Internal And External Environment Case Study

1352 Words 6 Pages
1. The current management knowledge is the result of innovative process involving many management pioneers.
(i) Analyse how management has evolved from a focus on the internal environment to that of external environment (25 marks)

What Are Internal and External Environments?
There are situations which arise that affect the way a company operates, be it in a positive or negative way. These situations can have either a positive or a negative impact on a business and are called 'environmental factors.' There are two types of environmental factors: internal environmental factors and external environmental factors. Internal environmental factors are events that occur within an organization. Generally speaking,
…show more content…
Interruptions to the supply chain and outdated or faulty IT systems are also factors that the company should evaluate.
• Strategic risks
These affect the firm’s ability to reach the goals in the business plan. They could be due to the impacts of changes in technological evolutions or customer demand. These factors could pose as threats as they can alter how customers perceive the products of the company. Based on these, customers might think a product is overpriced, dull and outdated.
• Innovation
An organisation needs innovation in order to keep up with competitors. It is essential to get one step ahead. Innovation could come in the form of marketing. It could also be through promotional initiatives in the marketing plan, staff training, and welfare. Embracing new technology is the best way to keep up with technological advancements.
A lack of innovation can pose a serious risk to a growing business. No innovation will cause a company to remain boring. The company will become dull, stagnant and irrelevant.
• Financial
…show more content…
The strengths and weaknesses of a business are the internal factors.

• Strengths
Strengths are the features of business which allow the whole organisation to work more effectively than competitors. The company will have to consider its strengths from its own point of view. Importance should be given to customers’ and clients’ view.
• Weakness
Weaknesses are the areas which have scope for improvement. The greatest thing about internal factors is that you have control over most of them. Changing internal factors often involves some indirect costs. Some of the factors are a result of the way the business is running, for example, reputation, credit worthiness, and image. Other factors depend on the business decisions, for instance, management structure and staffing.


The external environment of an organisation include those factors outside the company that affect the company's ability to function properly According to James Stoner, External environment can be defined as all elements outside an organization that are relevant to its operation.[1]There are some external elements which can be manipulated by company marketing itself, while others require the company to adjust itself due to these conditions. In order for an organization to function well, the monitoring of the basic components of the external environment is

Related Documents