The Effect of Business Environment on the Effectiveness and Functioning of an Organization

The Effect of Business Environment on the Effectiveness and Functioning of an Organization

To best answer the question of how different business environments

affect the effectiveness of a business it is imperative that we first

define what the business environment is and what all its factors are.

The business environment perse' is: the environment in which a firm

exists, this setting is a dynamic unity of everything inside and

outside of the Company which adversely affects the activities of a

firm either directly or indirectly. The idea that; "a firm does not

exist in isolation and that it works within its overall environment";

just reinforces the importance of this environment to all business'

and the need to consider it. Seeing also as how the world is changing

with time and technological advancements, the business environments of

today are a constantly changing group of situations that a firm has to

deal with. By monitoring and adjusting to the changes in its

environment, a firm is best prepared to succeed. And it is only

through this preparation that a firm can survive. As a whole, the

"business environment" is the single most important factor a company

must study, monitor and adjust to, to be assured the success and

realizations of its goals.

The following table illustrates clearly the Business Environment:

Firm

Internal Environment

External Environment

The two divisions which compose the whole of the business environment;

though the effects of these 2 differ on the firm none is more

important than the other and both must be taken into consideration.

The first division of the environment is the "Internal environ...

... middle of paper ...

... and definitely not

making a profit.

All in all the business environment affects organizations adversely,

in my example although two extremes it is clear that the environment

can literally facilitate an organization's effectiveness or take it to

its failure. In view of this: it is important to note that a firm's

success relies heavily on the notion that it studies its business

environment in depth, and makes the necessary plans, changes and

adjustments needed for it to continue in its given situation. The

success or failure of an organization rests mainly on its ability to

adapt to its environment and make the best out of its situation. Firms

which fail to adapt to the changes brought about by the differences in

the business environments, will fail at achieving their goals and in

worst case scenarios go bankrupt.