What is the Composition and characteristics of external business environment?

Answer 1

All businesses and organisations operate in a changing world and are subject to forces which are more powerful than they are, and which are beyond their control. No business can survive without continued interaction with the external environment, just as a ship at sea is subject to powerful natural forces of which it needs to be aware and deal with, organisations are influenced by forces in their external business environment. Any business strategy needs to take account of all these forces so that opportunities and threats can be identified and the organisation can navigate its way to success by matching its internal strengths to external opportunities. (A SWOT Analysis can help here.) As an aid to identifying all these external forces, a couple of acronyms come in handy.

Answer 2

The external environmental factors could include the following.

• Competition (what are they doing?)
• Customer behavior (needs, wants, and desires)
• Industry out look (local, national, global)
• Demographics (the change populations, there density, etc.)
• Economy (are we peaking, or moving negatively)
• Political movements and/or interference
• Social environment

Answer 3

The external environment is typically made up of things , situations, and events that occur outside of an organization, (usually beyond the organizations control), and affects the organization in either a positive or negative way. Some of these external things, situations, and events that affect the organization in a positive or negative way may include the following.

* demographics * economy * government interference * political issues * social issues * competition * environment issues

Answer 4

Thee are two types of driving forces (factors) that affect the way an organization operates in either a positive or negative way. Internal driving forces and external driving forces. Internal driving forces are those types of things, events, situations, that occur within an organization and effect it in either a positive or negative way. Typically, the internal forces are things that occur within the organization and are by-and-large under the control of the organization. Example, does the organization have up to date technology that has the capacity to hold power programs that can help the organization. Or, are they working with an old antiquated legacy system that is slow, crashes frequently, etc. This effects the organizations day-to-day operations. It's something that in internal and under the control of the organization. Even the culture of the organization effects the way it operates. In other words, are the employees happy, do they come into work energized, or do they come to work dragging themselves in because it's Monday and doing cartwheels out the door because it's Friday. This effects the way the organization operates in either a positive or negative way. Once again it is an internal event and under the control of the organization.

Now to address your question. External driving forces (factors) are those things, situations, events, that occur outside of the organization and effect it in either a positive or negative way. Example, the overall economy. This occurs outside the organization and by-and-large out of the control of the organization. In other words, are people spending money, or stashing it away because of financial concerns. This effects the organization. Another example could be changing demographics. Another, even weather. Weather can effect organizations such as farmers, ski resorts, catastrophes such as flooding, earthquakes etc. can effect all organizations. This occurs outside of the organization, and beyond the control of the organization. Still, it could effect it in either a negative or positive way. Another important external driving force would be competition. What is the competition doing, to gain more of the market share. It's occurring outside of the organization, out f the control of the organization, can effect it in either a positive or negative way. This is why informational resources are critical to the success, stability, and survivability of organizations.

Answer 5

If there is anything that is stead fast and unchanging, it is change itself. Change is inevitable, and those organizations who do not keep up with change will become unstable, with long-term survivability in question.

There are things, events, or situations that occur that affect the way a business operates, either in a positive or negative way. These things, situations, or events that occur that affect a business in either a positive or negative way are called "driving forces or environmental factors or forces."

There are two kinds of driving forces; Internal driving forces, and external driving forces. Internal driving forces are those kinds of things, situations, or events that occur inside the business, and are generally under the control of the company. Examples might be as follows.

· organization of machinery and equipment,

· technological capacity,

· organizational culture,

· management systems,

· financial management

· employee morale.

External driving forces are those kinds of things, situation, or events that occur outside of the company and are by and large beyond the control of the company. Examples of external driving forces might be as follows.

· the industry itself

· the economy

· demographics

· competition

· political interference

· government laws and regulations

Whether they are internal or external driving forces, one thing is certain for both. Change will occur! A company must be cognizant of these changes, flexible, and willing to respond to them in an appropriate way.

External driving forces can bury a business if not appropriately dealt with. The question is, how does a business know what changes are occurring so that they can deal with them in a positive way. OK, that's the next issue.

In order for a business to succeed and gain the competitive edge, the business must know what changes are indeed occurring, and what changes might be coming up in the future. I guess you might call this forecasting. Thus, critical to the business is what we call "informational resources." It is the collection and analyzation of data. Some examples of critical information might include the following:

• Competition (what are they doing?)
• Customer behavior (needs, wants, and desires)
• Industry out look (local, national, global)
• Demographics (the change populations, there density, etc.)
• Economy (are we peaking, or moving negatively)
• Political movements and/or interference
• Social environment
• Technological changes
• General environmental changes
• Government interference (laws, regulations, policies, ect.)

The above are just some issues organizations must be on top of. Well it's never easy, but organizations that are successful include all of the above (and more), to develop the appropriate tactics, strategies, and best practices, to ensure successful out comes.

Answer 6

Factors that influences the firm from outside