1. Organization while looking towards conducting their business has to deal with the different situations that the general environment presents. It is not possible for a business to be conducted in vacumn which thereby requires that the general environment is dealt in such a manner that it provides maximum advantage. The general environment for the business consists of the external environment and the competitive environment. Organizations need to develop strategies which looks towards dealing with both as the success of the organization will largely depend on the manner in which the business is able to deal with it. The external environment as the name suggests are the external factors which have an effect on the performance of the business.
These factors have an indirect effect on the business working and affect all business working in the industry similarly. The external factors which the business has to deal with are economic factors, political factors, legal factors, social factors, technological factors and environmental factors. Organizations have to take all the factors seriously and have to look towards dealing with it in the most efficient manner.
For example suppose a change in technology has resulted in certain production method to become obsolete as using the method means extra cost and wastage for the business. Organizations looking towards following the same method will have to encounter difficulties as using the same would lead towards inefficiency and will thereby have an effect on their performance vis-à-vis other players in the market. The competitive environment which is part of the general environment impacts the business directly and arises due competition that is prevalent. This has a larger effect on the performance of the organization and will require that proper strategies are developed which will help to deal with those is a better way.
This will require that the organization accesses the different risk that the business has to fact and based on it look towards formulating strategies so that the environmental factors are dealt in a better way and ensure maximum productivity and use of resources (Eric, 2009). While looking at both the external factors and the competitive environment it is seen that competitive factors have a larger effect on the organization as the magnitude of impact is large.
This is due to the fact that it directly impacts the organization and makes it difficult for the business to be able to control it. This requires that the organization scans the general environment in a proper manner and identifies the different factors and the effect they have on the performance of the business (Schermerhorn, Davidson, Poole, Simon, Woods & Chau 2011). This thereby highlights that the general environment of the business has an impact on the working of the business and requires developing tools and strategies which will help to reduce the impact on the business.
This will also help to improve the overall working strategy and will help the business to differentiate themselves from the competitors and deal with the general environment in the most productive manner. 2. Organization determine a motive or a path that they will look towards following and based on it the resources are allocated and strategies made so that overall effectiveness can be determined within the system. This has made organization adopt either a customer driven value organization or a quality driven value organization depending on the sector and type of business that the company looks to perform in.
Selecting the correct value for the organization and working based on it helps the business to get the required direction which facilitates in the development of a business model which matches the business requirements and ensures long term growth for the business.