Published by MBA Skool Team, Last Updated: August 04, 2021
What is Task Environment?
Task Environment of an organization is the environment which directly affects the organization from attaining business goals. In brief, Task Environment is the set of conditions originating from suppliers, distributors, customers, stock markets and competitors which directly affects the organization from achieving its goals.
Suppliers, distributors, customers, competitors all form part of the entire ecosystem in which an organization operates. Every business needs the other business to make sure that the best product is created for the customer meeting the needs and also earns profit. These interdependent conditions form the task environment.
Task environment helps in identifying the environmental factors responsible for the success of the company or a product.
Factors with Examples for Task Environment
Competitors generally look for higher margins and for this they provide unique features to its products, thus try to create differentiation.
Example: Adidas, Nike, Puma all shoe manufacturers produce shoes catering for different segments in different styles and charge premium accordingly.
Organizations also compete for customers as well as for wholesalers, retailers etc. Customers decide the fate of any company and hence companies try their level best to lure them.
Example: Customers might start looking for some other alternative due to shift in consumer behavior like moving from conventional vehicles to electric vehicles. The shift might have been caused by the competitors.
Suppliers have high bargaining power if the raw materials being supplied are rare or if there are less number of suppliers in the market. So it’s important to hold on the suppliers and maintain good relationship with them. Acting intelligently, companies often maintain more number of suppliers to reduce risk of deserting by anyone.
Example: Kriti Nutrients Ltd. in India is supplier of lecithin to Nestle (for baby foods)
Distributors who become intermediary between retailers and wholesalers or between manufacturer and wholesaler play a vital role in a task environment.
Example: In case of CPG products, distributors are the most important players in terms of increasing reach of a product across markets, customers and channels.
Hence, this concludes the definition of Task Environment along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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