6 - Environment: Each organization operates within a community of like organizations, which have a

collective organizational culture, within a neighborhood that has a distinct culture, within a national
culture and within the global community. Each of these external societies exerts forces that impact an
organization's ability to attain its mission. Examples of such external forces include…

Changing Mores and Laws: Regulations and rules that are put in place after an organization
comes into being. These regulations come from government entities on both the local and national
levels. New rules and regulations can have positive, negative, or indifferent effects on organizational
progress and productivity.

Demographic Changes: Changes in the community concerning race, sex, religion, and socio-
economic status. An organization might need to change how they market to, and even create
certain products if there is a severe enough change in community demographics.

Economic Cycles: Changes in the current state of economic well-being both inside and outside
the United States.

Environmental Concerns: Concerns relating to the well-being and health of the earth, and all its
physical landforms. Government regulations can cause companies to reduce waste and usage of
endangered materials. Some organizations might see environmental damage as a huge concern,
and might try to become more environmentally responsible.

Health Care Cost Escalation: Health insurance is something that is a necessity for employees
and all human beings in general. From an organizational standpoint, companies will need to provide
health insurance for their employees which will decrease profits as health care continues to escalate
in cost.

Global Competition: Companies and organizations all around the world want to sell their products
and make a profit as well. In some cases, this can affect the domestic market, as foreign companies
try to sell their products locally. Global competition causes local organizations to lower prices,
create higher quality products, or perform a combination of the both.

Limited Market Life Span: This is the idea that some products cannot be sold forever in the
same manner, on the same market. For many organizations, they need to find ways to improve
their products, or change how their product is created/marketed so that their organization as a
whole can continue to exist.

Federal, State and Local Laws: Rules and regulations that are created by the federal government,
state government, and local government (mayor, city council, etc.).

War: A state of usually open and declared armed hostile conflict between states or nations. A
period of such armed conflict. During times of war, organizations might not be able to get certain
materials for usage. Employees of organizations might be forced to go to war via the draft, and
some might quit their jobs and join the armed forces. National Guardsmen might be deployed for
combat.

Internal Environment Defined: Each organization has its own unique culture. This influences the way in
which employees relate to each other, to external paying customers and to the community. Examples of such
external forces include…

Communication: A process by which information is exchanged between individuals through
a common system of symbols, signs, or behavior. The exchange of information. In any
organization, communication is of the most importance. If employees can communicate
competently and effectively with one another, it can be seen through organizational prosperity.
If employees cannot communicate competently with one another, organizational deterioration
may occur.

Customer Service: How well a company or brand is able to meet the needs or wants of a
customer. If customer service is done correctly, it can result in organizational prosperity and
success.

Decision-Making: Making choices which can impact an organization and employees. Good
decision making can lead to organizational prosperity while bad decision making can harm or
destroy an organization.

Dress Codes: Set of rules and regulations concerning employee dress standards. Dress codes
can help to make an organization look professional. However, setting dress codes that are
too stringent can harm employee morale in the workplace.

Equipment: The set of articles or physical resources serving to equip a person or thing. The
implements used in an operation or activity. All fixed assets other than land and buildings of a
business enterprise. Equipment can help to speed up processes in business. However,
equipment malfunctions and break-downs can have a harmful impact on the organization.

Formality vs. Informality: Formality is an established form or procedure that is required or
conventional. For example, formality could mean wearing a suit and tie to a professional
business meeting. Informality is the opposite of formality. It is the characteristic of or appropriate
to ordinary, casual, or familiar usage. In an organization, formality can help employees within
an organization feel a sense of pride, and realize that there are standards to be met while working
for that organization. Informality can also be used to advantage in the workplace (e.g., casual
Friday, telecommuting, etc.) in order to bring a sense of reward and happiness to employees.

Home-Work life Balance: Being able to balance out time spent on working and time spent at
home with family. In any organization, if employees feel as though they do not have a good
home-work life balance, they may become distracted, not like working, and in some cases even
quit from the organization.

Leadership Style: Characteristic of leadership that every employee has in an organization.
Some leadership styles are more effective than others. In an organization, if a manager has a
good leadership style a company will be profitable, if a manager does not have a good leadership
style employees will become disheartened and the organization's profitability will decrease.

Staff Development: When an organization works to develop talents of staff members. If an
organization effectively works to develop the talents of staff members, staff will feel a sense of
pride in their organization and will want to work harder for the organization.

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