All organisations interact with the environment to varying extents. This stems from the concept that an organisation can be characterised as an open system, one that interacts with and reacts to its environment. Thus, an organisation observes its environment, perceives any threats or opportunities and evolves as required. The environment can be classified as everything outside of an organisation or all elements that are not formally defined as belonging to the organisation (Dill, 1962, cited in Downey, Hellriegel & Slocum, 1975). This is only one definition of the organisation-environment boundary. "This boundary can be drawn anywhere for the purpose of analysis" (Elliot, 1980, cited in Thompson, 1995, p. 62). Defining the limits of an organisation is dependent on the organisation, situation and reasons for definition initially. The defined organisational environment can be then further broken down into the organisations specific and general environments. Robbins & Barnwell (2002) define the specific environment as the elements that are directly relevant in accomplishing the organisation's goals.
Organisation
Flag of the peisans organisation in Muşeteşti, A...
Flag of the peisans organisation in Muşeteşti, A...The specific environment is dependent on the trade of the organisation, what inputs are received, what outputs are produced, direct competitors and any regulatory authorities that apply. The general environment incorporates the rest of the environment - anything else that could affect the organisation.
The concept that describes the effect the environment has on an organisation is environmental uncertainty (Downey et al., 1975). This concept does not imply that the environment itself is uncertain, but that environmental elements are always present; however they are inherently meaningless until they are perceived, responded to, and put into context by an individual (Weick, 1969, Galbraith, 1973, cited in Downey et al., 1975). How an organisation's environment is assessed, what is assessed as uncertainty and how it pertains to the organisation is defined by the perception of the viewer. Therefore different...