Business environment - Essay Example

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A big influence on internal business environment is the external environment. No business can choose to ignore the outside factors, if it aims to succeed in the today's corporate world. Corporate culture should embody what it takes to succeed in the environment…
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Download file to see previous pages These include social, political, economical and technological. These factors can make or break a business. In simple words the outside environments consists of stakeholders. A stakeholder is any group within or outside the organization that has a stake in the organization's performance. External environment mainly consists of people who have stakes in the activities of the business such as the government, local population, pressure groups and investors. To illustrate how these people are affected by the organization's activities, let's look at some examples:
The factor that I consider to be the most important in the external environment is social and cultural values that have to be followed and respected by the businesses. If this business does not follow the social values of the country, it will face a legal action against it and will have to shut down. This is how social and political factors are related. So, no business can prosper if ignores the social environment of the country it is operating in. This obligation of organization management to make decision and take actions in conformity with the normal social values and practices of the country, which enhances the welfare and interest of the society, is known as the social responsibility of the business and it cannot survive if it chooses to ignore this factor.
Although at first, it might become very complex to grasp the concept of social environment b...
Although at first, it might become very complex to grasp the concept of social environment because different people have different thoughts about as to which actions will improve the society's welfare. Social factor is wide a category which also includes the ethical practices of the businesses, its conformity with the tradition of the country and its responsibility to follow legal laws of the country.
As already discussed above, social environment is linked with the business's legal, ethical and discretionary policies. Similarly, social environment may also affect the political, technological and economic environment, either directly or through a series of patterns.
All modern societies lay down ground rules, laws and regulation that businesses are expected to follow. The respect that the business has for these rules and regulations defines the legal responsibility in the social environment for the business. Businesses are expected to fulfill their economic goals within the legal framework. For example, oil companies may be asked that they are allowed emit only a certain amount of gases in the environment. Their failure to follow this legal instruction will mean that they have violated the necessary requirement and for that they may be sued or forced to shut down. Similarly, companies producing waste may be asked, not to dump this waste in the places of scenic beauties such as beaches, island etc. If they still do this then they are ignoring their legal responsibility in the social environment. If they are found guilty they may be fined or kicked out of the country. So, all businesses are expected to follow these laws. Since, most of the laws are made by political setup of the country, ...Download file to see next pagesRead More
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