|
| 





‡ Environment literally means the surroundings, external

objects, influences or circumstances under which
someone or something exist.

‡ The environment of any organization is ³the aggregate of

all condition, events and influences that surround and
affect it.´

‡ Its understanding is very crucial.

 | |  |  





v. Environment is complex

2. Environment is dynamic

3. Environment is multi-faced

4. Environment has a far reaching impact.

 









‡ The external environment includes all the factors outside
the organization which provide opportunity or pose
threats to the organization.

‡ The internal environment refers to all the factors within

an organization which impart strength or cause
weaknesses of strategic nature.

‡ The 4 environmental influences could be described as

under.
|

v. An opportunity

2. A threat

3. A strength

4. A weakness
  
 
|


  





‡ P = POLITICAL ENVIRONMENT

‡ E = ECONOMIC ENVIRONMENT

‡ S = SOCIAL ENVIRONMENT

‡ T = TECHNOLOGICAL ENVIRONMENT
‡  |





‡ The political environment consist of factors related to

management of public affairs and their impact on the
business of an organisation.

‡ some of the important factors and influences operating in

the political environment are:
|

v. The political systems and its features

2. The political structure, its goal and stability

3. Political philosophy, government¶s role in

business
‡ |

|





‡ The economic environment consist of micro-level factors

related to the means of production and distribution of
wealth that have an impact on the business of an
organization.

‡ Some of the important factors and influences operating

in the economic environment are:
|

v. The economic structure adopted

2. Economic planning

3. Economic policies

4. Economic indices

5. Infrastructural factor
‡ |





‡ The social environment consist of factors related to

human relationship and the development, forms and
functions of such a relationship having a bearing on the
business of an organization.

‡ Some of the important factors and influences operating

in the social environment are:
|

v. Demographic characteristics

2. Social concerns

3. Social attitudes and values

4. Family structure and changes in it

5. Educational level
‡ |
 |





‡ The technological environment consist of those factors

related to knowledge applied, and the materials and
machines used in the production of goods and services
that have an impact on the business of an organization.

‡ Some of the factors and influences operating in the

technological environment are:
|

v. Sources of technology

2. Technological development

3. Impact of technology

4. Communication and infrastructural

|

‡  



 

v. REGULATORY ENVIRONMENT

2. MARKET ENVIRONMENT

3. SUPPLIER ENVIRONMENT
 







‡ |
  





  

v. Verbal and written information

2. Spying

3. Forecasting and formal studies

4. Information system
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‡ Manager views the impact of environment in different
ways.
‡ Some see uncertainty as threatening and some see as
opportunistic which merely requires the adaption of the
organization or its strategy.
‡ They seek to make choices that which part of the
environment can be set up for strategy implementation.
‡ Ex: in the gov.sector firms set up political action
committees or use public relation offices to influence
gov. policy and decision makers in ways favorable to
them.
|

‡ A very interesting descriptive study of how firms deals

with technological changes in the environment serves to
point out that a variety of strategic choices are actually
made by firms.
  
|

‡ ³BUSINESS POLICY´, azhar kazmi, tata McGraw-hill

publishing company limited, new Delhi.

‡ ³BUSINESS POLICY AND STRATEGIC

MANAGEMENT´, McGraw-hill international editions.