1Q-B-ORGMAN-Lesson-Reviewer-for-students-A (1) PDF

Environment Forces and Environmental Scanning Prepared by: Mr. Jeffrel Thurston Definition of Environment The term "environment" comes from the Greek word "enveron," meaning "to surround." It refers to the surroundings or factors tat influence an organizat...

Environment Forces and Environmental Scanning Prepared by: Mr. Jeffrel Thurston Definition of Environment The term "environment" comes from the Greek word "enveron," meaning "to surround." It refers to the surroundings or factors tat influence an organization’s growth or development. “Organization and its environment” mean the interactions between an organization and its suroundings. This includes everything from internal processes to external influences. Environmental Scanning It is the process of gathering information about events, trends, and relationship within the internal and external environments that could affect an organization. It helps management understand what is happening inside and outside the organization, enabling them to make informed decisions about the future. 3 Types of Environmental Factors 1. Internal Environment: This includes all the forces within the organization that can affect its performance, such as organizational structure, culture, and the people (human resources). These factors are controllable, meaning the organization can influence them to improve its functioning. The 5Ms (method, manpower, money, materials, and machinery including technology) as internal resources adds depth to its internal environment and is useful in identifying the organization’s strengths and weaknesses. 2. Task Environment: This refers to the immediate environment that directly affects the organization’s day-to-day operations. It includes: ▪ Suppliers: Provide raw materials and resources. ▪ Distributors: Help sell the organization’s products/services to customers. ▪ Customers: The people or entities that buy the goods or services. ▪ Competitors: Other businesses that offer similar products or services and compete for the same customers. 3. External Environment: These are factors outside the organization that it cannot control but must adapt to. The PEST model (Political, Economic, Social, and Technological) helps identify the external opportunities and threats, and is useful for understanding these factors: a. Political Factors: Government policies and regulations that affect business operations. b. Economic Factors: Economic trends, such as inflation or unemployment, that can influence purchasing behavior. c. Social Factors: Societal trends, behaviors, and cultural norms that impact customer preferences. d. Technological Factors: Advances in technology that can change the market landscape or affect how products are produced and sold. Levels of Business Environment 1. Micro-Level: This level focuses on the internal workings of the organization, including departments, teams, and individual roles. It emphasizes how these internal elements interact to achieve organizational goals. 2. Macro-Level: This level looks at the organization as a whole within the larger society. It considers how external factors, such as market trends and societal changes, influence the organization’s operations. SWOT Analysis The SWOT analysis connects internal strengths and weaknesses with external opportunities and threats, providing a wide view of the organization’s strategic position. This framework helps organizations assess their internal and external environments by identifying: a. Strengths: Internal resources and capabilities that give the organization an advantage (e.g., skilled workforce, advanced technology). b. Weaknesses: Internal limitations that may hinder performance (e.g., lack of resources or inefficient processes). c. Opportunities: External factors that could be beneficial for growth and improvement (e.g., emerging markets, favorable regulations). d. Threats: External challenges or external risks that could harm the organization (e.g., increased competition, economic downturns). Example of SWOT Analysis for a Local Organic Products Online Business: Strengths (internal): - Uses locally-sourced organic materials, reducing import costs. - Growing interest among Filipinos in sustainable, eco-friendly products. - Lower operating costs due to being an online business. Weaknesses (internal): - Limited funds for marketing and advertising. - Struggles with high shipping costs, especially for customers in remote areas. - Difficulty competing with well-known brands. Opportunities (PEST-related external): - Political: Government support for small businesses and eco-friendly initiatives, like loans or grants for sustainable companies. - Economic: More Filipinos, especially in cities, are willing to spend on premium, organic products. - Social: Filipinos are becoming more environmentally conscious, preferring green products. - Technological: Growing e-commerce platforms (Lazada, Shopee) make it easier to reach customers nationwide.  Threats (PEST-related external): - Political: Changes in trade policies could affect the import of some ingredients. - Economic: Rising prices (inflation) might reduce consumer spending on premium products. - Social: Bigger companies entering the eco-friendly market, leading to increased competition. - Technological: Difficulty keeping up with bigger brands in terms of technology, like advanced online selling tools or delivery systems.