Why external environment is importance

The firm has built a culture that encourages autonomy, quick decision-making, continuous improvement, and retaining the services of its best people. Everything in our company is bottom-up. This has a lot to do with our entrepreneurial spirit.

The first person with a big entrepreneurial spirit is the store manager. One of the characteristics that the managers mention is the autonomy they have. Store managers feel like the owners of their stores. His mother was Russian while his father was an American diplomat. When he was 18, the family moved to New York where he studied mechanical engineering and physics. He joined Rand Corporation in where he worked on strategic problem-solving for the North Atlantic Treaty Organisation.

Later he worked for Lockheed Aircraft Corp and rose to the rank of vice president. In , he chose to become an academic at the Carnegie Institute of Technology in Pittsburg. It had a significant impact on the business world. Prior to the publication of this book, senior managers had little knowledge on how to plan or make decisions on the future of the company.

Planning methods then were based on an extended budgeting system, and projecting it several years into the future. They paid little attention to strategic challenges. Ansoff advocated that in developing strategy, the managers must anticipate future environmental challenges to an organisation, and come up with strategic plans to counter these challenges.

He passed away in You may be trying to access this site from a secured browser on the server. Moreover, the U. Wealth distribution in these countries continues to decline. Income inequality globally is also rising. Other trends that also affect the global, regional, and local economies are discussed in this chapter as well as below. Technological forces are another ubiquitous environmental influence on organizations.

Information technologies and social media powered by the Internet and used by sharing-economy companies such as Airbnb and Uber have democratized and increased, if not leveled, competition across several industries, such as taxis, real estate rentals, and hospitality services.

To manage and use big data in all these functional areas, organizations rely on technology. Government and political forces also affect industries and organizations. More specifically, other aspects of societal cultures are education, language, religion, law, politics, and social organizations. The millennial ages 20 to 35 workforce, for example, generally seeks work that engages and interests them. Members of this generation are also health conscious and eager to learn. Since this and the newer generation Generation Z are adept and accustomed to using technology—social media in particular—organizations must be ready and equipped to provide wellness, interesting, and a variety of learning and work experiences to attract and retain new talent.

This generation numbered about 71 million compared with 74 million baby boomers ages 52 to 70 in By , an estimated 73 million millennials and 72 million boomers are projected.

Because of immigration, millennials are estimated to increase until Many communication scholars e. Stakeholders are interested in particular organizations, and in turn, organizations. Vanmathi UP13G Manikandan UP13G , maximamani aim. Vanmathi UP13G ,vanmathianbananthan yahoo. Guide :Dr. That is the general environment relates to PEST factors in the environment affecting all organaizatins.

Existing Government policy affects the whole economy, and governments are responsible for enforcing and creating a. When we assess a company through the open systems perspective, we can view the organization as an organism that depends on the external.

For instance, if you know your top competitor is going on a hiring binge, that will affect how you plan to recruit and reward employees. You can't write a good business plan based on guesses. To get the hard facts that you need requires internal and external analysis. Internal analysis looks at your company's strengths and weaknesses, such as the uniqueness of your product a strength and a lack of financing a weakness.

External analysis looks at the outside factors that can affect your success. While there are many external factors that can affect your business, you can identify the core ones with the acronym PESTLE, for p olitical, e conomic, s ocial, t echnological, l egal and e nvironmental factors. SWOT is another way to group your analyses. It breaks all factors, internal and external, into four classes: s trengths, w eaknesses, o pportunities and t hreats.

Your company's strengths and weaknesses are internal factors. Your opportunities and threats are external. Your business plan has to deal with the importance of external environments in managing organizations. To make the business plan effective, you need detailed information about how the external environment affects you. If, say, you're making an external analysis of your direct competitors, you might want the following information:.

You can find this sort of information by reading annual reports, press releases, presentations to investors and articles about the company. The results of your external analysis tell you how to compete effectively.

They also help you anticipate how the competition might react to your company's new product or pricing strategy. External analysis isn't the end game. It's just one step toward drawing up a good plan. Internal and external factors don't exist in a vacuum. For instance, suppose you see an opportunity for a new product line, but you don't have the ability to create one.

The opportunity is external, and the limits on your ability to exploit it are internal.