Lecture 4

Topics: Management, Strategic management, Organizational studies Pages: 19 (479 words) Published: May 22, 2015
4

Lecture

Business
Environment

2-1

Learning Objectives
• The external environment
• The organisational-environment relationship
• Internal environment

2-2

What Is External Environment?
External environment is
the factors, forces,
situations, and events
outside the organisation
that affect its
performance.

2-3

Components of External Environment
(PESTEL)

2-4

Components of External Environment
(PESTEL)
• Political: These factors determine the extent
to which a government may influence the
economy or a certain industry.
• Economic: These factors are determinants of
an economy’s performance that directly
impacts a company and have resonating long
term effects.

2-5

Components of External Environment
(PESTEL)
• Social: These factors examine the social
environment of the market like cultural trends,
demographics, population analytics
• Technological: These factors pertain to
innovations in technology that may affect the
operations of the industry and the market
favorably or unfavorably. 

2-6

Components of External Environment
(PESTEL)
• Legal: These factors have both external and
internal sides.
• There are certain laws that affect the business
environment in a certain country while there
are certain policies that companies maintain
for themselves. 
• Environmental: These factors include all those
that influence or are determined by the
surrounding environment. 
2-7

How Does External Environment
Affect Managers?
• Jobs and employment
• Assessing
environmental
uncertainty
• Managing stakeholder
relationships

2-8

The Organisation-Environment
Relationship
• Environmental uncertainty refers to the
degree of change and complexity in an
organisation’s environment.

2-9

The Organisation-Environment
Relationship

2-10

Managing Stakeholder Relationships
Stakeholders are any
constituencies in an
organisation’s
environment that are
affected by the
decisions and actions
of that organisation.

2-11

organisational Stakeholders

2-12

The Internal Environment
What Is organisational Culture?
Organisational culture is
the shared values,
principles, traditions, and
ways of doing things that
influence the way
organisational members
act.

2-13

Components of Internal Environment
• Human Resources
• Company Image and Brand Equity
• Other Factors
– Physical Assets and Facilities
– R & D and Technological Capabilities
– Marketing Resources
– Financial Resources

Copyright ©2013 Pearson Education

2-14

Defining Culture and Its Impact
• Culture is a perception.
• Organisational culture
isn’t concerned with
whether members like
it.
• Employees describe the
culture in similar terms
despite their diversity.

2-15

How Can Culture Be Assessed?

2-16

How Do Employees Learn the
Culture?
• Stories - recount significant events or
people

• Rituals - repetitive activities that



express and reinforce the important
values and goals of the organization
Material symbols - such as the
layout of organisations facilities, how
employees dress, employee bonuses
Language - developing unique terms
to describe equipment, key personnel,
customers, processes, or products
related to its business.

2-17

Where Does an organisation’s Culture
Come From?
• Organisational culture derives from:
– The founder’s biases and assumptions about what
the organisation and its values should be
– What the first employees learned from their own
experiences

2-18

Revision
• Define External Environment.
• List the six external environment components.
• Explain how culture can be assessed.

Copyright ©2013 Pearson Education

2-19

Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Chapter 1 Lecture room allocation system
  • Case Methodology vs Lecture Mode of Teaching Essay
  • Large Lecture Class Policy Essay
  • Essay about Lecture Classes: Not an Effective Way of Learning
  • Traditional Lecture Method: Yay or Nay? Essay
  • Essay on The Lecture Method
  • Lecture 01 S1 2014 Essay
  • Guest Lecture Essay

Become a StudyMode Member

Sign Up - It's Free