Factors Affecting General Environment Of Business Organizations

Describes the factors regarding issues of technology, socio-culture, politics, demographics and other factors.

Definition of key terms:

The business organization may consist of many factors that help in the business context for achieving the required goals and solutions. There are many factors that may have an adverse effect on business. The managers are required to identify those factors and achieving the required solution for these problems. The project is all about identifying the issues having an adverse effect on the general environment. The project describes the factors regarding issues of technology, socio-culture, politics, demographics and other factors. It informs the managers that what kind of problem may occur during the project.

The project also discuss regarding resilience framework of business. It informs concern of competitive advantage of business. The framework of resilience described various types of uncertainties and their solution to be done by management. It discuss regarding surprised situations of management. Management is required to understand that situation and solve it.

Uncertainty may be considered as a situation of changing business environment. When conditions are changing constantly within an organization, it may e termed as uncertainty in the business environment. It may be out of organization or management control.

General environment includes factors that don’t affect daily functions of a business or organization. These factors may not have a direct impact on regular basis operations. It includes the government, economic conditions, financial resource sectors and technology (Draft, 2009).

The term can be defined as forces that affect the business or an organization. These may include technological factors, economic factors, politic factors or resource factors.

The factors of general environment create situation for business which may affect its stability. If business a situations change rapidly without any warning, then it may be termed as an unstable business environment.

Persons managing the business and finding solutions for all business problems may be called managers of company or firm. They are responsible for handling all hurdles coming in the way of business success. These are the higher authorities of business. There are three types of managers in an organization, top- level managers, medium level and low- level managers. Top level managers are required to make strategies for the organization (Collin, 2009).

A group of people that comes together for achieving a particular purpose create the form of organization. All these people have a common goal by performing different activities.  An organization may be of any kind, profit- making or non-profit making. It consists of many persons with the same goal. It requires them to set up a group in which they share vision, mission, and goals. The strategies of an organization also need by the group of people included there.

Uncertainty

Investors in an organization expect some profit from their investment in the business. Above average returns may be defined ads return in excess of what the investors have expected from the business. Investors may invest more if they will receive better returns on their investment. The above average return attracts more investors.

It reflects the point that what kind of structure is required for planning a business process. It includes actual programs to be organized by the business organization for achieving the required objectives. It required having many integrating roles.

The reliance refers to situation adding a quick return to the business. It refers to the business organization to be more productive by creating difficult positions. The business requires having the resilience factors for achieving highest positions of business.

It refers to an event that may not be in the strategy of the business. It is a surprising event. In the business organization, there are many situations that are part of shocks event occurred in the business. Managers have to face all these issues and required to be available for solving problems occurred due to the issues of a surprising event (Robert, 2016).

The competitive environment refers to a situation where business is required to take steps that are against rivalry firms or organizations. It requires the management to have strategies that will affect the business of other firms. It may be termed as an advantage over competitors.

The general environment of a business organization can be affected due to some factors which may contribute to creating an uncertain environment for achieving above- average returns from the business. These factors are responsible for creating an unstable business environment. The general environment can be affected by those factors that may be out of manager’s control. Managers are responsible only for those factors that are within the control of the organization. They are not responsible to deal with factors affecting business organization from outside environment or from factors that are not within its control. This creates a situation that becomes a problem for achieving above average return for business or its investors.

There are many responsible factors affecting the general environment. These factors influence the performance of the organization. Some of these factors are described as follows:

This may be termed as a most important factor of business organization which affects its return. Politics of a country or region may change policies at any time. It affects position of business to great extent. Privatization and other such policies affect the organization and create the uncertain situation.  Sometimes, the policymakers intentionally change policies of a specific area or unit, which becomes a problem in achieving the required profits for the organization. It also consist the situation when there is a misunderstanding or lack of understanding policies of the country. The type of politicians affects the profit or return of an organization. The politic leaders make policies that are beneficial for their organizations or from which they can earn high returns. It affects the general environment and also returns of businesses.

General Environment

It includes age, location or size of the population. The change in these factors may create a situation of uncertainty in business organizations. It includes the change in consumer taste and preferences. The population is an important factor that affects the business (Jorge, 2011). It requires the business organizations to know regarding services required by current population or society. It acts as a key factor for achieving success. The most important factor the company must know about population is age and preferences of people. If a company works for a specific age group people, then it may become a problem of achieving the returns in business. It affects business and manufacturing industries due to the increase in the number of youth people increasing and starting their own businesses. The quality and quantity of products must be matched with the demand of people. (Welch, 2009)

Businesses also get affected due to socio- culture factors. It affects business organizations by cultural issues of a specific area or region. It affects businesses. Social factors affect the organization by having an impact on the production quality of business (Boddy, 2008). There is also a situation of gender sensitivity in socio-culture issues. Women are nowadays expecting to have their position in every area. They are also manager and leaders of business. But during their maternity leave or childcare, the business may face a problem of uncertainty because no one will be there for handling issues of the business organization. It becomes a major concern that requires the attention of policymakers for business.

