Organizational Environment

Organizational environment can be divided into two which is external environment and internal environment.

External environment consists of all outside institutions and forces that have an actual or potential interest or impact on the organization's ability to achieve its objectives. The environment that influences the organization includes competitors, resources, technology and also economic conditions. Competitors are the other organizations which operate in the same field and share the same customers group. After the industrial revolution technology became an important factor for the organizations. Technology brought the effectiveness to the industries. In modern technology is used also for management to bring the better organizational environment.

External environment can be conceptualized as having two layers surrounding the organizations which are general environment and task environment. General environment is widely dispersed and affects organizations indirectly. General environment are the factors and conditions (such as economic, social and demographic) that generally affect everyone in an industry or market in more or less similar manner.

General environment represents the outer layer of the environment and will influenced the organization over time, but often is not involved in day-to –day operations. This is because changes take time to happen. The dimensions of general environment include international, technological, socio-cultural, economic and legal-political. International dimension provides new to customers, competitors and also suppliers. International dimension will shapes social trends, technological trends and economic trends. Technological dimension has an impact on competition, relationship with customers, medical advances ad also nanotechnology advances. Dimension of the general environment are demographic, norms, customs and values of the population within which the organization operates. The important of socio-cultural characteristic are geographical distribution and population density, age and education levels. Economic dimension include the consumer purchasing power, unemployment rate and interest rate. As the consumer purchasing power decrease, it will then lead to the increase in inflation. Legal-political dimension includes federal, state, local government regulations and also political activities that designed to influence company behavior. Government regulations influence organizations through product safety requirements, import and export restrictions and also the information and labeling requirements.

Task environment includes sectors with which the organization interacts directly and that have a direct impact on the organization's ability to achieve its goals. Task environment includes competitors, customers, and suppliers. Task environment will affect the organization directly and this will influenced operations and performances. Task environment is the layer