication  Boundary-spanning roles: link and coordinate an organization with key elements in the external environment, the exchange of information to (1) d
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