Organizational Behaviour

Ninth edition

Chapter 02
Environment

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 Environment
Environment: issues, trends, and events outside
the boundaries of the organization, which influence
internal decisions and behaviours.

Stakeholders: anyone who is concerned with how

an organization operates, and who will be affected
by its decisions and actions.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
Figure 2.1
External environment–organization links

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 The Search for ‘Fit’

Environmental uncertainty: the degree of

unpredictable turbulence and change in the
political, economic, social, technological legal, and
ecological context in which an organization
operates.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 Environmental Complexity &
Dynamism

Environmental complexity: the range of external

factors relevant to the activities of the organization;
the more factors the higher the complexity.

Environmental dynamism: the pace of change in

relevant factors external to the organization; the
greater the pace of change, the more dynamic the
environment.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
Figure 2.2
Duncan’s typology of organizational
environments

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Table 2.1
Ansoff’s typology of environments

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Figure 2.3
The search for environment–organization
‘fit’

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 The search for environment–
organization ‘fit’

Post-modern organization: a networked,

information-rich, delayered, downsized, boundary-
less, high commitment organization employing
highly skilled, well-paid autonomous knowledge
workers.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 The search for environment–
organization ‘fit’ (flaws)

Environmental determinism: the argument that

internal organizational responses are primarily
determined by external environmental factors.

Strategic choice: the ability of an organization to

decide on the environment, or environments-that
is, sectors, and parts of the world-in which it will
operate.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 Analyzing the Organization’s
Environment

Environmental scanning: techniques for

identifying and predicting the impact of external
trends and developments on the internal
functioning of an organization.

Globalization: the intensification of worldwide

social and business relationships which link
localities in such a way that local conditions are
shaped by distant events.
Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
Percentage of UK population aged 65 or
over

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Average age of UK population

scanning

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 PESTLE Analysis

PESTLE analysis: an environmental scanning tool

identifying Political, Economic, Social,
Technological, Legal, and Ecological factors that
affect an organization.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
Figure 2.4
PESTLE analysis

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 Scenario Planning

Scenario planning: the imaginative development

of one or more likely pictures of the dimensions
and characteristics of the future for an
organization.

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Figure 2.5
External environment–organization link
detailed

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Figure 2.6
Three domains of action

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 Ethics
Ethics: the moral principles, values, and
rules that govern our decisions and actions
with respect to what is right and wrong, good
and bad.

Ethical frameworks: utilitarianism,

individual rights, and natural justice.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
Table 2.3
Ethical frameworks

Source: adapted from Organizational Dynamics, Vol. 12, No. 2, Velasquez, M., Moberg, D.J. and Cavanagh, G.F., Organizational statesmanship and dirty politics: ethical guidelines for
the organizational politician, p. 72, © 1983, with permission from Elsevier.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved
 Business Ethics

Ethical stance: the extent to which an

organization exceeds its legal minimum obligations
to its stakeholders and to society at large.

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Figure 2.8 Intensity of ethical
stance

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 Corporate Social
Responsibility

Corporate Social Responsibility (CSR): the

view that organizations should act ethically, in
ways that contribute to economic development,
the environment, quality of working life, local
communities, and the wider society.

Copyright © 2017, 2014, 2011 David A. Buchanan and Andrzej A. Huczynski. All Rights Reserved