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Organizational environment
Forces and conditions affecting resource use.
Internal environment
Strategy, structure, human resources, culture, and control mechanisms.
External environment
Industry-specific (task) and general environment.
Failure to adapt
Leads to competitive failure in the global economy.
Industry-specific (task) environment
Suppliers, distributors, customers, competitors.
General environment
Political, economic, sociocultural, technological, and international (PESTI) forces.
Globalization
Integration of economic, political, and social systems worldwide.
Factors driving globalization
Lower trade barriers, investment flow, cultural integration.
Trade wars
Conflicts leading to protectionism and restricted trade.
Global organizations
Companies operating across multiple countries.
Free-trade doctrine
The idea that unrestricted trade benefits all nations.
Tariff
Tax on imported goods.
Outsourcing
Using external firms for business processes.
Opportunities and threats
Depend on complexity and rate of change in the environment.
Strategic foresight
Predicting and preparing for future business trends.
Environmental change
Shifts in external forces requiring adaptation.
Government regulations
Laws affecting business operations.
Deregulation
Reducing government restrictions on businesses.
Privatization
Shifting public sector businesses to private ownership.
Competitive advantage
Achieved through efficiency, quality, innovation, and customer responsiveness.
Environmental, social, and governance (ESG) goals
Ethical responsibility in business.
Diversity, equity, and inclusion (DEI) goals
Promoting workplace inclusivity.
Artificial intelligence (AI)
Technology improving decision-making and automation.
Innovation
Developing new products, services, or processes.
Technology
Tools and systems advancing business operations.
Suppliers
Provide necessary inputs for production.
Distributors
Deliver products to customers.
Customers
End-users of goods and services.
Competitors
Other companies in the same industry.
Potential competitors
Businesses that might enter the market.
Barriers to entry
Factors preventing new companies from entering an industry.
Brand loyalty
Customer preference for a particular brand.
Economies of scale
Cost advantages from large-scale production.
Economic forces
Factors like inflation, unemployment, and economic growth.
Demographic forces
Population trends affecting business.
Sociocultural forces
Cultural and social trends influencing organizations.
Social structure
How a society is organized.
National culture
Shared values and beliefs of a country.
Power distance
Acceptance of unequal power distribution in society.
Individualism
Prioritizing personal goals over group goals.
Collectivism
Emphasizing group goals over individual interests.
Nurturing orientation
Valuing relationships, quality of life, and care.
Achievement orientation
Valuing competitiveness and success.
Long-term orientation
Prioritizing future rewards over short-term gains.
Short-term orientation
Focusing on immediate benefits.
B2B (business-to-business) commerce
Transactions between companies.
B2C (business-to-customer) commerce
Selling directly to consumers.
B2B marketplaces
Online platforms for business transactions.
Ecommerce
Online buying and selling.
Creating shared value (CSV)
Business strategies that benefit both companies and society.
Community economic development
Economic initiatives supporting local communities.
Uncertainty
Unpredictable external changes.
Uncertainty avoidance
Degree to which people feel uncomfortable with risk.
Certainty
Stability and predictability in the environment.
Protectionism
Policies restricting imports to protect domestic industries.
