Describe your understanding of the business environment of an organization. How can you use internal and external environments to analyze an organization’s current situation

Business Environment

Describe your understanding of the business environment of an organization. How can you use internal and external environments to analyze an organization’s current situation?

The term “business environment” refers to the sum or collection of all internal and external variables such as staff members, consumer wants and aspirations, market forces, managerial staff, clients, distributors, shareholders, governmental activities, technological innovation, social patterns, industry trends, economic forces, and so on. These variables have an impact on the corporation’s function and how it operates, either internally or externally. The sum of these variables impacts the environment and condition of the company or business organization.

The business environment aids in the identification of business possibilities, the utilization of beneficial resources, strategizing, and the general effectiveness, development, and productivity of the organization (Maitrayee, 2020). A business’s environment contains both risks and prospects. As a result, recognizing the environment aids in future scheduling and choice making. For instance, the entry of novel organizations into the market tends to increase rivalry. To cope with novel rivals, management must develop new strategies and initiatives. Environmental consciousness stimulates planners’ decision-making by providing intellectual stimulation. They are able to make adjustments to their strategies in a timely and efficacious manner. Recognizing the environment enables a company to acknowledge subjective information ahead of time, which can then be utilized to prepare for potential difficulties.

What are some components that make up the internal business environment?

The internal environment of a corporation is made up of components within the corporation, such as stockholders and business owners, existing staff members, administration, organizational resources, Image/goodwill of the corporation, and, most importantly, organizational culture, which describes employee’s performance.

Which factors influence the external business environment of an organization?

External environment factors are components that emerge outside of a corporation‘s internal surroundings and can have an effect on its activities. These external influences can either assist or hinder the corporation’s current operations. Supervisors frequently monitor external environment variables in order to identify and rectify concerns caused by the factors, as well as make relevant adjustments. Some of the factors that influence the external business environment include technological advancements, economic, ethical, social, natural, and competitive factors.

References

Maitrayee P. (2020, November 9). Business environment: Meaning, definition, concept, components, significance. Economics Discussion. https://www.economicsdiscussion.net/business-environment/business-environment/32496