The internal factors determine how the organization moves forward, both as a self-contained organizational entity and in response to its external environment. Mission Why does an organization exist? What is its purpose?
And we know that organization is a social entity that has a hierarchical structure where all necessary items are put together and they act within it to reach the collective goal. Organization or more specific business organization and it activates are always being affected by the environment.
In an organization, every action of the management body is influenced by the environment. Organizations have an external and internal environment; External Environment. In this post, we will look at the elements of organizations environment. External Environment of Organization In a simple way factor outside or organization are the elements of the external environment.
The organization has no control over how the external environment elements will shape up. The external environment can be subdivided into 2 layers: General Environment Task Environment General Environment of Organization The general environment consists of factors that may have an immediate direct effect on operations but nevertheless influences the activities of the firm.
The dimensions of the general environment are broad and non-specific whereas the dimensions of the task environment are composed of the specific organization.
Economic Dimension The economic dimension of an organization is the overall status if the economic system in which the organization operates. The important economic factors for business are inflation, interest rates, and unemployment. These factors of the economy always affect the demand for products.
During inflation, the company pays more for its resources and to cover the higher costs for it, they raise commodity prices.
When interest rates are high, customers are less willing to borrow money and the company itself must pay more when it borrows. Technological Dimension It denotes to the methods available for converting resources into products or services.
Managers must be careful about the technological dimension. Investment decision must be accurate in new technologies and they must be adaptable to them.
Socio-cultural dimension Customs, mores, values and demographic characteristics of the society in which the organization operates are what made up the socio-cultural dimension of the general environment. The socio-cultural dimension must be well studied by a manager.
It indicates the product, services, and standards of conduct that the society is likely to value and appreciate. The standard of business conduct vary from culture to culture and so does the taste and necessity of products and services. Political-Legal Dimension The politico-legal dimension of the general environment refers to the government law of business, business-government relationship and the overall political and legal situation of a country.
Business laws of a country set the dos and don ts of an organization. A good business-government relationship is essential to the economy and most importantly for the business.
And the overall situation of law implementation and justices in a country indicates that there is a favorable situation in of business in a country.
International Dimension Virtually every organization is affected by the international dimension. It refers to the degree to which an organization is involved in or affected by businesses in other countries.
Global society concept has brought all the nation together and modern network of communication and transportation technology, almost every part of the world is connected.
These factors include suppliers, customers, competitors, regulators and so on. A manager can identify environmental factors of specific interest rather than having to deal with a more abstract dimension of the general environment. The different elements of the task environment may be discussed as under: Competitors Policies of the organization are often influenced by the competitors.
Competitive marketplace companies are always trying to stay and go further ahead of the competitors. In the current world economy, the competition and competitors in all respects have increased tremendously.
The positive effect of this is that the customers always have options and the overall quality of products goes high. They are the peoples who hand them the profit that the companies are targeting. Suppliers Suppliers are the providers of production or service materials.
Dealing with suppliers is an important task of management. A good relationship between the organization and the suppliers is important for an organization to keep a steady follow of quality input materials.
Government agencies are the main player in the environment and interest groups are created by its members to attempt to influence organizations as well as government. Trade unions and chamber of commerce are the common examples of an interest group.
Strategic Partners They are the organization and individuals with whom the organization is to an agreement or understanding for the benefit of the organization. Internal Environment of Organization Forces or conditions or surroundings within the boundary of the organization are the elements of the internal environment of the organization.
Owners Owners are people who invested in the company and have property rights and claims on the organization.Jun 29, · The same internal factors that lead to an organization's success inevitably characterize that organization's relationship to the external environment in these broad areas.
Evaluate the internal and external influence on Primark and relate to it to best practices, corporate governance, corporate social responsibility and ethics? Majority organizations need best practices for achieving organizational objectives in the terms of profit, social and ethics issues.
The internal factors of a business are often studied in a SWOT analysis. The SWOT matrix is a structured planning method. You can use SWOT analysis to analyze your company and its environment. It assesses the strengths, weaknesses, opportunities, and threats.
The strengths and weaknesses of a project or business are internal factors. Opportunities and threats are external elements. 2 INTERNAL AND EXTERNAL FACTORS THAT ENCOURAGE OR DISCOURAGE HEALTH-RELEVANT BEHAVIORS INTRODUCTION There are a number of factors that determine the likelihood of engaging in a particular behavior.
Internal and External Environment Factors that Influences Organizational Decision Making By the word “environment” we understand the surrounding or conditions in which a particular activity is carried on. Business owners can control internal factors, but have no influence over external factors other than the ability to anticipate and adapt to those factors to minimize their effect on operations.