Business Management - Factors Affecting Organisations

These factors create certain expectations and requirements for organizations, which in turns determine the organization's direction and strategy. Whereas internal environment is made-up of several internal subsystems. Internal subsystems work together systematically and drive the organization in the direction which is in conformity to external environment demands; thereby making the organization effective and a good fit with external environment. (McShane & Steen, 2012, p.6)

External environmental factors are the macro environment affecting a business; they are factors outside the company and which they have no control over (Kotler & Armstrong, n.d.) these external factors bring about impacts to the company thus a company should always be prepared to react.

External factors are outside influences that can impact a business. Various external factors can impact the ability of a business or investment to

The internal and external fact of functions affects management every day. It is the performance that an organization or company within itself could turn out positive or negative. This also pertains to the outside world, where the factors can be beyond the control of the organization in positive or negative situations. The concepts in management implements the four functions needed for the core requirement in management. Planning is the foundation base which all others areas are built. There may be sudden strategies required to be implemented

Internal environment is the events and trends inside an organization that affects management, employees, and organizational culture. For example, where I work the internal environment is all about the production and numbers. Even though we as a team get the production done on time the employees don’t feel appreciated. Better said, there are no employee incentives to keep us motivated. Therefore, it is really important to focus on organizational culture because it affects the way individuals work, feel, and think about an organization. There are three components that make up organizational cultures, which are creation, success, and change.

External Environment: The main external elements need to be observed and established in and around the organization which will affect the organization.

1.First, describe each of these areas and discuss why they are important to self-awareness and effective managerial performance.

A company’s external environment includes all relevant factors and influences outside the company’s boundaries. By relevant means important enough to have a bearing on the decisions the company ultimately makes about its direction, objectives, strategy and business model.

The external environment is crucial to any company or organization because it allows management to see and understand things outside of their daily routine. The societal environment might focuses on the influence the external environment might have on the company’s strategy. In the long run, it might be beneficial or perhaps unfavorable. The general five forces are economic, technological, political-legal sociocultural, and demographic forces.

The company's mission statement, organizational culture and style of leadership are factors that are typically associated with the internal environment of an organization. The external environment are those factors that occur outside of the company that cause change in organizations and are, for the most part, beyond the control of the company. Customers, competition, the economy, technology, political and social conditions and resources are common external factors that influence the organization.

In the process of manufacturing, packaging, marketing and other necessary business activities, businesses interact with internal and external factors which may affect the business and can be affected by the business as well. A combination of both of the factors comprises the business environment in which the business operates. The internal factors refer to the factors those function within the business organization and the business can control or facilitate them as needed. Some prominent internal factors are the working conditions, employees, employer to employee relations, organizational culture and organizational structure etc. For a British-American online chain store like ASDA, the total numbers of employees working for the organization (140,000 employees working in 500 stores) is a key internal factor. On the other hand, external recruitment are factors as such as political factors(Laws and regulation system, governmental activities and ownership module, tariffs/ Taxation and trade barriers, conflict between political parties and socio-political unrest etc.) Macroeconomic concerns (interest rate, exchange rate of currency, employment rate, unemployment rate, discretionary income, GDP, recessions, depressions, inflation etc.), microeconomic concern (market size, demand and supply diagram, distribution channel and delivery mode etc.), social and technological factors which are not in the control of the business but affect the business by their activities

Technological factors capture the application of knowledge to create new processes and products. With new technology the apparel industry’s productivity has been given a boost. There has been an increase in automated machinery that has improved production and manufacturing facilities such as Ralph Lauren Corporation (Viking, 2009). Now they have new faster computerized sewing machines in order to make production go faster. Also new computer software has been a big plus for Ralph Lauren because now that can create and design new garments with no problem (Viking,

External environment is quite important for the any company, because it creates the conditions that the organization need to run the business in. In order to develop company strategy successfully, the external environment need to be analyzed properly. One of the best techniques to do that is Five Porter’s Forces analysis.

An analysis of the external environment includes the factors in a business’s external environment about a business's industry, competition, and political and social environments, and affects the firm’s strategy (Aaker, 2001).

Technological - how the rapid pace of change in production processes and product innovation affect a business.