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Assessing external environments

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  • Chapter 3 - Assessing external environments. After studying this chapter, you should be able to: Articulate the role of the external environment in management decisions and effectiveness, explain the five major dimensions of an organization’s general environment, describe the critical forces in the organization’s task environment,…

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  • The following will be discussed in this chapter: The organizational environment, external environment, importance of external assessment, how to conduct external audit, key external factors, industry life cycle.

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  • Regardless of whether the audit is done internally or externally, a common set of methods can be used to gather data needed to make assessments about practices. Methods are described briefly below in the context of a communications audit and then followed by a table that compares them on time, cost, and information yield.

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  • Audit data, obtained by reviewing written records and procedures, inter- viewing personnel, and personal observation, are collected from both an administrative area and a management or operational area,which controls the physical environment.Audit of the administrative area includes a review of how well or how poorly management has implemented the program. Audit of the operational areas,whereby management controls the physical environment, includes assessing the surroundings and external conditions that influence the daily operation of the organization....

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  • Scholars of strategy process research have developed various models on the formation of strategies for which organization-environment relations have always been a primary concern. While the majority of studies have emphasized an assessment of the environment for oppor- tunities and threats (e.g., Ansoff, 1965; Andrews, 1971; Porter, 1980), others have focused more directly on the environment as a central actor for strategy formation (see Mintzberg et al., 1998).

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