External Environment

External Environment • Events and conditions which surround and affect the functioning of an organization.

Open System Model Inputs Environment Environment Transformation Outputs

Components of the External Environment • General economy • Customers • Suppliers • Competitors • Social Factors • Legal and political factors • Technology

Environmental Uncertainty Complexity Simple Complex Low Perceived Uncertainty Few factors which remain the same Static Moderately Low Perceived Uncertainty Many factors which remain the same Rate of change Moderately High Perceived Uncertainty Few factors which are in a state of change High Perceived Uncertainty Many factors which are in a state of change Dynamic

Managing Environmental Uncertainty • Organizational structure • Vertical integration • Mergers and acquisitions • Strategic alliances

Technology • The activities, equipment and knowledge necessary to transform inputs into goods and services

Perrow’s Types of Technology Exceptions Problems Technological Type Few Easy to analyze Routine technology Difficult to analyze Craft technology Many Easy to analyze Engineering technology Difficult to analyze Non-routine technology

Thompson’s Types of Technology Technology Type Task Interdependence Integration Mediating Pooled Standardization (banks) Long-linked Sequential Hierarchy of (assembly line) Authority Intensive Reciprocal Mutual (hospital) Adjustment

Advanced Information Technology • The accumulation, storage, processing and transmission of data made possible by computers

Advanced Information Technology • Advanced Manufacturing Technology • Computer Aided Design and Manufacturing • Computer Integrated Manufacturing • Office Technology • Word processing • Communication (e-mail, fax) • Data bases, spreadsheets • Information storage and retrieval

Impact of Automation on Job Design • Manufacturing • Less skill on the shop floor • New jobs require skills in programming and electronics • Task lines blur between skill areas • Office technology • Initially some de-skilling • Ability to develop multiple skills in applications

Impact of Automation on Organizational Structure • Manufacturing • Flatter, more flexible structures • Increased need for coordination • Functional structures may be counter-productive • Office Technology • Flatter • Decentralized

Organization Culture • The cognitive framework of attitudes, values, norms, and expectations shared by members of the organization

Dimensions of Culture • Innovativeness • Stability • People orientation • Results orientation • Informality • Conscientiousness • Collaborativeness

Transmission of Culture • Symbols and slogans • Stories • Ceremonies • Mission statements • Social learning

Impactof Culture • Strong vs weak cultures • Performance • Person-organizations fit

Backwards and Forwards • Summing up: We examined the affect of environments that surround organizations and their core technologies. Moving to advanced information technologies means considering the impact on job design. • Looking ahead: A consequences of poor person-organization fit can be stress. What strategies exist to cope with and reduce stress? Next time, we study conflict andstress

External Environment