ITM Bridging Topic 02 – The Environment of Business

Learning Objectives

 

LO 1 Describe how environmental forces influence organizations and how organizations can influence their environments

LO 2 Distinguish between the macro environment and the competitive environment

LO 3 Explain why managers and organizations should attend to economic and social developments.

LO 4 Identify elements of the competitive environment.

LO 5 Summarize how organizations respond to environmental uncertainty

LO 6 Define elements of an organization’s culture

LO 7 Discuss how an organization’s culture affects its response to its external environment

External Environment

General environment :

All relevant forces outside a firm’s boundaries, such as competitors, customers, the government, and the economy.

Competitive environment

surrounding a firm; includes suppliers, customers, rivals, and the like.

 

Environmental Analysis

Environmental uncertainty

-Lack of information needed to understand or

predict the future.

Environmental complexity

-The number of issues to which a manager

must attend and the degree to which they are

connected

Environmental dynamism

-The degree of discontinuous change that

occurs within an industry

Influencing Your Environment

Independent  strategies

Strategies that an organization acting on its own uses to change some aspect of its current environment.

Cooperative strategies

Strategies used by two or more organizations working together to manage the external environment.

Culture and the Internal Environment of the  Organization

The set of important assumptions about the organization and its goals and practices that members of the company share

“The way we do things around here” that influences what employees do, and how they conceptualise, define analyse, and resolve issues.

Culture and the Internal Environment of the

Organization

In strong cultures, the majority of people within the organization agree on organizational goals

In weak cultures, the majority of people within the organization disagree on organizational goals

Tutorial: Group Discussion Questions

Select any industry or a company and make a Porter’s Five Forces Analysis of the company

EXAMPLE: A Global Athletic Shoe Industry

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