Environmental factors affecting organizations
Environmental factors are issues that the organization cannot control how they happen and how they can affect them (Farrell, 2018). Examples of environmental factors that affect business organizations include economic factors, technology, government policies, among many others. Today these environmental factors are becoming rapid and are consequently impacting organizations. Through the new and emerging technologies business organizations have adopted new and improved methods of doing their activities. Additionally, organizations have obtained automated and reliable ways of coordinating all their operations smoothly. In a similar vein, these emerging technologies have also catalyzed the growth of competition. The second environmental factor affecting organizations are economic factors. Changes in the economy, like inflation and change in economic policies, significantly affects organizations. In the case of inflation prices of products goes up, and this reduces the buying power of customers.The other factor that affects organizations is government policies and regulations (Farrell, 2018). When the government sets strict business regulations organizations to find it hard to operate, and this puts them at risk of closing down.
Additionally, the government can also interfere with how organizations operate through giving special powers and rights to specific companies resulting in a monopoly. Since these environmental factors are unpredictable and inevitable organizations can only be prepared to handle them through proper frameworks. Additionally, the organizations need to strategically plan on how to adopt new technologies if they want to be successful and competitive. Today the world is becoming a small village due to globalization and business organizations have also been significantly impacted by these technologies.
References
Farrell, K. (2018). Book Review: Complexity, Organizations, and Change. Organization & Environment, 18(1), 124-127. doi: 10.1177/1086026604273668