Various Factors of the External and Internal to Organization Essay Example for Free

Various Factors of the External and Internal to Organization Essay The internal environment of an organization refers to events, factors, people, systems, structures and conditions inside the organization that are generally under the control of the company. The companys mission statement, organizational culture and style of leadership are factors typically associated with the internal environment of an organization. As such, it is the internal environment that will influence organizational activities, decisions and employee behavior and attitudes. Changes in the leadership style, the organizations mission or culture can have a considerable impact on the organization. The External Environment The external environment are those factors that occur outside of the company that cause change inside organizations and are, for the most part, beyond the control of the company. Customers, competition, the economy, technology, political and social conditions and resources are common external factors that influence the organization. Even though the external environment occurs outside of an organization, it can have a significant influence on its current operations, growth and long-term sustainability. Ignoring external forces can be a detrimental mistake for managers to make. As such, it is imperative that managers continually monitor and adapt to the external environment, working to make proactive changes earlier on rather than having to take a reactive approach, which can lead to a vastly different outcome. Changing for the Internal Environment To better understand changes in the internal environment, lets look at the following example. After graduating from college, Cassandra decided to buy an existing tanning salon in her community. Before Cassandra purchased the salon, it was in terrible financial trouble. Many of the employees complained about the general managers leadership style, and the staff were often confused about what products and services they offered at the salon because the manager continuously implemented his next bright idea with little warning, most of which were complete failures. Cassandra knew that if she was ever going to be able to bring any level of success to the salon, she needed to make several changes to the internal environment of the tanning salon. The first thing Cassandra did was to fire the existing manager because of his ineffective leadership style. She replaced the manager with someone who practiced a leadership style that was better aligned with the company and its employees. Next, Cassandra spent time developing a clear mission of the company and communicated the new mission to all employees. Over the next several months, Cassandra spent time getting to know her employees and worked hard to foster a culture that was positive and rewarding. All of these changes made by Cassandra were necessary due to the internal forces that were pushing for change, and with the help of her employees, Cassandra was able to bring the much needed changes to the internal environment of the company. Changing for the External Environment If we return to the example of Cassandras tanning salon, we can also find some external forces that required additional change at the tanning salon. If you remember, one of the major issues the staff was having with the previous general manager was his continuous changing of products and services at the salon. What his staff did not know was that he was trying to respond to external factors relating to changing customer demands. As a result, Cassandra spent time talking to her customers to find out what they really want in a tanning salon and was sure to make any changes necessary to accommodate those demands. Additionally, because of the struggling economy, Cassandra needed to ensure her pricing was affordable to her clients and comparable to what her competition was offering for similar tanning services and products at their salons. Lesson Summary Lets review. The internal environment of an organization refers to events, factors, people, systems, structures and conditions inside the organization that are generally under the control of the company. The companys mission statement, organizational culture and style of leadership are factors that are typically associated with the internal environment of an organization. The external environment are those factors that occur outside of the company that cause change in organizations and are, for the most part, beyond the control of the company. Customers, competition, the economy, technology, political and social conditions and resources are common external factors that influence the organization. In order for managers to react to the forces of internal and external environments, they rely on environmental scanning. Environmental scanning refers to the monitoring of an organizations internal and external environments for early signs that a change may be needed. Environmental scans allow managers to use the knowledge gained during the scanning process to decide what steps, or changes, Answer: If there is anything that is stead fast and unchanging, it is change itself. Change is inevitable, and those organizations who do not keep up with change will become unstable, with long-term survivability in question. There are things, events, or situations that occur that affect the way a business operates, either in a positive or negative way. These things, situations, or events that occur that affect a business in either a positive or negative way are called driving forces or environmental factors or forces. There are two kinds of driving forces; Internal driving forces, and external driving forces. Internal driving forces are those kinds of things, situations, or events that occur inside the business, and are generally under the control of the company. Examples might be as follows  · organization of machinery and equipment,  · technological capacity,  · organizational culture,  · management systems,  · financial management  · employee morale. External driving forces are those kinds of things, situation, or events that occur outside of the company and are by and large beyond the control of the company. Examples of external driving forces might be, the industry itself, the economy, demographics, competition, political interference, etc. Whether they are internal or external driving forces, one thing is certain for both. Change will occur! A company must be cognizant of these changes, flexible, and willing to respond to them in an appropriate way. External driving forces can bury a business if not appropriately dealt with. The question is, how does a business know what changes are occurring so that they can deal with them in a positive way. OK, thats the next issue. In order for a business to succeed and gain the competitive edge, the business must know what changes are indeed occurring, and what changes might be coming up in the future. I guess you might call this forecasting. Thus, critical to the business is what we call informational resources. It is the collection and analyzation of data. Some examples of critical information might include the following: * Competition (what are they doing?) * Customer behavior (needs, wants, and desires) * Industry out look (local, national, global) * Demographics (the change populations, there density, etc.) * Economy (are we peaking, or moving negatively) * Political movements and/or interference * Social environment * Technological changes * General environmental changes * Government interference (laws, regulations, policies, ect.) The above are just some issues organizations must be on top of. Well its never easy, but organizations that are successful include all of the above (and more), to develop the appropriate tactics, strategies, and best practices, to ensure successful out comes.