Environmental Analysis

19492 Words Apr 11th, 2008 78 Pages
Introduction

Managers are responsible for the success of an organization and concerned about the effect that factors in the external environment have upon it.

They cannot control the external environment but they need to identify, evaluate and react to those forces outside the organization which may affect them.

The way in which managers attempt to achieve this is by means of a qualitative assessment of signals they receive which are relative to outside influences. There is therefore a need to carry out an analysis of these forces by means of methods we are going to discuss in details later, and this is called the environmental analysis.

Managers are also concerned in the ways in which organizations can most clearly identify
…show more content…
In turn, an organization can influence its environment, through such activities as advertising and marketing. Thus an organization can exert influence over its customers by making a product or service available, and thus establishing a demand for it which did not exist previously. This sometimes results in a leading organization creating a market larger than it alone can satisfy, thus creating business for following organizations.

P- political/legal- all organization have to exist within the political and legal system wherever they operate. Politics can be national or local, and both can have a significant effect on the life and well-being of the organization. If the political party in power never changes, or if its policies never changed, then life would be very simple. But it does change frequently, and changes of government will often cause shifts in emphasis which might lead to disruption of business.

Some political parties are prepared to spend money, others are not. Some will have free trade policies and encourage businesses to set up in different countries and export and import their goods and services. The worse type of country to deal with is the one with political instability, because you never know if the next group to come to power will favour you.

laws- international law can sometimes have powerful influences on businesses,
Open Document