Organisation and environment relationship

The Relationship between an Organization and Its Environment

organisation and environment relationship

In order to understand the relationship between an organization and its environment, we will look at the interactions between them in some primary areas . The reason is that the environment creates uncertainty for organization managers , and they must respond by designing the organization to. The Relationship between an Organization and Its Environment Understanding the environment that surrounds an organization is important to the .

For any organization, the environment The set of external conditions and forces that have the potential to influence the organization.

The Relationship between an Organization and Its Environment – Mastering Strategic Management

It is useful to break the concept of the environment down into two components. The general environment or macroenvironment Overall trends and events in society such as social trends, technological trends, demographics, and economic conditions.

The industry or competitive environment Multiple organizations that collectively compete with one another by providing similar goods, services, or both. Every action that an organization takes, such as raising its prices or launching an advertising campaign, creates some degree of changes in the world around it.

Most organizations are limited to influencing their industry. A few organizations wield such power and influence that they can shape some elements of the general environment.

While most organizations simply react to major technological trends, for example, the actions of firms such as Intel, Microsoft, and Apple help create these trends. Some aspects of the general environment, such as demographics, simply must be taken as a given by all organizations. Overall, the environment has a far greater influence on most organizations than most organizations have on the environment.

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  • 3.2 The Relationship between an Organization and Its Environment

Why Does the Environment Matter? Understanding the environment that surrounds an organization is important to the executives in charge of the organizations. There are several reasons for this. First, the environment provides resources that an organization needs in order to create goods and services. As the human body must consume oxygen, food, and water, an organization needs to take in resources such as labor, money, and raw materials from outside its boundaries.

Subway, for example, simply would cease to exist without the contributions of the franchisees that operate its stores, the suppliers that provide food and other necessary inputs, and the customers who provide Subway with money through purchasing its products.

How Environment Affect the Organization

An organization cannot survive without the support of its environment. Second, the environment is a source of opportunities and threats for an organization. Subway faces a threat from some upstart restaurant chains. The industry or competitive environment consists of multiple organizations that collectively compete with one another by providing similar goods, services, or both.

Every action that an organization takes, such as raising its prices or launching an advertising campaign, creates some degree of changes in the world around it. Most organizations are limited to influencing their industry. A few organizations wield such power and influence that they can shape some elements of the general environment.

Organization and Environmental Relationship

While most organizations simply react to major technological trends, for example, the actions of firms such as Intel, Microsoft, and Apple help create these trends. Some aspects of the general environment, such as demographics, simply must be taken as a given by all organizations.

Overall, the environment has a far greater influence on most organizations than most organizations have on the environment. Why Does the Environment Matter? Understanding the environment that surrounds an organization is important to the executives in charge of the organizations.

organisation and environment relationship

There are several reasons for this. First, the environment provides resources that an organization needs in order to create goods and services.

organisation and environment relationship

As the human body must consume oxygen, food, and water, an organization needs to take in resources such as labor, money, and raw materials from outside its boundaries. Subway, for example, simply would cease to exist without the contributions of the franchisees that operate its stores, the suppliers that provide food and other necessary inputs, and the customers who provide Subway with money through purchasing its products. An organization cannot survive without the support of its environment.

Second, the environment is a source of opportunities and threats for an organization.

Organization and Environmental Relationship

Subway faces a threat from some upstart restaurant chains. Saladworks, for example, offers a variety of salads that contain fewer than five hundred calories. Noodles and Company offers a variety of sandwiches, pasta dishes, and salads that contain fewer than four hundred calories.

Executives must also realize that virtually any environmental trend or event is likely to create opportunities for some organizations and threats for others.