Chapter 2 Notes - I The organization's environments A The general environment(external Economy Overall health and vitality of the economic system in

Chapter 2 Notes - I The organization's environments A The...

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I.The organization’s environmentsA.The general environment (external)Economy-Overall health and vitality of the economic system in which the organization operates-Growth, inflation, interest rates and unemployment importantTechnology-Methods available for converting resources into products or services-In service and manufacturing sectorPolitical-legal climate-Government regulation of business and the relationship between business and government-Three Basic Reasons1.legal system defines what an organization can and cannot do2.sentiment in government influences business activity3.Political stability has ramifications for planning, nobody wants to start new business in unstable countryB.The task environment (external)Competitors-Other organizations that compete with a particular organization for resourcesCustomers-People who pay money to acquire a organization’s products or servicesSuppliers-Provide resources for other organizationsRegulators-A body that has the potential to control, legislate or otherwise influence the organization’s policies and practices1.Regulatory agencies – created by the government to regulate business activities: EPA, SEC, FDA2.Interest groups: organized by its members to attempt to influence organizations; MADD, NRAStrategic partners (allies)-Organization working together with on e or more other organizations in a join venture or similar arrangement C.The internal environment: conditions and forces within an organizationOwner: Whoever can claim property rights to an organizationBoard of directors: governing body elected by the stockholders and charged with overseeing the general management of the firm to
ensure that it is being run in a way that best serves the stockholders’ interestsEmployeesPhysical environmentII.The ethical and social environment of managementA.

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