Political enviroment
- When we conduct enviromental scanning programmes, we consider an organization’s political enviroment.
Political enviroment - relates to the interaction between business, society and government. Before laws enacts.
A politcal enviroment analysis can detect potential legal and regulatory and have a chance to influence that legislation.
If a business-government relation is properly undertaken it can be a sustainable competitive advantage. Example, recieving information beforehand that competitors are unaware of.
Lobbyist firms, with key industry knowledge, are engaged either permanently or as needed.
A politician can be paid a fee to give political advice on matters of importance to an organization, where this is legal within that particular jurisdiction, and that politician is not serving directly within the government in question on the same portfolio as that on which they are advising.
An in-house public relations manager might handle government relations directly.
An industry association can be contacted to lobby on behalf of members (e.g. in the European financial services industry, groups include the Banking Federation of the EU, the European Savings Bank Group).
- Where its legal, a politician may be invited directly to join the board of directors, board of trustees, or board of advisers of an organization.
The economic environment
In this environment we develop an understanding of the contry’s economic circumstance because it has an effect on ”factor prices” within an industry.
Factors - raw material, labour, buildings and any other input to a business.
The external environment is affected by the following items:
Wage inflation – annual wage increases in a particular sector will depend on the supply of labour in that sector. Where there is scarcity of supply, wages usually increases (e.g. doctor).
● Price inflation – how much consumers pay for