Organisations exist in uncertain, changing environment and continually confront new challenge and problems, managers must find solutions to these challenges and problems if organisations are to survive, prosper, and perform effectively (Jones 2004, p.1). In order to attain this objective, it is necessary to investigate that how organisations function and how they affect and are affected by the environment.
The organisation is the collection of people working together to achieve a common purpose (DuBrin 2002, p. 256). According to Jones (2004, p.2), 'An organisation is a tool used by people to coordinate their actions to obtain something they desire or value.' The way in which an organisation creates value is at three stages which are input, conversion, and output. Each stage is affected by the environment in which the organisation operates. Organisations obtain the human resources, information and knowledge, raw materials, and money and capital as input from environment, then transform inputs and add value through machinery, computers, and human skills and abilities (conversion). The results of the conversion process it to output the finished goods or services that the organisation releases to its environment. Although even a group of people can work together to produce goods and services, people work in organisation can create more value because it can increase specialization and the division of labour, use large-scale technology, manage the external environment, economize on transaction costs, and exert power and control (Jones 2004, pp. 2- 8).
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