The Business Environment
An organisation does not exist in a vacuum. It exists in its environment, which provides resources and limitations.
If an organisation adapts to its environment, it will prosper, otherwise it will fail.
An organisation and its environment are interdependent and interact very intensively.
o The organisation depends upon its environment for the resources and opportunities necessary for its existence.
o The environment contributes resources to the organisation only if the organisation returns desired goods and services to it.
Effects of the Environment on the Organizations
Environmental factors affect an organisation in 2 ways. They set limits and pose threats and they also provide opportunities and challenges. A change in the government export policy may suddenly threaten an export oriented organisation. A reduction in the rate of interest may provide cheap finance to an organisation.
Effect of Organization on the Environment
Effects of the organisations on its environment are quite obvious in the case of cigarette manufacturing; liquor manufacturing, film making, pharmaceutical companies, etc. These organisations have an obvious impact on its environment.
Elements of the Environment
The business environment that firms operate in can be divided into the internal environment and the external environment.
A. Internal Environment
This refers to all the factors or forces that affect the day to day activities of the business.
• As Peter Duckers has put it, "The ultimate aim of all business organisation is - to create a customer". These days, for most products and services, the market belongs to the buyer. The customers e...
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• Misleading advertising
• Complaints from customers
3. The environment
• Restoration of land to natural uses
4. Financial honesty and openness
• Bribery and corruption
• Company control and ownership
• Executive pay and compensation
• Contributions to political parties
Conflict between Social Responsibility and Profitability
1. Money invested in social responsibility comes out of the company's profits.
2. If shareholders do not receive what they believe to be a fair return on their investment they are unlikely to contribute to the future requirements of the company.
3. Managers of the business are evaluated strictly upon economic performance; rewards go to managers who keep costs down.
Therefore, social responsibility cannot be left to the whims of individual firms and managers must be enforced by law.
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It will be advantageous for the company if they can project themselves as responsible corporate citizen and an environment friendly company. Social enrichment schemes, recycling schemes and educational funds can be initiated to cater to this cause and long term goal.
Organisations are structured in a variety of ways, depending on many aspects including their size, objectives, culture and management style. It is important to look at these aspects as these influence the design and the structure of the business.
External factors are those that are beyond the control of management. There exist several external factors in a business environment. These are competition, fiscal policies, and macro-environment, and industry analysis factors amongst others. Macro environment and industrial analysis factors will be considered.
An organization is described as a grouping of associated people acting together. This is a structured layout, focused to meet a need and pursue collective goals. With all organizations, an effective management structure is established to undertake relationship management between members and associated activities. The management of an organization subdivides the hierarchy to assign roles and responsibilities. Every individual is entrusted with discrete authorities to carry out their tasks. Organizations can be referred to as open systems as they affect and are affected by external or internal environment.
Technological change, change in economic climate, natural occurrences and such-like are matters that concern the macro-environment of a business. These external, uncontrollable, influences can and will impact hugely on the success or failure of a business. One of the tools that are applicable in considering these factors is PESTLE. Political; Environmental; Social; Technological; Legal and Economic considerations will need to be engaged in order to prepare the business for macro-environmental influences. For this reason, PESTLE will be the most appropriate tool to use to identify and outline the main macro-environmental factors that may affect my business.
The external business environment consists of four elements, they are as follows: Political, Economic, Social and technological. It would be impossible to analyse the whole environment in one essay, I have therefore decided to focus my essay on the technological environment. I have chosen this area to focus on because as Palmer and Hartley point out, it is one area that is forcing immense change in the external business environment.
A. Business Environment: Analyze the current internal and external factors related to the business environment of your company. In other words, what are the internal and external factors, and how do they influence the business environment of your company?
Organizational environment is defined as all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization (Daft, 2009). One organization that has faced environmental factors which required them to change their current organizational strategy, is the Starbucks Corporation.
... the organization and can directly affect its basic operations and performance. It includes elements such as suppliers, competitors, customers and labour market. And the general environment affects the organization indirectly. It includes elements such as legal and political environment, ecological environment, socio cultural environment.. etc.
Organisation is the most important element in management. Any organization is located and operated in the environment. Every action of all organizations is possible only if it allows its realization. The internal environment is the source of its vitality. It involves the capacity needed for the functioning of the organization, but at the same time can be a source of problems and even her death of the organisation. The external environment is the source that supply organization resources. The organization is in constant exchange with the external environment consequently it provides itself with survival. The main objective of this work is to consider elements of the internal and external environment of the organization which are in a constant
In this environment conscious world, there is a growing argument about the ways in which a business should run its activities that should not have any negative impact on the environment overall. Raderbauer, M. (2011) A research done at the University of Exeter indicated that Industry has been the perpetrator behind ruining the environment for fulfilling its short-term profits instead of long-term environment consequences. Many businesses have understood the importance of preserving the environment and thus it is in the betterment of its own business, keeping in mind the long-term profits they can have while making environment responsible decisions. Business are more affected by environment because they run with the help of all the raw materials