Four external forces that affect an Organization
Topics: Economics, Max Weber, Capitalism, Sociology, Wealth / Pages: 5 (1292 words) / Published: Apr 25th, 2015

Organization Behaviour

Four external forces that affect an Organization

Written by Nazar Elkhawad

Table of Contents

Terms of reference: 3
Introduction: 4
Global perspective 5
Economic growth 5
Inflation 5
Interest rates 5
PEST Macro analysis 5
Political atmosphere 5
Social environment 6
Technological development 7
Economical environment 8
Bibliography: 9

Terms of reference:
This report was commissioned by the lecture of Management and Organisation Behaviour as individual assessment on four external forces that can currently affect Organisation for these modules within the Bachelor of Business Degree in Management.


In this assignment I will present a brief literature review of the main four external forces that can currently affect an organization (a business). First I will introduce global economical powers that influence the four external forces after that I will then introduce the four forces in more detail.

Global perspective

As the world is emerging from the waters of deep economical crisis I think the best to start with are global influences that affect the main four forces. Each organization is directly strongly influenced by general laws of economics:

Economic growth - is influenced by various factors such as development on stock markets, which is strongly influenced by political activities around the world, prices of raw materials (metals, oil etc.) but also prices of energy and future of the economical development in general.

Inflation - increases cost of operations and price of products and reduces employment.

Interest rates – as many businesses operate with money borrowed from banks changing interest rates influence directly interest expense, which influences the cost of operations and the cost of product

PEST Macro analysis

Each local business is based in a certain environment that directly influences its performance. The environment a company exists in has a strong impact on every aspect of the

Bibliography: Swedberg, R. (2003). Principles of Economic Sociology, New Jersey: Princeton University Press, 158-159 Weber, M. (1920). The Protestant Ethic and the Spirit of Capitalism, Berlin: Klaus Lichtblau and Johannes Weiss Waterman A.M.C. (1999). Religion and Economics: Normative Social Theory; Boston 1999: Unwin Hyman, London & Boston, 1930 Dean, M., Waterman, A. (1999). Religion and Economics: Normative Social Theory. Massachusetts: Kluwer Academic Publishers. Swedberg, R. (2003). Principles of Economic Sociology, New Jersey: Princeton University Press, 283-284. Smith A. (1776). An inquiry into the nature and causes of the wealth of nations, London: Adman Black and William Tait

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