Organizational environment consists of both external and internal factors. Environment must be scanned so as to determine development and forecasts of factors that will influence organizational success. Show
Environmental scanning refers to possession and utilization of information about occasions, patterns, trends, and relationships within an organization’s internal and external environment. It helps the managers to decide the future path of the organization. Scanning must identify the threats and opportunities existing in the environment. While strategy formulation, an organization must take advantage of the opportunities and minimize the threats. A threat for one organization may be an opportunity for another. Internal analysis of the environment is the first step of environment scanning. Organizations should observe the internal organizational environment. This includes employee interaction with other employees, employee interaction with management, manager interaction with other managers, and management interaction with shareholders, access to natural resources, brand awareness, organizational structure, main staff, operational potential, etc. Also, discussions, interviews, and surveys can be used to assess the internal environment. Analysis of internal environment helps in identifying strengths and weaknesses of an organization. As business becomes more competitive, and there are rapid changes in the external environment, information from external environment adds crucial elements to the effectiveness of long-term plans. As environment is dynamic, it becomes essential to identify competitors’ moves and actions. Organizations have also to update the core competencies and internal environment as per external environment. Environmental factors are infinite, hence, organization should be agile and vigile to accept and adjust to the environmental changes. For instance - Monitoring might indicate that an original forecast of the prices of the raw materials that are involved in the product are no more credible, which could imply the requirement for more focused scanning, forecasting and analysis to create a more trustworthy prediction about the input costs. In a similar manner, there can be changes in factors such as competitor’s activities, technology, market tastes and preferences. While in external analysis, three correlated environment should be studied and analyzed — Examining the industry environment needs an appraisal of the competitive structure of the organization’s industry, including the competitive position of a particular organization and it’s main rivals. Also, an assessment of the nature, stage, dynamics and history of the industry is essential. It also implies evaluating the effect of globalization on competition within the industry. Analyzing the national environment needs an appraisal of whether the national framework helps in achieving competitive advantage in the globalized environment. Analysis of macro-environment includes exploring macro-economic, social, government, legal, technological and international factors that may influence the environment. The analysis of organization’s external environment reveals opportunities and threats for an organization. Strategic managers must not only recognize the present state of the environment and their industry but also be able to predict its future positions. Related ArticlesView All Articles
AbstractExternal and internal factors have crucial impact to SMEs environment. Nowadays business environment is more global and competitive than it has been in the past. A broad range of business factors are connected to SME’ competitive advantage. The aim of this research is to show the importance of external and internal factors in creation of the SME’s competitive advantage. The resource – based view of the SMEs, such as capabilities, competencies etc., and the threat of new entrants, rivalry, threat of substitutes, supplier power and buying power; the combine of these factors are in the center of this study. Firms need to better understand the competitive environment and develop strategies that create sustained competitive advantage. Then we present our study methodology used on this study which consists in a combination of qualitative and quantitative method. To realize the aim of this study are determines some objectives and research question pertaining the impact of the external and internal factors, such as Porter’s five forces or, tangible and intagible assets in the creation of competitive advantage etc. Based on the research questions are made hypothesis. The empirical analyze is done to understand the potential sources of competitive advantage for SMEs. Study consists on a final sample of 460 participant from different small and medium enterprises in Northern Albanian Region. It is used regression analysis. The result revealed that both, external and internal factors have positive affect in competitive advantages of SMEs. Based on the result of this analyze are done conclusions. Findings support the idea, within limitations, that external environment have greater impact than internal environment on SME’s success. Results strongly suggest some important academic and practitioner implications and some suitable recommendations. Downloads
Download data is not yet available. How to Cite Kraja, Y. B., & Osmani, E. (2015). IMPORTANCE OF EXTERNAL AND INTERNAL ENVIRONMENT IN CREATION OF COMPETITIVE ADVANTAGE TO SMEs. (CASE OF SMEs, IN THE NORTHERN REGION OF ALBANIA). European Scientific Journal, ESJ, 11(13). Retrieved from https://eujournal.org/index.php/esj/article/view/5641 Why is it important to understand internal and external environment?Once they know about both positive and negative effects within and outside the company, they can produce suitable strategies to handle any predicted situation. Therefore, examining internal and external factors is considered the most important task for an enterprise before launch any strategic marketing plan.
Why is the understanding of external and internal threats important in an organization?When an organization matches internal strengths to external opportunities, it creates core competencies in meeting the needs of its customers. In addition, an organization should act to convert internal weaknesses into strengths and external threats into opportunities. Focus on your strengths. Shore up your weaknesses.
Why is it important to understand the internal environment?Evaluating the internal environment, company's assets, and capabilities highlights organizational weaknesses and strengths. Combining both findings gives you a broader perspective and a holistic picture of your organization's situation.
Why is it necessary to assess and analyze the external and internal environment of the firm?Environmental scanning is necessary because there are rapid changes taking place in the environment that has a great impact on the working of the business firm. Analysis of business environment helps to identify strength weakness, opportunities and threats.
|
Why is understanding and analyzing the internal and external environment important?
zusammenhängende Posts
Urheberrechte © © 2024 WIKIFI Inc.
