Impact of Rapid Environmental Changes on Organizations
The term environment describes the context within which organizations set strategies and interpret or respond to feedback (Eisner, 2003). The strategies that organizations set are largely dependent upon their operating environments. However, environmental impacts on strategic decision making are greater in more advanced organizations. Complex environmental changes can, for example, make it more difficult for organizations to interpret and respond to changes in their environments. In other words, rapid environmental changes make tasks more difficult for organizations by affecting the ways in which they interpret performance and strategy. While the effectiveness of strategies that organizations set is largely dependent on internal organizational members, the strategies can better be understood and interpreted by understanding the environment (Eisner, 2003). With rapid environmental changes, organizations get pressurized to produce outputs more efficiently and faster. The modern business environment is characterized by new technologies and increased competition. This implies that products in the market can become obsolete within a short while because customer needs are dynamic.
Organizations must, therefore, study their business environments and integrate new information obtained into decision-making processes. Organizations must also understand how their past experiences can affect their ability to understand and respond to their dynamic environment in the future (Eisner, 2003). Major changes in government regulations, technologies, and markets can elicit different organizational strategies and responses. As such, organizations should be able to factor in different environmental factors into their decision-making processes. Organizations that face rapid generational improvements and innovations must also find ways of responding to their markets and adapting internal processes to ensure that they accommodate changes. In other words, organizations must learn to incorporate new services, new processes, and new components into their business processes effectively and efficiently, lest they get thrown out of the game. They must learn to adapt to environmental changes to remain competitive and relevant.
References
Eisner, Alan. (2003). Eisner, Alan B. “The effects of rapid environmental change on competitive strategies: An organizational learning perspective,” Journal of the Academy of Strategic Management, 2003, Volume 2, pages 31-54. Journal of the Academy of Strategic Management. 2. 31-54.