The general environment includes everything outside the organization, for example, economic factors, political conditions, socio-cultural influences, globalization issues and technological factors. It covers conditions that may affect the organization, but whose importance is not clearly appreciated. Most of management's attention is usually focused on the specific environment of the organization, which is the part of the environment that is directly necessary for an organization to achieve its goals. The specific environment of each organization is unique and changes at the same time as the surrounding conditions. It includes input providers, clients, competitors, government agencies, and public pressure groups.
The organization and its environment:
The organization is an open system that interacts with its specific environment, depends on it, and at the same time, is always aware of the possible influences of its general environment.
The specific environment:
Different organizations face different specific environments. However, for most organizations, the factors that generate uncertainty are:
- Suppliers: when you think of suppliers, companies that supply materials and equipment generally come to mind. However, it also includes those who provide financial inputs and labor. Managers try to ensure a constant flow of the necessary inputs at the lowest possible price. Since these inputs involve uncertainties, managers often go to great lengths to ensure that they will all receive a consistent and reliable flow.
- Clients: is the person who absorbs the production of the organizations, which exist to satisfy their needs. Of course, some organizations face a considerably higher degree of uncertainty than others, relative to their consumers (eg tastes may change)
- Competitors: all organizations, even monopolies, have one or more competitors. Managers cannot afford to ignore competition, but must monitor it in order to be prepared to respond to it.
- Government: the federal, provincial and local governments influence what organizations can and cannot do. There are laws that have significant implications. Organizations spend a great deal of time and money on complying with government regulations, but the effects of these go beyond time and money. In reality, they also reduce administrative discussion by limiting the options available to managers.
- Pressure groups: managers must recognize groups that defend special interests and try to influence the actions of organizations. As social and political movements evolve, so does the power of pressure groups.
The general environment: The following should be considered:
- Economic conditions: interest rates, inflation rates, changes in disposable income, stock market indices and the stage of the general business cycle are some economic factors in the general environment that can affect the administrative practices of an organization.
- Political conditions: these include the general stability of the countries where the organization operates and the specific attitudes that government officials have towards the business sector.
- Social conditions: managers must adapt their administrative practices to the changing expectations of the society within which they operate. When values, customs, and tastes change, managers have to change too. This applies to your offers as internal policies.
- Global conditions: globalization is one of the main factors that affect managers and organizations.
- Technological conditions: we live in a time of technological changes. For managers of all organizations, technological advancements mean the ability to make better decisions more quickly.
