Organisational Environment and Resources

Organisational Environment Definition: The organisational environment is technically anything which is external to an organisation and can affect it in anyway, causing the organisation to react to this change. Fro example if a competitor lowers their prices, then an organisation in the same market may have to react by also lowering its prices, or saying that they have a better quality product which could help brand image and in turn sales, more than selling for cheaper.

Organisational Resources: The assets that are by an organisation for the production process. This includes human, monetary, raw materials and money.

Another aspect which makes interaction with the environment vital is the resources it provides organisation with. The environment provides us with financial support, raw materials and other important aspect which help us succeed, such as people to become employees, help and ideas. All of this leads to dependency on resources (Resource Dependency), however this also leads to organisations trying their hardest to take control of these resources so that they no longer have to rely upon them. This is fro example making more profit, so they rely less on banks for finance, buying an oil rig, so that they don’t need to go through suppliers to acquire the oil and therefore they don’t risk not being supplied.

Another way to try and make dependencies less it so being partnerships and agreements with other organisations, such as outsourcing some parts of the business to other organisations. This will reduce the cost, but may lead to poorer quality, slower production, and many other problems.

Key Learning Points

  1. Define the Organizational Environment?
  2. Define Resources?
  3. What are the Four Main Resources?

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