Relationship between business organisation their environment

Internal and External Environment Factors that Influences Organizational Decision Making

relationship between business organisation their environment

Every organisation has to work within a framework of certain environmental forces and there is a continuous interaction between the. Relationship between organisations and the environment Change Levy in the United Kingdom (UK) have an impact on the cost structure of companies. Define the environment in the context of business. Understand how an organization and its environment affect each other. Learn the difference between the.

The socio-cultural dimension must be well studied by a manager.

Relationship between Environment and Business

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.

relationship between business organisation their environment

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.

relationship between business organisation their environment

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.

relationship between business organisation their environment

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.

Internal and External Environment Factors that Influences Organizational Decision Making

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.

  • Relationship between Environment and Business

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.

3.2 The Relationship between an Organization and Its Environment

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.

Most organizations are limited to influencing their industry. A few organizations wield such power and influence that they can shape some elements of the general environment.

While most organizations simply react to major technological trends, for example, the actions of firms such as Intel, Microsoft, and Apple help create these trends. Some aspects of the general environment, such as demographics, simply must be taken as a given by all organizations. Overall, the environment has a far greater influence on most organizations than most organizations have on the environment. Why Does the Environment Matter?

The Relationship between an Organization and Its Environment – Mastering Strategic Management

Understanding the environment that surrounds an organization is important to the executives in charge of the organizations. There are several reasons for this. First, the environment provides resources that an organization needs in order to create goods and services.

relationship between business organisation their environment

As the human body must consume oxygen, food, and water, an organization needs to take in resources such as labor, money, and raw materials from outside its boundaries. Subway, for example, simply would cease to exist without the contributions of the franchisees that operate its stores, the suppliers that provide food and other necessary inputs, and the customers who provide Subway with money through purchasing its products.

An organization cannot survive without the support of its environment. Second, the environment is a source of opportunities and threats for an organization. Subway faces a threat from some upstart restaurant chains. Saladworks, for example, offers a variety of salads that contain fewer than five hundred calories. Noodles and Company offers a variety of sandwiches, pasta dishes, and salads that contain fewer than four hundred calories. Executives must also realize that virtually any environmental trend or event is likely to create opportunities for some organizations and threats for others.

This is true even in extreme cases. In addition to horrible human death and suffering, the March earthquake and tsunami in Japan devastated many organizations, ranging from small businesses that were simply wiped out to corporate giants such as Toyota whose manufacturing capabilities were undermined.

relationship between business organisation their environment