Explain how variables from the business environment may influence the operations of the organisation

Demography covers many aspects that are important to marketers including family dynamics, geographic shifts, workforce changes, and levels of diversity in any given area.

Organization’s External Environment

In pursuing both recruitment and training strategies, an organisation is often limited by its financial strength. Each must continually interact with other organizations and individuals- the consumers, suppliers, unions, shareholders, government and many more.

Due to increasingly broad world economy, it is important to watch the competition across the oceans, competitive products launched from abroad, changing socio-political situations, and home grown entrepreneurs.

Therefore, marketing intermediaries are vital link between the business and the consumers. These demographic changes can have a significant effect locally. It is particularly noteworthy in the organizations that operate on thin margins or new startups since they have little support to raise capitals.

Business laws of a country set the dos and don ts of an organization. The same would apply to the manufacturers that produce and stores that sell these wares. Businesses that depend directly on a good supply of water e.

Technology Technological change has been rapid in the last 50 years and is a factor in the external environment that constantly exerts pressure on the business or organisation. Staff Unless you're a one-person show, your employees are a major part of your company's internal environment.

The internal environment of the company includes the factors which are within the company and under the control of company like product Organizational culture, Leadership, and Manufacturing quality. The attitudes of staff and volunteers, and their ability to "go the extra mile" makes a very significant difference.

On the other hand, if the economic environment is one of prosperity, consumers are more likely to spend money, not just on necessities, but larger items as well. By doing so, they can create the kind of environment that they will prosper in and can become more efficient by marketing in areas with the greatest customer potential.

Within this area are two different economies, subsistence and industrialized. Competitors Policies of the organization are often influenced by the competitors. Businesses in the food industry are routinely affected by the environment.

Variables can be dependent or independent. A cutthroat culture where every employee competes with one another creates a different environment from a company that emphasizes collaboration and teamwork. A store located in a densely populated metropolitan area may have higher sales than a store in a sparsely populated rural area.

The business cannot control these aspects but can respond to change if needed. If you're flush with cash, you have a lot more flexibility to grow and expand your business or endure an economic downturn.

Higher level of uncertainty entails that organizational leaders have a complex environment to deal with, it test their visionary and decision making capability in absence of clear data. The number of employees laid off during a recession depends partly on declining business revenues.

Economic factors includes economic conditions and economic policies that together constitutes the economic environment. Workers who are in the age group of 50 plus value loyalty to their employers. Environmental Factors The environment can have a direct and indirect affect on how a business operates.

Dealing with suppliers is an important task of management.

Internal and External Environment Factors that Influences Organizational Decision Making

To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. Normally, you would not go for a walk in the rain without an umbrella, because you understand the environment and you know when it rains you can get wet.

Video of the Day Brought to you by Techwalla Brought to you by Techwalla Social Factors Social factors that affect the economic environment of a business are the cultural influences of the time. In effect, a business' day-to-day operations can pose an ongoing threat to the natural environment.There are a number of factors both internal and external which affect organizational functioning.

Any change in these factors necessitates changes in an organisation. The more important factors are as follows: External Forces. Every organization exists in some context; no organization is an island in itself.

Knowing how internal and external environmental factors affect your company can help your business thrive. External: The Economy. In a bad economy, even a well-run business may not be able to survive.

Business environment is the sum total of all external and internal factors that influence a business. You should keep in mind that external factors and. The economic environment of business is affected by internal and external factors.

An internal factor that affects the business environment is the cost of labor, materials, processes and procedures.

Internal factors can be improved through company projects. Business is affected by different factors which collectively form the business environment.

These include economic, social, legal, technological and political factors. Business environment is therefore, the total of all external forces, which affect the organization and the business operations (Kotler &Armstrong ).

INTERNAL AND EXTERNAL BUSINESS ENVIRONMENT. Business environment influence the functioning of the business system. Thus, business environment may be defined as all those conditions and forces which are external to the business and are beyond the individual business unit, but it operates within it.


Explain how variables from the business environment may influence the operations of the organisation
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