Name: Argie G. Catambacan Class Code: HRM 2232 (3-106)

Name: Argie G.
Catambacan Class Code: HRM 2232 (3-106)
Learning Activity 3: Organization’s Environment
What is the organization external environment?

The organization external environment or also referred to as the general
environment, is an inclusive concept that involves all outside factors and influences that
impact the operation of a business that an organization must respond or react to in
order to maintain its flow of operations.
What are the dimensions of external environment?

- According to Tan Chee Teik (2013), there are six (6) dimensions of external
environment. These are political, economic, social, technological, environmental
and legal or known as PESTEL.
1. Political/Legal - The extent to which a government may influence the

economy and thereby impact organizations within a certain industry. This
includes government policy, political stability, and trade and tax policy.
2. Economic - Encompasses factors such as interest rates, inflation, changes in
disposable income, stock market fluctuations, and business cycle stages.
3. Social - Changes in the sociocultural market environment that illustrate
customer needs and wants. This includes emerging trends, population
analytics, and demographics.
4. Technological - How innovation and development evolve a market or
industry. This includes automation, technology awareness and adoption rates,
and new services or products.
5. Environmental- The ecological and environmental aspects that affect a
company’s operations or consumer demand. This includes access to
renewable resources, weather or climate changes, and corporate
responsibility initiatives.
6. Legal - The current legal allowances or requirements within countries or
territories in which an organization operates. This includes health and safety
requirements, labor laws, and consumer protection laws.
What are the factors in the internal environment?
An internal environment is a set of elements that define the atmosphere within
the company’s structure. It describes the way activities and relationships are carried out
inside the business, normally within co-workers. Further, internal environmental factors
are easier to control than external environmental factors.
According to Businessjargons.com, the factors of internal environment are;
 Value System
Value system consists of all those components that are a part of regulatory
frameworks, such as culture, climate, work processes, management practices
and norms of the organization. The employees should perform the activities
within the purview of this framework.
 Vision, Mission and Objectives
The company’s vision describes its future position, mission defines the
company’s business and the reason for its existence and objectives implies the
ultimate aim of the company and the ways to reach those ends.
 Organizational Structure
The structure of the organization determines the way in which activities are
directed in the organization to reach the ultimate goal. These activities include
the delegation of the task, coordination, the composition of the board of directors,
level of professionalization, and supervision. It can be matrix structure, functional
structure, divisional structure, bureaucratic structure, etc.
 Culture
Corporate culture or otherwise called an organizational culture refers to the
values, beliefs and behavior of the organization that ascertains the way in which
employees and management communicate and manage the external affairs.
 Human Resources
Human resource is the most valuable asset of the organization, as the
success or failure of an organization highly depends on the human resources of
the organization.
 Physical Resources and Technological Capabilities
Physical resources refer to the tangible assets of the organization that play an
important role in ascertaining the competitive capability of the company. Further,
technological capabilities imply the technical know-how of the organization.
Know and understand the following:
1. General Environment
- The general environment is composed of the nonspecific elements of the
organization's surroundings that might affect its activities. It is the type of external
environment that affect the performance of business organization indirectly. It
comprises the following factors: economic, technological, sociocultural, political-
legal, and international. The effects of these dimensions on the organization are
broad and gradual.
2. Task Environment
- The task environment consists of specific dimensions of the organization's
surroundings that are very likely to influence the organization. It also consists of
five elements: competitors, customers, suppliers, regulators, and strategic
partners. Because these dimensions are associated with specific organizations in
the environment, their effects are likely to be more direct and immediate.
3. Internal Environment
An internal environment is a set of elements that define the atmosphere
within the company’s structure. It describes the way activities and relationships
are carried out inside the business, normally within co-workers. Further, internal
environmental factors are easier to control than external environmental factors.
The internal environment also consists of the organization's owners, board of
directors, employees, physical environment, and culture. In other words, internal
environment includes everything within the boundaries of the organization.
REFLECTION
As I am doing this activity, I have learned the difference between external and
internal environments in which the external environment are events that take place
outside of the organization and are harder to predict and control. Meanwhile, the
internal environment occurs within an organization and is easier to control than the
external environment. Moreover, I find general and task environments similar in a way
that both are on the external environment. The only difference is that the general
environment is a larger environment within which the task environment is embedded.
Because task environment is the specific external groups and organizations that affect
the firm, examples are competitors, customers, suppliers, etc.
References
Chapter 3 The Environment of Organizations and Managers.
https://college.cengage.com/business/griffin/management/7e/students/summaries/ch03.
html
Internal Environment https://businessjargons.com/internal-environment.html
Tan Chee Teik (2013). Importance Of the External Environment.
https://m360.sim.edu.sg/article/pages/Importance-of-the-External-Environment.aspx
Strategic Environment: The General Environment (PESTEL).
https://open.oregonstate.education/strategicmanagement/chapter/3-the-general-
environment-pestel/
The Organization’s External Environment.
https://opentextbc.ca/organizationalbehavioropenstax/chapter/the-organizations-
external-environment/
What is the difference between the general environment and the task environment?
https://www.answers.com/Q/What_is_the_difference_between_the_general_environme
nt_and_the_task_environment

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Name: Argie G.

Catambacan Class Code: HRM 2232 (3-106)

Learning Activity 3: Organization’s Environment

What is the organization external environment?

What are the dimensions of external environment?

1. Political/Legal - The extent to which a government may influence the

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