Chapter 3

6 basic mechanisms organizations adapt to environment

- Information management - Strategic response - Mergers, acquisitions and alliances - Organization design and flexibility - Direct influence - Social responsibility

Task environments include:

- competitors - customers - suppliers - strategic partners - regulators

Thompson's dimensions of environment

- degree of change - degree of homogeneity

Two external environments are

- general - task

Important economic factors

- general econoic growth - inflation - interest rates - unemployment

Strategic response options

- maintaining status quo - altering strategy a bit - adopting an entirely new strategy

Two important kinds of regulators

- regulatory agencies - interest groiup

How can culture affect an organization

- shape of the market - ethics of political influence - attitudes in the workforce

Models of organizational effectiveness

- system resource approach - internal process approach - goal approach - strategic constituencies approach

Dimensions of general environment

- technological - sociocultural - political-legal - international dimensions

Importance of political-legal dimension

- the legal system partially defines what an organization can and cannot do - pro or antibusiness sentiment in government influences business activity - political stability has ramifications for planning

Organization culture

The set of values, beliefs, behaviors, customs and attitudes that helps the members of ther organization understand what it stands for, how it does things, and what it considers important

Uncertainty

Unpredictability created by environmental change and complexity. Driving force that influences many organizational decisions

What determines the feel of the organization?

culture

Task environment

specific organizations or groups that influence an organization

Five competititve forces

the threat of new entrants, competitive rivalry, the threat of substitute products, the power of buyers, and the power of suppliers

Key to achieve organizational effectiveness

understanding the environment in which the organization functions

When is information management most important

when forming initial understanding of the environments and when monitoring the enviroments for signs of change

Acquisition

when one firm buys another, sometimes against its will (hostile takeover)

Direct influence

when organizations are able to directly influence their environments in may different ways

Merger

when two or more firms combine to form a new firm

Customer

whoever pays money to acquire an organization's products or services

Interest group

A group organized by its members to attempt to influence business

Regulator

A unit that has the potential to control, legislate, or otherwise influence the organization's policies and practicies

Regulatory agencies

An agency created by the governement to regulate business activities

Competitor

An organization that competes with other organizations for resources

Supplier

An organization that provides resources for other organizations

Strategic partners/allies

An organization working together with one or more other organizations in a joint ventire or similar arrangement

Board of directors

Governing body elected by a corporation's stockholders and charged with overseeing the general management of the firm to ensure that it is being run in a way that best serves the stockholder's interests

Owner

Whoever can claim property rights to an organization

Boundary spanner

an employee such as sales respresentative or a purchasing agent, who spends much of his/her time in contact with others outside the organization

Internal environment

conditions and forces with in the organization

Organic design

considerably more flexible and permits the organization to respond quickly to environmental change

Internal process approach

deals with the internal mechanisms of the organization and focuses on smooth and efficient operations, focuses on transformation process

Importance of socioculture processes

determin the products, services, and standards of conduct that the society is likely to value

External environment

everything outside an organization's boundaries that might affect it

Goal approach

focuses on the degree to which an organization reaches its goals, focuses on outputs

System resource approach

focuses on the extent to which the organization can acquire the resources it needs, focuses on inputs

Strategic constituencies approach

focuses on the groups that have a stake in the organization, focuses on feedback

computer-based information system

gather and organize relevant information for managers and to assist in summarizing that information in the form most pertinent to each manager's needs

Organization desing and flexibility

incorporating flexibility in its structural design

Mechanistic organization design

is charecterized by formal and rigid rules and relationships

What can culture doe for an organization?

it can shape the firm's overall effectiveness and long-term success

Socioculture dimension

the customs, mores, values, and demographic charecteristics of the society in whcih the organization functions

Degree of change

the extent in which the environment is relatively stable or relatively dynamic

Threat of substitute products

the extent to which alternative products or services may supplant or diminish the need for existing products or services

International dimension

the extent to which an organization is involved in or affected by business in other countries

Power of buyers

the extent to which buyers of the product or services in an industry have the ability to influence the suppliers

Threat of new entrants

the extent to which new competitors can easily enter a market or market segment

Power of suppliers

the extent to which suppliers have the ability to influence potential buyers

Degree of homogeneity

the extent to which the environment is relatively simple (few elements, little segmentation) or relatively complex (many elements, much segmentation)

Alliance/partnership

the firm undertakes a new venture with another firm

Political-legal dimension

the government regulation of business and the relationship between business and government

Technological dimension

the methods available for converting resources into products or services

Competitive rivalry

the nature of the competitive relationship between dominant firms in the industry

Economic dimension

the overall health and vitality of the economic system in which the organization operates

Environmental scanning

the process of actively moinitoring the environments through activities such as observation and reading

General environment

the set of broad dimensions and forces in an organiztion's surroundings that creat its overall context