Slide 1

MGT 4153Dr. Rebecca LongOrganizational EnvironmentsOrganizational EnvironmentsDefined as all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization.

Domain Chosen environmental field of action.

Ten Sectors can be identified for most organizations.

Sectors are usually divided into two subdivisions: Task and General

Task the industry, raw materials, market sectors, and perhaps HR and international sectors.

General Financial, Technology, Economic conditions, Government, SocioculturalAn Organizations Environment(Task & General)Long 2(a) Competitors, industry size and competitiveness, related issues(b) Suppliers, manufacturers, real estate, services(c) Labor market, employment agencies, universities, training schools, employees in other companies, unionization(d) Customers, clients, potential users of products and services(e) Stock markets, banks, S&L, private investors(f) Techniques of production, science, computers, information technology

(g) Recession, unemployment rate,inflation rate, rate of investment,economics, growth(h) City, state, federal lawsand regulations, taxes,services, court system,political processes(i) Age, values, beliefs,education, religion,work ethic, consumerand greenmovements(j) Competition fromand acquisition byforeign firms,entry into overseasmarkets, foreign customs, regulations,exchange rates

International Context(j)InternationalSector(d)MarketSector(e)FinancialSector(f)TechnologySector(g)EconomicConditionsSector(a)IndustrySector(h)GovernmentSector(c)Human ResourcesSector(b)Raw MaterialsSector(i)SocioculturalSectorORGANIZATIONDOMAINPorters Five Competitive Forces and Strategies (Chapter 2)Long 4Power of Buyers

Power of Suppliers

Degree of Rivalry

Threat of New Entrants

Threat of Substitutes

Long 5Low Uncertainty1. Small number of elements, and elements are similar 2. Elements remain the same or change slowly

Examples: Bottlers, distributors, container mfrs, food processors

High-Moderate Uncertainty1. Small number of elements, and elements are similar 2. Elements change frequently and unpredictably

Examples: E-commerce, fashion, music, toysHigh Uncertainty1. Large number of elements, and elements are dissimilar 2. Elements change frequently and unpredictably

Examples: Computer firms, aerospace, telecomms, airlines

Low-Moderate Uncertainty1. Large number of elements, and elements are dissimilar2. Elements remain the same or change slowly

Examples: Universities, appliance mfrs, chemicals, insuranceENVIRONMENTALCHANGESTABLEENVIRONMENTAL COMPLEXITYUNSTABLESIMPLECOMPLEXAdapting to UncertaintyLong 6

Long 7Low Uncertainty1. Mechanistic structure; formal, centralized2. Few departments

3. No integrating roles

4. Current operations orientation; low speed response

High-Moderate Uncertainty1. Organic structure, teamwork; participative, decentralized2. Few departments, much boundary spanning3. Few integrating roles4. Planning orientation; fastresponseHigh Uncertainty1. Organic structure, teamwork; participative, decentralized2. Many departments differentiated, extensive boundary spanning3. Many integrating roles4. Extensive planning, forecasting; high speed responseLow-Moderate Uncertainty1. Mechanistic structure; formal, centralized2. Many departments, some boundary spanning3. Few integrating roles4. Some planning; moderate speed responseENVIRONMENTALCHANGESTABLEENVIRONMENTAL COMPLEXITYUNSTABLESIMPLECOMPLEXControlling Environmental ResourcesLong 8Establishing Inter-organizational Linkages:OwnershipContracts, joint venturesCooptation, interlocking directoratesExecutive recruitmentAdvertising, public relationsControlling the Environmental Domain:Change of domainPolitical activity, regulationTrade associationsIllegitimate activities