External Forces

External Forces

Classifying external influences involves a tradeoff. Broad categories can apply to many organizations, but narrower descriptions are often more useful for a particular decision. Banasiewicz groups external forces into five categories:

• Market demand
• Political and legal influences
• Social and ethical expectations
• Technological change
• Competition

To respond to these forces, an organization needs some shared understanding of its identity, purpose, and relationships. The author calls this organizational consciousness. In this framework, it has three aspects: reflexive awareness of the organization’s own attributes and position; social awareness of its place in a larger community; and collective coordination across departments and levels around a shared purpose.

Past experience also shapes present decisions. Declarative organizational memory includes facts and events people can recall and discuss. Procedural memory concerns how work gets done, often through routines that people follow without consciously reconstructing every step.

Emotion can affect which experiences people remember and retell. A difficult project or regulatory dispute may become a familiar organizational story, influencing later decisions even after the original reasons for a practice have been forgotten. Examining that history can help distinguish useful experience from an assumption that no longer fits.

Decision-makers also face bounded rationality: (1) information is limited and may be unreliable, (2) cognitive capacity to process it is limited, and (3) time to decide is limited. These constraints make comprehensive optimization difficult, especially when the external environment is complex. They help explain why good intentions and considerable effort do not ensure the best possible choice.

For a specific decision, an organizational ecosystem offers a more concrete view. It consists of the interdependent economic, political, and social entities with a stake in the organization. Similar organizations may have similar ecosystems, but the relevant relationships still need to be examined in each case.

Interdependence does not imply cooperation.1 Customers may benefit from an organization’s products while seeking lower prices; competitors may challenge it while depending on some of the same infrastructure. Regulators influence decisions through rules and enforcement. Relationships can involve both cooperation and conflict.

Mapping those relationships makes the broad forces easier to investigate. Instead of discussing technological or political change only in the abstract, ask which stakeholders can influence the decision, what they want, how they interact, and what choices those interactions leave available.