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Copyright © by Houghton Mifflin Company. All rights reserved. 3–1
The Organization and Its The Organization and Its EnvironmentsEnvironments
OwnersEmployees
Physical environmentBoard of directors
Culture
Competitors
Internationaldimension
Political-legal
dimension
Technologicaldimension
Socioculturaldimension
Economicdimension
Regulators Customers
Strategicpartners
Suppliers
Internal environment
Task environmentExternal environment
General environmentFigure 3.1
Copyright © by Houghton Mifflin Company. All rights reserved. 3–2
McDonald’s General EnvironmentMcDonald’s General Environment
McDonald’s
International Dimension• Restaurants in 115
countries• About two-thirds of sales from outside
the United States
Political-LegalDimension• Government
food standards• Local zoning
climate• General posture
toward businessregulation
TechnologicalDimension• Improved information
technology• More efficient
operating systems
Sociocultural Dimension• Demographic shifts in
number of single adultsand dual-income families
• Growing concerns abouthealth and nutrition
EconomicDimension• Strong economic
growth• Low unemploy-
ment• Low inflation
Internal environment
Task environmentExternal environment
General environment
Figure 3.2
Copyright © by Houghton Mifflin Company. All rights reserved. 3–3
McDonald’s Task EnvironmentMcDonald’s Task Environment
McDonald’s
Competitors• Burger King• Wendy’s• Subway• Dairy Queen
Customers• Individual
consumers• Institutional
customers
Suppliers• Coca-Cola• Wholesale food
processors• Packaging
manufacturers
Strategic Partners• Wal-Mart• Disney• Foreign partners
Regulators• Food and Drug
Administration• Securities and
ExchangeCommission
• EnvironmentalProtectionAgency
Internal environment
Task environmentFigure 3.3
Copyright © by Houghton Mifflin Company. All rights reserved. 3–4
Environmental Change, Complexity,Environmental Change, Complexity, and Uncertainty and Uncertainty
Simple
Complex
Stable Dynamic
Moderateuncertainty
Mostuncertainty
Moderateuncertainty
Leastuncertainty
Degree of Change
Deg
ree
of
Ho
mo
gen
eity
Source: Adapted from J.D. Thompson, Organizations in Action. Copyright © 1967 by McGraw-Hill. Reprinted by permission of McGraw-Hill Companies. Figure 3.4
Copyright © by Houghton Mifflin Company. All rights reserved. 3–5
How Organizations Respond to Their How Organizations Respond to Their EnvironmentsEnvironments
General Environment
Task Environment
Informationmanagement
Socialresponsibility
Strategicresponse
Mergers, takeovers,acquisitions,alliances
Directinfluence
Organizationdesign andflexibility
TheOrganization
Figure 3.5
Copyright © by Houghton Mifflin Company. All rights reserved. 3–6
A Model of Organizational A Model of Organizational EffectivenessEffectiveness
(Systems resource approach)
Acquiring the resourcesneeded from theenvironment…
making it easier toacquire futureresources.
(Combined approach)
and satisfies thestrategic constituentsin the environment, . . .
(Strategic constituencies approach)
and combining themin an efficient andproductive manner…
(Internal processes approach)
OrganizationalSystem
Feedback
(Goal approach)
facilitates the attainmentof organizational goals…
Inputs
Transformation
Outputs
1 2 3
5 4
Figure 3.6
Copyright © by Houghton Mifflin Company. All rights reserved. 3–7
Examples of Admired andExamples of Admired andHigh-Performing FirmsHigh-Performing Firms
Fortune’s Most Admired Companies (2000)
Business Week’s Best Performing Companies (2000)
1. General Electric 1. Microsoft
2. Microsoft 2. Time Warner
3. Dell Computer 3. Cisco Systems
4. Cisco Systems 4. Oracle
5. Wal-Mart 5. EMC
6. Southwest Airlines 6. Citrix Systems
7. Berkshire Hathaway 7. Morgan Stanley Dean Witter
8. Intel 8. Gap
9. Home Depot 9. Warner-Lambert
10. Lucent Technologies 10. Lucent Technologies
Table 3.1Source: “America’s Most Admired Companies,” Fortune, February 21, 2000, pp. 108–110; “The Business Week 50,” Business Week, March 27, 2000, pp. 123–125.
