Principles of Management

Principles of Management

Business environment refers to the forces which diversely affect the

activities of a firm. An idea put forth in the Thames study guide is

and I quote "a firm does not exist in isolation. It works within the

overall environment and must keep up with the changes in this

environment". This so called business environment is divided into two

general classifications, the "External" and the "internal"

environments. Factors in the environment are variable; they change

over time, knowing this; the environment must be monitored closely and

the company must adjust the way they do business according to the

changes in the environment. If it fails to do so, the company will

most likely suffer a loss in revenue. In discussing the different

factors involved I'd like to use as an example the McDonald's food

corporation. A firm, known the world over which in its success is an

example of diversity and change. Being an MNC which spans the globe it

has to adjust to almost anything, and everything in each different

environment that it finds itself in.

The business environment is split into two divisions, the first of

which is the "internal environment". Factors in the internal

environment are the forces which have a direct effect on the daily

activities of the company, the absence of any of these individual

dynamics would mean the failure of the company in question. There are

a total of six factors in the internal environment, each of which

affects the firm directly and adversely. This is the environment found

inside the company itself.

The first of the internal factors that must be taken into

consideration are the cu...

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...the next, these ideas even change with the passing of time. A

firm must be conscious of these beliefs and respect them; it must also

in effect monitor them and adjust with the changes that time or

experience may bring to the people.

In defining the different aspects found in the business environment it

is clear that a firm must take everything that has an effect on it

into consideration to ensure its success. And given that time changes

everything in that environment, a company must be sure to be

constantly monitoring the changes, making adjustments of its own to

make sure it keeps up with the changes in its business environment.

Failure of the firm to do so will mean being less competitive and less

productive, not giving it the maximum profit, hampering the firm's

progress as a whole and in extreme cases bankruptcy.