Report on Factors Affecting Business Organization and its Environment

This report examines the various factors that affect business organizations and their general environment, focusing on how these elements contribute to uncertainty and instability. It defines key terms such as uncertainty, general environment, and resilience, and explores factors like political, demographic, socio-cultural, economic, technological, and legal aspects. The report emphasizes the importance of a resilience framework to navigate these uncertainties and maintain a competitive edge. It also discusses the impact of these factors on achieving above-average returns and highlights the role of managers in addressing challenges arising from both internal and external sources, including unexpected shocks and competitive pressures.

FACTORS AFFECTING BUSINESS ORGANIZATION

Contents
Introduction.................................................................................................................................................3
Definition of key terms:...............................................................................................................................3
Uncertainty..............................................................................................................................................3
General Environment...............................................................................................................................3
Factors.....................................................................................................................................................3
Unstable...................................................................................................................................................4
Managers.................................................................................................................................................4
Organization............................................................................................................................................4
Above Average Returns...........................................................................................................................4
Framework..............................................................................................................................................4
Resilience................................................................................................................................................4
Shocks.....................................................................................................................................................5
Competitive Management........................................................................................................................5
The uncertainty of General Environment.....................................................................................................5
Factors affecting General Environment.......................................................................................................5
Political factors........................................................................................................................................6
Demographic Factors:..............................................................................................................................6
Socio- Culture Factors.............................................................................................................................6
Economic Factors....................................................................................................................................7
Technological factors..............................................................................................................................7
Legal Factors...........................................................................................................................................7
Framework of Resilience.............................................................................................................................8
Competitive business environment..............................................................................................................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

Introduction
The business organization may consist of many factors that help in the business context for
achieving the required goals and solutions. There are many factors that may have an adverse
effect on business. The managers are required to identify those factors and achieving the required
solution for these problems. The project is all about identifying the issues having an adverse
effect on the general environment. The project describes the factors regarding issues of
technology, socio-culture, politics, demographics and other factors. It informs the managers that
what kind of problem may occur during the project.
The project also discuss regarding resilience framework of business. It informs concern of
competitive advantage of business. The framework of resilience described various types of
uncertainties and their solution to be done by management. It discuss regarding surprised
situations of management. Management is required to understand that situation and solve it.
Definition of key terms:
Uncertainty
Uncertainty may be considered as a situation of changing business environment. When
conditions are changing constantly within an organization, it may e termed as uncertainty in the
business environment. It may be out of organization or management control.
General Environment
General environment includes factors that don’t affect daily functions of a business or
organization. These factors may not have a direct impact on regular basis operations. It includes
the government, economic conditions, financial resource sectors and technology (Draft, 2009).
Factors
The term can be defined as forces that affect the business or an organization. These may include
technological factors, economic factors, politic factors or resource factors.

Unstable
The factors of general environment create situation for business which may affect its stability. If
business a situations change rapidly without any warning, then it may be termed as an unstable
business environment.
Managers
Persons managing the business and finding solutions for all business problems may be called
managers of company or firm. They are responsible for handling all hurdles coming in the way
of business success. These are the higher authorities of business. There are three types of
managers in an organization, top- level managers, medium level and low- level managers. Top
level managers are required to make strategies for the organization (Collin, 2009).
Organization
A group of people that comes together for achieving a particular purpose create the form of
organization. All these people have a common goal by performing different activities. An
organization may be of any kind, profit- making or non-profit making. It consists of many
persons with the same goal. It requires them to set up a group in which they share vision,
mission, and goals. The strategies of an organization also need by the group of people included
there.
Above Average Returns
Investors in an organization expect some profit from their investment in the business. Above
average returns may be defined ads return in excess of what the investors have expected from the
business. Investors may invest more if they will receive better returns on their investment. The
above average return attracts more investors.
Framework
It reflects the point that what kind of structure is required for planning a business process. It
includes actual programs to be organized by the business organization for achieving the required
objectives. It required having many integrating roles.

Resilience
The reliance refers to situation adding a quick return to the business. It refers to the business
organization to be more productive by creating difficult positions. The business requires having
the resilience factors for achieving highest positions of business.
Shocks
It refers to an event that may not be in the strategy of the business. It is a surprising event. In the
business organization, there are many situations that are part of shocks event occurred in the
business. Managers have to face all these issues and required to be available for solving
problems occurred due to the issues of a surprising event (Robert, 2016).
Competitive Management
The competitive environment refers to a situation where business is required to take steps that
are against rivalry firms or organizations. It requires the management to have strategies that will
affect the business of other firms. It may be termed as an advantage over competitors.
The uncertainty of General Environment
The general environment of a business organization can be affected due to some factors which
may contribute to creating an uncertain environment for achieving above- average returns from
the business. These factors are responsible for creating an unstable business environment. The
general environment can be affected by those factors that may be out of manager’s control.
Managers are responsible only for those factors that are within the control of the organization.
They are not responsible to deal with factors affecting business organization from outside
environment or from factors that are not within its control. This creates a situation that becomes
a problem for achieving above average return for business or its investors.

