6.1 The External Environment External eavironment refers tothe fetors and frees outside the organisation th ve the pte to niacant lence the Wey sucess fhe organ Exterta "inironmentisbreadly feo fypes—met environment and ask enaronment Men ‘chovonment or tndzeet action environment consists ofthe broad conditions ad ‘Tends nthe society within which an organiation operates I nfences he cine ‘thin which an organisation operates but does not llect tne organisation direct ‘Generally 2 singe organisation cannot direct alter the meq environment. Te ‘neg evo ons of ve aor eae: flog ono. st {othe sper outside cements wath which an organisation feteracts he ea ‘of conducting fs bsiness. I rectly dnlaences he acties of the organisa ‘The task eoirennent depends largely onthe speile products and service thal =| Grganisation decides to offer and nthe location where it chooses to conduct is business Therefore, cach organisation must assess ls own situation to determ Ms specific tsk exvisonment: Astle organisation can aft ts lank exvronmest Main clementa ofthe task environment are: customers and cients, competion polices, labour apply and Government agencies Fi 6.1 i 8, The cern Endeoumen of he Orgniton Mega or General Environment Jsronment refers to macro economic forces that influence the health ofthe whlch in turn tnluence the profitably of rms within that economy. The ements of mega environment are described below: Environment, Technolgeal environment reflects the current Ta process of imnovation refers to ellorts n the bask clences to develop logen, procenes, methods and products, Ths process i fen called remearcht fdvlopment and gant earpacations ike harat Heavy Electra Limited spend sums of money every year on It. The process of technology transfer involves the new technology from the laboratery to the market Le., the taster of {o useful produets and applications. Technology transfer can occur both and between industries, Por example laser technology t used In medical ‘4 wel as in metal industry. Paradigm abit occurs when a new technology Pasinese model dramatialy alters the nature of demand and competion Fclors in the technological environment have two main implications for srs, technologjeal progres causes product obsolescence: Therefore, a sation must find new opportuniies Io snarket Ils products and services. Fegulre conceptual and dhagnostic ki jeer 19 monitor tecologeal developments, 2. Reonomle Environment. Economic environment refers to the systems of ing. distributing and consuming wealth. Some countries eg United Sates Kino have a capitalist ecanoay in which means of production are privately and controlled by indiiduals- On the other hand, canis ike China have in economy, herein State owns and controls the means of production, In a st economy, market forees govern ecanomle acivy, whereas ih a Socalst 5, econome acy i contrlled by national planing. Within county eae conditions and trend ike wages, prices nd heal polices fect the costs products and services. Per capita income. savings, mvestment. price level oment interest rates, product. etc are mpertant indicators of te econonic nina country India s a mbsed economy In which econane ach i ay both marke forces and government regulations, Within a given economic ‘several economic factors such as ilaten, lnetest rates an eeession ace organisations. Business firms have Mle Independent contral over these ‘As economic systems ifr from county to county. companies operating ‘countries have to face diverse sets of economic forces, General econo tone and trends are Important al,23, Socio cultural Environment, The seco ultra environment chistes alts. values, norms, bees, belviours and demographic trends ot county Demographic trends refer to age composition, eduction pater, Income level a ‘moby ef population inthe country. These trends fet organisations terms hature othe workforce, avallabty of leat and pro af ayng pubic For example the ise ofthe md cing India ha edt changes in foc ats. fashion. hone Turmsting. ete: Changes tm naltaal eds and estes are aifect S| ‘atone Lifestyles are the outward manifesstons oles snd atitudes of people For example, designed clothes have virtually no market in seme countries, Dat ‘ther countsies consumers are wilingo pay pretlu prices for such clothes. Sok utara ores uence how workers ina out fo bons tet jobs and employer ‘or exanpl. due to lereased emphasis on personal growth al areer develop employees want more than jst memey and scart rom jo. They oe the Jo ‘continuing learn nd growth experience which may require iamuent ta motes, Greater mobibty of people sid their creative nets require more lela Sina ea many rgmntion have dsp a en rk Cultural factors may fctitat or consrsia the working of organisa. ‘countries. the compete mouve at desire to work hard are very Ub. tn Doty. public opinion. puble issues, Government Boe, poltical pales ie {roups, trends tn lelolation. judietal system are lmportant aspects of ta fxvironment. Organisations mast operate within the general legs ramen ct ‘Lag eironment empowers managers Yo make contacts own popes and ssa corporation. also exertses seca contra over ther By specie abi {owards customers, workers, vestere and Governed. acest yea. theSupreine Cour band te ling of eee tel tir aso ‘Tom North Eastern tts: Thus has heavy ar sorperates i he pwc se | moda nme whos trend orm hy fa ria a uaa ‘Winco tsa major profue o matcalks, Recent the company anounced ‘chal rests Ta athe performance ies Dirng the AiSetener Period. sales dropped by eound 2 percent and he Hoste slipped inate ‘cord’ et ls of oer Rs 34 err. Th = nga hanson et of eRe {tere drag these prod the peeves yar. Th eer ee cp ra Serban anther operant comp na hs ‘trios awa enacted bythe government to regulate business pose a challenge t sand managers 8 Task or Specific Environment he mega environment s general and abstract. task environment tends tobe specie and precise. thas a direct impact