These factors affect the general environment to the great level. Most important economic factor if inflation in the country. It affects the return of an organization.  Due to inflation, people ignore to buy different products at the same value. They prefer to take cheaper products or not to buy those products during inflation. It affects business by not having any receipt from the products. It reduces the working capital of the company or organization (Litterer, 2011)

Technology is a factor that keeps on changing after every day. It requires the management to stay updated. Technology is a factor that helps in performing the everyday task if business organization. But management is required to apply updated technology in the organization. It becomes a problem in performing functions of the organization. Small businesses can’t support everyday change technology to their business (Chaffney, 2014). Another factor is that employees of an organization may resist on changing business situation or conditions due to technology. It requires providing training to employees of an organization. According to Armstrong, (2009 p. 41-43), it needs fund and support of employees. It consists of changing work from manual to sophisticated tools. Advance technology affects business production by quality, quantity and some other factors (John, 2010). Businesses may find it harder to have information about what kind of technology they need for their business. It affects the return of an organization to great extent. 

Factors

It is one of the important factors of the general environment. A business is required to perform its function while applying rules and regulations of that city or country. It must follow laws created to achieve the required position. Employment law is also needed to follow for the achievement of the required profits. For example, if an employee gets a job from the employer and then they are bound to follow contract law (James, 2016). Other regulatory requirements regarding which business need to take concern are discrimination, unbiased decision, safe environment, unfairly dismissal and reasonable remuneration of employees. It may create an uncertain situation for managers if rues are not followed appropriately (Robert, 2016). Other legal rules for the business organization include timely payment of taxes and license fee of an organization.

The business or organization has to face many problems due to above-mentioned factors of the environment (Jeffs , 2008). It requires business organizations to have a framework which will help it to save the reputation of business affected sue to those reasons. Managers are required to perform some functions for performing the required framework. The framework decided has been apart between different sectors:

Low Uncertainty: It is a situation where there are few departments for working. The departments are formal and centralized. It includes a situation where there are low-speed responses to clients. This is a level of strategy. It contains less environmental challenges (Knight, 2015)

Low Moderate uncertainty: Organizations support to these type of uncertainties by making the centralized structure of the organization. It requires the organization to have many departments. Managers or authorized persons are required to have some business planning for achieving the required position. It requires managers to have a quick response to the business. It results in solving complex business problems (Harari, 2009)

High Moderate uncertainty: The unstable position occurs when businesses are decentralized. It requires the business to be centralized for the stable position. The high moderate strategy of this uncertainty requires the management to be fast responsive for meeting urgent requirements of the business (Edwin, 2014). It requires having few departments of working with fast responsive. It also considers some planning for achieving the required business position

High Uncertainty: This is a most complex situation of uncertainty. It requires more focus on the planning of strategies of the business. For achieving the result of adequate level, it required to more responsive. The business is requires to be centralized here. It can control business functions that cause loss or uncertainty to some factors within control of the business.

Unstable

The Business environment contains a number of similar businesses. It results in the competitive business environment (Paul, 2013). It requires the business organization to have strategies that may help an organization in achieving the required level of success. It needs the management to apply strategies given by top level managers for achieving goals of the organization. The competitive business environment includes Porter’s five forces business process. It includes threat of entry supplier power, buyer power, threat of substitute, competitive rivalry. These five forces affect the business organization in its competitive business environment ( Kroon, 2013).

The organization may have potential shock from competitors regarding their new strategies. The organization needs to manage new strategies that may help them in competing with the competitors. It requires them to have great leaders that may analyze factors of competitive environment and can help organization for achieving these requirements.

Conclusion

Business organizations are required to give a fair look at the point of factors affecting the organization. It needs to maintain some strategies that will help the organization to meet those strategies and help the organizations to achieve goals in the best possible manner. Managers of business are responsible for analyzing strategies of competitors and making new strategies for the organization. It helps to meet mission and vision of organization. The factors affecting general environment must be taken while making strategies for the company or business organization. Managers must analyze factors regarding those issues and accept the new technologies. Employees of organization are also important to deal with these kinds of problems in organization.

The project also concludes that the level of uncertainties must be analyzed by management. It is important to understand and identify solutions for these uncertainties. It concludes that low level uncertainties are simple process. It concludes that managers must take factor of competitive environment into practice. This requires that management to take steps of resilience for solving shocks of competitive environment. 

References

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