Relationship between business and it environment

Relationship between Environment and Business

relationship between business and it environment

Relationship between Environment and business. Business and environment interaction takes place in the following ways: 1. Business is affected by economic . Introduction. In the past three decades, multiple researchers have studied the relationships between business environments and firms׳ manufacturing strategies. Business and its Goal, its environment, its effect on business & their relationship.

Three-step hierarchical regression analyses of organizational characteristics as moderator dependent variable: Hypothesis H4a proposes the organizational characteristics variable moderates the relationship between the environment and business strategies.

To obtain results, we defined a product of the environmental variables independent variable and organizational characteristics proposed moderating variable that would represent the interaction between the two variables. Athree-step hierarchical regression was run through SPSS, taking the business strategies as dependent variables. In step 2, we added the organizational characteristics variable. Consequently, hypothesis H3 is not demonstrated.

Theoretical Contributions and Implications With the purpose of examining the relationship between the environment and the various types of business strategies and analyzing the behavior of organizational characteristics as a moderator variable of this relationship, we analyzed empirical data and confirmed the existence of evidence of the positive influence of the environment on business strategies, but not of the moderating influence of organizational characteristics on the relationship between the environment and business strategies.

With regard to complex environments, statistical results are significant for the three types of business strategies: For companies resorting to prospectors strategies, the greater the number of clients, competitors and technological activities they perceive as their characterizing markets, the more enticing will be the environment and the greater the opportunities to explore and develop new products and market segments.

For companies engaging in analyzers strategies, the number of clients, their competitors and technological activity are regarded as a good opportunity for competing in markets, provided other companies have entered those markets with relative success, because these companies seek to mitigate risks. As regards the uncertain environment, results show a high significance in using prospectors business strategies.

relationship between business and it environment

However, this is not so regarding analyzers and defenders business strategies. Analyzers and defenders companies, on the contrary, will not venture into an uncertain environment because they are interested in mitigating risk.

Instead, they will focus on preserving stability and protecting their market segment. Results also show a highly changing environment encourages prospectors strategies but restricts analyzers and defenders strategy development. Koka, Madhavan and Prescott propose the lower the uncertainty of the environment, the more predictable decision-making becomes, and companies have more clarity in the cause-effect relationship of the decisions they make.

Organizational characteristics do not exert a significant moderating influence on the relationship between the environment and business strategies. This assumes that, when implementing business strategies, companies take into account the environmental behavior but do not regard formalization, specialization and centralization as factors that strengthen the relationship between the environment and business strategies.

We propose an academic research model including relationships at the level of dimensions both for the environment and business strategies whereby we may confirm our proposition that a complex environment impacts the three types of business strategies prospecting, analyzers and defenders while an uncertain environment impacts positively only prospectors strategies, but not analyzers or defenders strategies.

We also confirmed the perception of the complex environment encourages the three types of business strategies. This is an approach that managers should reconsider. Limitations and Future Research Findings of this study should be reviewed taking into account the following limitations and options for future research: Another limitation comes from the size of companies, i. Gopalakrishnan holds the size of companies leads to different types of information from survey respondents.

It has also to be taken into account that the current sample of companies surveyed is limited to companies based in Lima, Peru. Whether the findings can be transferred also to other regions has to be proven by additional studies with a larger geographical scale. When gathering data, only one respondent was interviewed at each company. However, future studies should increase the number of respondents from each company in order to level out personal preferences or biases.

Relationship between Business Activities and the Environment

Although we have confirmed that for service companies the business environment generally as well as complex and uncertain types of environment, impact business strategies to a certain extent, future studies should verify these results in other industries, such as manufacturing and mining. Evidence from a Developing Country.

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relationship between business and it environment

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Entrepreneurship Theory and Practice, 29 3 While most organizations simply react to major technological trends, for example, the actions of firms such as Intel, Microsoft, and Apple help create these trends. Some aspects of the general environment, such as demographics, simply must be taken as a given by all organizations.

Overall, the environment has a far greater influence on most organizations than most organizations have on the environment.

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Why Does the Environment Matter? Understanding the environment that surrounds an organization is important to the executives in charge of the organizations. There are several reasons for this. First, the environment provides resources that an organization needs in order to create goods and services. As the human body must consume oxygen, food, and water, an organization needs to take in resources such as labor, money, and raw materials from outside its boundaries.

Subway, for example, simply would cease to exist without the contributions of the franchisees that operate its stores, the suppliers that provide food and other necessary inputs, and the customers who provide Subway with money through purchasing its products.

relationship between business and it environment

An organization cannot survive without the support of its environment. Second, the environment is a source of opportunities and threats for an organization. Subway faces a threat from some upstart restaurant chains.

Saladworks, for example, offers a variety of salads that contain fewer than five hundred calories. It receives inputs from the environment, converts them into outputs through productive facilities which are also received from the environment and sends them back to the environment. A constant feedback is received from the environment to improve its performance.

The environment offers threats and opportunities to business systems which they overcome and exploit through their strengths and weaknesses. SWOT analysis helps in integrating external environment with the internal environment.

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The business and environment, thus, have much to give and take from each other. The economy is structured by effective interaction of the business and its environment. The business-environment interaction is a continuous process. It is like a biological organism that keeps environment and management responsive to each other. This interaction is shown as: This involves changes in business and environmental policies and leads to new level of business-environment interface or business-environment equilibrium.