Business plan environmental factors that cause

environmental factors affecting business pdf

Social factors—our attitudes, values, and lifestyles—influence what, how, where, and when people purchase products. The heads of departments need to make sure that the information flow is widely conveyed to all customers. The internal environment is very much associated with the human resource of the business or organisation, and the manner in which people undertake work in accordance with the mission of the organisation.

external environmental factors affecting business

For example, if a business has skilled and motivated workers, they are sure to be the biggest asset of this enterprise. The world's most successful brands wouldn't be where they are today if trade barriers were in place.

business environment factors

Often such changes are not heralded and business managers must be alert as to what competitors are doing. In the UK, two-thirds of small businesses were affected by severe weather between and Other age groups, such as Generation X—people born between and —and the baby boomers—born between and —have their own spending patterns.

For this reason, "flatter" organisation structures are often preferred i. This external business environment is composed of numerous outside organizations and forces that we can group into seven key subenvironments, as Figure illustrates: economic, political and legal, demographic, social, competitive, global, and technological.

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How does natural environment affect business

Organisation structure is essentially the way that the work needed to carry out the mission of the organisation is divided among its workforce. Successful innovation can bring about productivity, cost reduction, higher competitiveness, brand value, turnover increase. The political environment is shaped by the amount of government intervention in business affairs, the types of laws it passes to regulate both domestic and foreign businesses, and the general political stability of a government. Negative attitudes can severely impact on the organisation's ability to implement strategies for development despite however thorough the planning processes. In contrast, companies which fail to apply innovation will surely face the risks of losing market share to competitors, underlying profit loss and losing key staff. Innovation In the competitive marketplace and industrial revolution we are living now, no company can survive without upgrade new ideas and technology served overall success. Positive attitudes of staff and volunteers will not only make the management task easier but also will be noticed and appreciated by customers of the business or members of organisation. In addition, minorities represent more than 38 percent of the total population, with immigration bringing millions of new residents to the country over the past several decades. In the UK, two-thirds of small businesses were affected by severe weather between and Gulf Coast suffered another disaster in April as a result of an explosion on the Deepwater Horizon oil-rig, which killed 11 workers and sent more than 3 million barrels of oil into the Gulf of Mexico.
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Understanding the Business Environment