DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)

Environmental Forces and Environmental Scanning

LAS for Organization and Management (Grade 11)
Quarter 3 - Week #3

Name: ___________________________________________ Strand: ________________________ Date:

______________

I – Background The various components of business environment are External

Good day, students! Are you doing well? This
Learning Activity Sheet (LAS) was written for you in mind. This
LAS to help you define and identify Environmental Forces and
Environmental Scanning.
II- Learning Competencies:
After going through this LAS, you are expected to:
1. Analyze various forces/elements influencing local and
international business environment using PEST and SWOT
(CG code: ABM_AOM11-Ia-b-3)
III- Essential knowledge, concepts and activities
Environmental Forces and Environmental Scanning
Environment consists of those factors that affect a business
enterprise from outside. External Environment includes
shareholders, competitors, customers, society, government laws and
regulations, policies and technology.
1. Micro-environment includes those players whose decisions and
actions have a direct impact on the company. Production and
selling of commodities are the two important aspects of modern
business. Accordingly, the micro-environment of business can
be divided.
2. Macro-environment is the condition that exist in the economy
as a whole, rather than in a particular sector or region. In
general, the macro environment includes trends in the gross
domestic product (GDP), inflation, employment, spending, and
monetary and fiscal policy.

The environment in which a business operates is a major

consideration n determining an organization’s design structure. The Various Constituents of Micro-environment are as under:
Considerations such as uncertainty, procurement, and
competition are linked with the external environment. A 1. Suppliers of inputs: An important factor in the external micro-
company’s strategy and approach to operations must also be environment of a firm is the supplier of its inputs such as raw
aligned with the limitations of its external environment. materials and components.
2. Customers: The people who buy and use a firm’s product and
Definition of Terms services are an important part of external micro-environment.
Since sales of a product or service is critical for a firm’s survival
1. Environment Scanning means seeking for and sorting and growth, it is necessary to keep the customers satisfied. A
through data about the environment. concern for customers’ satisfaction is essential for the success of
2. External Business Environment refers to the a business firms. Besides, a business firm has to compete with
factors/elements outside the organization which may affect, rival firms to attract customers and thereby increase the demand
either positively or negatively, the performance of the and market for its product.
organization. 3. Marketing Intermediaries: In the firm’s external micro-
3. Internal Business Environment refers to the environment, marketing intermediaries play an essential role of
factors/elements within the organization which may affect, selling and distributing its products. Marketing provides an
either positively or negatively, the performance of the important link between a business firm and its ultimate
organization. customers.
4. Competitors: Different firms in an industry compete for sale of
BUSINESS ENVIRONMENT their products. This competition may be based on pricing of
their products and non-price competition through competitive
INTERNAL advertising such as sponsoring some events to promote the sale
EXTERNAL ENVIRONMENT
ENVIRONMENT of different varieties and models of their products.
MICRO MACRO  Value System 5. Publics: Finally, publics are an important force in external
 Mission and microenvironment. Environmentalists, media groups, women’s
 Suppliers or  Economic Objectives associations, consumer protection groups, local groups, Citizens
inputs  Political-  Organizational Association are some important examples of publics which have
 Customers Legal structure an important bearing on the business decisions of the firm.
 Marketing  Technologic  Corporate
Intermediaries al Culture External Macro Environment
 Competitors  Global  Quality of
 Public  Socio- Human Apart from micro-environment, business firms face large
cultural Resources external environmental forces. An important fact about external
 Demographi  Labor Unions macro environmental forces is that they are uncontrollable by the
c  Physical and management. Because of the uncontrollable nature of macro forces a
 Natural Technological firm must adjust or adapt it to these external forces. These factors are:
 Ecological Capabilities 1. Economic Environment: Economic environment includes all
those forces which have an economic impact on business.
Accordingly, total economic environment consists of agriculture,
industrial production, infrastructure, and planning, basic
economic philosophy,

