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How the business environment affects the effectiveness and functioning of an organization

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0523-001019 Table of contents I. Introduction to Business environments A. Divisions of the business environment i. Internal Factors ii. External factors B. Conclusion to intro II. How the business environment affects the effectiveness and functioning of an organization III. Conclusions To best answer the question of how different business environments affect the effectiveness of a business it is imperative that we first define what the business environment is and what all its factors are. The business environment perse' is: the environment in which a firm exists, this setting is a dynamic unity of everything inside and outside of the Company which adversely affects the activities of a firm either directly or indirectly. The idea that; "a firm does not exist in isolation and that it works within its overall environment"; just reinforces the importance of this environment to all business' and the need to consider it. Seeing also as how the world is changing with time and technological advancements, the business environments of today are a constantly changing group of situations that a firm has to deal with. By monitoring and adjusting to the changes in its environment, a firm is best prepared to succeed. And it is only through this preparation that a firm can survive. ...read more.


Airports, docks, highways, etc.). In collaboration with this, a company must also take into consideration the technological environment. The rapid growth of technology use is a consideration which assures the company better products at a faster production pace, and at a cheaper price. It makes it easy for firms to invent new products or improve existing ones. Two factors of the external environment which exist together are the Politico-Legal environment and the Economic environment. the politico-legal considerations include the attitudes of government which will later have a direct impact on operations, and the legal framework with which the firm is to exist. In the economic stand point government also plays a large role, with differing economic policies which regulate different state economies. The state of this factor plays a large part in the level of sales and profits of a firm. For both these factors a stable government is a critical factor and must be sought out by the firms. The last and probably the most sensitive factor in the external environment is the socio-cultural environment. These are the attitudes of people towards certain things, be it because of culture, custom, or experience these attitudes will differ and must be dealt with by the firm. ...read more.


Many patients are untreated, and many die because of the deficiencies in the hospitals. Also many get infections which could have been avoided had better precautions been taken. In some worst case scenarios people are not even diagnosed because the doctors were ill educated, and these people die without a fighting chance. Given the case of my example it is really hard if not almost impossible for a hospital like this to make changes and adjustments, mostly because of its lack of capital and no where to get it. It just continues to exist, not achieving its mission and definitely not making a profit. All in all the business environment affects organizations adversely, in my example although two extremes it is clear that the environment can literally facilitate an organization's effectiveness or take it to its failure. In view of this: it is important to note that a firm's success relies heavily on the notion that it studies its business environment in depth, and makes the necessary plans, changes and adjustments needed for it to continue in its given situation. The success or failure of an organization rests mainly on its ability to adapt to its environment and make the best out of its situation. Firms which fail to adapt to the changes brought about by the differences in the business environments, will fail at achieving their goals and in worst case scenarios go bankrupt. ...read more.

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