Organizational Environment

1506 words 7 pages
b. Organizational Environment
Organizational Environment: those forces outside its boundaries that can impact it. Forces can change over time and are made up of Opportunities and Threats. (7) The Organizational environment refers to the forces that can make an impact. Forces made up opportunities and threats. Organizations do not exist in isolation. It works with the overall environment. Scholars have divided these environmental factors into two main parts as. Internal Environment External Environment (8)
c. Internal Environment The internal environment consists of the inherent competencies of the firm and the structure of its internal systems and processes. It is imperative for the organization to conduct an internal analysis to
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Maintaining a good relationship with government bodies will ensure the continuity of business. E stands for Economic factors. Economic factor play an important role for the company. If the economy runs down, the demand for products or order will be reduce. Every person or organization will try their best to cut down the cost causing no much fund floating around the market. If inflation does happen, the organization will suffer a lot of loses as price gain higher, the operating cost increases resulting net profit decrease. S stands for Social factors. The organization will forecast the growth of the population demand. They put more effort on potential companies and areas which have a higher demand. During inflation, the organization may scale down the company by retrenchment to cut down the company operating cost. T stands for Technology factors. Technology factors influence the company. As the technology grows, the organization will go for the top 3 high technology equipment as company products to stay ahead from competitors. (16)

1. Task Environment Suppliers are individuals and organizations that provide an organization with the input resources that it needs to produce goods and services such as: Raw materials, component parts, labor (employees). Suppliers that are the sole source of a critical item are in a strong bargaining position to


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