Environmental Analysis

Question: Disuss about the Environmental Management? Answer: Introduction This report is based on the environmental analysis of the organization. As we know that environmental analysis is a type of strategic tool that is very much required for the business organization so that there must be an analysis takes place to manage the organization and its management. In the present time, it has become very difficult for companies to survive in competition as there is a lot of competition present in the market place. With such critical business environment it has become very difficult to consider and observe all the things. The companies are required to perform on a very margin scale so that the requirements of the customers get fulfilled. They have to maintain good quality product as well as the quantity of the product should also be good as compared to the competitors to have a competitive advantage. It has become very relevant to analyze the market situation and make decisions according to the same. The business environment is a study that helps the businesses to understand the marketing conditions and situations that directly or indirectly affects the operations of the business. In this way, this study will help the student to understand the importance of the marketing environment for all the business organizations as it has a direct and indirect both types of impact on the organization. Environmental scanning is performed by many of the organization in order to understand the market of the current business. We will learn about the different internal and external environment of the company including the SWOT, PESTLE etc. that will help us in better understanding. Environmental analysis It is type of strategic tool that help the business organizations to identify and analyses the internal and external factors that directly and indirectly affect the firm and its operations. It helps to determine the strength, weakness, threats opportunities, competitors, etc. that influence the performance of the business organization (Agle, et.al. 2008). Qualitative environment and quantitative environment As we know that, the qualitative and quantitative analysis of business environment. The management of environment is very relevant as it straddles the natural and the social culture of the organization. It helps in addressing the problems in both the manner that is in scientific and also the social terms. It is said that the qualitative environment focuses on the values of the organization, social behavior, culture, ethics, satisfaction, rational and objectives of the organization as well as the other members related to the same (Wiklund, Shepherd, 2005). The area in which quantitative environment helps are numerical based areas like the unit required to be produced, the financial requirements of the organizations., etc. both the qualitative and quantitative approaches help the business organization in the overall management of the same. In order to achieve the maximum output from the given inputs, the firms are using a combination of both the environment. Mostly all the organizations analyze both the environment before making any decision. Internal and external environment of the business organization Every organization has to make changes in their firm according to the internal and external environment of it s they affects the performance and operations of the same. So the organizations haveanalyzed some tools that can help it to curb the risk of internal and external factors risk that can affect. As we know, that changes are the inevitable fore that can come without any invitations. It is very relevant for the individuals as well as for the organizations to accept the changes and change according to the same. There is a need to make changes according to the changes takes place. The business model of the company must be designed in a way that it can accept the changes. There are various types of situations and events that lead in the affects of the organization. Much business fails to accept the changes. These types of factors are known environmental factors that may create negative impact on the business (Hillman, et.al. 2007). There are basically two types of factors that are internal and external factors that can harm the organization. The internal factors are those factors that are present in the business internally and the external factors are those factors that indirectly affect the business as they present outside the company. It is very easy to control the internal factors of the organizations. Contrast to this, it is very difficult to manage the external factors of the organization (Rowley, Moldoveanu, 2003). Internal factors Technological Justification of choice- As we know that technology is one of the major factors for the production of the goods and services. It helps in almost every type of business organization. To compete with the advanced world, technology will help the organizations. Judgement of reliability- It is the most reliable factor as it directly affects the operations of the business organizations. Authority- The authority to ring new technology must be related to the top of the management of the business organization. Limitations for use- If there is a limit to use the technology, than the business will not be able to manage the up gradation in the business as all the things are directly and indirectly related to the technology. Financial capabilities Justification of choice- Finance is the as the backbone of any business organization. Without fulfillment of financial needs, it is impossible to run the business organizations. The internal management of every business depends on the financial injection to it. Judgement of reliability- Finance is also a reliable factor as business and its operation are very relevant for the all the firms whether they are big or small. Authority- Finance is the major part aft e business and it is managed by the top level of the management only. Limitations for use- Financial matters are very crucial in nature so they are managed by the top authority so that there will not any issues takes place. Human Justification of choice- Human resources refers to the employees and workers who are working in the orgnaistaion. Every organization should value the human resource working in the organization as they are the one due to which the operations take place in the business organization. Judgement of reliability- Human resource is the most reliable internal factors. An organization can not limit the working of human resource as they play the vital role. Authority- The authority of human resource is lies within themselves and the HR department of the company. Limitations for use- This point is not validate with the human resource of the company as they are the living resource that must be valued and treated with respect. Some of the examples of internal factors are- Management changes Morale of the employees and workers The cultural changes in the organization The issues and changes related to the finance and marketing External factors Political Justification of choice- Political environment refers to the government and the rules and regulations impose by them. Judgements of reliability- The companiescan not rely on the political externalfactors they tend to change according to the present scenario of the political parties and their policies and strategies. Authority- The authority in the hands of political parties and the present government of the country. Limitations for use- There are limits to use the political factors as they are not in the control of the firms. The firms are fully dependent on the political situation of the country. Technological Justification of choice- The changes takes place in the technology may or may not affects the performance of the business organization. It is very important