INFS 212

Principles of Management

Session 3– The Environment of an Organisation

Lecturer: Dr. Emmanuel Adjei Department of Information Studies

Contact Information: eadjei@ug.edu.gh

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
 Session Overview

Kreitner observes that “ organisations are ever present

feature of society”. As we go about our normal business
of living we are surrounded by organisations, look to
organisations for food, clothing, shelter, education,
employment, entertainment, healthcare, transportation
and the protection of our human rights. In short, for the
satisfaction of every one of our individual needs, we
rely on organisations, large or small.

Slide 2
 Session Overview
In Session One we learned that the purpose of
management is to achieve organisational goals in an
efficient and effective manner. In the performance of their
functions, organisations become accountable to a number
of different groups in society including customers, suppliers,
creditors, government agencies and the wider public.
While serving the needs of the different constituents of
society, organisations do not have the luxury to do
whatever they choose.

Slide 3
 Session Overview
They provide goods and services (or operate) within the
framework of internal and external forces. That
framework defines the environment of organisations. This
Session focuses on organisations, paying attention to the
internal and external forces that impact on their
operations.

Slide 4
 Session Objectives
Objectives
At the end of this Session, you should be able to:
• Explain the concept organisation
• Understand the characteristics of organisations
• Identify the different types of organisation
• Identify and explain what constitute the Internal and
External environment of an organisation
• Distinguish between the Task and the General
Environment
Slide 5
 Session Outline
• The key topics to be covered in this Session are as
follows:
• Topic One: Defining and Explaining Organisations
• Topic Two: Classifying Organisations
• Topic Three: The Internal Environment & The External
Environment of Organisations

Slide 6
 Reading List

1. Chandan JS (2002). Management: Concepts and

Strategies. New Delhi, Vikas Publishing House, PVT Ltd
(Read Chapter 3, pages 53-69)

Slide 7
Topic One
DEFINING AND EXPLAINING
ORGANISATION
Slide 8
 The Environment of an Organisation
Defining organisation
• Collection of people working together to achieve a common
purpose. In doing so the people are able to accomplish tasks
that are far beyond the reach of anyone acting alone.
• Edgar Schein: an organisation is the planned coordination of
the activities of a number of people for the achievement of
some explicit purpose or goal, through the division of labour
and function, and through a hierarchy of authority and
responsibility.

Slide 9
Topic Two
CLASSIFYING ORGANISATIONS
Slide 10
 Classifying Organisations

• The term organisation covers a multitude of industrial,

commercial, service industry and public service
activities

Slide 11
 Classifying Organisations
1. Private and Public
Sector organisations
Organisations can traditionally
be classified as:
• Private enterprise organisations,
and
• Public sector organisations
The distinction is made on the
basis of ownership and finance,
and the profit motive.
Slide 12
 Classifying Organisations
i. Private enterprise organisations are owned and
financed by individuals, partners, or shareholders.
The main aim is of a commercial nature such as
profit, return on capital employed, market standing
or sales level.
ii. Public sector organisations include central
government departments such as the Ministry of
Health, which do not have profit as their goal.

Slide 13
 Classifying Organisations
2. Prime Beneficiary of an organisation
organisations may be classified on the basis of who
benefits, namely the prime beneficiary of its operations.
Four types of organisations are identified on this basis:

Business organisations
• Uniliver
• Ghana Telecom
• Ghana Post
• Financial Institutions

Slide 14
 Classifying Organisations
3. Mutual Benefit organisations
Individuals may join together strictly to pursue their own
self interest.
Examples are
• labour unions
• political parties
• manufacturer’s associations etc.

Slide 15
 Classifying Organisations
4. Commonweal organisations
• Like non profit service organisations. Exist to offer
services without attempting to make profits.

Example:
• The Ghana Army
• The Police
• Fire Service

Slide 16
 Classifying Organisations
5. Non Profit Service organisations
• Some organisations do not exist to make a profit.
Examples are public schools and public universities,
District Assemblies, institutions falling under the Ghana
Civil Service and Government owned hospitals.

