Internal and External Environment of Organization

This presentation provides an overview of the internal and external factors that impact business operations and success. It discusses the role of employees and management in shaping the internal environment. It also explores the impact of political, social, economic, technological, legal, and environmental factors on the external environment. Additionally, it examines how businesses can impact the external environment through social, economic, technological, and legal means. Overall, it highlights the importance of understanding and managing the environment in which businesses operate.

INTERNAL AND
EXTERNAL
ENVIRONMENT OF
ORGANIZATION

TABLE OF CONTENT
Introduction
Internal Factors
External Factors
Impact of Business on External Environment
Conclusion
References

INTRODUCTION
Organizations survives and operates within
the society, for the society and by the society
members. The society is backed by the
certain factors and forces of the environment
so every company has to face and survive in
the prevailing environment. The environment
involves some factors which may be internal
and external and creates some impact on the
business operations and its success.

INTERNAL FACTORS
Internal factors of environment are those which born inside the boundaries of the
company and impacts the business at a small scale that is micro level. The factors only
effects the operations of business individually not to the industry as a whole.

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Internal factors in respect of Marks and Spenser are described below:
 Employees: The company's employees are those who gives a real picture to the
planned strategies and objectives formulated by the top level management team of
any organization in the course of business. Employees had a very big impact on the
workings of the company as their efficiencies and effectiveness leads business to the
success (HASBI and et.al., 2020).

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 Management: This refers to the key personal of the organization who formulates
the roles and objectives which needs to be accomplished by the employees of the
organization. They are placed at the top level in the management hierarchy. Since
they outlines the policies and targets to be achieved it has a direct relation with the
success and failure of the business. Good and achievable objectives helps business
in its growth whereas objectives created out of imagination will prove tough to
achieve (Holtskog and et.al., 2018).

EXTERNAL FACTORS
External environment refers to the factors
which builds an impact on the performance
of the business organizations from outside
the walls of company. These factors affects
the operations at a large scale that is macro
level and is uncontrollable in nature by the
business management.

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PESTLE analysis for Marks and Spenser is analysed as under:
 Political Factor: The factor directs the policies and role of government which has
an impact in business operation's. Concepts such as Political stability and instability,
governmental taxes, trade policy, trade restrictions, etc. are categorized under
political factors.

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 Economic Factors: Factors such as economic growth, exchange rate system,
inflation, GDP, etc. It creates an impact on the operation's of the business as
well as their profitability. The factor is concerned with the demand and
supply prevailing in the market (Islami, Mulolli, and Mustafa, 2018).

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 Social Factor: The factor is being concerned with the societal beliefs and values,
perspectives and acceptance of the society members, etc. Since the companies
operated within the society so it has to abide by the societal culture. This includes
demographics of the society, population growth and distribution, etc (Muli, 2018).

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 Technological Factor: This comprises of technological know how and its
innovation. Technology is something which is the need of the hour and no company
can survive by operating without the use of technology. Up-gradation or
enhancement in technology supports the company to achieve growth and increase
sales in the market.

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 Legal Factors: The factor is backed by laws and rules formulated by the court of
law for the operations of businesses. These comprises of laws such as Advertising
standards, consumer laws, labour laws, health and safety, etc. it is not on the wish of
the companies to follow these laws rather it is mandatory for them.

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 Environmental Factors: This includes issues like pollution, sustainability, carbon
emission, natural disaster, climatic change, etc. under the shed. Environment is
something which is inseparable from the planet and every one is concern about this.
People now a days are very much conscious about the environmental issues and its
use so companies need to pay concern on the environmental issues in order for long
term sustainability in the market.

IMPACT OF BUSINESS ON
EXTERNAL ENVIRONMENT
Every business exists in the environment and of whose resources the companies uses in
their operation's. Business and environment both are inter-related to each other and are
inseparable too. Unlike the external environment creates an impact on business, business
also creates an impact on environment. The ways in which a business can impact on the
external environment are us under:

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 Social: Business can generate employment in the society by employing
competent personal in the organization and by creating more and more
opportunities through establishment of its branches. Marks and Spenser being a
multinational company can setup its branches in various countries which gives
rise to the employment.

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 Economical: Since business firms operates with the motive of earning profits.
Companies earns profits by the sale of its products for some price.
Businesses can impact economy either by increasing the purchasing power
of consumers in the economy or can bring inflation by charging high prices
for their products and services.

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 Technological: Technology is the need of the hour and every company in
builds some kind of technology in its business operations. Innovation in the
products or services comes out from the use of updated technology and by
smart use of the same. Business can create its impact on technological
environment by bring innovations in its offerings regularly or frequently.

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 Legal: When the market big giants follows legal rules and regulations in its
business and operates accordingly, then it creates an impact on other firms to
follow the laws. Generally small companies tries to follow the growth strategies
of multinational or large scale companies so influences others to respect legal
policies and regulations in practice. By this business impacts on external
environment.

CONCLUSION
From the present essay it can be concluded that environment has a great impact on the
success and sustainability of the business in market as well as in society. The factors
related to internal and external environment such as employees of the organization,
management, political, social, economical, technological, legal and environmental plays
a greats impact on every business. Some factors are uncontrollable whereas some are
controllable in the hands of company.

REFERENCES
Darchen, S., 2020. Contextual and external factors enabling planning innovations in a
regeneration context: the Lyon Confluence project (France). International
Planning Studies. 25(4). pp.340-354.
Dvorsky, J., Sopkova, G. and Janoskova, M., 2017. Evaluation of the social environment
and access to financial resources for business: case study of the Czech and Slovak
Republic. Ekonomicko-manazerske spektrum. 11(1). pp.62-73.
HASBI, and et.all., 2020. Analyzing of External Environment Force and Islamic
Business Ethics on Baitul Maal Wat Tamwil Performance through Organizational
Commitment. Journal of Applied Economic Sciences. 15(1).
Holtskog, and et.all., 2018. Culture: Internal Business Contradictions. In Learning
Factories (pp. 83-101). Palgrave Macmillan, Cham.