The firm and its environment in organization and management. Week 2 2022-10-15

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The firm and its environment are important concepts in organization and management that have significant implications for the success or failure of a business. The firm refers to the organizational structure and functioning of a business, while the environment refers to the external factors that can impact the firm. Understanding the relationship between the firm and its environment is essential for effective management, as it allows managers to anticipate and respond to changes in the external environment and make informed decisions that help the firm achieve its goals.

One of the key ways in which the firm and its environment are connected is through the concept of strategic fit. Strategic fit refers to the alignment between the firm's internal resources and capabilities and the opportunities and threats presented by the external environment. A firm that has a strong strategic fit is able to effectively leverage its internal strengths to take advantage of external opportunities and mitigate the impact of external threats. On the other hand, a firm that lacks strategic fit may struggle to compete in its industry and may be vulnerable to external disruptions.

The firm's external environment can be divided into three main categories: the microenvironment, the mesoenvironment, and the macroenvironment. The microenvironment includes factors that are directly related to the firm, such as customers, suppliers, and competitors. The mesoenvironment includes intermediaries that play a role in the firm's operations, such as distributors, regulators, and the media. The macroenvironment includes broader societal forces that can impact the firm, such as economic conditions, technological changes, and cultural trends.

Managers must pay attention to all three levels of the firm's environment in order to make informed decisions and achieve strategic fit. For example, a manager might consider the impact of technological changes on the firm's operations, as well as the impact of cultural trends on the firm's customer base. By analyzing the firm's environment in this way, managers can identify opportunities and threats and develop strategies that help the firm adapt to changing conditions.

In conclusion, the firm and its environment are closely connected in organization and management. Understanding the relationship between these two concepts is essential for effective management, as it allows managers to anticipate and respond to changes in the external environment and make informed decisions that help the firm achieve its goals. By considering the micro, meso, and macro environments, managers can develop strategies that achieve strategic fit and enable the firm to thrive in a dynamic and competitive business world.

The Firm and Its Environment

the firm and its environment in organization and management

Their wings do not come from a common ancestor: they evolved independently to make flight possible. The degree to which a society emphasizes short-term thinking versus greater concern for the future or long-term thinking. Mutual Dependence of Factors- all the factors of the environment are mutually dependent. Refer to business organizations with few departments. The rebuilding of infrastructure and dwellings requires concrete, steel, and other materials.

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Week 2

the firm and its environment in organization and management

Moreno, MBA, CFE Page 3 INTERNAL ENVIRONMENT - Company Plans and Objectives - Changes in policies that may affect the relationship among managers and between management and employees - Organizational Structure - Simplifying the line of authority that promotes responsibility and accountability and aid in fast decision making - Plant and machinery - Relationship of the organization with the employees and their productivity - Human resources - Relationship of the organization with the employees and their productivity - Financial resources - financial stability to meet production and operation requirement - Corporate image - Reputation of the company in the eyes of the employees and outsiders - Labor management and relationship - relationship helps in increasing the morale of the employees and motivates them to put efforts in the business. An organization cannot survive without the support of its environment. First, the environment provides resources that an organization needs in order to create goods and services. Seeking for and sorting through about the environment. Some aspects of the general environment, such as demographics, simply must be taken as a given by all organizations. Consider a plain wooden chair that a person bought for her home.

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3.2 The Relationship between an Organization and Its Environment

the firm and its environment in organization and management

The examples of internal factors are nature and number of personnel, physical facilities, organisation and functional means, such as marketing mix, to suit the environment. What Is the Environment? This is true even in extreme cases. In other words, business is influenced by its environment and, in turn, to a certain degree, it will influence the external forces. Moreno, MBA, CFE Page 1 THE FIRM AND ITS ENVIRONMENT What is a business? Geographical Boundary- the internal and external forces and conditions arise within that boundary that affect the organization. Many firms in the same industry grow to resemble each other over time as they exploit a common economic niche. Three features are common to this web of relationship between business and its environment: 1 There is symbiotic relationship Fig. For any organization, the It is useful to break the concept of the environment down into two components.

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Business Firm and Its Environment

the firm and its environment in organization and management

. As odd as it may seem, however, these tragic events also opened up significant opportunities for other organizations. The wood was harvested or recycled by a different organization, which sold it to the carpentry business. It is said that business is a product of environment OR Business is the creation of its environment. Refers to the factors or elements affecting a business organization. Even the simplest, low-technology products require the cooperation of many different organizations to reach the consumer.

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02_The_Firm_and_Its_Environment (2).pdf

the firm and its environment in organization and management

ADVERTISEMENTS: 5 Price to be fixed for the product, etc. For example, social factor affects economic, political, religious, legal, technical, races, and other factors. For example, firms in industries with declining sales usually find ways to cut costs to stay afloat. Business is an all profit-seeking activities and organization that provide goods and services necessary to an economic system. Internal and External- internal is composed of forces and conditions within the organization, whereas external environment is composed of the forcers and conditions outside the organization.

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The firm and its environment Chapter webapi.bu.edu

the firm and its environment in organization and management

According to Robert Albanese , it may be defined as a perceived set of conditions, influences, or forces internal or external to an organization that has relevance to the goals and tasks of the organization. Why Does the Environment Matter? They just do what they evolved to do, and nature does the rest to mediate their interactions. Similarly, organizations facing similar challenges often find similar ways to meet those challenges. As the human body must consume oxygen, food, and water, an organization needs to take in resources such as labor, money, and raw materials from outside its boundaries. Japanese concrete manufacturers, steelmakers, and construction companies are likely to be very busy in the years ahead. Exchange of Resources- every organization imports its resources, such as: human, materials, financial, physical and informational, from its environment and exports its good or services outside to its environment. That chair was sold to her by a retail store, which is a for-profit organization.

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the firm and its environment in organization and management

Organization and Management Prepared by Mrs. ADVERTISEMENTS: After reading this article you will learn about business firm and its environment. Write the letter of your answer on the space provided. ORGANIZATION AND MANAGEMENT Chapter Quiz No. The concept of evolution helps biologists understand how organisms adapt to their environment over time. These organizations evolved because of economics, and no one person understands how to harvest lumber, drill and refine oil, sell furniture, build cars, and act as a salesperson. A few organizations wield such power and influence that they can shape some elements of the general environment.

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the firm and its environment in organization and management

However, the geographical limit is determined by the scope of operation of the forces and conditions outside the organization. Is the item offered for sale which can be goods or services. Most organizations are limited to influencing their industry. The internal factors are regarded as controllable factors, as the firm has got control over these factors. They keep on changing as time passes and so does business. For example, organisms found in the desert usually have evolved ingenious ways to conserve water.

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