Organizational Environment

Running Head: ORGANIZATIONAL ENVIRONMENT 1

Organizational Environment: Surviving the Global Marketplace

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ORGANIZATIONAL ENVIRONMENT 2

Organizational Environment: Surviving the Global Marketplace

Book Summary

The global environment has both direct and indirect influence to any organization

operating internationally. Pfeffer and Salancik (2003), elucidates that organizations are

dependent on external physical and financial resources that are obtained from the external or

global environment. They point out that understanding of an organization’s environment is the

key to comprehending its structure and actions that need to be taken when dealing with changes

in their environment. Similarly, Pfeffer and Salancik (2003) elaborate on how organizations

survive from the external environment. This survival is highly dependent on how efficiently the

organization can acquire and retain resources from the external environments.

In their book, Pfeffer and Salancik (2003) indicate that prior decisions, by managers, are

a contributing factor to several external factors faced by an organization. Managers have the

obligation of manipulating the environment for it to suit the organization and its operations

(Pfeffer & Salancik, 2003). The two also describes how organizations try to manage their social

context with the aim of establishing a favorable global environment. Similarly, understanding the

relations existing between an organization and its environment is a crucial skill that the

management should exhibit about the adoption of the external orientations and comprehend the

organizational functioning (Pfeffer & Salancik, 2003). Additionally, the management should

understand the external challenges facing their organization to develop a strategy to overcome

those challenges.

Blog Article Summary

ORGANIZATIONAL ENVIRONMENT 3

Global companies face numerous challenges that call for particular attention. In their

article, Dewhurst, Harris and Heywood (2012) indicate that running a global organization has

been a major business challenge for years. In their site, they discuss how profound globally

operating companies experienced low performance in comparison with locally focused

organizations in the year 2011. In their survey, Dewhurst, Harris and Heywood (2012)

discovered that firms that direct their survival on external environments to acquiring natural

resources adapt more favorably to dynamic regulatory authorities. On the other hand, consumer-

oriented organizations have some challenges on their local operations while maintaining

coherent global operations (Dewhurst, Harris & Heywood, 2012). Similarly, despite the

difference in operations, most organizations face similar challenges when it comes to the global

expansion.

According to Dewhurst, Harris and Heywood (2012), no particular model can encompass

all global organizations. However, most global firms are faced with similar challenges under

costs, people, management strategies as well as the global scale risk. They also indicate that how

critical these four elements are is dependent on the companies’ model of operation, the global

strategy, and their histories. Although global expansion has its substantial benefits, it also comes

with several strategic challenges, which include challenges of maintaining local flexibility as

they expand globally (Dewhurst, Harris and Heywood, 2012). For firms to enjoy the benefits

associated with global expansion, global companies need to adequately deal with the challenges

(people, costs, and risk of global scale).

Training Course Summary

ORGANIZATIONAL ENVIRONMENT 4

University of London (2016) in its Global MBA Module Specifications indicates that

successful organizations are characterized by abilities to effect change and “win” competitive

advantage. The module provides fundamental theories that can be applied by innovative firms

that need to operate globally. Additionally, the course provides adequate knowledge to spearhead

innovation in the modern dynamic global market. The module also provides a chance for

evaluation of externalities in the business world involving innovation trends to equip

organizations with essential knowledge on strategies to take in developing an internal

environment to facilitate expansion.

University of London (2016) Global MBA course explains the dynamic internal and

external organizational settings. It gives an understanding of the available opportunities and

strategies to follow in embracing change. Innovation is the key to organizational growth.

Therefore, an organization’s ability to innovate and stand out contributes to its survival in the

global market. The course enables learners to acquire knowledge on basic innovative strategies

that guarantee substantial growth of a business expanding to the world markets. It also provides

information on different technologies affecting business (positively or negatively).

