The major forces that affect Organization-Environment relationships are as follows:
Economic Environment :
The economic environment of business is largely determined by the economic system of the country .A number of economic factors such as economic planning and control,national income ,industrial policies,monetary and fiscal policies,investments,savings,inflation,and international economic activities reflect economic development. The economic environment dramatically affects companies’ ability to function effectively and influences their strategic choices.
Political Environment is related to management of public affairs. Political environment mainly refers to the political structure,composition of bureaucracy,and ideology of the ruling government .Political philosophy can be democratic or autocratic.Democracy provides greater role to private sector.The political system that exist in a country influence business organization.
Legal Environment refers to all the legal principles and polices that affect Organizations’ activities.It is the framework of laws ,regulations and court decision intended to encourage and control business activities.Thus, government can affect business opportunities through tax laws ,economic policies,and international trade rulings.
Socio-cultural forces consists of the attitudes ,beliefs and values of individuals and groups in society.As the values,customs and tastes change in the society ,the managers must also change his organizational pattern.As society change,our life also changes by new things. Life styles and social values promote social change.It affects product choice.
Technology consists of skills,operating methods,system and tools that are designed to make work more efficient.It also largely influences organization by creating changes in jobs,skills ,life styles ,products production methods and processes.Information technology ,automation ,computerization,and new materials have influenced organization.