The Internal and External Environment of Business
Distinguish between internal and external environment of business and in each case explain five components of the environment.
The term business, in economic sense means human activities which are performed with the objectives of earning profits. Human activity for earning profit may be in the form of production, extraction or purchase of goods for sale. It is expected of business to provide goods and services to the society in an effective manner. Thus, in today’s competitive environment, survival of business unit is not possible without customer satisfaction. In an effort to achieve all this, a business entity has to interact with its internal as well as its external environments.
According to Janin, Trehan and Trehan (2010), business environment refers to those aspects of the surroundings of business enterprise which have influence on the functioning of business. The world is dynamic and at times it undergoes through some changes which the business entity should be able to read so as to adapt well to these changes and hence be in a position to be able to continue its operations.
It true that the managers cannot always regulate or control their environments, so it is always better to be aware of any changes that occur or that may occur, simply because these changes ultimately affect their daily day actions and decisions. For example, media reforms in Zimbabwe that led to the opening up of airwaves in broadcasting to other players has had an impact on the operations of the Zimbabwe Broadcasting Corporation’s radio and television channels. Also, related to this, was the coming on board of the free to air satellite dishes, which have made it possible for people in Zimbabwe to have access to other channels other than the ZBC channels. Thus, for the managers of those existing channels, it was not at all possible to ignore the increased service and competition brought about by the coming on board of competitors. It is therefore a fact that, If managers
The term business, in economic sense means human activities which are performed with the objectives of earning profits. Human activity for earning profit may be in the form of production, extraction or purchase of goods for sale. It is expected of business to provide goods and services to the society in an effective manner. Thus, in today’s competitive environment, survival of business unit is not possible without customer satisfaction. In an effort to achieve all this, a business entity has to interact with its internal as well as its external environments.
According to Janin, Trehan and Trehan (2010), business environment refers to those aspects of the surroundings of business enterprise which have influence on the functioning of business. The world is dynamic and at times it undergoes through some changes which the business entity should be able to read so as to adapt well to these changes and hence be in a position to be able to continue its operations.
It true that the managers cannot always regulate or control their environments, so it is always better to be aware of any changes that occur or that may occur, simply because these changes ultimately affect their daily day actions and decisions. For example, media reforms in Zimbabwe that led to the opening up of airwaves in broadcasting to other players has had an impact on the operations of the Zimbabwe Broadcasting Corporation’s radio and television channels. Also, related to this, was the coming on board of the free to air satellite dishes, which have made it possible for people in Zimbabwe to have access to other channels other than the ZBC channels. Thus, for the managers of those existing channels, it was not at all possible to ignore the increased service and competition brought about by the coming on board of competitors. It is therefore a fact that, If managers
References: Chidakwa, A. M. (2000). Business and its Environment, Zimbabwe Open University: Harare Dhlakama, C. (2012). The impact of labour turnover on the performance of Mutasa Rural District Council for the year 2008 (Unpublished research) Jain, T. R., Trehan, M. and Trehan, R. (2010). Business Environment, Rahul Jain V. K. (India) Enterprises: New Dehli Ting Chi (2006). A study of the relationships between business environment characteristics, competitive priorities, supply chain structures and firm performance in the US technical textile industry ( A Doctoral Dissertation), University of North Carolina