External and Internal Factors of the Business Environment

Context
of
business

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................2
Macro environmental factors that changed the nature of modern business in the global
environment.................................................................................................................................2
LO 2 ................................................................................................................................................3
Individual and organisation to manage sustainability and behave ethically .............................3
CONCLUSION................................................................................................................................4
REFERENCES ...............................................................................................................................5

INTRODUCTION
Business can be defined as where the exchanged of goods and services in order to earn money.
This report will study how to operate or mange the business. It includes the external and internal
factors of the Business environment. It also highlighted the importance and reasons of
individuals and organisation to mange the responsibly, sustainable and behave ethically in the
relation to the culture, social, economic and environmental issues(Ellul, 2018. ).
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LO1
Macro environmental factors that changed the nature of modern business in the global
environment.
PESTLE analysis is a important tool which help the organisation to show the picture of external
environment which affect the business to the large extent. It helps the business to have better
understanding and help to achieve the goals of the business. The factor which affect the business
are political, economic, social, technological, environment and legal factor which are explained
below -
Political factor
Political factor influence the business to the large extent and also affect the consumer
buying power. Different policies, regulation taxes laws, monetary policies, fiscal policies are all
part of political environment. It affects the modern business in the global environment as the
policies which is imposed by the government is not in favour to the organisation then it will give
negative impact upon the firm. For example if the government increases tax then it will affect the
sales as cost of the product will increase and it will cause negative effect the business(Zahari and
Romli, 2018.).
Economical factor
Economic factor have huge influence on the firm and also it affects the success of the
business to the large extent. Economic factor include GDP, inflation rates, unemployment rates,
consumers spending potential etc. it affects the modern business in the global environment. If the
GDP of a country is low, then it affects the demand of the product as demand decreases and it
impacts the sales of the company and it will cause negative affect. On the other hand if the
income level of the consumer increases then the demand of the product increases and cause
positive affect.
Social factor
Social factor deals with preferences, tastes, beliefs, attitude, customs, cultural value and
education status. The firm has to analysis the need and preferences of the customers before
launching any product it will give positive impact to the customers that is, in modern days people
are more diet conscious and prefer healthy foods so it will necessary for the food industry to shift
from oily to healthy items.
Technological factor
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In the modern world technology is changing drastically due availability and advancement
of new and innovative technologies. Every business uses' technology to sell products such as in
modern world online marketing became very famous thus it will cause positive effect to the
industry as it will help the firm to reach wide audience and attract more customers .
Environment factor
Environment factor include climate changes, weather, carbon footprint, energy power
consumption, safe water disposal and dealing with hazardous material. Nowadays in modern
business environment factor influence the business to the large extent as it affect the abilities and
smooth function of the firm. It majorly affects the production process if the climate of the
particular region is bad then it will affect the raw material of the company and hence it will cause
negative impact. And also by the help of environment factor company is minimising its waste so
that to improve the working of the company(SHTAL, and et.al., 2018.).
Legal factor
Legal factor refers to the law made by the government that the company has to follow. It
includes health and safety law, environment law , regional law , international trade laws etc. . if
the laws and regulation are in favour of the company it will give positive impact on the
company . On the other hand if the laws are against the company it will cause negative impact.
LO 2
Individual and organisation to manage sustainability and behave ethically
Sustainability means business has to behave in the ethical manner and responsible for
fulfilling the social responsibilities and also protect natural resources such as water, air, forests.
There are many laws and regulation that encourages sustainability such as anti pollution laws
that ensure that every organisation to follow the laws. The first step to manage sustainability is
that organisation must fulfil their corporate social responsibilities for that it can give free
education for the needy people , provide scholarship , and also protect environment as to reduce
carbon footprint. By fulfilling the responsibilities the company can help to increase the brand
image of the company and attract many customers . For ethical behaviour organisation must use
proper language with the employees and the customers so that it create good image of the
company and also organisation ensure that customers problems resolve immediately. And also to
follow proper code of conduct and moral principle and also have transparency between the
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customers and the organisation. And also does not include in unfair trade practices and should
not sale low quality product in high prices. For cultural sustainability it is duty for the
organization respect the culture of the country and should not disrespect the culture should not
hurt the sentiments of the customers. And also organisation should also do various charity works
and other social causes so that it will gain customers as by doing all the social causes the
goodwill of the organisation also increases and thus it increases the market share of the company
For economic sustainability it is important to maintain good quality product so that the demand
of the product increases and thus it maximises the profit of the company . Behaving ethically will
help the business to run for long term basis and also it will help to expand the business and
maximise the growth of the business(Ellul, 2018.).
CONCLUSION
From the above study it will conclude that the changes in the business environment is must
important for the sustainability and growth of the business. It concludes that the macro
environment factors that changes in the nature of the business in the global environment and on
the other hand it also shows the responsibly ans sustainably of the individual and organisation
through the social, culture, economic and environmental issues.
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REFERENCES
Ellul, J., 2018. The technological system. Wipf and Stock Publishers.
SHTAL, T.V. And et.al., 2018. Methods of analysis of the external environment of business
activities. Revista ESPACIOS. 39.(12).
Zahari, A.R. and Romli, F.I., 2018. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics.
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