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business enviorment

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Administrative Studies
ADMS 1000
Len Karakowsky

Exploring the Canadian Business EnvironmentChapter 1Making sense of organizations and managementy To understand the forces that act on business we can examine issues that are part of the organizations external environment The Organization as an open system y We are society of organizations y From our hospitals to our schools to our multinational organizations it is hard to imagine life organizationsWhat is organizationy Organization can be identify in three broad categories of organizations1 Publicgovernmental organization that provides goods and services without necessarily generating a profit2 Privatenon governmentorganizationsincluding voluntary organizations that offer goods or services without necessarily generating a profit 3 Private organizations produces goods or services with the intent of making a profit for the benefit of their owners or shareholders Organizations may be large corporations or small non profit organization they might be housed within a large sky scraper or they simply be composed of members who are spread across a wide location1 Organization is social entities They are made of people They have been generated and are maintained by people They involve some level of human interaction 2 Organizations are created to achieve goals They are goal directed Whether it is a profitmaking organization or a nonprofit making organization all organizations have some kind of goal or objective they were designed to achieve 3 Organizations interact with the environment An organization obtains inputs from its environment whether its form of people raw materials technology or financial capital All these inputs are transformed by the organization and become outputs the goods services or knowledge that the organization generatesUsing Metaphors to Describe Organizationsy Organization as machine y Organization as living organism y Organization as political system y Organization as theatre y Organization as sport team y Organization as family Organization as open systemsy One useful perspective involves the view of organizations as systems y A system can be defined as interdependent elements working together to achieve a goal or goals y The notion or organization as systems is intended to guide our understanding of what organizations are all about and how they function and survive y The word open system means that organizations are a unit that are embedded in and dependent on exchanges with the environment they work within y Organizations can be viewed as social system with people who make up the basic elementsy Closed systems have been defined as fully selfsufficient entities units requiring no interaction with the environment and this clearly makes this metaphor difficult to find in practicey Organizations environment represents all elements that exists outside the organization and that potentially influence or affects the organization in some way y Open systems perspective of organizations give emphasis to the importance of the environment and interaction with the environment y Organizations are dependent on the environment for their survival and success Without having the important environmental inputs whether they are suitable employees or the raw materials for productions organizations cannot function effectivelyy Organizations are made in response to societal or environmental needs it is environment will determine the organizations fate The external context of business y We can refer to the external context of organizations as their environment Management scholars have typically defined the environment of an organization along two dimensions the organizations specific or task environment and the organizations general sphere or environment that would include the external environments of all organizations in a society y The specific sphere has been known to as the environment domain of the organizationSpecific or task environmenty Any organization is surrounded by external stakeholders These are parties or groups that have direct influence on the organizations ability to gain resources and generate outputsGeneral environment y The sphere surrounding the organizations specific environment is known as general environment The forces that make up the general environment ultimately shape the specific environment of the organizationy General environment factors typically include economic competitive technological labour global societal and political forces Economic forces y Whether it is recession or strong economic health in Canada the economic environment acts as strong influence on the present and future prospects of any organizationsy Organizations are continuously forced to adapt to changing economic conditionsy Downsizings are more likely to occur in lean times than in rich y Economic changes have also facilitated changes to the nature of the employeremployee relationships Competitive forcesy Competitive forces work at two levels for any organizations y Organizations will have its own two of competitors yet the forces of competition can be looked from a more general level y Organizations to compete effectively must continually create new and better methods of serving customers While globalization has opened up larger markets for business it has also facilitated much higher levels of competition Technological forces y Technology plays a central role in how organization functions how it obtains resources and ultimately how effectively it competes y The technological environment exerts influence across industries y For instance the Bell Canadathe increase in the number of competitors in the telecommunications industry was partly a consequence of the ability of smaller business to enter the industry with the increasingly sophisticated technology that formerly was the domain of big businessgiven its costly nature y Change in technology is constant and is a force that allows and demands organizational changey One benefit in technology is increased flexibility in work arrangements yTelework or telecommunicating essentially means that given todays technology an employee can work from homey Technology has also facilitated business process re design or re engineering
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