The internal and external environment of an organization

What is the internal and external environment in an organisation?

There are things, situations and events that occur from within and outside the organization and affect the organization in either a positive or negative way.

The internal and external environment of an organization

The internal environment of an organization

The internal environment of an organization is the environment that has a direct impact on the business and is composed of the elements within the organization.

The internal environment of an organization

Elements of internal environment :

- human resources - it contributes to the strength and weakness of any organization. The human resource in any organization must have characteristics like skills, quality, high morale, commitment towards the work, attitude. - management structure and nature - the organizational structure like the composition of board of directors, influences the decisions of business as they are internal factors.

- internal power relationships - the relationship among the three levels of the organization. The mutual coordination among those three is an important need for a business.

Elements of internal environment :

- research and development - R&D department has a direct impact

on the organization. This aspect mainly determine the companys ability to innovate and compete.
- financial factors - financial policies, financial positions and capital

structure are also important because they affect business performances, strategies and decisions.
- marketing resources

The internal environment of an organization

The internal environment of an organization

The external environment

It refers to the environment that has an indirect influence on the business. The factors are uncontrollable by the business. External Environment may pose significant threats or possibilities for an organization. Any organization that easily adapts to the environment essentially survives and the ones that do not are the ones that are eliminated in the competition.

The external environment of an organization

The external environment of an organization

There are two types of external environment : 1. The micro environment is also known as the task environment and operating environment. The micro environment consist of the actors in the companys immediate environment that affect the performance of the company. These include the suppliers, marketing intermediaries, competitors,

The external environment

2. The Macro Environment is also known as general environment and remote environment. Macro factors are generally more uncontrollable than micro environment factors. When the macro factors become uncontrollable , the success of company depends upon its adaptability to the environment.

What is a SWOT analysis?

A SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

What is a SWOT analysis?

Thank you for your attention !

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