Define environmental uncertainty and resource dependence. Describe the major ways in which managers can deal with high environmental uncertainty and resource dependence.
A good answer would base the analysis of environmental uncertainty on Duncan's approach, which characterises uncertainty in the stable-unstable and simple-complex dimensions. It should identify buffering, boundary spanning, organisational differentiation and integration as responses to growing uncertainties. As to management of resource dependence, the student should refer to inter-organisational linkages (ownership, strategic alliances, interlocking directorates, executive recruitment) and boundary spanning.
The modern organizations do not live in the vacuum. They are open systems, which must interact with the environment. It must continuously change and adapt to the environment.
Organizational environment is defined as all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization.
The environment of an organization can also be understood by analysing its domain within external sectors.
An organization's domain is the chosen environmental field of action. Domain defines the organization's niche and defines those external sectors with which the organization will interact to accomplish its goals.
The environment comprises several sectors or subdivisions of the external environment that contain similar elements. Ten sectors can be analysed for each organization: industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, socialcultural an d international.
The environment influences the organization by two essential ways, first, the need for information about the environment; second, the need for resources from the environment.
The environmental condition of complexity and change create a greater need to gather information and to respond based on that information. The organization also is concerned with the scarce material and financial resources provided by the environment and with the needs to ensure the availability of resources.
Environmental uncertainty means that...