10. Types of environment
Internal environment External environment
Micro environment Macro environment
ENVIRONMENT OF BUSINESS
11. INTERNAL ENVIRONMENT
Has a direct impact on the business
Controllable: company has control over these factors
Factors
1.Value system
2.Vision, mission and objectives
3.Management structure and nature
4.Internal power relationship
5.Human resources
6.Company image
12. Value system
The value system of the founders and those
at the top has important bearing on the
choice of business, the mission and
objectives of the organization, business
policies and practices and is an important
factor contributing to success.
“We never dreamt about size, revenues and
profits. Our dream, right from day one, was
to build a corporation that was, above all
things, respected”
13. Vision, Mission & Objective
Ranbaxy’s mission: “to become a research based international
pharmaceutical company”-has driven it to enter the foreign
markets and development.
Thus the business domain of the company, priorities,
direction of development, business philosophy, business
policy etc, are guided by the vision, mission and objectives
of the company.
14. Contd….
Management structure
Organization structure influences business decisions.
Composition of board of directors , influences the
decisions of business as they are internal factors
Structure & style of organization may delay a decision making or may help
in quick decisions
VS
15. Contd….
Internal Power and Relationship
The amount of support the top management enjoys from
different levels of employees, shareholders and board of
directors have important influence on the decisions and
their implementation
•For example: relationship between the members of the
board of director and between CEO.
16. Contd….
Human resource
Important factor for any organization
Contributes to the strength & weakness of any organization
Must have characteristics like skills, quality, high morale,
commitment towards the work , attitude, etc.
The involvement & initiative of the people at different
levels vary from organization to organization
Organizational culture & overall environment have bearing
on them
17. Contd….
Company image & brand equity
Company’ image & brand equity in outside market has impact on the
company ‘s internal environment
Helps in raising finance, making joint ventures , other alliances,
expansions & acquisitions , entering sale & purchase
contracts , launching new products, etc.
18. OTHER FACTORS
Physical assets and facilities
Facilities like production capacity, technology are among the
factors which influences the competitiveness of the firm. The
proper working of the assets is indeed for free flow of working of
the company Example: DLF Infrastructure
Research and development
Though R&D department is basically done external environment
but it has a direct impact on the organization.
This aspect mainly determine the company’s ability to innovate
and compete
Example: Apple
19. Contd….
Marketing resources
Resources like the organization for marketing, quality of
the marketing men, brand equity and distribution network
have
direct bearing on marketing efficiency of the company
Example: Vodafone
Financial factors
Factors like financial policies .
Financial positions & capital structure are also important
internal environment affecting business performances ,
strategies and decisions
Example: HZL
