BU398 Chapter 4: BU398 – CHAPTER 4
BU398 – CHAPTER 4
THE ENVIRONMENTAL DOMAIN
• ORGANIZATIONAL ENVIRONMENT: All elements that exist outside the boundary of the
organization that have the potential to affect all or part of the organization
• GREEN ENVIRONMENT: Our natural environment
• DOMAIN: A orgaizatio’s hose field of atio
• SECTORS: Subdivisions of the external environment that contain similar elements. Ten
sectors are analyzed for each organization:
o Industry, raw materials, human resources, financial resources, market,
technology, economic conditions, government, sociocultural, and international
• TASK ENVIRONMENT: Includes sectors with which the organization interacts directly and
that have a diret ipat o the orgaizatio’s aility to ahieve its goals. The setors
included are:
o Industry Sector
o Raw Materials Sector
o Market Sector
o Human Resources Sector
o International Sector
• GENERAL ENVIRONMENT: Includes those sectors that might not have a direct impact on
the daily operations of a firm but will indirectly influence it. The sectors included are:
o Government Sector
o Sociocultural Sector
o Technology Sector
o Financial Resources Sector
o Economic Conditions Sector
ENVIRONMENTAL UNCERTAINTY
• Applies primarily to those sectors that an organization deals with on a regular day-to-
day basis
• SIMPLE-COMPLEX DIMENSION: Concerns environmental complexity, which refers to
heterogeneity, or the number and dissimilarity of external elements relevant to an
orgaizatio’s operatios
• STABLE-UNSTABLE DIMENSIONS: Refers to whether elements in the environment are
dynamic.
o Stable if it remains the same over a period of months or years, or experiences
readily predictable change
o Unstable if environmental elements shift abruptly and unexpectedly
• These elements combine into a framework, pictured below
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ADAPTING TO ENVIRONMENTAL UNCERTAINTY
• Positions and Departments
o As the complexity and uncertainty in the external environment increases, so
does the number of positions and departments within the organization, which in
turn increases the internal complexity
• Buffering and Boundary Spanning
o BUFFERING ROLES: The purpose of these is to absorb uncertainty from the
environment
o BOUNDARY-SPANNING ROLES: Link and coordinate an organization with key
elements in the external environment. Primarily concerned with:
▪ Detecting and bringing into the organization information about changes
in the environment
▪ Sending information into the environment that presents the organization
in a favourable light
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