COMMERCE 1BA3 Study Guide - Wedding Cake, Habitat, Vertical Integration

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Document Summary

Events and conditions surrounding an organization that influence its activities. Organizations open systems take inputs from the external environment, transform some of them, and send them back into the environment as outputs. Inputs = capital, energy, materials, info, tech, people. This process sensitizes us to the need for organization to cope with demands of environment. Components of the external environment: the economy. Organizations that only sell g/s can suffer economics downturn and profit from upturn. Downturn competition for customers ^, unemployment ^, Some companies thrive in poor economic condition (welfare offices: customers. Organizations must be sensitive to changes in customer demands. Successful firms sensitive to customer reactions: suppliers. Changed to more exclusive relationship with suppliers: competitors. Compete for resources customers & suppliers. Hypercompetitive aggressive competition: must become flexible to respond quick to changes, social/political factors. Changes in public attitude towards ethnic diversity, age of retirement, environment, csr,