INTRODUCTION Modern businesses are very dynamic as they have to operate in global environment and is affected by various factors. These factors include both micro as well as macro environmental factors. This essay will include identification and discussion of various environmental factors that have changed the nature of modern businesses in this globalised world. Furthermore, the essay will also include; why it is important to follow ethical norms and sustainability. MAIN BODY Nowadays every organisation wants to operate globally in order to grow and expand its business. In order to operate globally, the companies have to change the ways in which they are operatingcurrentlysuchastheyhavetoadoptadvancedtechnology,fulfilcorporate responsibility and ethics in business(Hamilton and Webster, 2018). Even if the company wants to operate effectively all across the world; it is essential for it to have a clear understanding of the impact of various external environmental factors on the business. These external environmental factors include both micro as well as macro environmental factors. Micro environmental factors are those factors which directly affect immediate business operations of the business as well as its decision making.These are those factors which are within the reach of the company and could even be controlled. They include factorssuch as suppliers, customers, competitors and so on. These factors have changed the nature of modern businesses in a way that is discussed below. Suppliers are those people who supply material as well as labour as per the demand made by the business organisations. They play a important role in adopting a purchase policy which gives bargaining power to the business organisations. It affects the nature of modern business because if the company manages to get easy availability of material or labour and at low cost then it would be able to achieve economies of scale which in turn will give the businesses a competitive advantage over other companies that are operating in the same industry all over the world(Jayashree and et.al., 2016). Customer are those people who buy the goods or avail the services. They are the most important factor of external environment because without customers there is no existence of company. They affect the nature of modern businesses because in order to grow and expand 1
every company should make efforts to grab more and more customers by restricting not only to the national boundaries but also attracting the customers of other countries as well. Competitors are those people or organisations which are competing against each other. Theyplayamajor rolein affectingthenature ofmodernbusinessesbecausewhenan organisation operates at global level it attracts competition from companies of all over the world. This, adversely affect the smooth running of the business organisations. Macro environmental factors are those factors on which the company has no control. These factors include technological environment, political environment, legal environment, socio -cultural environment and so on. Technological environment is concerned with innovation as well as up-gradation of technology(Miller and Jentz, 2017). They affect the nature of modern businesses because nowadays it is very important for every organisation operating at global level toadoptadvancedtechnologyotherwiseitwontbeabletosurviveinthiscompetitive environment and lag far behind them. Further, political environment has also contributed in change of nature of modern businesses because the companies have to now gain complete knowledge of the political environment of all the countries in which the company is operating so as avoid unnecessary restrictions imposed on the company by the political party in power. Even the legal environment has changed the nature of modern businesses as now it is very essential for them to have knowledge about legal issues or laws of all the countries in which the company is carrying out its activities; otherwise it will lead to spoiling the image of the company. Furthermore, social cultural environment has changed the nature of businesses because now the culture and values of all the societies in which the business is operating has to be managed by keeping in view the recent trends, lifestyle, opinion and values of various cultures or society. It is very important for individual and organisations to manage responsibly, sustainably andbehaveethicallytowardsvarioussocial,cultural,economicandenvironmentalissue otherwise it will wont be able to survive in this fast changing world(Will and Mueller,2019). Apart from this, if the company fails to fulfil its corporate social responsibility then it would loose its image in the mind of customers because when a company fulfils its social obligations, it is viewed as a socially responsible enterprise and helps in building up the image of the company which would in turn also hinder the smooth running of the business. Moreover, if the company fails to fulfil economic and environmental issue then it wont be able to beat its competitors and 2
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thus would not be able to gain competitive advantage as well as it will damage the environment which is injurious for health of not only the employees of the organisation but also for the entire society. Other reasons which leads to importance of individuals and organisations to manage responsibly is to avoid unnecessary government restriction which may lead to complexities in carrying out the business smoothly. If the organisations are managed responsibly then it would contribute towards the well being of the employees which in turn would help in creation of job satisfaction in the mind of employees by developing a sense of belongingness as well as it helps in motivating the employees(Zinovieva and et.al., 2016). CONCLUSION Fromtheaboveessayithasbeensummarisedthattherearevariousexternal environmental factors that affect the working of the business. These factors include micro environmental factors such as customers, suppliers, competitors, intermediaries, general public and so on. While on the other hand, macro environmental factors also have an impact on the working of modern businesses such as technological factors, environmental factors, legal factors, political factors, socio cultural factors and so on. 3
REFERENCES Books and journal Hamilton, L. and Webster, P., 2018.The international business environment. Oxford University Press. Jayashree, S. and et.al., 2016. Impact of external factors on implementation of ISO 14000EMStowardscorporatesustainability.InternationalInformationInstitute(Tokyo). Information.19(7A). p.2631. Miller, R.L. and Jentz, G.A., 2017.Business law today: The essentials. Cengage learning. Will, M.G. and Mueller, J., 2019. Change Management: The Organization as a Micro– Macro System. InManagement for Scientists(pp. 99-111). Emerald Publishing Limited. Zinovieva, C.G. and et.al., 2016. Study of external and internal factors affecting enterprise’s stability.Advances in Systems Science and Applications.16(1). pp.62-71. 4