Principles of Hotel Management

A
TMOSPHERIC
I
MPORTANCE
Every organisation exists and operates within its environment.
In fact, every organisation is a sub-system of its total
environmental system. Every organisation interacts with its
environment, and both affect each other.
F
UNCTIONAL
A
TMOSPHERE
Simply stated, organisational environment refers to the
environment under which an organisation exists and operates.
The environment is composed of many factors, forces, conditions,
influences and so on.
According to Robert Albanese:
“The environment of an organisation may be defined
as a perceived set of conditions, influences, or forces
external to an organisation that has relevance to the
goals and tasks of the organisation.”
In the words of Robbing:
“Environment is the composition of those institutions
or forces that affect the performance of the
organisation but over which the organisation has
little control.”

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Basics of Management
35
According to Prof. Keith Davis, organisational environment
“is the aggregate of all conditions, events and influences that
surround and affect it.”
Thus, organisational environment refers to those
surroundings, factors, circumstances, institutions or influences
that affect the working and existence of an organisation.
C
HIEF
 T
RAITS
Following characteristics of organisational environment
highlight its nature :
Organisational environment is dynamic. It is
constantly changing due to the change in the factors
or forces composing it.
Organisational environment consists of many factors, forces,
conditions, events, influences institutions etc. arising from many
sources. These all interact with each other and create new set
of influences. Thus, it is complex phenomenon. It is easier to
understand in parts but difficult to understand in its totality.
The dynamic environment consists of internal and external
environment. Internal environment is composed of the forces
and conditions within the organisation. External environment is
composed of the forces and conditions outside the organisation.
There is a geographical boundary of the environment of
every organisation. Forces and conditions that arise within that
boundary usually affect the organisation. However, the
geographical limit is determined by the area of operation of the
organisation.
All the factors of the environment are mutually dependent.
Each factor affects all the other factors. For instance, social
factor affects economic, political, legal, religious, technical and
other factors.
Organisational environment is multi-faceted. It may look
different to different persons. Moreover, a slight change in factors

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36
Principles of Hotel Management
may cause change in the environmental scene. Again, some
see a particular state of environment as an opportunity while
others may perceive it as a threat.
Environment affects all organisations. The profitability, growth,
prosperity, diversification, etc. of art organisation largely depend
on the environment in which it exists and operates. Moreover,
any change in the environment also affects an organisation in
several different ways.
Every organisation imports its resources (human, physical,
financial and informational) from its environment and export its
goods or services to its environment.
The basic purpose of every organisation is to earn profits
through satisfaction of needs of the environment. No organisation
can survive and succeed without achieving this purpose.
Every organisation has to face and deal with the challenges
posed by its environment. It is a precondition for the success
of the organisation. In order to face challenges effectively, every
organisation needs to change its plans and strategies according
to the change in the environment.