Organizational Environments
1. Why are inter-organizational relationships important to our understanding of the impact of organizational environment?
A specific organization has to have a form of relationship with the surrounding environment for survival and better performance. The surrounding environment is divided into external and internal, and is defined as forces and institutions both inside and outside the organization that enable the organization achieve its pre-determined goals (Worthington & Brington, 2009). The external environment is divided into general and specific. General environment signifies broad external conditions such as global, economic, technological, political, and socio-cultural conditions, while specific refer to customers, suppliers, competitors, and pressure groups. In the case of internal environment, what it refers are aspects having a direct influence on the performance or survival of an organization (Hall & Tolbert, 2009). The aspects here are marketing, personnel, and physical facilities.
However, despite determination of important factors that determine an organizational environment, the environment is classified as uncertain. This means that it is difficult to predict because of the erratic direction the aspects exhibit at an instance. In the modern era, many businesses have emphasised on inter-organizational relationships, including their management to combat the uncertainty of organization environment. Identification, examining, and promoting inter-organizational relationships are imperative if an organization has to gain the expertise, resources, and leadership in competition and innovation (Worthington & Brington, 2009). Therefore, it can be summarized that the impact of IR (Inter-organizational Relationship) on an organization environment are two ways; provision of firm innovation and enhancement, and better performance by employees through allowing them to discuss current practices with colleagues in related fields (Hall & Tolbert, 2009).
Learning is also enhanced through IR where organizations such as Toyota overcame its challenges. For instance, the challenges the company had were: motivating employees to share proprietary information, limiting “free-rider” opportunities where employees share information but do not want to offer their own knowledge, and enhancing quick and efficient knowledge transfer (Hall & Tolbert, 2009). The strategy used by the company entailed using four level network sharing knowledge, setting of rules to prevent free riding, and offering strong tie networks that exchange explicit and tactic knowledge in a bilateral or multilateral setting.
2. PROFESSIONAL ANALYSIS: You are a middle manager of Hotels For All and have three assistants at your disposal. The company is presently solely a brick-and-mortar entity. Identify some of the key conditions and variables that will be necessary to put Hotels For All on its own new Web site and be identified as HotelsForAll.com. What new products can it offer online to expand its income base? Write up a report to your superiors using the Memorandum form of communication.
The current hotel industry has been dictated by innovation in online marketing. This is a major challenge for Hotels for All company, which is a brick-and-mortar entity. The challenge here is that the organization cannot compete at the same level with other players in the industry who have advanced websites that provide all the company is offering.
Therefore, the solution is that the company has to make the company go online and also offer more products to increase its income base. However, for successful implementation of the strategy there are key conditions and variables that have to be considered. The conditions and variables are dictated by the concepts of inter-organizational relationships and business environment. Organizations in the hotel industry are all dependent on certain clients and if one entity behaves differently, the others would feel the effect.
The nature of structural arrangement is a condition that should be considered before going online. There should be a clear definition of roles and responsibilities for all employees to work harmoniously. The transaction costs and uncertainty in the company would reduce drastically.
The type of governance should be determined where the choice should be between contracts or network level governing groups. Contracts are advantageous since they promote accountability through defining roles of personnel, and reducing uncertainty through possibility of enforcing specifications (Benchman & Inkpen, 2011). Governing groups are advantageous in promoting relationship assets such as trust, loyalty, and commitment (Benchman & Inkpen, 2011).
The shared activities amongst employees should be coordinated in written or unwritten agreements. The coordination should be either by a dedicated network staff or an inter-organizational committee. However, the committee is more advisable when it comes to addressing accountability issues. This is an investment in itself and would anchor commitment to network activities (Hall & Tolbert, 2009).
The next condition is managing task interdependence. Research has proven that the type of formal structure reflects the interdependence the organization is trying to manage (Caglio & Ditilio, 2012). In the service industry like in a hotel industry the question is how do clients flow through the network; the online system. The advice here is that an integrated case management structure is more effective in service delivery.
The last condition is the size of network in the organization which has an impact on the performance. If the network is large then the coordination and costs would be higher hence difficult to manage the independent entity (Hall & Tolbert, 2009). Size of a company is also important where large organizations with better financial base are able to absorb costs of sustaining inter-organizational relationships. Small organizations on the other hand require more resources hence more willing to dedicate scares resources to their development and success.
New products
The new products that can be added on the hotels website include: tour guidance services, top destination guidance, property catalogues, and flight booking services. In tour guidance, extra income would be generated when clients staying in the hotel can be guided outside the hotel environment. This relates with top destination guidance where income can be generated from advising clients on best tourist destinations near the hotel. Property catalogues would provide clients with range of houses, condos, and other accommodations that can be bought, leased, or rented hence extra income. Furthermore, clients who think that the airport is far away or are too busy to book flights, then the hotel can do so at an affordable fee.
Conclusion
Therefore, the setting up of a website for Hotels for All is the best decision as it would improve organizational learning, performance, and competitiveness. The variables and conditions to be considered are: nature of structural arrangement, governance type, coordination type, management structure, and size of network. Furthermore, to increase the income products such as tour guidance services, top destination guidance, property catalogues, and flight booking services should be included in the website.
3. It has been suggested: "Organizations are not benign recipients of the laws and regulations." Do you agree with this statement? Explain why or why not.
Personally, I agree with the above statement as it has been proven that many companies do not take kindly to any laws or regulations that are not in their interest. The conflict results from perceptions that are vastly different amongst authorities and management of an organization. Authorities charged with legislations and have an interest of promoting the welfare of the society while organizations have an interest for looking at their welfare which is maximum profits.