2. Mission and Objectives: The business domain of the company,

direction of development, business philosophy, business policy
etc. are guided by the mission and objectives of the company.
Prepared by: Mr. Roseller T. Cabasag – Teacher II
 DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)
stages of economic development, trade cycles, national income,
per capita income, savings, money supply, price level and
population.
2. Political-legal Environment: Business firms are closely
related to the government. The political-legal environment
includes the activities of three political institutions, namely,
legislature, executive and judiciary which usually play a useful
role in shaping, directing, developing and controlling business
activities.
3. Technological Environment: Technological environment is
exercising considerable influence on business. Technology
implies systematic application of scientific or other organized
knowledge to practical tasks or activities. Business makes it
possible for technology to reach the people in proper format.
4. Global or International Environment: Global environment
plays an important role in shaping business activity. With the
liberalization and globalization of the economy, business
environment of an economy has become totally different wherein
it has to bear all shocks and benefits arising out of global
environment.
5. Socio—cultural Environment: Social and cultural
environment also influences the business environment indirectly.
These include people’s attitude to work and wealth, ethical
issues, role of family, marriage, religion and education and also
social responsiveness of business.
6. Demographic Environment: The demographic environment
includes the size and growth of population, life expectancy of the
people, rural-urban distribution of population, the technological
skills and educational levels of labor force. All these
demographic features have an important bearing on the
functioning of business firms.
7. Natural Environment: Natural environment influences
business in diverse ways. Business in modern times is dictated by
nature. The natural environment is the ultimate source of many
inputs such as raw materials and energy, which firms use in their
productive activity. The natural environment which includes
geographical and ecological factors such as minerals and oil
reserves, water and forest resources, weather and climatic
conditions are all highly significant for various business
activities.
8. Ecological Environment: Due to the efforts of
environmentalists and international organizations such as the
World Bank the people have now become conscious of the
adverse effects of depletion of exhaustible natural resources and
pollution of environment by business activity. 1.
Internal Environment
The factors in internal environment of business are to a
certain extent controllable because the firm can change or modify
these factors to improve its efficiency. However, the firm may
not be able to change all the factors. The various internal factors
are:
1. 1. Value System: The value system of an organization means the
ethical beliefs that guide the organization in achieving its mission
and objectives. It is a widely acknowledged fact that the extent to
which the value system is shared by all in the organization is an
important factor contributing to its success.
project – such as an online advertising campaign – is performing
according to initial projections.
Porter’s Five Forces
The objective of all firms is assumed to be maximization of
profit. Mission is defined as the overall purpose or reason for its
existence which guides and influences its business decision and
economic activities.
3. Organization Structure: The organizational structure, the
composition of the board of directors, the professionalism of
management etc. are important factors influencing business
decisions. The nature of the organizational structure has a
significant influence over the decision-making process in an
organization.
4. Corporate Culture: Corporate culture is an important factor for
determining the internal environment of any company. In a
closed and threatening type of corporate culture the business
decisions are taken by top level managers while the middle level
and lower level managers have no say in business decision
making. This leads to lack of trust and confidence among
subordinate officials of the company and secrecy pervades
throughout the organization.
5. Quality of Human Resources: Quality of employees that is of
human resources of a firm is an important factor of internal
environment of a firm. The characteristics of the human resource
like skill, quality, capability, attitude and commitment of its
employees etc. could contribute to the strength and weaknesses
of an organization.
6. Labor Unions: Labor unions collectively bargains with the
managers for better wages and better working conditions of the
different categories of workers. For the smooth working of a
business firm good relations between management and labor
unions is required.
7. Physical Resources and Technological Capabilities: Physical
resources such as, plant and equipment and technological
capabilities of a firm determine its competitive strength which is
an important factor for determining its efficiency and unit cost of
production. Research and development capabilities of a company
determine its ability to introduce innovations which enhances
productivity of workers.
Specific Components of the External Business Environment
Stakeholders, Customers, Suppliers, Pressure groups, Organization’s
investors or owners
and Employees.
Component of the Internal Business Environment
Resources – financial, physical, mechanical, technological, and
human resources must be subjected to internal analysis (SWOT)
What is a SWOT Analysis?
A SWOT analysis is a technique used to determine and
define your Strengths, Weaknesses, Opportunities, and Threats
(SWOT). SWOT analyses can be applied to an entire company or
organization, or individual projects within a single department. Most
commonly, SWOT analyses are used at the organizational level to
determine how closely a business is aligned with its growth
trajectories and success benchmarks, but they can also be used to
ascertain how well a particular
IV. Assessment
Directions: Read each item carefully. Choose the letter of the best answer.
Write the letter of the correct answer on the space provided.
_____1. Which of the following refers to the factors/elements outside
the organization which may affect, either positively or negatively the
performance of the organization?
Prepared by: Mr. Roseller T. Cabasag – Teacher II
 DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)
A. External Business Environment
Porter’s Five Forces analysis is a framework that helps B. Internal Business Environment
analyzing the level of competition within a certain industry. It is C. Macro-Environment
especially useful when starting a new business or when entering a D. Micro-Environment
new industry sector. It is especially useful when starting a new
business or when entering a new industry sector. According this _____2. It is the condition that exist in the economy as a whole,
framework, competitiveness does not only come from rather than in a particular sector or region.
competitors. Rather, the state of competition in an industry A. External Business Environment
depends on five basic forces: threat of new entrants, bargaining B. Internal Business Environment
power of suppliers, bargaining power of buyers, threat of C. Macro-Environment
substitute products or services, and existing industry rivalry. D. Micro-Environment

