Internal and external environment of the organization: defining the relationship

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The activity of any business entity is influenced by the internal and external environment of the organization, with the help of which actions are determined, as well as the ways of their functioning in the long term. All this directly depends on the ability of the subject to adapt to certain expectations and specific requirements of the environment.

So, today there are two subspecies of this concept: the internal and external environment of the organization. Internal factors can include the main elements, as well as subsystems of the structure of the enterprise itself, capable of ensuring the flow of processes in it. The concept of the organization's external environment is represented by a set of subjects, conditions and factors that, even being outside it, can influence its general behavior.

What is the enterprise environment? These are the combinations of various uncontrollable forces, taking into account which companies must exercise theiractivity. This term consists of macro- and microenvironment (external and internal environment of the organization). At the same time, the internal structure is represented by objects that are directly related both to the business entity itself in general and to its various structural elements. It is represented by a combination of technological, labor and economic factors, managed and regulated to a greater extent than the external environment. The internal environment at the enterprise determines the organizational and technical conditions of work, which can be attributed to the results of decisions made in management.

The internal and external environment of the organization must be constantly analyzed in order to identify the strengths and weaknesses of all aspects of its activities. This is necessary for the timely use of additional opportunities and the acquisition by the enterprise of some internal potential. Also, the identification of weak points helps to prevent the aggravation of threat and danger.

The internal and external environment of the organization are closely interconnected. Their performance is significantly influenced by the economic condition of society, which reflects the level of availability of money and labor resources, as well as the interest rate on invested capital. We should not forget about the prices of raw materials, materials and services.

There are political factors that are somewhat dependent on the ruling party in the state. Also an important role in this matter is played by the policy of the President and the presence(or lack of) hostilities.

A variety of the external environment is the cultural environment, the main elements of which include the actual culture, education, religious traditions and moral standards.

The internal and external environment of an organization combines various factors that manifest themselves regardless of the activities of a business entity with a significant impact on it. So, external factors can include elements of direct impact that can have a direct impact on the organization's activities.