Organisational environment is defined as the forces, institutions and authorities that influences the performances of organisation but over which it has no or very little control. Alternatively, it can be defined as the universe minus the organisation under consideration. This environment could be (a) general, (b) industry specific, and (c) organisation specific.
The general environment encompasses a wide spectrum of factors such as economical, social, financial, political and legal framework of the city, state and country in which organisation perform. Other factors could be ecological, environmental and cultural conditions of the region along with the infrastructure availability, and the availability of scientific, technical and managerial human resources.
The industry specific environment is that group of outside agencies and conditions which are industry or organisation specific and is directly relevant to it in its performance. This environment is unique to the type of industry and organisation and changes with location and time. Typically, it will include the demand market, fluctuations in demand, consumer's preferences, input suppliers, human resources, competing organisations their strengths and weaknesses, regulatory agencies, city, state and country's rules, regulations and controls, labour unions, trade associations and consumer and public pressure groups. At any given moment of time, it is the part of environment with which the management is most concerned.
The organisation's specific environment mostly depends on the domain it has selected. Change the domain and this specific environment changes. Domain refers to the claim the organisation stakes out for itself with respect to the range of products or services offered and markets served. It identifies the organisation's niche.
There can be a vast difference between the objective or real environment and the one that the manager perceives. The difference is primarily due to the non-correlation between the actual environmental characteristics and the perceived ones. Unfortunately, it is the perception and not reality that influence the decisions of organisational designers. The effectiveness of design greatly depends upon the accuracy of this perception which depends on the background, education, capability and functional area of the individual.
It may therefore be suggested that organisations construct or invent their own specific environments depending upon their perceptions. It is to be noted that characteristics of environment, whether general, industry specific and/or organisation specific are not deterministic in nature. The variations in its perception by individual manager further compound this uncertainty. Some organisations face relatively static environment at a particular point of time characterised by absence of new competitors, no fresh technological breakthroughs, little consumer or public awareness etc., while other organisations are faced with a explosive, fastly changing dynamic environment, exponential growth of technologies breakthroughs, mushrooming of new competitors, fastly changing government regulations and enlightened consumer and public awareness. Construction environment is nearer to first perception while information industry is very close to second perception. The higher the degree of environmental dynamics, the larger will be the uncertainty associated with it. It is this uncertainty which is a threat to organisation's productivity and even its survival. It is the endeavour of the manager to minimise this uncertainty, or at least to minimise the effect of uncertainty on organisation's performance.
Real life organisations are open systems. Not only they interact with their environment, it is essential that they interact for its survival and livability. The manages have to learn develop the strategies for minimising environmental uncertainties and devise contingency plan to meet the challenges of these uncertainties.
No comments:
Post a Comment