¡Descarga Adapting Organizational Responses to Environmental Uncertainty y más Apuntes en PDF de Idioma Inglés solo en Docsity! CHAPTER 4: THE EXTERNAL ENVIRONMENT Purpose of This Chapter The purpose of this chapter is to develop a framework for assessing environments and how organizations can respond to them. The organizational domain and the sectors that influence the organization are identified. Following on, two major environmental forces on the organization are explored. Organizations respond to these forces through structural design, planning systems, and attempts to adapt to and influence elements in the external environment. The Environment Domain Organizational environment is defined as all the elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization. An organization’s domain is the chosen environmental field of action. Domain defines the organization’s niche and defines those external sectors with which the organization will interact to accomplish its goals. The environment comprises several sectors or subdivisions of the external environment that contain similar elements Task Environment The task environment includes sectors with which the organizations interact directly and have a direct impact on the organization’s ability to achieve its goals. It typically includes the industry, raw materials and market sectors, and sometimes the human resources and international sectors. General Environment The general environment includes those sectors that may not have a direct impact on the daily operations of a firm but will indirectly influence it. It typically includes the government, sociocultural, economic conditions, technology and financial resources sectors. International Context The international sector can directly affect many organizations, and it has become extremely important in the last few years. Nevertheless, the distinctions between foreign and domestic operations have become increasingly irrelevant. Increasingly, organizations, no matter their home, are engaged in partnerships and alliances with other firms globally. The growing important of the international sector means that the environment for al organizations is becoming extremely complex and competitive. Environmental Uncertainty There are two essential ways the environment influences organizations: 1) the need for information about the environment; and 2) the need for resources from the environment. Environmental uncertainty refers primarily to those factors that an organization deals with on a regular basis. Uncertainty means that decision makers have some degree of insufficient information about environmental factors, making prediction of external changes difficult. Uncertainty increases the risk of failure for organizational responses and makes it difficult to assess costs and probabilities associated with decision alternatives. Therefore, organizations must cope with and manage uncertainty to be effective. Simple-Complex Dimension The simple-complex dimension concerns environmental complexity, which refers to heterogeneity, or the number and dissimilarity of external elements relevant to an organization's operations. A simple environment is one in which the organization interacts with and is influenced by only a few similar external elements. In contrast, in a complex environment, the organization interacts with and is influenced by numerous diverse external elements. Stable-Unstable Dimension The stable-unstable dimension refers to whether elements in the environment are dynamic. An environmental domain is stable if it remains the same over a period of months or years Framework The two dimensions above are combined into a framework for assessing environmental uncertainty. Generally speaking, there are four types of environments: 1) the simple, stable environment where uncertainty is low; 2) the complex, stable environment represents somewhere greater uncertainty; 3) the simple, unstable environment with even greater uncertainty; and 4) the complex, unstable environment with the greatest uncertainty Adapting to Environment Uncertainty Environmental uncertainty represents an important contingency for organization structure and internal behaviours. For example, refer back to Chapter 3 that organizations best equipped to face uncertainty generally have a more horizontal structure as this encourage cross-functional communication and collaboration to adapt to environmental changes. Organizations need to have the right fit between internal structure and the external environment. Internal structures can be adapted in many ways to better meet the external environment. Positions and Departments As the complexity in the external environment increases, so does the number of positions and departments with the organization, which in turn increases internal complexity. This relationship is part of being an open system. Each sector in the external environment requires an employee or department to deal with it. Buffering and Boundary Spanning The traditional approach to coping with environmental uncertainty was to establish department or roles to buffer or absorb its effects upon the ‘technical core’ of organizations. Buffer roles or departments enable the ‘technical core’ of organizations to function efficiently. However, companies in a newer approach are attempting to remove or reduce the buffers so the ‘technical core’ is directly connected to its environment as emphasis is placed upon being wellconnected to customers and suppliers rather than ensuring the stability of the established technical core. Despite the advantage, this has the potential disadvantage of exposing the technical core to the uncertain environment and makes it more fluid and adaptable. Boundary-spanning roles link and coordinate an organization with key elements in the external environment. Boundary spanning is 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. Generally speaking, boundary spanners prevent the organization from stagnating by keeping top managers informed about environmental changes. The greater the uncertainty in the environment, the greater the importance of boundary spanners. One new approach to boundary spanning is business intelligence, which refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant. An intelligence team is a cross-functional group, led by a competitive intelligence professional, who work together to understand a specific business issue. In today’s turbulent environment, many successful companies involve everyone in boundaryspanning activities. Differentiation and Integration
