Muhammad Usman Shahid

1. ANALYSIS OF ORGANIZATION AND ITS
ENVIRONMENT
Represent To: Ma’am Sahar Iftikhar
Prepared By: M Usman Shahid
Roll No. : BBAE-19-11
BBA 3rd Evening
Oral Communication
Business Administration
Ghazi University

2. WHAT IS ORGANIZATION ENVIRONMENT?
Definition:
1. Environment of any organization is “the aggregate
of all conditions, events and influences that
surround and affect it”.
2. The combination of internal and external factors
that influence a company’s or organizational
operating situation.

3. TYPES OF ENVIRONMENT?
 Internal Environment
 Owner
 Board of Directors
 Employees
 External Environment
 Micro Environment
 Macro Environment

4. INTERNALENVIRONMENT
1. Forces or conditions or surroundings within the
boundary of the organization are the elements of
the internal environment of the organization.
2. The internal environment consists mainly of the
organization’s owners, the board of directors,
employees and culture.

5. INTERNAL ENVIRONMENT?
Owners
• They are people who invested in the company and
have property rights and claims on the
organization.
• They can be an individual or group of person who
started the company; or who bought a share of the
company in the share market.
• They have the right to change the company’s policy at
any time.

6. INTERNAL ENVIRONMENT?
Board of Directors
• The board of directors is the governing body
of the company who are elected by
stockholders, and they are given the
responsibility for overseeing a firm’s top
managers such as the general manager.

7. INTERNAL ENVIRONMENT
Employees
• Employees or the workforce, the most important
element of an organization’s internal environment,
who performs the tasks of the administration.
• Individual employees and also the labor unions
they join are important parts of the internal
environment.
• If managed properly they can positively change the
organization’s policy. But ill-management of the
workforce could lead to a catastrophic situation for the
company.

8. EXTERNAL ENVIRONMENT
1. Factors outside the organization which provide
opportunities or pose threats to the organization
2. Factors that can impact the ability of a business or
investment to achieve its strategic goals and
objectives.
3. Classified into two categories
 Micro
 Macro

9. EXTERNAL ENVIRONENT
 Refers to the environment which is in direct contact with
the business organization and can affect the routine
activities of business straight away.
 Types of Factors:
 Suppliers
 Customers
 Marketing Intermediaries
 Competitors
 Publics
 Financial Intermediaries
Micro Environment

10. MICRO ENVIRONMENT
 SUPPLIERS:
Suppliers are the persons who supply raw material to company.
 CUSTOMERS:
Customers are the persons who buy goods from company.
Micro Environment

11. EXTERNAL ENVIRONMENT
 MARKETING INTERMEDIARIES:
Market intermediaries are those person who helps company to sell
its products.
 COMPETITORS:
Competitors are those who also sell same product as the company or business.
Micro Environment

12. EXTERNAL ENVIRONMENT
 PUBLIC:
Group of people who can buy or who can show
their interest to buy the products of company
 FINANCIAL INTERMEDIARIES:
Are those institutions who provide loan, credit and
advance to company.
Micro Environment

13. EXTERNAL ENVIRONMENT
 Refers to the external factors which affects company and its business and there is
no control of company on these factors.
Types of Factors:
 Economic
 Non-Economic
 Political
 Demographic
 Socio-Cultural
 Technological
 Natural
Macro Environment

14. EXTERNAL ENVIRONMENT
Macro Environment
ECONOMIC:
1. The economic environment constitutes of economic
conditions, economic policies, and the economic
system that is important to external factors of
business.
2. Economic environment refers to the nature and
direction of the economy within which business
organisation are to operate. insert picture background

15. EXTERNAL ENVIRONMENT
NON-ECONOMIC:
Political and Legal Forces:
Refers to the political, government and legal environment.It
has close relationship with the economic system and
economic policy.
This refers to set of laws, regulations, which influence the
business organizations and their operations
Macro Environment

16. EXTERNAL ENVIRONMENT
 NON-ECONOMIC:
Demographic Forces
Demography refers to study of the population.
Demographic factors are as below:
 Size of population
 Growth rate
 Family size
 Educational level
 Age composition
 Sex composition
Macro Environment

17. EXTERNAL ENVIRONMENT
NON-ECONOMIC:
Socio-Cultural Forces:
Socio-cultural environment is an important factor that should be
analysed while formulating company business strategies. These includes people’s
attitude to work and wealth, ethical issues, role of family, marriage, religion and
education and the social responsibilities of business
Macro Environment

18. EXTERNAL ENVIRONMENT
NON-ECONOMIC:
Technological Forces:
Technological forces or factors could be said to be the most
pervasive in the environment. Technology refers to the application of
knowledge base which science provides. It is a well established fact that
information and communication technology has revolutionized business
operations
Macro Environment
NON-ECONOMIC:
Natural Forces:
The natural environment includes geographical and
ecological factors that influence the business operations. These factors
include the availability of natural resources, weather and climatic
condition, location aspect, topographical factors, etc

19. DEFINITION AND CONCEPT
It a process of conducting research on the
business environment within which an organization operates and
on the organization itself, in order to formulate strategy.
STRATEGIC ANALYTICALTOOLS

20. 1. PEST Analysis
2. PESTLE Analysis
3. STEEPAnalysis
4. STEEPLEAnalysis
EXAMPLES OF ANALYTICAL METHOD
USED IN STRATEGIC ANALYSIS

21. POLITICAL:
These include government regulation such as employment
laws, environmental organizations and tax policy.
Other political factors are trade restrictions and
political stability
PESTLEANALYSIS
ECONOMIC:
These affect the cost of capital and
purchasing power of an organization.
Economic factors include economic growth,
interest rates, inflation and currency
exchange rates

22. SOCIAL:
These impact on customer’s need and the potential
market size for an organization’s goods and services.
Social factors include population growth, age
demographics and attitude towards health.
PESTLEANALYSIS
TECHNOLOGICAL:
These influence barriers to entry, make
or buy decisions and investment in innovation, such as
automation, investment incentives and the rate of
technological change.

23. LEGAL:
This factor has both external and Internal sides .There
are certain laws that affect the business/organization
environment in a certain country while there are certain
policies that companies maintain for themselves.
PESTLEANALYSIS
ENVIRONMENTAL:
This factors includes all those that influence or
are determined by more the surrounding
environment.