Figure 3.1 the organizational environment
In the specific environment are forces that directly affect an organization’s ability
to obtain resources.
In the general environment are forces that shape the specific environments of all
organizations.
Specific environment:
- Customers
- Distributors
- Unions
- Competitors
- Suppliers
- Government
General environment:
- Demographic and cultural forces
- International forces
- Political forces
- Technological forces
- Economic forces
- Environmental forces
Figure 3.2 three factors causing uncertainty
As the environment becomes more complex, less stable, and poorer, the level of
uncertainty increases.
Complexity; simple to complex
Dynamism; Stable to unstable
Richness; rich to poor
Resource dependence theory: A theory that argues the goal of an organization is
to minimize its dependence on other organizations for the supply of scarce
resources in its environment and to find ways of influencing them to make
resources available.
Symbiotic interdependencies: Interdependencies that exist between an
organization and its suppliers and distributors.
Competitive interdependencies: Interdependencies that exist among
organizations that compete for scarce inputs and outpurs.
, Figure 3.3 inter organizational strategies for managing symbiotic
interdependencies
Symbiotic interdependencies generally exist between an organization and its
suppliers and distributors. The more formal a strategy is, the greater the
cooperation between organizations.
Informal ---------------------------------------------------------- Formal
Reputation – Cooptation – Strategic alliance – Merger and takeover
Reputation: A state in which an organization is held in high regard and trusted by
other parties because of its fair and honest business practices.
Cooptation: A strategy that manages symbiotic interdependencies by neutralizing
problematic forces in the specific environment.
Strategic alliance: An agreement that commits two or more companies to share
their resources to develop a new joint business opportunity.
Figure 3.4 types of strategic alliance
Companies linked by a strategic alliance share resources to develop joint new
business opportunities. The more formal an alliance, the stronger the link
between allied organizations.
Informal --------------------------------------------------------------- Formal
Long-term contract – Networks – Minority ownership – joint ventures
Network: A cluster of different organizations whose actions are coordinated by
contracts and agreements rather than through a formal hierarchy of authority.
Minority ownership: the Japanese system of Keiretsu shows how minority
ownership networks operate.
Keiretsu: A group of organizations, each of which owns shares in the other
organizations in the group, that work together to further the group’s interests.
See Figure 3.5 p. 97.
Joint venture: A strategic alliance among two or more organizations that agree to
jointly establish and share the ownership of a new business.
Figure 3.6 joint venture formation
Two separate organizations pool resources to create a third organization. A formal
legal document specifies the terms of this type of strategic alliance.
Company A Company B
↓ ↓
In the specific environment are forces that directly affect an organization’s ability
to obtain resources.
In the general environment are forces that shape the specific environments of all
organizations.
Specific environment:
- Customers
- Distributors
- Unions
- Competitors
- Suppliers
- Government
General environment:
- Demographic and cultural forces
- International forces
- Political forces
- Technological forces
- Economic forces
- Environmental forces
Figure 3.2 three factors causing uncertainty
As the environment becomes more complex, less stable, and poorer, the level of
uncertainty increases.
Complexity; simple to complex
Dynamism; Stable to unstable
Richness; rich to poor
Resource dependence theory: A theory that argues the goal of an organization is
to minimize its dependence on other organizations for the supply of scarce
resources in its environment and to find ways of influencing them to make
resources available.
Symbiotic interdependencies: Interdependencies that exist between an
organization and its suppliers and distributors.
Competitive interdependencies: Interdependencies that exist among
organizations that compete for scarce inputs and outpurs.
, Figure 3.3 inter organizational strategies for managing symbiotic
interdependencies
Symbiotic interdependencies generally exist between an organization and its
suppliers and distributors. The more formal a strategy is, the greater the
cooperation between organizations.
Informal ---------------------------------------------------------- Formal
Reputation – Cooptation – Strategic alliance – Merger and takeover
Reputation: A state in which an organization is held in high regard and trusted by
other parties because of its fair and honest business practices.
Cooptation: A strategy that manages symbiotic interdependencies by neutralizing
problematic forces in the specific environment.
Strategic alliance: An agreement that commits two or more companies to share
their resources to develop a new joint business opportunity.
Figure 3.4 types of strategic alliance
Companies linked by a strategic alliance share resources to develop joint new
business opportunities. The more formal an alliance, the stronger the link
between allied organizations.
Informal --------------------------------------------------------------- Formal
Long-term contract – Networks – Minority ownership – joint ventures
Network: A cluster of different organizations whose actions are coordinated by
contracts and agreements rather than through a formal hierarchy of authority.
Minority ownership: the Japanese system of Keiretsu shows how minority
ownership networks operate.
Keiretsu: A group of organizations, each of which owns shares in the other
organizations in the group, that work together to further the group’s interests.
See Figure 3.5 p. 97.
Joint venture: A strategic alliance among two or more organizations that agree to
jointly establish and share the ownership of a new business.
Figure 3.6 joint venture formation
Two separate organizations pool resources to create a third organization. A formal
legal document specifies the terms of this type of strategic alliance.
Company A Company B
↓ ↓
