ORGANISATION-ENVIRONMENT INTERFACE FOR CHANGE

An organisation interacts with the external environment, exchanges resources

with it, influences it, and in turn is influenced by the various variables therein.
Different elements of the environment interact with the various subsystems of
the organisation in different ways and to different degrees (Fig. 1.7).

Fig. 1.7 Organisation environment interface for

change

Exchange of Information

Since an organisation is a part of its environment, it must exchange

information with the environment. The organisation as a system, with
information processing sub-systems, operates in such a manner as to keep
itself fully informed of its environment. It scans the environmental forces and
their behaviour and collects important information to be used for decision-
making and control purposes.

Exchange of Resources

An organisation in an open system who gets inputs from the environment and
in turn supplies its output to the environment. The organisation receives inputs
in the form of finance, materials, labour, equipment and so on from the
external environment through contractual and other arrangements.

The organisation is dependent on the external environment for the disposal of

its output. This is also an interaction process—perceiving the needs of the
external environment and catering to them, that is, satisfying the needs and
expectations of the customers. Besides customers, the management has to meet
the demands of other groups such as shareholders, creditors, workers,
suppliers of materials, general public and so on.

Exchange of Influence

The external environment holds considerable power over the organisation both
by virtue of its being more global and inclusive and also by virtue of its being
more global and inclusive and also by virtue of its command over information
and other inputs. It offers a range of opportunities, incentives and rewards, on
the one hand, and a set of constraints, threats and restrictions, on the other.

The influence of environment on the organisation is universal as it depends on

the environment not only for procurement of inputs, but also for sale of its
output.

Sometimes, the organisation may also be in a position to wield considerable

power over some of the elements of the external environment by virtue of its
command over resources and information.

The dependence and influence between the organisation and the external
environment is reciprocal to a large extent. Organisational dependence on the
environment means environmental power and control over the organisation.