Organizational Environment
An organizational environment is composed of forces or factors that have a direct or indirect impact on the activities of an organization. These factors include the organizations goals and objectives, its internal structure, the nature of the market, its competitors, laws, external social and economic forces, natural environment, and other elements. The environment influences and affects the decisions, priorities, and missions of the organization, and it can either facilitate or hinder the successful attainment of its goals and objectives.
The organizations goals and objectives are determined by the management and generally encompass its vision and purpose, whereas its internal structure refers to the way in which the organization is organized, including its hierarchy and administrative procedures. The nature of the market pertains to the products or services that are offered and consumed by the general public, as well as the industry’s profitability, growth potential, cycle, and other factors. Its competitors refer to other organizations that offer similar products or services, and their marketing strategies, price points, and industry standing. Laws pertain to both internal regulations and the external legal environment, such as tax laws, labor laws, and consumer protection laws.
External social and economic forces refer to social trends, political environments, economic fluctuations, consumer tastes, and other factors outside of the control of the organization that can have a major impact on the manner in which it conducts business. Natural environment refers to the physical environment surrounding the organization, including its climate, terrain, and topography. Organizations must take these into account, especially when selecting locations for new operations or relocating existing ones.
Organizational environment is a very important factor to consider when making decisions, developing strategies, or attempting to adjust or modify operations. It is the environment that shapes the organization, and understanding the various forces and their potential impacts can allow the organization to take advantage of opportunities, reduce risks, and maximize their chances of achieving their goals and objectives. As such, it is important to thoroughly assess and analyze the organizational environment, so that the organization can come to a full appreciation of the outside forces that might affect it.
In conclusion, the organizational environment is composed of numerous factors which have an impact on the activities, decisions, and operations of the organization. These factors can either facilitate or hinder its progress and ultimate success, so it is important to understand the environment in depth in order to identify ways to capitalize on opportunities and reduce risks. Knowing and understanding the environment can be crucial, in order to attain the goals and objectives of the organization and maximize its chances of success.
