Chapter 4, Problem 1CRQ

Explain how several current environmental forces are affecting and will affect organizations and organizational structures’ effectiveness and efficiency in the near future?

Summary Introduction

To explain:

The effect of several current environmental forces on organizations and organizational structure's effectiveness and efficiency in the near future.

Introduction:

Changes are so frequent today and then every change draws so many challenges, that it is crucial for the organization's managers and leaders to be cautious about the changes in the environment. An organization's environment comprises of its surroundings−anything that, positively or unfavorably, impacts its activities.

Explanation of Solution

In a specific nation or region, the overall environment generally involves political, financial, socio-cultural, technological, legal, environmental (natural) and demographic variables. The overall environment comprises of variables that can directly affect operations but nevertheless affect the company's activities.

An organization's financial aspect is the general status if the organization works in the financial scheme. Inflation, interest rates, and unemployment are the major financial variables for the company. These economic variables always influence product demand. The company pays more for its sources during inflation and they raise commodity prices to cover the higher costs for it. Customers are less prepared to borrow money when interest rates are high, and the business itself must pay more when borrowing. The business can be very choosy about who it hires when unemployment is high, but the buying power of clients is small as fewer individuals work.