3.1 The Organizational Environments and The Natural Environment

Quoted from Stoner's book we have the following: The Organizations exchange resources with the external environment, defined this last one, as all elements outside the organization that are relevant to its operations.

The Organizations take inputs (raw materials, money, labor, and energy) from the external environment, transform them into products or services, and then send them back to the external environment in the form of products.

The external environment has elements of direct and indirect action. The first also called interest groups, include shareholders, unions, suppliers, and many more who has direct influence on the organization. The second like technology, economics, politics and society, affects the climate in which the organization operates and have the potential to become elements of direct action.

The direct action elements of the environment

The direct action environment is made up of interest groups. The external interest groups include labor unions, suppliers, competitors, consumers, special interest groups, the media, financial institutions, government offices and other interest groups. The internal interest groups include employees, shareholders, and the board of directors.

The indirect action elements of the environment

Social variables: demographics, lifestyles, social values.

Economic variables: incomes, prices charged by suppliers and competitors, as well as government fiscal policies, affect both the costs of producing goods or offering services, as well as the market conditions in which they are sold.

The most common economic indicators measure a country's income, product, savings, investment, prices, salary, productivity, employment, government activities, and international transactions.

Political variables: factors that can influence the activities of the organization as a consequence of the political processes or politic climate.

Technological variables: they include advances in the basic sciences, for example physics, as well as new advances in products, processes and materials. Currently we can mention the internet, artificial intelligence and data analysis among others.

The natural environments

Also quoted from Stoner´s book, we have that in recent years, concern about environmental damage has acquired great importance. This focus on environmental issues is having a huge impact on many organizations, which must not only deal with changes imposed by specific laws and regulations, but also with public perception. Likewise, it has created opportunities: today, many organizations are dedicated to developing new products and processes that do not harm the environment or that clean up the environmental damage that has occurred.

Some of the current concerns for the environment are: pollution, climate change, ozone depletion, among others.

Examples of frameworks for thinking about the natural environment are:

1) Cost-benefit framework: if the benefits for people willing to pay are higher than the costs, then the organization will create a surplus and will be able to continue producing goods and services.

2) Sustainable development framework: defined as a development that “gratifies the needs of the present without compromising the ability to gratify the needs of future generations”.