Factors affecting General Environment
There are many responsible factors affecting the general environment. These factors influence
the performance of the organization. Some of these factors are described as follows:
Political factors
This may be termed as a most important factor of business organization which affects its return.
Politics of a country or region may change policies at any time. It affects position of business to
great extent. Privatization and other such policies affect the organization and create the uncertain
situation. Sometimes, the policymakers intentionally change policies of a specific area or unit,
which becomes a problem in achieving the required profits for the organization. It also consist
the situation when there is a misunderstanding or lack of understanding policies of the country.
The type of politicians affects the profit or return of an organization. The politic leaders make
policies that are beneficial for their organizations or from which they can earn high returns. It
affects the general environment and also returns of businesses.
Demographic Factors:
It includes age, location or size of the population. The change in these factors may create a
situation of uncertainty in business organizations. It includes the change in consumer taste and
preferences. The population is an important factor that affects the business (Jorge, 2011). It
requires the business organizations to know regarding services required by current population or
society. It acts as a key factor for achieving success. The most important factor the company
must know about population is age and preferences of people. If a company works for a specific
age group people, then it may become a problem of achieving the returns in business. It affects
business and manufacturing industries due to the increase in the number of youth people
increasing and starting their own businesses. The quality and quantity of products must be
matched with the demand of people. (Welch, 2009)

Socio- Culture Factors
Businesses also get affected due to socio- culture factors. It affects business organizations by
cultural issues of a specific area or region. It affects businesses. Social factors affect the
organization by having an impact on the production quality of business (Boddy, 2008). There is
also a situation of gender sensitivity in socio-culture issues. Women are nowadays expecting to
have their position in every area. They are also manager and leaders of business. But during their
maternity leave or childcare, the business may face a problem of uncertainty because no one will
be there for handling issues of the business organization. It becomes a major concern that
requires the attention of policymakers for business.
Economic Factors
These factors affect the general environment to the great level. Most important economic factor
if inflation in the country. It affects the return of an organization. Due to inflation, people ignore
to buy different products at the same value. They prefer to take cheaper products or not to buy
those products during inflation. It affects business by not having any receipt from the products. It
reduces the working capital of the company or organization (Litterer, 2011)
Technological factors
Technology is a factor that keeps on changing after every day. It requires the management to stay
updated. Technology is a factor that helps in performing the everyday task if business
organization. But management is required to apply updated technology in the organization. It
becomes a problem in performing functions of the organization. Small businesses can’t support
everyday change technology to their business (Chaffney, 2014). Another factor is that employees
of an organization may resist on changing business situation or conditions due to technology. It
requires providing training to employees of an organization. According to Armstrong, (2009 p. 41-
43), it needs fund and support of employees. It consists of changing work from manual to
sophisticated tools. Advance technology affects business production by quality, quantity and
some other factors (John, 2010). Businesses may find it harder to have information about what
kind of technology they need for their business. It affects the return of an organization to great
extent.

Legal Factors
It is one of the important factors of the general environment. A business is required to perform its
function while applying rules and regulations of that city or country. It must follow laws created
to achieve the required position. Employment law is also needed to follow for the achievement of
the required profits. For example, if an employee gets a job from the employer and then they are
bound to follow contract law (James, 2016). Other regulatory requirements regarding which
business need to take concern are discrimination, unbiased decision, safe environment, unfairly
dismissal and reasonable remuneration of employees. It may create an uncertain situation for
managers if rues are not followed appropriately (Robert, 2016). Other legal rules for the business
organization include timely payment of taxes and license fee of an organization.
Framework of Resilience
The business or organization has to face many problems due to above-mentioned factors of the
environment (Jeffs , 2008). It requires business organizations to have a framework which will help
it to save the reputation of business affected sue to those reasons. Managers are required to
perform some functions for performing the required framework. The framework decided has
been apart between different sectors:
Low Uncertainty: It is a situation where there are few departments for working. The
departments are formal and centralized. It includes a situation where there are low-speed
responses to clients. This is a level of strategy. It contains less environmental challenges (Knight,
2015)
Low Moderate uncertainty: Organizations support to these type of uncertainties by making the
centralized structure of the organization. It requires the organization to have many departments.
Managers or authorized persons are required to have some business planning for achieving the

required position. It requires managers to have a quick response to the business. It results in
solving complex business problems (Harari, 2009)
High Moderate uncertainty: The unstable position occurs when businesses are decentralized. It
requires the business to be centralized for the stable position. The high moderate strategy of this
uncertainty requires the management to be fast responsive for meeting urgent requirements of the
business (Edwin, 2014). It requires having few departments of working with fast responsive. It
also considers some planning for achieving the required business position
High Uncertainty: This is a most complex situation of uncertainty. It requires more focus on the
planning of strategies of the business. For achieving the result of adequate level, it required to
more responsive. The business is requires to be centralized here. It can control business functions
that cause loss or uncertainty to some factors within control of the business.
Competitive business environment
The Business environment contains a number of similar businesses. It results in the competitive
business environment (Paul, 2013). It requires the business organization to have strategies that
may help an organization in achieving the required level of success. It needs the management to
apply strategies given by top level managers for achieving goals of the organization. The
competitive business environment includes Porter’s five forces business process. It includes
threat of entry supplier power, buyer power, threat of substitute, competitive rivalry. These five
forces affect the business organization in its competitive business environment ( Kroon, 2013).
The organization may have potential shock from competitors regarding their new strategies. The
organization needs to manage new strategies that may help them in competing with the
competitors. It requires them to have great leaders that may analyze factors of competitive
environment and can help organization for achieving these requirements.

Conclusion
Business organizations are required to give a fair look at the point of factors affecting the
organization. It needs to maintain some strategies that will help the organization to meet those
strategies and help the organizations to achieve goals in the best possible manner. Managers of
business are responsible for analyzing strategies of competitors and making new strategies for
the organization. It helps to meet mission and vision of organization. The factors affecting
general environment must be taken while making strategies for the company or business
organization. Managers must analyze factors regarding those issues and accept the new
technologies. Employees of organization are also important to deal with these kinds of problems
in organization.
The project also concludes that the level of uncertainties must be analyzed by management. It is
important to understand and identify solutions for these uncertainties. It concludes that low level
uncertainties are simple process. It concludes that managers must take factor of competitive
environment into practice. This requires that management to take steps of resilience for solving
shocks of competitive environment.

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