Compare and contrast the concepts of environmental and organizational pressure. How do these pressures affect an

Compare and contrast the concepts of environmental and organizational pressure. How do these pressures affect an organization? (300 words with reference)

Expert Answer

 Organizational pressures are those which are within the organization for supporting business growth, ensuring high profitability, considering shareholder value etc. The aim is to focus on activities from organizational future perspective.

Environmental pressures are those which may arise due to various reasons like: environmental law ,government regulation etc. Thus, it forces the organization to bring in changes to incorporate the same. Example: The government regulations have mandate for organization to spend 1% of profit on CSR (Corporate Social Responsibility) and take actions for environmental sustenance.

Hence, major differences are:

  • Organizational pressure is internal, Environmental is external
  • It is much easier to avert organizational pressure but very difficult to ignore environmental pressure
  • Organizational pressure is more focused towards profitability compared to environmental which focuses on sustenance

These pressures have huge impact on the organization and the way they conduct their business. It results in changing the strategic and operational strategies with consideration to pressure. Example the government in some states have banned use of plastic bags as they are not environment friendly. The company may be supplying material in same bag but as per law it needs to discontinue. So a company needs to come up with alternate which is more environment friendly like paper bags etc. Now, as the cost increases, the company will have to rework on its costing and deal with customers. Similarly in case of organizational pressure, there are changes. Example: The worker union may demand for pay hike and match with industry average. It will put in excess pressure on company as cost of operation will go up and profit margins will reduce. Also, if wages are increased, same needs to be justified to stakeholders. But action is important as it may halt the entire operation. Thus, in both scenario, organization is impacted.

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