MGT 420 Module 2 Discussion Question 2:

For your organization, or for one with which you are familiar, identify the factors that operate in its general and specific environments. How does this understanding influence the effectiveness of an organization?

ADDITIONAL INFORMATION

The general and specific environments of an organization

Introduction

The environment of an organization is the sum total of all factors that influence it. These include the physical and social structures of an organization, as well as its culture and values.

The general environment factors are:

The general environment factors are:

• Social, demographic, economic, political and legal.

• Global and geographical.

Social/Demographic

The social context of an organization refers to the factors that influence its organizational culture. These include:

• Demographic profile of customers, employees and suppliers

• Social, cultural and ethical values that influence the organization’s activities

• Social and psychological characteristics of management team

Economic

The economy is a big factor in determining how an organization can succeed. If the economy is doing well, there may be opportunities to expand or start new businesses. A bad economy will slow down growth and make it harder for companies to hire workers and pay them enough money to live on.

In addition, an unstable or volatile economic climate can make it difficult for organizations to plan ahead with regard to their finances and operations. This could lead them into debt if they try too hard during bad times; however, good planning can help mitigate this risk by setting aside funds from operating expenses (such as salaries) so that those funds are available when needed most—during periods of high demand for labor such as construction projects or seasonal increases in sales volume.[1]

Political/Legal

The political and legal environment is the set of laws, regulations, and policies that affect an organization. It can have a huge effect on an organization’s ability to achieve its goals. For example, if you want to run a business without paying taxes for years at a time then you need to be aware of what’s going on with tax regulations in your country or state.

Technological

Technology is a major force in the economy, and it can play a role in an organization’s environment. For example, technology may be used to create competitive advantages for companies that have access to better, faster or more reliable technology than their competitors.

Technology can also affect an organization’s strategy by affecting how much money it spends on research and development (R&D), how many employees it hires or where they work (e.g., remote locations).

Global/Geographical

Globalization is the process of increasing interdependence and integration among nations, peoples, and economies. It refers to the globalization of trade, culture and people through economic ties. Globalization has many impacts on organizations such as:

• The global marketplace provides new opportunities for growth by offering new markets for products or services developed by an organization.

• Organizational leaders must be aware of their company’s location in order to make informed decisions about how to respond effectively when faced with challenges that arise from changes in global markets (e.g., currency fluctuations).

Understanding the general environment factors is important for strategic decision making

Understanding the general environment factors is important for strategic decision making. The general environment factors are social/demographic, economic, political/legal and technological. These four factors affect each other in various ways and can be used to predict future events as well as understand current conditions.

When you’re trying to figure out what’s going on with your company or business in terms of its performance against expectations or goals set by management early on in its life cycle (or even before), it helps if you have some idea of where things stand in terms of overall health—both for your organization as well as for any competitors who might be competing against you at any given time period.

Conclusion

As you can see, there are a lot of factors that go into the general and specific environments of an organization. It is important to understand how these environments affect your company and what steps need to be taken as part of your strategic decision making process. If you want more information on where these factors come from and how they impact business decisions, feel free to reach out!

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