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The Nature of Organizations. Lecture #2. Ripple Effects. Interconnectedness between organizations. Sears Roebuck example. 1993: Sears decided to eliminate catalog sales Ripple effects of that decision. Ripple Effects from Sears.
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The Nature of Organizations Lecture #2
Ripple Effects • Interconnectedness between organizations
Sears Roebuck example • 1993: Sears decided to eliminate catalog sales • Ripple effects of that decision
Ripple Effects from Sears • Company that photographed home furnishings for Sears lost sales of $400k/yr • Company that provided flowers for the photography company lost sales of $8k/yr
Ripple Effects from Sears • The store that sold the film lost sales of $10k/yr • The company that processed the film lost sales of $16k/yr
Ripple Effects of Sears • The company that built the sets for the photos lost sales of $25k/yr • The company that printed the catalogs eliminated 800 jobs
Ripple Effects of Sears • The U.S. Postal Service estimated it lost $90 - $100 million/yr in revenues from delivering the catalogs
Environmental Awareness • Political • Economic • Social • Technological
Political Environment • Domestic Government • Foreign Government • Legal Environment • Special Interest Groups
Economic Environment • Customers • Suppliers • Competitors • Investors
Social Environment • Demographics • Culture
Demographics • Which state would be a good choice to test-market products for retired people?
Concert Revenues: 1989 • Rolling Stones: $44 million • NKOTB: $17 million
Concert Revenues: 1990 • Rolling Stones: $44 million • NKOTB: $
Technological Environment • Technology Transfer • Lasers for eye surgery, dental work
Technology Transfer • CDs play for approximately 75 minutes
Technology Transfer • With blue lasers, CDs will play 5 hours
External Environments • Political • Economic • Social • Technological
Internal Resources • Financial • Physical • Human • Technological and System
Financial Resources • Cash • Stocks • Bonds • Net Income
Physical Resources • Plant facilities • Equipment • Raw Materials
Human Resources • Specialized Personnel • Managerial Personnel
Human Resources • Specialized Personnel • Managerial Personnel • Sometimes dependent on demographics