Internal and External factors

This article discusses the impact of internal and external factors on business operations and success. It explores the influence of employees, management, political, social, economic, technological, legal, and environmental factors. The case of Marks and Spenser is used as an example. Find study material and solved assignments on Desklib.

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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 environment is
one which appears within the surrounding of company such
as employees, vision and mission, management,
organizational culture, etc. External environment is one which
arises outside the organization but impacts the business from
both externally and internally at large. It includes factors such
as Political, Economic, Social, Technological, Legal and
Environmental. No business or organisation can survive by
ignoring these factors of environment as it is inseparable from
the company. whether small medium or large every company
has to face the environmental factors (Darchen, 2020). The
internal and external factors of Marks and Spenser is
discussed in the present report.
Internal and External environment factors are those which
brings an impact on business success and its growth. Every
company in the society has to experience the causes and effects
of the factors prevailing in the environment.
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 effect the
operations of business individually not to the industry as a
whole. Companies can manage and reduce the effect of internal
factors on the business since these factors are controllable by
the organization in nature (Dvorsky, Sopkova, and Janoskova,
2017). Factors such as Employees of the company,
management, business policies and objectives, mission and
vision, organizational culture, etc. are considered as internal
factors.
Internal and External factors
Introduction Explain how internal factors impact on the specific business
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.all., 2020).
For Marks and Spenser its employees are very important and are
respected by the management. They are behaved with a great
degree of dignity and honour in the organization. For the long term
growth and success of the company its employees are the biggest
pillar.
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.all., 2018).
Marks and Spenser management team conveys its policies,
objectives, roles and responsibilities, target to its employees
effectively which helps the company to grow and minimizes the
changes of misunderstanding and loss of efficiency. Management
formulates the objectives by keeping in mind the competencies of
its employees which can be achievable by them.

Explain how external factors impact on the specific business
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. Company
cannot control the forces of factors rather it has to
adhere to its consequences and adjust its policies
according to those forces. Political, Economical,
Social, Technological, Legal and Environmental
factors are considered under the umbrella of
External environment of any business also known
as PESTLE analysis.
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).
Marks and Spenser being an old renowned brand in the markets of UK,
now having a styling issue with the customers. The customers have a
perception that company being an old does not offers new style in its
clothes to the customers especially for young age customers. The
company has adopted the payment via credit cards for the first time in
the market when the concept of credit cards has started in the market. It
is important for the company to understand the social culture and offer
its products according to the society's preferences.
Technological Factor: This comprises of technological knowhow 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. In the
dynamic environment it is very necessary for the companies to install
new technologies in the workings of the company in order to enjoy
competitive advantage (Tengtarto, 2020) .
Marks and Spenser runs its operations with the technological
enhancement as the company has installed self-check out technology in
its food unit chain. The self-check out technology allows the company
to save its time and capital. The company also uses e-commerce
technology for the sale of its clothing section.
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.
The company Marks and Spenser enjoys the governmental
support in terms of free trade across the country along with no tariff or
tax barriers. The operations of Marks and Spenser is affected by some
major factors that is political stability and tax policy.
Economic Factors: Factors such as economic growth, exchange rate
system, inflation, GDP, etc. It creates an impact on the operations 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).
Marks and Spenser being a quality focused company offers high range
products to its potential buyers which is quite high compared to
competitor’s prices. The effect of Brexit has lead company to face
crises and has impacted on cutting of its employees’ number by 2% in
the organization. The impact of economic factor forced company to
provide some discount to the customers in order to maintain its sale.
Marks and Spenser initiated to offer discount of at least 20% to its
buyers. And the economic crises in the year 1999 forced company to
enter into international market to save company from bearing the
losses.

Explain the different ways in which a business can impact on the 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:
 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.
 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. High purchasing power of the
consumers will leads the economic condition for
growth. Pocket friendly prices of Marks and Spenser
products impacts the external environment by
increasing the purchasing power of its potential
buyers worldwide.
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.
Marks and Spenser always brings some innovation in
its business which motivates its competitors to bring
innovation in their products too which creates an
impact on the environment.
Legal: When the market big giants follow 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 try 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. The company Marks
and Spenser is a multinational renowned trustworthy
brand which has a great influence on small and
medium business in the market. Marks and Spenser
creates an impact on external environment by
following legal laws and regulations properly in its
business which gives a motivation to other firms as
well as its competitors to follow the rules and
regulations.
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, economic, technological, legal and environmental plays a
greats impact on every business. Some factors are uncontrollable whereas
some are controllable in the hands of company. It can also be said from the
report that business also creates an impact on the external environment
especially in respect to employment generation, strengthening the
economic condition, giving birth to innovation, etc. Both business and
environment are inter connected to each other and both creates impact on
each other. Marks and Spenser is greatly impacted by the forces of
external environment and on the other hand also creates an impact on
environment through its brand image and also by its large scale
operation's.
REFERENCES
Books and Journals
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.