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characteristics of organizational environments

change, complexity, scarcity

types of organizational environments

general and specific

making sense of the organizational environment

cognitive maps

general environment

the economic, technological, sociocultural, and political trends that indirectly affect all organizations

specific environment

the customers, competitors, suppliers, industry regulations, and advocacy groups that are unique to an industry and directly affect how company does business

economy (component of general environment)

growing (favorable to business growth) vs. shrinking economies, predicting future economic activity, business confidence indices

business confidence indices

indices that show mangers' level of confidence about future business growth

technology trends

the knowledge, tools, and techniques used to transform input into output

sociocultural trends

demographic changes, changes in behavior, attitudes, and beliefs

political/legal trends

legislation, regulations, court decisions

trends of the general environment

the 'great recession,' Moore's law, aging of the population, progressive 'turn to the right'

customers (as component of specific environment)

reactive customer monitoring: responding to problems, trends, and events ; proactive customer monitoring: anticipating problems, trends, and events

competition (as a component of specific environment)

who are your competitors? what are their likely courses of action? what are their strengths and weaknesses?

suppliers (as a component of specific environment)

relative independence, opportunistic vs. relationship behavior

supplier dependence

the degree to which a company relies on a supplier because of the importance of the supplier's product to the company and the difficulty of finding other sources of that product

opportunistic behavior

a transaction in which one party in the relationship benefits at the expense of the other

relationship behavior

mutually beneficial, long-term exchanges between buyers and suppliers

industry regulation

regulations and rules that govern the business practices and procedures of specific industries, businesses, and professions

advocacy groups

groups of concerned citizens who band together to try to influence the business practices and procedures of specific industries, businesses, and professions

environmental change

the rate at which a company's environment changes; includes punctuated equilibrium theory

punctuated equilibrium theory

companies cycle through stable and dynamic environments

environmental complexity

number of external factors in the environment that affect organizations

resource scarcity

degree to which an organization's external environment has an abundance or scarcity of critical organizational resources

environmental uncertainty

the more complex the environment is, the higher the scarcity of resources, and the more uncertain a business

environmental scanning

searching the environment for events or issues that might affect an organization; keeps companies current on industry factors, reduces uncertainty, alter organizational strategies, contributes to organizational performance

cognitive maps

simplified models of external environments depicting how managers believe environmental factors relate to possible organizational actions

external business environment components

economy, technology, sociocultural, political/legal

specific business environment components

customs, competitors, suppliers, industry regulation, activists

characteristics of business environments

change and punctuated equilibrium, complexity, resource scarcity, uncertainty

dealing with business environments

environmental scanning, cognitive maps

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