on managerial actions and decisions ‘he main clements ofthe task enolronment are as fellows 1, Customers. The individuals and organisations that purchase the products ofan orgatsation are ta known customers and ellen, Many organisations ound that pays to tay close to the customer Therefore they are paying attention to service and qual Hstening to castomers about ther needs or niches to serve eastomers etter than others, New products and services demanding customers, new markeling methods and pressures from customer 5 about packaying ad qualily have complicated business relations 2. Competitors. An organisation's competitors are other organisations tha offer or have a high potential of offering rival produets or services. An son needs to be concerned with its known and potential competitors as fs wit what they are doing, For example, Modi Xerox uses a technique called arking fo estimate what its competiior does and how much It costs. A shoud be concerned with its direct as well as indirect competitors. For lean airline faces competition not only from other airlines but from Mrs alays snd Iuxuty bus lines Arm has also to compete with other firms for se. rast materials, labour, finance, ete 3. Suppliers. The suppliers refer to those individuals and organisations which raw materials, productsservices, labour, finance and other resources the needs fo conduct ts operations: The ably to attract and retain adequate fo quality resources s erucal for every enterprise. Therefore, it must ha elaions with ts vendors, finanetal nstisitions investors, trade wntons, ee vendors the conventional belief os been that He beat ta have Soule sorder to reduce dependence on any one source. But now companies sr that they are better abe to cut costs by reducing the number of suppliers hey deal with and negotiating contracts with then 4. Government. Government agencies and interest groups control and influence ‘The Internal Environment slenvironment ofa organisation refers to everything inside it that aes ability to pursue actions It consists ofthe following elements1. Objectives. An organisation isa group of people with common object ‘Objeciwes are the specific reslts which an orgamisation desire to achieve activities of an organisation are directed towards the accomplishment a objectives, ‘2. Structure, The structure of an organisation refers to vertical and hor ‘aumouty responsibiy relationships between ts members Structure ls cha by division o labour. span of management, coordination between tasks 3. Tasks, An outgrowth of division of labour is the creation of tasks mean series of jobs. Tasks are assigned to postions, Tasks involve worling people, things and information, 14. Technology. Technolo i 8 means of transforming inpts into ou ‘sacombnation of hls, equipment acti, tools and relevant jnowledge (o transform materials, information and people. Tasks and te@inology arc el related. Financial and physical resources are also important. Rare, niaable Substitutable resources gve a competitive edge to firm, 5. People. The knowledge and skills of people in the organisation constitu ‘human capital The people nan organisation maybe classified into three cat tase fo be passive Telling the Lop management run thelr corporation. however, shareholders loldinga lage block of shares have started exerting power, As a result, managers have tobe more concerned about owners. () Managers. The Hoard of Direciors and other top organs of are responstbe for ensuring thal the company s beng run in the best inter the shareholders and sorely. Top execulves are concerned largely with s ‘making and overall control ofthe company’s operations (6) Employees, Blue and white collar workers are an important elem firm's internal environment. 4 company cannot be successful if managers ‘workers hol eillerent goals and values and interpersonal relationships among Inc hostile, Workers form trade unions which exercise a sgaieantinfuence ftitudes and behaviour of thelr members, 6, Organisation Culture. Culture is the foundation of internal env because largely determines the beaour of managers in the organisation, ‘eeveto the st of values that decses what the organisation stand for nove {things and what it considers Important. An organisations culture starts founder. For example, JRD Tala believed in mutual trust between employe tmployees, Ashe organislion grows ts culture is modified or refined by Slopuns, stores and Geremontes, The siccess and experience of the of llso shape its elture. The culture of Tata group has undergone some changes Ran Tata tock over aa dhe Bead of he group Unough muta rast ss ‘important Managers must understand the curren culture of their organisatlon a appropriate actions to relnforce/modify it They an maintain culture by ‘ahd promoting people whose behaviour is consistent with the esting culture ‘can also be ariculated through slogans, ceremonies and symbol } | | | | | ‘Tintern environment of an organisation also comprises ts resources, The sources determine te capacity of the organisations to achieve ils sated goals. Resource of an organisation may be outlined slong fanetional lines (Table 61 ‘ae 61: Resor Profi by Pena ren Sain a ach etre ee 1 ee coe prea Ses mg at eet 6 Sea eta eer ares lo) Rtn mn ang yan ht 1 Renee a a Sta he loa et oS sso not rn (8 Reh inn nt het nn Rone putea ageches cS a ‘beendih of proces line, brand layaly service effectiveness. Pe ga geet metas ig: ern 9) Se rene ea sama 1G Rett ade wr lo en i tea ay tt mrt cep Sateen gn gaipetaci yrs en, (G Retang a SS gre ts a Son a ue 12) = Peel emu, (a) = Syms aig reat soe Ars or Gt dD Stn any rn! ce ‘Tle 2: Examples of Rasa td by Oretlation Spa — Tan Peal Pgaeal—TS ‘ecm Coen Grate Simpl” Tae eran, Seopa eee Saag Sante Renee one forces laeniyofDe acu Admin UGC Grant, Rex, Campin en Std! eed Sees" Destine" Cotes Ree eae proton Relnicnn, Fr Borowig Baingr pt pa Nant Grocery Mame, ook. Sure, Bulan et om toe wer crcny re Spc Soe