2 Responses Required-12 Hours Please

Discussion Board 2: Chapter 4 Question

Chapter 4: Is changing the organization's domain a feasible strategy for coping with a threatening environment?

Daft (2016) defines the organizational environment as “everything that exists outside the boundary of the organization and has the potential to affect all or part of the organization” (p. 142). The organizational environment can affect performance, operations, employees, and resources. Typically, organizational environments encompass a wide variety of interconnected elements, such as competitors, customers, government regulations, economic conditions, technological innovations, and numerous other entities and factors (Fang & Chen, 2016). These factors are categorized into two environments: internal and external.

Internal organizational environments are those entities and factors within the organization that influences organizational activities. Internal organizational environments are increasingly mirrored in implementation frameworks, focusing on intra-organizational constructs like structure, leadership, and social context (Birken, et al., 2017). Factors such as employee and leadership behavior, the organization's culture, morale, and organizational mission, vision, and values are frequently considered part of the internal organizational environment. These factors can often reveal the strengths and weaknesses found within the organization.

External organizational environments are those entities and factors outside the organization that influences organizational activities and direction. External organizational environment factors may refer to the numerous social, legal, economic, business factors including customers and competition among several other factors (Gorla, Chiravuri, & Chinta, 2017). The organization has little to no control of the external environment factors; however the operating environment may have a direct and immediate impact on the activities, direction, growth and survivability of the organization.

The external organizational environment includes its domain. “An organization’s domain is the chosen environmental field of action” (Daft, 2016, p. 142). The organization’s domain is the area an organization chooses to operate and interact for products, services, and markets served (Daft, 2016). Domain is the organization's operational specialty and outlines the external sector the organization will engage with to accomplish its goals (Daft, 2016). The domain the organization chooses to operate in can be a large field; however, it is beneficial for the organization to have a focused specialty. The organization’s domain is not an unchanging stationary, rigid environment. The organization’s domain can change and expand frequently, in order to grow, remain competitive, and increase profit.

The organization’s domain is divided into several similar, smaller sectors. “Eleven sectors can be analyzed for each organization: industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, natural, sociocultural, and international” (Daft, 2016, p. 142). The sectors can be categorized into two categories: task environment or the general environment (Daft, 2016). The task environment includes those sectors that directly interact and have a direct impact on the organization reaching its goals (Daft, 2016). The industry, raw materials, market, human resources, and international sectors affect the organization’s task environment. The general environment are those sectors that may not have a direct impact on the daily operations of the organization, but will indirectly influence it. The government, natural, sociocultural, economic conditions, technology and financial resources sectors influence the organization’s general environment.

In addition to the task and general environments, the international environment can also affect organizations. With the explosion of the Information Age, the world has rapidly merged into a global community. These tremendous advances have virtually erased boarders, breaking down barriers to unite people, cultures, and organizations; this international unification is amplified in the global business arena. Industries such as the auto, medical, manufacturing, and even the domestic industries are influenced by the international environment. The international environment offers “a popular strategy for firms and represents an important alternative for strategic expansion” (p. II). There are three primary reasons that influences organizations to expand internationally: economies of scale, economies of scope, and low-cost production factors (Daft, 2016).

“As the environment becomes more complex, events become less stable, and financial resources become less available, the level of uncertainty increases” (Daft, 2016, p. 146). There are several factors that can influence environmental uncertainty. Typically, those sectors that an organization deals with on a daily basis causes environmental uncertainty. The general environment sectors, such as economic conditions, social trends, or technological changes can cause an organization’s environmental uncertainty. However, typically those factors in the task environment sector (industry, raw materials, market, human resources, and international) causes rapid, unpredictable change that can create a threatening environment.

Changing the organization's domain is a feasible strategy for coping with a threatening environment. Organizations face two primary issues: competitiveness, and changes in the business environment (Khumalo & E van der Lingen, 2017).  “Organizations inability to navigate environmental changes and challenges successfully, or their complacency about doing so, are major issues that have proved costly or life-threatening for many firms” (Khumalo & E van der Lingen, 2017, p.147). Due to these environmental changes, organizations must be adaptable and willing to change domains to remain competitive. Two primary methods organization use to change domains is through mergers and acquisitions. Utilizing mergers and acquisitions provides organizations the advantage of entering a new domain without having to build a company from the ground up.

The Bible has much to say about change. Hebrews 13:8 gives Christians the assurance that “Jesus Christ is the same yesterday and today and forever” (English Standard Version). Although Jesus remains the same, the business environment is constantly changing. For that, the Bible encourages Christians in the face of change. “Have I not commanded you? Be strong and courageous. Do not be frightened, and do not be dismayed, for the Lord your God is with you wherever you go” (Joshua 1:9 English Standard Version). “For I know the plans I have for you, declares the Lord, plans for welfare and not for evil, to give you a future and a hope.” (Jeremiah 29:11 English Standard Version). Change challenges Christians and organizations. Change is necessary for growth and innovation. Although Christians and the business environment are ever changing, we can rely and depend on the a unchanging God to help guide us through the changes.

Conclusion

Factors that control an organizational environment are classified into internal and external factors. The internal environment is composed of elements within the organization. The external environment refers to forces outside the organization and can divided into domains and sectors. The sectors are further divided into general and task environments. As organizational environments become more complex, events become less stable, and financial resources dwindle, which causes uncertainty to increase and create a threatening environment. As a feasible strategy for coping with a threatening environment, organizations may choose to change their domain to remain competitive, survive, and grow.

References Birken, S. A., Bunger, A. C., Powell, B. J., Turner, K., Clary, A. S., Klaman, S. L., . . . Weiner, B. J. (2017). Organizational theory for dissemination and implementation research. Implementation Science, 12(1), 1-15. doi:10.1186/s13012-017-0592-x CALL FOR PAPERS: “Cross‐Border M&As: Challenges and opportunities in global business environment”. (2015). Thunderbird International Business Review, 57(3), II-III. doi:10.1002/tie.21718 Daft, R.L. (2016). Organization theory & design (12th ed.) Boston, MA: Cengage Learning. Fang, S., & Chen, H. K. (2016). Strategic intent, organizational environment, and organizational learning mechanisms: A multiple-case study in the construction industry in taiwan. Personnel Review, 45(5), 928-946. doi:10.1108/PR-11-2014-0266 Gorla, N., Chiravuri, A., & Chinta, R. (2017). Business-to-business e-commerce adoption: An empirical investigation of business factors. Information Systems Frontiers, 19(3), 645-667. doi:10.1007/s10796-015-9616-8 Khumalo, M., & E van der Lingen. (2017). The open business model in a dynamic business environment: A literature review. South African Journal of Industrial Engineering, 28(3), 147-160. doi:10.7166/28-3-1851