Many organizations advocate for stability instead of venturing into risky operations like innovation and change. Therefore, organizations would encourage the formation of laws and regulations that reduce competition. For instance, in the banking industry, there is great success in securing laws and policies that protect it from fraud and competition. Similarly, the pharmaceutical industry in America has become successful in enabling the American Medical Association enforces rules that permit drugs to be marketed by their brand names as opposed to their generic names (Schaffer et al., 2008). This strategy in the pharmaceutical industry makes it nearly impossible for new entrants to get a market share. Furthermore, in many industries organizations always strive to select the suitable legal strategy aimed at a specific governmental level. Organizations in this case become important players in legislation development where they lobby for certain regulations that suit them (schaffer et al., 2008).
In addition, organizations do not receive laws kindly because of a trait that makes them deal actively with the environment. They aim to customize the environment to their own advantage. An argument can therefore arise that change is a major cause of uncertainty and hence they can best be managed by maintaining the status quo, this has been proven to supress innovation.
4. Explain how the following can significantly impact organizational environments: (a) legal conditions, (b) political conditions, (c) technological conditions, and (d) demographic conditions.
Legal conditions
Legal conditions signify the legal environment of an organization and entail a set of regulations and laws that influence operations. For instance, there are approximately 15 laws that govern business enterprises ranging from the companies Act in 1952 and the latest one being the competition Act of 2002 (Worthington & Brington, 2009). Besides legislations, two other legal conditions that impact organizational environments are judicial decisions and a company’s constitution. Judicial decisions ensure that laws and the government function at the interest of the public. These together with decisions involving trade and industry impact business activities. A company’s constitution is part of its internal environment and provides directions and specifications of operations, which if not adhered to result in punishments.
Political conditions
Encompass the political system which is the attitude towards unionism, business community, and governmental policies (Worthington & Brington, 2009). The conditions affect the strategy that an organization takes in running the business. If a government is stable, then organizations have confidence and strength in carrying out their operations and invest. However, if unstable the company can even wind up operations. Trade unions are important in advocating for the rights of employees and consumers. Therefore, if certain organizations are against them then strikes, lockouts, and disputes might arise that in turn influence operations in organizations.
Technological conditions
The conditions include strategies and approaches an organization adopts in producing their goods and services, and distributing them (Worthington & Brington, 2009). Technological conditions are not similar in many countries and are changing at an alarming rate. Therefore, for survival and growth many organizations are forced to adapt to the changes. Furthermore, numerous organizations have a research and development department specifically to work on improvements and innovations. This makes them competitive and increases their market share in the industry they are in.
Demographic conditions
They are aspects of a population in a society, which are size, growth rate, density, and distribution (Worthington & Brington, 2009). For instance, demand for products and services is high in high density areas compared to sparsely populated regions. High population also signifies availability of labour hence encourage organizations to effectively use labour in their operations. This shows that many organizations watch the demographic aspects of populations to find opportunities in their business operations.
5. What is the relationship between "boundary spanners or gate keepers" and the perception of the environment?
Boundary spanners or gate keepers are members of an organization who are charged with exchanging information between the organization and its environment (Ekkerink, 2008). From this definition it can be seen that a boundary spanner filters information leaving the internal business environment and those coming in the organization from an external business environment. The spanner in this case is related with the perception of the environment through understanding his three roles. First, the boundary spanner represents the organization he/she is working in; second, they process facts and eases information coming from the external environment; and third they reduce uncertainty.
At a micro level (personal level) Ekkerink, (2008), explained the inter-relationships between external and internal environment using three models that included boundary spanning behaviour. Functional specialization model argues that individuals focus on external and internal communication based on their formal position. Communication star model asserts that people’s communication extents both internal and external networks; both networks are mutually related and anchor a boundary spanner’s ability to process information. The third model is the cyclical model which stipulates that communication environment can change because of boundary spanning activity or requirements of an organization.
At a macro level, Ekkerink, (2008) asserted that boundary spanning roles are increased when the environment is unstable. Therefore, if the environment is stable then less monitoring is required and less information processing. Furthermore, roles of a boundary spanner can be created be because of uncertainty. Further, uncertainty even makes their roles ambiguous, and a conflict between two organizations spanned.
Therefore, at a macro and micro level boundary spanning is directly related to perceptions in the environment. Roles of boundary spanning are influenced, created, or altered when communication environment or business environment alters.
References
Bachmann, R., & Inkpen, A. C. (2011). Understanding Institutional-based Trust Building Processes in Inter-organizational Relationships.Organization Studies (01708406), 32(2), 281-301. doi:10.1177/0170840610397477
Caglio, A., & Ditillo, A. (2012). Interdependence and accounting information exchanges in inter-firm relationships. Journal Of Management & Governance, 16(1), 57-80. doi:10.1007/s10997-010-9136-3
Commander, S., & Svejnar, J. (2011). BUSINESS ENVIRONMENT, EXPORTS, OWNERSHIP, AND FIRM PERFORMANCE. Review Of Economics & Statistics, 93(1), 309-337.
Ekkerink, R. (2008). Boundary Spanning Activity: does environment uncertainty make a difference. IAIF. Available at:
http://www.ucm.es/bucm/cee/iaif
Hall, R. H., Tolbert, P.S. (2009). Organizations: Structures, processes, and outcomes, 10th Edition. Upper Saddle River, NJ: Prentice Hall. "Chapter 8”
Schaffer, R. Agusti, F., & Earle, B. (2008). International Business Law and its Environment (7th ed.). Ohio: Cengage Learning. Pp. 78-242
Worthington, I., & Brington, C. (2009). Business Environment. Ottawa: Pearson Education. Pp. 34-89
