Task Environment

External Environment refers to the major factors and forces outside the organization that have the potential to significantly affect the performance of an organization. External environment can significantly influence the effectiveness of the organization to large extent.

External Environment – Analyze in 3 ways to reduce uncertainty:

1. Macro/Societal environment (PEST):

■ General forces that do not directly touch on the short-run activities but often influence its long-run decisions.

2. Task environment (5 forces):

■ Those elements or groups that directly affect the corporation and, in turn, are affected by it. The task environment is the industry within which that firm operates.

3. Industry analysis (Group Map):

■ An in-depth examination of key factors/competitors within a corporation’s task environment.

The task environment is usually the environment that most organizations like to focus on. The task environment is very helpful to the organization because it helps them to specifically identify environmental factors that are important in the company’s success. This environment is made up of five parts. The first part are the competitors. Competitors compete mostly for customers dollars for example Nike, Adidas and Puma all compete for customers that are looking for athletic shoes, soccer cleats etc. Organizations also compete against one another but not only for customers money, but also for things like the right to buy a piece of real estate, or for a loan if the bank has limited funds they can lend. The second part is customers. Organizations have individual customers as well as wholesalers, retailers, and schools that are also customers to companies. For example hospitals buy food in bulk from McDonalds which makes the hospital a Micky Ds customers. The third part are suppliers, the ones who provide resources to other organizations. For example McDonalds buys soda from Coca Cola, and ketchup from Heinz. Most companies don’t...