Slide 17
Topic Three
THE INTERNAL ENVIRONMENT & THE
EXTERNAL ENVIRONMENT
Slide 18
The Internal Environment & the External
Environment
 Internal Environment of an
organisation
Defining the Internal Environment
Durnham (1990) describes the internal environment of an
organisation as consisting of a “wide variety of factors
within its formal boundaries” which includes the following:

Slide 19
The Internal Environment & the External
Environment
i. Peoples and their beliefs
• Human resource (managers and non-managers)
• organisational culture

Other internal environmental factors of an organisation

are
• Group attitudes
• Board of Directors

Slide 20
The Internal Environment & the External
Environment
II. The structural features of an organisation
• Design of jobs
• organisational design ( the structural arrangement
of an organisation’s work units such as
departments, units etc.)
III. Organisational processes
• Coordinating
• Decision making
• Communicating
Slide 21
The Internal Environment & the External
Environment
 External Environment of an
organisation
I. Task environment Task environment include
consumers or customers, government / regulatory
agencies, competitors and suppliers

II. General environment The general environment

includes such element as political and legal forces,
economic, social and technological influences.

Slide 22
The Internal Environment & the External
Environment

I. Task Environment
• Suppliers
• Customers
• Competitors
• Regulatory agencies

Slide 23
The Internal Environment & the External
Environment
II. The General Environment
a) Economic factors
• Inflation
• Interest rates, unemployment,
• Disposable income
• The current state of an organisation’s market,
and the purchasing power of the population,
• The state of trade in the world and availability of
foreign exchange.

Slide 24
The Internal Environment & the External
Environment
b) Technological factors: Technology is the means by which
an organisation converts its inputs (such as raw materials,
unfinished goods and energy) into output (products or
services). Technological elements include the knowledge,
means, processes, systems, hardware and software available
to an organisation for this transformation process. Technology
affects the way organisations operate or the products and
services they provide.

Slide 25
The Internal Environment & the External
Environment
c) Political – Legal:
• Government regulation of business and the
relationship between business and government.
Example
• Policies on tax
• trade regulations,
• minimum wage legislation,
• and pollutions standards

Slide 26
 Summary
An organisation is a cooperative social system involving the
coordinated efforts of two or more people pursuing a
shared purpose. Organisations can traditionally be classified
as private or public. We can also classify organisations
according to who benefits from its operations.
Organisations which fall under this classification include
business enterprises, non profit service organisations and
commonweal organisations. Whatever their purpose all
organisations have four characteristics, namely,
coordination of effort. Common goal and purpose, division
of labour and hierarchy of authority.
Slide 27
 Summary con’t
In performing their functions, organisations are
influenced by internal and external environmental
forces. The internal environment consist of a number of
different factors including organisational processes, the
board of directors, human resource, group attitude and
so on. A critical component of an organisation’s internal
environment is its social system, which includes
organisation members and the values and beliefs they
share.

Slide 28
 Summary con’t
The external forces include everything beyond the
boundaries of an organisation and comprises what we
call the task and general environments. Elements in the
task environment include competitors, customers,
suppliers and regulatory agencies. The general factors
include the political and legal, economic, social and
technological environment.

Slide 29
 Sample Questions for Consideration
1. List five regulatory agencies in Ghana and discuss in
brief their functions.

2. Mention and discuss the various factors that define the

general environment of an organisation.

Slide 30
 References

1. Robbins, S.P. & DeCenzo D.A. (2008) Fundamentals of

Management: Essential concepts and applications, (Sixth
Edition), Pearson, Prentice Hall: Upper Saddle River, NJ.
(Read Chapter , pages 38-68).
2. Chandan JS (2002). Management: Concepts and
Strategies. New Delhi, Vikas Publishing House, PVT Ltd
(Read Chapter 3, pages 53-69).

Slide
Google Confidential and31
Proprietary