Environmental changes on organizations

Environmental changes on organizations

Environment is the setting in which companies understand and answer to the feedback on performance and set plans (Eisner, 2003). The change in the context in which organizations operate has a far-reaching effect on the organizations. The environment could be either external or internal. An organization relies on the setting around it. The environment change affects the performance of the organization for numerous reasons. First, fast environmental variation defines a commotion that increases indecision to a setting. This indecision obscures the connection between companies and their settings. Moreover, ecological modification can affect decision making in an organization.

Change in environment challenges the capacity of the business to understand the surroundings and respond to conservational modification. Therefore, as setting variations, organizations should also alter their plans. Also, as environments revolve swiftly, there is a cumulative weight on companies to yield products quicker and more effectively. New products are associated with changing customer needs, more significant rivalry, new know-how that makes the current products absolute, delicate product life cycle, higher development cost, increased demand for strategic partners in the development process. Furthermore, environmental changes lead to high complexity and dynamism within organizations, which lead to a matter of endurance. Endurance deals with the degree of changes in the changing shares of the setting (Kelly, 2005).

Rapid environmental changes ensure that organizations have a well-laid strategy to survive the market at any given moment. This leads to improvement in the management skills as well as the expertise level among the staff in an organization. It calls for extra training of the team in the organization, which implicates an additional cost spent on the preparation of the staff. Some organizations opt to lay off the staff without such skills and recruit guys with high expertise level, which leads to loss of a job as well as creating a high turnover of employees in the organization. Another impact related to rapid environmental changes is improved services and products as organizations compete to retain their customers in the market. Again, this leads to a price drop on products as well as services, which is a significant gain to the consumers of such goods and services. Such a drop in prices makes some organizations change their target market or change the goods or services they offer to more marketable or less competitive products (Lengnick-Hall, Beck, 2005).

Some environmental factors that affect organizations are internal. They include management, financial positions, assets, and many more. Regular changes in the administration may affect the organization negatively. When managers lay out their work plans and set targets of output, they need time to implement and achieve the objectives. Changing the managers in short periods may interfere with the performance of the organization because some targets take time to be implemented. If this happens repeatedly, it may lead to failure of the organization. Also, the financial position of the organization determines its viability and existence in the market. Rapid changes in the business situation may affect the operation of the organization as the laid-out plans will be interfered with. A change in the economy affects the financial position of the organization in either a positive or negative way directly (Kelly, 2005).

Environmental variation is, thus, a key component in organization theory. It explains the factors that affect the organizational setting and also donates to inner changes within a particular organization. The description and valuation of such variations lead to a quite challenging task. Though some methods have been realized through the formation of conservational traits that evaluate the influence of conservational changes in the output of a firm.

References

Eisner, A. B. (2003). The effects of rapid environmental change on competitive strategies: An organizational learning perspective. Academy of Strategic Management Journal, 2, 33-48.

Kelly, C. (2005). Guidelines for rapid environmental impact assessment in disasters. Benfield Hazard Research Centre, University of London.

Lengnick-Hall, C. A., & Beck, T. E. (2005). Adaptive fit versus robust transformation: How organizations respond to environmental change. Journal of Management, 31(5), 738-757.