Report: Internal and External Environment Analysis of an Organization

This report provides a comprehensive analysis of the internal and external environments that impact a business. It begins by defining internal factors, such as employees and management, and their influence on organizational operations. The report then delves into external factors, including political, economic, social, technological, legal, and environmental (PESTLE) factors, and their effects on business performance, using Marks and Spencer as a case study. It examines the impact of these factors at a macro level, highlighting their uncontrollable nature. The report further explores how businesses can impact their external environments in social, economic, technological, and legal contexts. The conclusion emphasizes the crucial role of both internal and external environments in determining a business's success and long-term sustainability.

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.