There are several factors which directly or indirectly influence the growth and development of an organism. There are as follows:
An organization has little or no control over its environment but needs to constantly monitor and adapt to these external changes, a proactive or reactive response leads to significantly different outcome.
The Environmental Domain The domain consists of all the entities of the environment that interacts with the organization. Although the domain can be large, it is important to focus on the ones that have the highest significance. The common external factors that influence the organization are discussed below.
It comprises of the related industries with similar products or services, their geographic locations and markets. It is important to know all the competitors, their organizational size and skills pool, their competitive advantages, their marketing strategies, offshore development etc.
Due to increasingly broad world economy, it is important to watch the competition across the oceans, competitive products launched from abroad, changing socio-political situations, and home grown entrepreneurs.
They are the end-users of the product and services, the most critical aspect of the environment.
Customers likes and dislikes changes rapidly, people live in a tight social system that create and encourage trends. These include the social, economical and cultural changes like population age, ethnicity, education level and economic class.
Such changes affect the customer preference and the mass market trends. An organization depends upon availability of certain external resources for its operations and productivity. These include undergraduate students, related university courses, training schools and labor market.
The availability of adequately External forces that influences the development employees at various levels in the organization can change dramatically over the period of time. Once the demand for certain skill drops, so does the supply, in a long run it adversely affect the organization since it becomes hard to obtain highly skilled new workers.
Similarly, as the competition grows, they compete for the same skill set in the market creating a high temporary demand.
Every organization uses certain raw materials to manufacture its product or service, any disruption in its supply, changes in cost of materials etc can have an adverse effect.
It provides operational support; it includes savings or available cash, credit lines to fund new ventures, venture capitals, the stock markets and investors. It is particularly noteworthy in the organizations that operate on thin margins or new startups since they have little support to raise capitals.
It includes the science and technology required for the production, the technical tools that are used in the manufacturing or the technology of the product itself in case of high-tech industry.
Internet, social network, advances in semiconductors and communication technologies have revolutionized how organizations operate in current era. All organizations have to abide by the legal system, new laws and regulations are constantly added due to the political or social changes.
Compliance can result in additional cost, developing new technology, additional taxes or legal fees; one such example is lowered carbon emission requirements. Not all factors impact the day to day operations and thus needs to be weighed differently.
Higher level of uncertainty entails that organizational leaders have a complex environment to deal with, it test their visionary and decision making capability in absence of clear data. A framework of environmental uncertainty can be formulated by determining the complexity and stability of the environment.
Not all domain factors might have considerable impact, one company might have very few competitors with little market share while another might be threatened by new players.
It is the frequency at which the domain elements change and how predictable are the changes. Domain is considered to be stable if only few elements change in a predicable fashion. It is considered unstable if the domain elements are dynamic and shift abruptly, and it is hard to anticipate the changes.
Environmental Intelligence Environmental intelligence gathering is a process of constantly scanning the environmental domain for changes. Its purpose is to detect the changes, gather vital information, perform methodical analysis and present its reports to the top executives in the organization.
There are two channels of obtaining environmental domain changes that are mentioned below. Organizations are an open system and are tightly bounded to its external environment.
Almost every functional unit has either direct or indirect linkage with the environment and it receives tips and information about the related changes. Similarly procurement dept can detect changes in suppliers and finance about availability of credit, economic outlook etc.
Some organizations create an additional functional unit that acts as a bridge between other units, it systemically collects and compiles the competitive information that is used by top executives in strategic planning and decision making.
Organizations can also use specialized external services in field of competitive intelligence and strategic planning.
These consultants work with the internal functional units as well the external environment to obtain their information, thus can potentially provide unbiased recommendations which are sometimes hard to obtain internally. Adapting to External Environment In order to survive and prosper, the organization has to adapt itself to the ecological system that surrounds itself.
It is important to utilize the environmental intelligence to determine the uncertainty and take appropriate actions for the well being of the organization.4 External Factors that Affect Human Resource Management Government Regulations – With the introduction of new workplace compliance standards your human resources department is constantly under pressure to stay within the law.
It greatly influences the different aspects of growth and development i.e. height, weight and structure of the body, colour of hair and eye, intelligence, aptitudes and instincts.
However environment equally influences the above aspects in many cases. External factors have far-reaching affects on your child's development. Your child's home environment, the friends with whom he spends time, the food that he eats and the amount of screen time -- not to mention the content -- are factors that influence his physical, social and cognitive development in powerful.
Organization’s External Environment The external environment of an organization comprises of all the entities that exist outside its boundary, but have significant influence on its growth and survival.
External and Internal Determinants of Development Thomas Osang A s Rodrik, Subramanian, and Trebbi () point out, factors that affect economic development can be classified using a two-tier approach. Based on a standard production function, inputs such as labor and physi-cal and human capital directly affect per capita income.
Internal & External Factors That Affect an Organization. by Sampson Quain; Updated May 04, Business owners can’t control external factors, but they must be able to anticipate and adjust to these factors to keep their organizations on track.
Internal and External Environment Factors That Influences Organizational Decision Making;.