Entry 3 (IY1 Introduction to Business and Management)

Entry 3

In this entry, I am going to illustrate internal environment and micro environment.

The definition of business environment

!) According to Arthur M. Weimer, " Business environment is the climate or set of conditions - economic, social, political or institutional in which business operations are conducted."

!!) According to Bayard O.Wheeler, " Business environment is the total of all things external to business firms and industries which affect their organisations and operations.

Business environment has two components:

(1) Internal environment : people, finance, technology, power, culture, objectives and structure.

(2) External environment (Micro/Macro) : micro environment includes suppliers, customers, competitors, potential entrants and substitutes.

Examples of change in each element of the organisation( internal environment)

# Objectives   1) Developing a new product or service.
                    2) Changing the overall mission or direction.

# Technology  1) Building a new factory.
                    2) Creating a website on the Internet.
# People - 1) Design a training programme to enhance skills.
             2) Changing the tasks of staff to offer a new service.
# Structure - 1) Reallocating functions & responsibilities between department.
                 2) Redesigning work to improve communication and efficiency.

The definition of micro environment

!) According to Philip Kotler, "The micro environment consists of factors in the company's immediate environment which affect the performance of the business unit.

!!) According to Hill and Jones, "The micro environment of a company consists of elements that directly affect the company.

Porter's five forces are widely used to assess the structure of any industry.

Porter's five forces are the:
1) Bargaining power of suppliers
2) Bargaining power of buyers
3) Threat of new entrants
4) Threat of substitutes
5) Rivalry among existing firms

                                                  

 

 

 

Given my experience in an English academy, there were a great number of business environments regardless of internal and external environments. First of all, internally, the president of academy executed a plan to redesign work in order to improve efficiency and communication.

In addition,  an institute owner sent his staffs a certain seminar so as to enhance employee's skills. Secondly, externally, there were a lof of competitors that teach English. As a result, our academy tried to attract a great many students, providing discount coupons and employing teachers who were much in demand from a lot of parents.

 

 

To conclude, I mentioned definition of business environment, internal environment and external environment in more details based on my personal experiences. In the business world, business environment is unavoidable situation. Therefore, organisations should deal with a variety of environmental factors well.