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Business Management: Internal and external environments
Typology: Exams
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Business Management: Internal and external environments
Internal Environment✔✔Everything inside the organisation They have total control over: Staff, Managers, Policies, Structures etc
Operating Environment✔✔Everything outside the environment which can have a direct impact on the organisation or with which it directly interact. Much less control over it: Customers, Suppliers, Competitors
External Environment✔✔Everything outside the organisation that it has little or no control over.
Customers✔✔The buyers and users of the products of a LSO. Important because without them there is no business hence why they need to meet the needs of the customer
Suppliers✔✔Organisation or individual that supply resources to the organisation allowing it to conduct operations. Reliability, Consistency, Adaptability
Creditors✔✔Creditor supplies money to the business and in the long run get paid back over time. Keeps the business running
Competitors✔✔Other organisations that offer rival products or services. Important because:
Make you innovative Their customers are your potential customers
Lobby groups✔✔Groups of people who attempt to directly influence or persuade an organisation to adopt particular policies. Important because:
Help employment policies Environmental groups (plastic bags)
Macro environment✔✔Made up of the broad factors in the economy and society within which the organisation operates
Globalisation✔✔The effect of high tech communications, lower transport costs and unrestricted trade and financial flows turning the whole world into a single market, producing a more integrated global economic system
Political influences✔✔Actions of the federal, state, and local governments. There could be legal changes in the law or their actions/decisions could influence how an LSO conducts itself
Technological influences✔✔The use of technology to change the workplace and its activities. Technology changes rapidly and LSO's must keep up with these changes to stay efficient and meet competition
Economic influences✔✔How the economy is operating. Things such as:
Level of economic activity Exchange rate, interest rates Consumer confidence
Social attitudes✔✔The prevailing attitudes of society, these can change over time. As a consequence LSO's must be seen to be responding to these changes
Legal influences✔✔The laws made by Parliament and rulings sat foe by the courts. The conduct of an organisation must comply with these laws