Environmental Dynamism Essay

1935 words - 8 pages

Environmental dynamism, along with environmental change and environmental uncertainty, serves a significant role in organizations. The definition of environmental dynamism is the “degree to which important environmental components change” (Griffin & Moorehead, 2012, p. 471). The dynamics of an environment can influence the types of environment, leadership styles, and management controls of organizations. Therefore, it is important to understand how organizations are impacted by environmental dynamics in order to ascertain the most effective ways for organizations to perform.
The dynamics of an environment are influenced by two types of environments: stable environments and unstable environments. Environmental stability occurs when “competitive forces within each country’s economic system vary, each economy remains strong” (Griffin & Moorehead, 2012, p. 472). Stable environments are found in “many cultures…[such as] the economies of Sweden and the United States” (Griffin & Moorehead, 2012, p. 472). On the other hand, environmental instability occurs when “far-reaching changes in the economic and management philosophies of [certain] countries make their environments far more dynamic” (Griffin & Moorehead, 2012, p. 472). Unstable environments are found in “other countries [which] are much more dynamic… [such as] France [whose] policies on socialism versus private enterprise tend to change dramatically with each election” (Griffin & Moorehead, 2012, p. 472). Stable environments and unstable environments impact certain aspects of organizations. For instance, the performance of organizations is dependent on the stability, or instability, of the environment. In an article written about organizational performance it was found that performance is “highly sensitive to environmental instability” (Hamann, P., Schiemann, F., Bellora, L., & Guenther, T. W., 2013, p. 83). The article also found that, “For years with high environmental instability [organizational performance] becomes weaker” (Hamann, P., Schiemann, F., Bellora, L., & Guenther, T. W., 2013, p. 83). The opposite would hold true for organizational performance in stable environments. Performance of organizations is stronger in years with high environmental stability. These aspects of the environment impinge on stability which is comparable to certain areas of organizations also influenced by the stability of the environment.
An area where environmental stability and instability exists with import in organizations is in emerging markets. The conditions of the environment with this type of market are important to the success of organizations. Whether the environment is stable or unstable can help to determine this success. Typically organizations with first-mover advantages are significant in emerging markets. First-mover advantages generally pertain to the timing in which an organization emerges into certain markets. In an article written on the subject it is stated that, “Timing of entry is an...

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