Chapter #2

The Environment of Organization

Organization
Organizations are groups of people, with ideas and
resources, working toward organization goals.
OR A systematic arrangement of people brought
together to accomplish some specific purpose is
called organization.
Characteristics of Organization

Purpose Structure

People
 Environment
 A situation, space and place where
organization operates in.
 Types of Environment:
 External Environment
 Internal Environment
External Environment
 The external environment is everything or
elements outside of organization’s
boundaries that might affect it.
 There are two types of external

environments
1. General environment
2. Task environment
General environment
 The general environment of organization
includes.
 Economical
 Technological
 Sociocultural
 Political
 International
General Environemnt
 Econmic : The external factor which can
either affects positively or negatively the
organization.
General Environment
 Technological:The technological dimension of
the general environment refers to the
methods available for converting resources to
products or services by using technology.
General Environment
 Sociocultural :It includes people’s values,habits,
attitudes which depend on the region , etc
General environment

 Political Environment:Changes in laws by

parliament and government such as taxation
etc have caused organizations to change.
General Environment
 An international Environment:Globalization of
markets affect every business.
Task Environment
 Task environment includes those sectors that
have a direct working relationship with the
organization
 The task environment includes
 Competitors
 Customers
 Suppliers
 Strategic partners
 Regulators
Task Environment
 Competitor is the organization who provide
same or alternative products/services
Task Environment
 Customers:Whoever pays money to acquire
an organization’s products or services
Task Environment
 Suppliers :An organization that provides
resources for other organizations
Task environment
 Strategic Partners: An organization working
together with one or more other organizations in a
joint venture or similar arrangement.
Task environment
Regulators:
A unit that has the potential to control,
legislate, or otherwise influence the
organization’s policies and practices.
Internal Environment
 An organization also have internal
environments that consists of,
 Owners
 Boards of directors
 Employees
 Physical work environment
Internal Environment
 Owner :Whoever can claim property right of
an organization
Internal environment
 Board of directors:These member are elected
by a corporation’s shareholders and charged
with overseeing the general management of a
firm to ensure that is being run in a way that
best serves the shareholders interests.
Internal Environment
 Physical work environment:Employee safety
and health have caused many organizations
to pay more attention to their internal
environment.
Thank you