Journal Article Summary

A study by Knight and Cavusgil (2004) investigate organization adaptation in the foreign

market using the case of Born-Global Firms. The authors highlight that innovativeness,

organizational capabilities to achieve tremendous success in the global market and knowledge

are the key elements in measuring the performance of enterprises. According to the article,

companies that operate globally in their early stages exhibit exceptional managerial skills and

commitment of resource to the global operations. For successful adoption of the international

ORGANIZATIONAL ENVIRONMENT 5

trade, the firms study the international market, understand them, and then formulate strategies or

capabilities to facilitate their international goals (Knight & Cavusgil, 2004). According to Knight

and Cavusgil (2004), technological advancement and globalization are the two key contributors

to the early adoption of internationalization by firms expanding to the external business

environment. Additionally, from their study, it was clear that the innovative nature of the born-

global firms is the key to success in the global business environment.

Knight and Cavusgil (2004) indicated that resource-based perspective stresses on

organization’s foundational resources, which are paramount since they provide stability for

strategy development in diverse business environments. From their study, it is evident that

entrepreneurs with a stable market orientation are the most likely to for the born-global firms.

Consequently, organizational culture and business strategies are essential elements in the

adoption of internationalization. Similarly, human, financial and physical resources have been

highlighted as primary factors influencing competitive advantage among young organizations.

“At the strategy level, global technological competence, unique products development, quality

focus, and leveraging foreign distributor competences all appear to be significant drivers of

superior performance overseas,” (Knight and Cavusgil, 2004, p. 136).

News Publication Summary

In an interview, David P. Kelly suggested that investors should invest in a risky

environment (Sommer, 2013). In his publication, Sommer (2013) indicated that according to Mr.

Kelly, an investor should focus on diversity not avoidance of risk. According to him, when there

are problems in the economy, investors should take the opportunity and expand their businesses.

ORGANIZATIONAL ENVIRONMENT 6

External forces create uncertainties, which do not necessarily mean losses; it is, therefore,

advisable to make more investment since no one can predict what will happen.

From the publication, for investments to make more profits, investors need to buy assets

when they are cheaply priced with a possibility of rising. Kelly advises that developed-market

entities are better buying than developed-market bonds.

Conclusion

From the summaries, it is evident that the global environment comes with several

strategic advantages. However, the firms face numerous challenges as they adapt to the

international market. The management needs to pay more attention to these difficulties and

formulate plans that will overcome these problems. Competitive advantage is crucial for

organization’s survival in the dynamic business world. Firms that have been well established in

the global marketplace provide stiff competition to young companies trying to enter the market.

Therefore, it is up to the managers to these enterprises to make effective management strategies

that will allow the company to entry the market. As discussed above, the key strategies that

influence the success or failure in the international environment are organizational culture and

business strategies.

For firms to survive in the global external environment, they need to adapt favorable

culture and business strategies. For example, strategies such as product uniqueness, quality

perfection, and adapting to the global technologies contribute significantly to excellent

performance on the world market. Similarly, firms should formulate a culture that will support

changes caused by the external factors.

ORGANIZATIONAL ENVIRONMENT 7

References

Dewhurst, M., Harris, J. & Heywood, S. (2012, June). The Global Company’s Challenge.

Retrieved from http://www.mckinsey.com/business-functions/organization/our-

insights/the-global-companys-challenge

Knight, G. A. & Cavusgil, S. T. (2004). Innovation, Organizational Capabilities, and the Born-

Global Firm. Journal of International Business Studies, 35, 124–14.

doi:10.1057/palgrave.jibs.8400071

Pfeffer, J. & Salancik, G. R. (2003). The External Control of Organizations: A Resource

Dependence Perspective. California USA: Stanford University Press.

Sommer, J. (2013, August 31). For Investors, No Need to Duck. Just Diversify. Retrieved from

http://www.nytimes.com/2013/09/01/your-money/for-investors-no-need-to-duck-just-

diversify.html

University of London. (2016). Global MBA Module Specification: Innovation and Change.

Retrieved from

http://www.londoninternational.ac.uk/sites/default/files/documents/mba/inovation_and_c

hange.pdf

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