THE EXTERNAL ENVIRONMENT

In 1998, NOKIA was considered as the world’s leading maker of cell phone. But in 2004 the market share of NOKIA decreased because of a part of its product that doesn’t match consumer needs…Some of the factors that caused this decrease are, firstly, the fact of focusing in producing smart phones that are expensive; so a big part of its clients turn instead to cheaper stylish models of other marks. Secondly, NOKIA had stuck to the candy bar instead of the clamshell design that fueled a new cell phone boom in Europe and U.S. And last but not least, NOKIA was slow to respond the demand of customized phone with features that the costumers of Mobile operators wanted.
All these missteps got NOKIA back on track. So we can say that NOKIA was influenced negatively by its environment. The external environment, including international competition and events, is the source of major threats confronting today’s organizations. The environment often imposes significant constraints of the choices that managers make for an organization.
The question raised is how does the environment influence an organization?

First of all, we have to identify the environmental domain. An organization’s domain is the chosen environmental field of action. In this chapter, analysis considers only aspects of the environment to which the organization is sensitive and must respond to survive.
The environment contains several sectors that can be subdivided into the task environment and general environment.. The task environment includes sectors with which the organization interacts directly, and that can have a direct influence on achieving its goals. On the other hand, the general environment includes those sectors that can have an indirect influence on the organization’s operations and it includes the government, socio-cultural , economic conditions …
Two essential ways the environment influences organizations; the need for information about the environment, and the