Does the External Environment Determine the Success or Failure of...

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Does the External Environment Determine the Success or Failure of an Organization?

By | December 2012
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Introduction
The external environment can be defined as forces and factors outside the organization affecting the overall company’s performance directly or indirectly. It can be divided into two components including specific environment and general environment. Specific environment refers to the unique factors of each company that directly relevant to the achievement of goals and affect managers’ actions and decisions directly including suppliers, customers, pressure groups and competitors. General environment refers to the broad conditions that may affect the company, in which includes political or legal environment, economic environment, sociocultural environment, technological environment and demographic environment.

Background Information
Starbucks is a famous recognized company selling coffee and food. In 1980s, Starbucks maximized market in coffee and has become the leading seller in North America. In 1971, it started running business in Seattle and grown from 55 stores in 1989 to now 2200 today. According to Schultz (1997), Starbucks founders learned to darkly roast Arabica beans from Alfred Peet introducing this technique to the U.S. It also provided a relaxing, attractive social atmosphere and offered high-quality Products and created a great working environment for its employees. Knowing the basic history, it is important to analyze the performance of the company.

Legal-political environment

It means that the business operates in the relationships between government and coffee producing nations and it offers the frameworks. The review should include public policies and political about private enterprises, states and local government control and regulation. Government subsidies or taxes have influence on the cost of running the coffee shop.

In July 2002, The U.S. declared that a war outbreak on Iraq. The tensions between the Middle East and the United States had been increasingly volatile. Arab people boycotted the American services...
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