CHAPTER 3 - CHAPTER 3 External environments All events...

CHAPTER 3
External environments
 All events outside a company that have the
potential to influence or affect it.
Environmental change
 The rate at which a company's general and
specific environments change.

Stable environment
 An environment in which the rate of
change is slow.
Dynamic environment
 An environment in which the rate of
change is fast.
Punctuated equilibrium theory
 The theory that companies go through
long periods of stability, followed by short
periods of dynamic, fundamental change,
and then a new equilibrium.
Environmental complexity
 The number and the intensity of external
factors in the environment that affect
organizations.
Simple environment
 An environment with few environmental
factors.
Complex environment
 An environment with many environmental
factors.

Resource scarcity
 The abundance or shortage of critical
organizational resources in an
organization's external environment.
Uncertainty
 Extent to which managers can understand
or predict which environmental changes
and trends will affect their business.
General environment
 The economic, technological,
sociocultural, and political trends that
indirectly affect all organizations.