Preview

The External Environment ( Strategic Management)

Powerful Essays
Open Document
Open Document
1786 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The External Environment ( Strategic Management)
Review
THE EXTERNAL ENVIRONMENT
(STRATEGIC MANAGEMENT) A host of external factors influence a firm’s choice of direction and action, ultimately its organizational structure and internal factors. These factors, which constitute the external environment, can be divided into three interrelated subcategories there are as follows: A. REMOTE ENVIROMENT
The remote environment comprises factors that originate beyond and usually irrespective of any single firm’s operating situation: economic, social, political, technological, and ecological factors. That environment presents firm with opportunities, treats, and constraint; but rarely does a single firm exert any meaningful reciprocal influence. 1. Economic Factors
Economics factors concern the nature and direction of the economy in which a firm operates. Because consumption patterns are affected by the relative affluence of various market segment, in strategic planning each firm must consider economic trend in the segment that affect its industry. 2. Social Factors
The social factors that affect a firm involve the beliefs, values, attitudes, opinions, and lifestyles of persons in the firm’s external environment, as developed from cultural, ecological, demographic, religious, educational, and ethics conditioning. Like other forces in the remote environment, social forces are dynamic, with constant change resulting from the efforts of individuals to satisfy their desires and needs by controlling and adapting to environment factors. One of the most profound social changes in recent years has been the entry of large numbers of women into labor market. Second, social change has been the accelerating interest of consumers and employees in quality-of-life issues. Third, social change has been the shift in the age distribution of population. A consequence of the changing age distribution of the population has been a sharp increase in demands made by a growing a number of senior citizens. 3. Political

You May Also Find These Documents Helpful

  • Satisfactory Essays

    First a corporation needs to look at external and internal factors. Some of the external factors that a corporation needs to look at are the markets, legislation and government actions, demographics, and marketing trends.…

    • 382 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Prep for Assignment 3hrc

    • 800 Words
    • 4 Pages

    • an analysis of a minimum of 4 external factors and their impact on the business activities of an organisation…

    • 800 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Stilssim External Analysis

    • 1479 Words
    • 6 Pages

    The external environment consists of two parts, the general environment and the competitive environment. The general environment can have dramatic effects on an organizations strategy and the general environment consists of six parts. These parts are demographic, sociocultural, political/legal, technological, economic and global. Only three parts of the general environment will affect StilSim Personal Company. The parts that will affect StilSim are demographic, technology and economic. The competitive environment consists of factors that are relevant to an organizations strategy and the competitive environment consist of Porter’s Five Forces (Dess, McNamara, & Eisner, 2016, p. 52). Porter’s Five Forces are the threat of…

    • 1479 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    Bus 330 Assignment Week 3

    • 591 Words
    • 3 Pages

    comprises the external factors that can influence a business. These factors are often out of…

    • 591 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    ▪ An analysis of a minimum of 4 external factors and their impact on the business activities of an organisation…

    • 906 Words
    • 4 Pages
    Satisfactory Essays
  • Better Essays

    As for external factors one of the external factors would be perhaps a new law that is given and affects directly or indirectly the business and that business needs to make some changes.…

    • 1583 Words
    • 7 Pages
    Better Essays
  • Good Essays

    Hsm Week 2

    • 438 Words
    • 2 Pages

    The four external environmental factors that help organizations achieve optimal function are economic factors, sociological factors, political and professional factors, and technological factors. Economic factors play an important role to an organizations funding. Economic factors also include competitors. For example, other organizations that may be providing the same services to clients and consumers would be competitors. Sociological factors focuses on community demographics and the people with whom the organization serves. Sociological factors such as demographic factors help an organization achieve optimal function because demographics allow the organization to meet the diverse needs of the people they serve. Political and professional factors consist of an organization abiding by required laws and regulations. Professional factors involve a type of regulation known as accreditation and consideration of working relationships with other professional organizations in the community. Last, technological factors allow the organization to stay updated with new technology that helps improve the success of the organization.…

    • 438 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    The remote environment looks at how the economy is doing and if the economy can support the organizations product and or service. The social environment, which focuses on the demographic of the organizations consumer, who they are what they buy, their ethnic background, their hobbies, etc….. This better helps the organization to gear the product and or service to that group. It also consists of the political, technological, and Ecological environment.…

    • 304 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    CPA - GSL 2014

    • 880 Words
    • 4 Pages

    What have been the remote environment trends that have driven the industry to its current state? Are these factors changing? What will be their impact on future growth in the industry? Remember an article may only make reference to some of the factors in the remote environment.…

    • 880 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    3HRCF302B HR2012 2

    • 480 Words
    • 4 Pages

    an analysis of 4 external factors and their impact on the business activities of an organisation…

    • 480 Words
    • 4 Pages
    Satisfactory Essays
  • Best Essays

    stagecoach business analysis

    • 3335 Words
    • 14 Pages

    It is widely known that business strategies are critical to survival and development to entities. Basically, companies set their strategies to earn profit. A number of factors are considered when setting those strategies. Generally, in literatures, those factors affecting business strategies are divided to two types, internal factors and external factors. In specific, internal factors are the factors that the entity could take control of while external factors are those that companies could not change. In this study, instead of analyzing all the factors influencing business operations, I am trying to illustrate how external factors affect business operations.…

    • 3335 Words
    • 14 Pages
    Best Essays
  • Good Essays

    External environment - consists of all forces or groups outside the organization that have the potential to affect the organization. Some elements in a company’s external environment that can play a significant role in a firm’s activities are competitors, customers in the marketplace, the government and other legal or regulatory bodies, general economic conditions, pools of available human or financial resources, suppliers, technological trends and so forth.…

    • 4770 Words
    • 20 Pages
    Good Essays
  • Good Essays

    1. The external Environment The general, industry, and competitive environments impose pressures and constraints on the product and determines strategies that will result in superior returns. (External Environment à Organization)…

    • 864 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Internal and external factors can influence an organizational structure. The Evo Company have a range of factors that influence their organizational structure such as;…

    • 599 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Economic factors play a key role in how a successful organization functions because when the economy is in a recession and funding cuts are inevitable human services are usually first to be cut in the budget. Funding sources, non-cash revenues, clients or consumers, suppliers and competition are all economic factors that affect the optimal function of an organization.…

    • 389 Words
    • 2 Pages
    Satisfactory Essays