External Environment Factor
EXTERNAL ENVIRONMENTAL FACTORS
There are 7 external environmental factors. They are political, economic, sociocultural, technology, customers, competitors and suppliers. Each of these factors have a great impact to an organization. They offer both opportunities and treats to organization.
POLITICAL factors refer to the relationship between a business and a government. Every organization must spend a great time and money to meet with governmental regulation.
ECONOMIC factors refer to the conditions of the economic system which an organization operates. Every organization should focus on economic growth and stability to survive long term. Economic factors will also affect customers buying power and pattern. For example, when economic is good, customers will spend their money wiser if compared to a bad economic.
SOCIOCULTURAL factors refer to customer preferences and tastes. 3 factors should be consider in social cultural factors. They are demographic, lifestyle and social values.
TECHNOLOGY factors refer to the relationship between technology and organization. High technology are used to increase efficiency and effectiveness. To success long term, an organization should respond well in the changing on technology.
CUSTOMERS are clients who absorb the organizational output. It is important for an organization to understand and fulfil customers’ needs and wants.
COMPETITORS can produce competitive forces. Competitive forces can provide opportunities and threats to an organization.
Every organization should build a strong relationship with their SUPPLIER. It is important as it can ensure a steady needed input and the lowest price and delivery time.
KEY ELEMENT WHEN DESIGNING ORGANIZATIONAL STRUCTURE
CENTRALIZATION means decision making is concentrated at upper levels in the organization. DECENTRALIZATION means decision making are delegated to the lower levels of the management. Centralization usually common in a field that are sensitive, such as finance.
There are 7 external environmental factors. They are political, economic, sociocultural, technology, customers, competitors and suppliers. Each of these factors have a great impact to an organization. They offer both opportunities and treats to organization.
POLITICAL factors refer to the relationship between a business and a government. Every organization must spend a great time and money to meet with governmental regulation.
ECONOMIC factors refer to the conditions of the economic system which an organization operates. Every organization should focus on economic growth and stability to survive long term. Economic factors will also affect customers buying power and pattern. For example, when economic is good, customers will spend their money wiser if compared to a bad economic.
SOCIOCULTURAL factors refer to customer preferences and tastes. 3 factors should be consider in social cultural factors. They are demographic, lifestyle and social values.
TECHNOLOGY factors refer to the relationship between technology and organization. High technology are used to increase efficiency and effectiveness. To success long term, an organization should respond well in the changing on technology.
CUSTOMERS are clients who absorb the organizational output. It is important for an organization to understand and fulfil customers’ needs and wants.
COMPETITORS can produce competitive forces. Competitive forces can provide opportunities and threats to an organization.
Every organization should build a strong relationship with their SUPPLIER. It is important as it can ensure a steady needed input and the lowest price and delivery time.
KEY ELEMENT WHEN DESIGNING ORGANIZATIONAL STRUCTURE
CENTRALIZATION means decision making is concentrated at upper levels in the organization. DECENTRALIZATION means decision making are delegated to the lower levels of the management. Centralization usually common in a field that are sensitive, such as finance.