for the business organization to accept the changes takes place in the technology as it may help to have the competitive advantage. The changes can be related to the automation, development of new techniques, research, and the amount of technical awareness that must be required in the business. The changes must be welcomed and accepted by the entire organization. Judgement of reliability- The changes takes place on the international level that create a drastic competition for the firms as the competitors. Thecompanies are reliable on the technology changes (Sen, Bhattacharya, 2001). Authority- The authority sometimes changes in the external environmental is the government and the rules and regulation imposed by the same affects the changes in the technology. Limitations for use- The new technology is not easy assessable as it is very expensive and not easy to be access in the business organization (Rowlands, Nicholas, Huntington, 2004). Economic Justification of choice- The economic factors refers to the economic conditions of the country. Thesefactors have a direct impact on the businessorganizations. Forexample if there is inflation in the country it will affect the business operations. The purchasing power of the customers is also related to the economic factors of the country. It includes inflation rate, demand and supply of goods and services, foreign exchange rate, economic growth, etc. (Hodgkinson, et.al. 2001) Judgement of reliability-The companies cannot rely on the economic factors of the country as these factors are not in the control of any business organization. The economic conditions are also tends to change according to the government and many other factors related to it. Authority- The authority is in the hands of government of the country. Limitations for use- The limit for the economic factors cannot be fixed as they are not in the control. Some of the examples of external factors The change stakes lace in the economy of country or other country in which the business is dealing with The threat present in the market like competitors The political factors and political instability The rules and regulations of the business The industry itself is also a big threat for the business organization. Informationanalyzed in collaboration with the stakeholders in terms of its Relevance to the organizations core or future business. Stakeholders are the members that are related to the business organization. They are the person who has many things to earn and lose in relation to the business organization. The stakeholders engagement is a relevant process that influences the performance of the business. It is important to maintain good relations with the stake holders for the smooth working and running of the operations of the business. Many businesses conduct stakeholders analysis in which they identify and analyze the performance of the stakeholders with regards to the business operations. It also helps to judge the influence of the stakeholders on the organization that ultimately helps in the success of the same. The organizations manage the business and its stakeholders in a way that they can provide maximum benefits to the business (Janssen, et.al. 2006). If we talk about the future prospectus, the stakeholders must be rained happy and satisfied with the business as they are the relevant part of the organization. Due to the crucial behavior of stakeholders, it becomes difficult to manage all the stakeholders. The decision makers are unable to make wise decision for all the members related to the organization (Orlitzky, Schmidt, Rynes, 2003). There are certain steps that can help to manage the stakeholders of the company is the best possible way it can- It is very relevant to identify the internal and external stakeholders of the company The second step is to identify the nature and behavior of each and very stakeholder related to the business. The third step is to construct a matrix according to the influence and importance of each stakeholder to the firm The last but not the least step states that there must be a proper management of the stake holders. It comprises of monitoring and maintenance the relationship of the organization with the stakeholders (Chermack, Kasshanna, 2007). Quantitative and qualitative tools to analyze the potential and actual impact of stakeholders on the business organization Stakeholders mapping It refers to the process in which the engagement of the employees in regards with the orgnaistaion is measured. In this process, the information and data about the stakeholders are pulled. After this, the strategies are made related to the each stakeholder of the business (Creswell, 2013). Decision tree It is type of support tool that looks like a tree. It is a graph pr model showing all the possible consequences and outcomes from each and every decision made in the organization. It is related to the stakeholders, outcomes, resources, cost of production and other cost, utility, etc. It is a way to display the algorithm. Regression models It is a statistical modeling and analysis of regression in a statistical format. It helps to estimate the relations between the stakeholders and employees with the organization. Many organizations uses this model to analyze the importance of the members related to the firm (Bauer, Bakkalbasi, 2005). Aid to decision making in timely manner Most of the companies are unable to manage the time management of the operations in their organizationthat leads in the lag of the work done. There must be a proper management of the time so that the work can be completed on the time. To maintain the good relations with the stakeholders of the company, management of time is very relevant. The organizations should design themselves in a way that there will be minimum impact takes place. There are other dimensions that influence the performance of the company. Conclusion At last, we can draw a conclusion that the environmental analysis of the organization leads to benefits as it helps the organization to realize the potential of the same. As we know that the environment and the economic are the two major issues that affect the operations of the business organizations. There is a requirement of sustainable development in the organization to attain the future profits and to run the business for a long run. There are various types of internal external factors on the business environment that creates impact on the business. The organizations should design themselves in a way that there will be minimum impact takes place. There are other dimensions that influence the performance of the company. As we discussed above, there are qualitative and quantitative measures that distracts the performance of the company. The organization should analyze the real objective and the work accordingly to achieve the same. Many of the organization bring substantial improvements to cope with the two major factors that are economy and environment. In this study, we have talked about the stakeholders and the major influence of all the stakeholders on the business. The decision making of the business should be dependent on the satisfaction level of the stakeholders and the employees working with them. There are various types of tools and policies used by the firms to maintain a good relations with all the external people related to the company. This report will help the student to have an in-depth knowledge about the entire business environment analysis as all the relevant points are mentioned in details. It will help to have a better understanding of the external and internal environment. References Agle, B. R., Donaldson, T., Freeman, R. E., Jensen, M. C., Mitchell, R. K., Wood, D. J. (2008). Dialogue: Toward superior stakeholder theory. Business Ethics Quarterly, 18(02), 153-190. 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