Impact of Internal and External Factors on Business Organization - Sainsbury

This report discusses the impact of internal and external factors on the business organization, specifically focusing on Sainsbury, a supermarket chain in the retail industry. It covers the political, economic, social, technological, legal, and environmental factors that affect Sainsbury's operations. It also explores the internal factors such as finance and resources, organizational culture, employees and managers, and vision and mission statement. The report concludes by emphasizing the importance of considering these factors in decision-making to ensure the company's success.

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The business environment can be connoted as the
external forces, institutions and factors which are
beyond the control of business and affect and
influence the working of company. There are many
internal factors also which affect the working of
companies and these includes the competitors,
customers, government, suppliers, etc. The
environment in which a business operates is dynamic
in nature as it changes with changing time and needs
of the society. It is not static but rather it is complex
and changeable. The organization chosen for this
report is Sainsbury which is a supermarket chain
dealing in retail industry. It was founded in the year
1869. This report shall cover the relationship of
business with its external environment.
It is important for the business to analyse its business environment so that it can such decisions which are in harmony with them. These
influence the working and operations of business. In context to Sainsbury, the effect of internal and external environment is illustrated below-
Internal and External factors
INTRODUCTION How external and internal factor affect business organization.
Technological- It includes the technological
advancement in the business environment which
influences the working of business. In context to
Sainsbury, it has recently developed the e-commerce
store of it which is helping in catering to tech friendly
generation. This is helping in attracting more customer
who are lazy to visit store and shop for themselves.
Legal- It involves the laws and regulations which is
important for the company to comply with in order to
prevent any legal obligations. As Sainsbury involves
various layers of decision making, the systematic
changes in its working must not be affected by its
business structure. It must take quick regulatory
approvals in order to be at toes to meet customer
demands as any delay may result in loss of market.
Environmental- It includes the environmental
conditions which influences the business and its
customers. In context to Sainsbury, the supermarket
chain produces high carbon footprint which is adversial
to current conditions of environment. The company
must take active steps to lower its environmental
impact so that it can contribute to protection of ecology
and environment.
Impact of external factors on business organization, Sainsbury
External factors consist of those circumstances, influences and situation which is
beyond the control of business which affects the decisions of business made by
owner and its stakeholders. There are many external factors which have direct
impact on ability of business to accomplish its objectives. In context to Sainsbury,
the effect of external factors on its business environment is illustrated below-
Political- It involves the political influence on the working of the business which
affects its operations. In relation to Sainsbury, the biggest political factor which
affects the company is Brexit because as the UK is no longer part of European
Union, there are chances of increase in import rates which increases likelihood of
product price increase, thereby affecting the brand of company and losing
customers due to high competition which offers products at low rates.
Economic- It includes the economic condition of the country where the company
operates. In context to Sainsbury, it is dependent upon the road transport as it has
to ship the products across UK. This simply means that if there is rise in petrol and
diesel price, it will result in product price hike which will result in two things,
firstly loss of customers and secondly lack of fossil fuel will lead to looking for
alternate transport.
Social- It involves the socio cultural factors which affect the demand and supply o
offering of company. The large part of revenue generation for Sainsbury is from
sale of fast food item and the population shift to health conscious food may affect
its working as it has to change its product to healthy options.

Impact of Internal factors on Sainsbury
Internal factors include the strength and weakness of the
business which affects as to how a company can meet its
objectives. Some of the internal factors which affects the
business of Sainsbury are discussed below-
Finance and resources- These are the most requisite and
essential thing which is required by business to carry on its
functions. It plays an important role in maintaining the
performance of business at marketplace. Sainsbury is one
of the largest supermarketchain which requires huge funds
for its daily functioning. So these provide positive impact
on business but it is important to maintain these in an
effective manner to ensure smooth functioning.
Organizational culture- the culture of the company plays
an important role in the regulating the operations of the
business in the right manner. This factor has a influential
role in the business as culture plays an important role in
increasing the productivity of business. Sainsbury follows
influential culture that helps in maintaining discipline in
staff members so that they can perform their duties in an
effective manner in order to achieve its goals and
objectives. It creates positive and healthy environment in
the workplace.
Employees and managers- They are the asset of the
company as they are behind the success of the business.
The high quality skilled staffs are the key to success of
business. Sainsbury are concern of their employees so that
they can give their best and perform well. If the employees
are productive, it will lead the company to success and if
they are not productive, it will affect the working of
business.
Impact of the business on the external environment
The activities of corporations provide specific impact on the business environment.
Every company operates in external environment so it is important for its to pay
attention to it so that it can analyse the impact of business on external environment.
The activities of Sainsbury have a direct influence on external environment and it is
discussed below-
Competitive environment- As there is huge competition prevailing in the market so
it is essential for business to have such strategies which can help in taking a step
ahead of the competitors. Sainsbury has many competitors in the market and its
business affect the external environment positively as it focus on meeting the
current market demand through its offering.
Economy- As every business operates in the environment and its economy plays an
important role in it. Sainsbury has to take care of the economic factors while
making any decision so that it can contribute in uplifting the economy of country in
the positive manner.
Customers and suppliers- It is very requisite for the company to maintain healthy
and positive relationship with customers as they are the king of the market.
Suppliers on other hand are essential for business as they play important role in
fulfilling the demand of market so it is important to maintain good relationship with
them. Sainsbury takes care of its customers and suppliers altogether so that they
can fulfil their needs I order to achieve its business objectives.
Technology- It is important for business to take help of the technologies in order to
battle the competitions. With the use of right technology at right place, Sainsbury
can fulfil its daily operations in an effective manner. It uses advanced technologies
to connect with customers, making the economy of the country more uplifted.
Governmental policies- In order to follow the government laws and policies, the
companies make such strategies which are complied to so that it can have positive
impact on external environment. Sainsbury makes sure that it complies with
policies of government so that it can have positive impact on environment but if
there no compliance with national policies, it may create negative impact on it.
Vision and mission statement- It is essential
for the business to consider these statements so
that they can work to achieve it. These help in
gaining more profitability. The managers of
Sainsbury make such policies and rules which
inculcate the vision and mission statements so
that the employees can work on to achieve the
same. These statements have the huge influence
on decision making and working of business.
References
Cho, M. and Lee, K.H., 2017. Restaurant External and Internal Business Environments and Performance:
Moderating Effects of Supplier Commitment, 29(10), pp.405-422.
Elfahmi, S., Chandrarin, G. and Manan, A., 2021. The influence of external environment, internal environment, and
motivation on competitiveness through the product innovation of Lasem Batik Tulis SMEs in
Indonesia. International Journal of Business Innovation and Research, 24(4), pp.514-534.
It is concluded from the above report that every
business has huge influence on its working due
to business environment. There are two types
of factors, external and internal factors of
business environment which affects the
working of business. The external factors
include political, social, technological,
economic, environmental and legal factors
which influence the business and the working
of company also affect the external factors. On
other side, the internal factors include the
employees, culture of company, its vision,
mission, funds, resources and many others.
These all affect the working of business as the
company has to make such decisions which are
set in harmony with it.
Conclusion