NAME:SALHIN BIN BOLKERI

SEM:3
ID:CSC2021/020019

1.Externel Environent:
An external environment is a group of factors or conditions that are outside the
organization but affect it in some extent. In business, this term commonly applies to
elements related to out of control dimensions such as society, economy, regulations and
political system. They interact with other entities and are influenced by a wide range of
events, situations and other player’s decisions that are out of its control. No matter how the
firm controls its internal processes, there are many other aspects that also impact the
performance and ultimately affect profitability and growth.
Government decisions, competitor movements and changes in the socio-economic
environment are some issues that must be known and understood by the company.
Identification and comprehension of those elements allows more complete analysis of risks
and potential threats. Monitoring trends and forecasting events support better strategies
because the firm can take advantage of positive situations and minimize the effect of
adversities.
Example:
Nwarz & Hanlet is a growing company operating in a niche of the pharmaceutical industry. It
has been very successful with a narrow portfolio but now the Board of Directors decided to
analyze market possibilities in other pharmaceutical categories.
In this regard, they started studying the external environment. The analysis allowed the
Board to identify were some risks related to competitors because of the potential
introduction of large multinationals. It was also possible to identify regulatory constraints
because the government imposes stricter demands in these new categories. Finally,
consumers associations were more inclined to react negatively to new companies, since
they had bad experiences in the past in some of the researched categories.
Nevertheless, the Board of Directors recognized opportunities in some of them. Thanks to
the information gathered and analyzed in relation to the external environment the company
was able to define a coherent growth strategy that positively impacted its performance.
2. INTERNAL ENVIRONMENT
An internal environment is a set of elements that define the atmosphere within the
company’s structure. It describes the way activities and relationships are carried out inside
the business, normally within co-workers.A company’s organizational structure consist in a
set of daily interactions between employees. There is normally a hierarchical order that
guarantees proper supervision and the way leadership is carried out will affect the business’
culture. This is an important aspect of the internal environment since leadership roles within
the structure will serve as the starting point of culture creation.
A positive and encouraging internal environment has to be modeled from top to bottom and
this a key role that top executives have to take care of. On the other hand, adequate
compensation, rewards and benefits also have the power to create a healthy environment.
If employees perceive that they are being properly compensated for their job duties their
attitude towards work will be more positive.
Other elements such as training and career development programs, a friendly environment,
a challenging job design and growth opportunities are also part of the internal environment
of any company. Managers should always encourage a healthy internal structure in order to
obtain more productive results.
Example:
Larry and Sergei are both employees of Polet Communications, a company that provides
internet services for companies with high bandwidth requirements. Polet Communications
was recently the winner of the Best Place to Work award for the state where it is based on.
Larry and Sergei were interviewed by the organization that grants this award to answer a
few questions about the way things are inside the company.
When they were asked about the internal environment they quickly responded that it was
the best work experience they have had so far. The company is constantly challenging its
employees to grow and to have a proactive kind of thinking. Problems are solved in a
friendly environment by including the whole team in many different aspects of the business
to give them a broad idea about things that are happening within the company. They both
said that they feel they’ve found a place where they will be willing to work for the rest of
their lives.