COMMERCE 1B03 Chapter Notes - Chapter 15: Electronics Industry, Mass Production, Corporate Social Responsibility
21 Apr 2016
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External environment- those events and conditions surrounding the organization that influence its activities. Organizations can be described as open systems. Organizations often suffer from an economic downturn and profit from an upturn. When a downturn occurs, competition for remaining customer"s increases, and organizations might postpone needed capital improvements. An example of the impact of the general economy is the recession: falling orders/reduced inputs, so organizations radically downsized to cut costs. Organizations must be sensitive to changes in customer demands. Successful firms are generally highly sensitive to customer reactions. Organizations are dependent on the environment for supplies, which include labour, raw materials, equipment, and component parts. Successful organizations monitor the activities of competitors. For many organizations today the competition has become so aggressive that their environments have been described as hypercompetitive. Organizations that find themselves in hypercompetitive environments must become extremely flexible to respond quickly to changes and cope with hyper competition.
