We now turn to the six basic mechanisms through which organizations adapt to their environment. Let’s find out how organization adapt to their environment?
How Organization Adapt to their Environment
Information management: One-way organizations adapt to their environment is through information management. The massive use of IT (Information Technology) and MIS (Management Information System) is a pointer to the overriding importance of information.
Strategic response: An organization may also adapt to its environment through strategic response. If for example, a market is shrinking or does not provide reasonable possibilities for growth, the company may decide to cut back, On the other hand, if the market that the company currently serves is growing rapidly, the firm might decide to invest more heavily in products and serves for that market.
Mergers, takeovers, acquisitions, and alliances: A company y may engage in these kinds of strategies for a variety of reasons. Such as easing entry into new markets or expanding its presence in a current market.
Organization design and flexibility: An organization may also adapt to the environmental condition by incorporating flexibility in its structural design. Thus a firm, operating in a dynamic and complex environment might choose a design with relatively few standard procedures while allowing managers considerable discretion and flexibility over management decisions. Such an organization can quickly respond to environmental change.
Direct influence on the environment: Organizations are not necessarily helpless in the face of their environments. Indeed, many organizations are able to directly influence their environment in many organizations are able to directly influence their environment in many different ways, such as:
- Influencing regulators through lobbying and bargaining.
- Influencing customers through creating new uses for a product and also flinging new customers and taking customers away from a competitor.
- Influencing suppliers by signing long-term contracts with fixed prices as a hedge against inflation.
- Influencing union through collective lea gaining sessions.
- Influencing stock-holders with the information contained in annual reports, and by pure persuasion.
- Influencing strategic allies through negotiations and agreements.
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