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BU398 > Chapter 2: The External Environment > Flashcards

Chapter 2: The External Environment Flashcards

1
Q

The Environmental Domain:

A

refers to everything outside of the organization

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2
Q

Organizational environment

A

all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization

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3
Q

Green environment

A

the natural environment

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4
Q

Domain

A

an organization’s chosen environmental field of activity
- Defines an organization’s niche, and defines the external sectors with which the organization will interact to accomplish its goals

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5
Q

Sectors

A

subdivisions of the external environment that contain similar elements

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6
Q

List of the sectors

A
  • industry, raw materials, hr, financial resources, market, technology, economic conditions, governemnt, sociocultural, international
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7
Q

Industry sector

A

Competitors, industry size and competitiveness, related issues

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8
Q

Raw Materials Sector

A

Suppliers, manufacturers, real estate, services

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9
Q

Human Resources Sector

A

Labour market, employment agencies, universities, training schools, employees in other companies, unionization

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10
Q

Financial Resources Sector

A

Stock markets, banks, savings and loans, private investors

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11
Q

Market Sector

A

Customers, clients, potential users of products and services

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12
Q

Technology Sector

A

Techniques of production, advances in science, computers, info technology

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13
Q

Economic conditions Sector

A

Recession, unemployment rate, inflation rate, rate of investment, economics, growth

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14
Q

Government Sector

A

City, province, federal laws and regulations, taxes, services, court system, political processes

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15
Q

Sociocultural Sector

A

Age, values, beliefs, education, religion, work ethic, consumer and green movements

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16
Q

International Sector

A

Competition from and acquisition by foreign firms, entry into overseas markets, foreign customs, regulations, exchange rates

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17
Q

Task enviornment

A
  • Or “core” environment, sectors that organizations deal with directly, have a direct impact on the org
  • Includes: industry, raw materials, market sectors
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18
Q

General Environment

A
  • Sectors that have an indirect impact on the organization
  • Includes: government, sociocultural, technology, financial resources, and economy
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19
Q

Environmental Uncertainty

A

Environment influences organizations: (1) the need for information about the environment (2) the need for resources from the environment

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20
Q

Uncertainty

A
  • occurs when decision makers do not have sufficient information about environmental factors and have a difficult time predicting external changes
  • Organization should focus on task sector
  • Environmental uncertainty is a function of (1) degree of complexity (2) degree of stability
21
Q

Simple Complex - Dimension

A
  • The number and dissimilarity of external elements relevant to an organization’s operation
  • Organization interacts with and is influenced by numerous diverse and different external elements
22
Q

Stable-Unstable Dimension

A

Whether elements in the environment are dynamic,
- rate of change or degree of predictability of change

23
Q

Adapting to Uncertainty

A
  1. Differentiation and integration between departments
  2. Add positions and departments
  3. Buffering and boundary spanning roles
  4. Mechanistic vs. organic management (efficiency vs learning)
  5. Planning, forecasting, and responsiveness
24
Q

Differentiation

A

the cognitive and emotional differences among managers in various functional departments of an organization, and formal structure differences among these departments

25
Q

Integration

A

the quality of collaboration between departments of an organization

26
Q

Add positions and departments

A

As the uncertainty in the external environment increases, the number of positions and departments increase, which increases internal complexity

27
Q

Buffering roles

A
  • activities that absorb uncertainty from the environment
    Ex - stockpiling supplies and raw materials
28
Q

Boundary-spanning roles

A
  • Activities that link and coordinate an organization with key elements in the external environment
  • Primarily concerned with the exchange of information to (1) detect and bring into the organization information about changes in the environment and (2) send information into the environment that presents the organization in a favourable light
    Ex - BI
29
Q

Mechanistic

A
  • an organization system marked by rules, procedures, a clear hierarchy of authority, and centralized decision making
30
Q

Organic

A

an organization system marked by free-flowing, adaptive processes, an unclear hierarchy of authority, and decentralized decision making

31
Q

Planning, forecasting, and responsiveness

A

The goal of increasing internal integration and shifting to more organic processes is to enhance the organization’s ability to quickly respond to sudden changes in an uncertain environment

32
Q

Resource Dependence

A

a situation in which organizations depend on the environment, so they:

  • Strive to acquire control over resources to minimize their dependence
  • Try to minimize vulnerabilities
  • May team up with others when resources are scare (interorganizational linkages)
33
Q

Address resource dependence through:

A
  1. Controlling resources
  2. Controlling Enviornment
34
Q

Controlling resources

A
  • ownership
  • formal strategic alliance
  • cooptaion, interlocking directorates
  • executive recruitment
  • advertising and PR
35
Q

Ownership

A
  • Buying part of or controlling interest in another company, gives the company access to technology, products or other resources it doesn’t currently have
  • Increase ownership through M&A
36
Q

Formal Strategic Alliance

A

High level of complementarity between the business liens, geographical positions, or skills of the two companies form a strategic alliance through contracts and joint ventures

37
Q

Joint venture

A

result in the creation of a new organization that is formally independent of the parents, although the parents will have some control, organizations share the risk and cost associated with large products of innovations
- contracts and joint ventures, gives rights to use and asset/supplier arrangment

38
Q

Cooptation

A

when leaders from important sectors in the environment are made part of an organization

39
Q

Interlocking directorate

A

a formal linkage that occurs when a member of the board of directors of one company sits on the board of another company

40
Q

Direct interlock

A

a situation that occurs when a member of the board of directors of one company sits on the board of another

41
Q

Indirect interlock

A

a situation that occurs when a director of one company and a director of another are both directors of a third company

42
Q

Executive Recruitment

A

Transferring or exchanging executives

43
Q

Advertising and Public Relations

A

Advertising is important in highly competitive consumer industries and in industries that experience variable demand
- PR - case the org in a favourbale light

44
Q

Controlling the environment

A
  • change of domain
  • political lobbying
  • trade associations
  • illegitimate acitivites
45
Q

Change of Domain

A

The organization decides which business it is in; the market to enter; and the suppliers, banks, employees, and location to use - and this domain can be changed

46
Q

Political Lobbying

A

Political strategy can be used to erect regulatory barriers against new competitors or to quash unfavourable legislation

47
Q

Trade associations

A

Work to influence the external environment is accomplished ny jointly with other organizations that have similar interests

48
Q

Illegitimate activities

A

Represent the final technique companies sometime use to control their environmental domain
- Certain conditions such as low profits, pressure from senior managers, or scarce environmental resources may lead managers to adopt behaviours not considered legitimate

49
Q
A

BU398 (8 decks)

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