PESTEL Analysis. A PESTEL analysis or PESTLE analysis ____3. Which of the following is the process of measuring or
(formerly known as PEST analysis) is a framework or tool used comparing one’s own products, services, and practices?
to analyses and monitor the macro-environmental factors that A. Benchmarking C. Poster’s Analysis
may have a profound impact on an organization’s performance. B. PESTEL Analysis D. SWOT Analysis
This tool is especially useful when starting a new business or
entering a foreign market. It is often used in collaboration with _____4. It is framework or tool used to analyses and monitor the
other analytical business tools such as the SWOT analysis and macro-environmental factors that may have a profound impact on an
Porter’s Five Forces to give a clear understanding of a situation organization’s performance.
as the SWOT analysis and external factors. PESTEL is an A. Benchmarking C. Porter’s Analysis
acronym that stands for Political, Economic, Social, B. PESTEL Analysis D. SWOT Analysis
Technological, Environmental, and Legal factors.
_____5. Which of the following includes the size of a growth of
Components of Environmental Scanning population, life expectancy of the people, rural-urban distribution of
population, the technological skills and education levels of a labor
1. Developing a competitive mindset – by seeking and sorting force?
through data about environment, you may be able to A. Demgraphic Environment C. Natural Environment
understand and predict the various changes, opportunities B. Economic Environment D. Socio-Cultural Environment
and threats that may affect organizations in the future.
2. Considering future business scenarios – by realistic _____6. Which of the following include people’s attitude to work and
consideration of both worse case scenario or unfavorable wealth, ethical issues, role of family marriage, religion and education
future conditions, as well as middle ground possible and also social responsiveness of business?
conditions, you will have an idea or what to do in the future. A. Demographic Environment C. Natural Environment
3. Business prediction (also known as business forecasting) – is B. Economic Environment D. Socio-Cultural Environment
a method of predicting how variables in the environment will
alter the future of business. It could be used in making _____7. Which of the following is NOT an External Macro-
decisions regarding offshoring, branching out locally, and Environment?
expanding or downsizing the company. However, the A. Demographic Environment C. Organization Structure
accuracy of such business predictions cannot always be B. Ecological Environment D. Political-legal
assured.
_____8. Which of the following is an example of Opportunity under
the SWOT Analysis of an organization?
Benchmarking – the process of measuring or comparing one’s A. Changing customer attitudes toward your company
own products, services, and practices with those of the B. Few competitors in your area
recognized industry leaders in order to identify areas for C. Things your company does well
improvement. D. Things your competitors do better than you.

_____9. Which of the following is a framework that helps analyzing

the level of competition within a certain industry?
A. Benchmarking C. Poster’s Analysis
B. PESTEL Analysis D. SWOT Analysis

_____10. What is the acronym PESTEL stands for?

A. Political, Ecological, Social Technological, Environmental, and
Legal
B. Population, Economic, Social, Technological, Environmental, and
Legal
C. Political, Economic, Social, Technological, Environmental, and
Legal
D. People, Economic, Social, Technological, Environmental, and
Legal

Prepared by: Mr. Roseller T. Cabasag – Teacher II

 DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)

IV. Learning Activities

Directions: You have to fill in the graphic organizer chart to
generalize the thing about the topic. Use a separate sheet of
paper (10 points)

V. Assessment
Directions: Read each item carefully. Choose the letter of the best answer.
ANSWER KEY Write the letter of the correct answer on the space provided.
1. A
2. C _____1. What managerial skill has the ability to analyze and solve complex
3. B problems?
A. Conceptual skill C. Leadership skill
4. D B. Human Skill D. Technical skill
5. D
6. B _____2. Who is capable of maintaining unity of action in the organization?
7. C A. Figurehead C. Liaison
8. A B. Leader D. Spokesperson
9. B
10. B _____3. Which of the following is NOT a managerial skills?
A. Conceptual skills C. Human skills
B. Behavioral skills D. Technical skills

_____4. Which of the following defined as the various roles played by

managers?
A. Decision-making C. Interpersonal role
B. Informational role D. Managerial role

Prepared by: Mr. Roseller T. Cabasag – Teacher II

DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)
_____5. What managerial skill that has the ability to use one’s expertise?
A. Conceptual skill C. Leadership skill
B. Human skill D. Technical skill

_____6. What managerial skill enable managers in all levels to relate well
with people?
A. Conceptual skill C. Leadership skill
B. Human skill D. Technical skill

_____7. Which of the following managerial levels focus on long-term

organizational concerns and emphasize the organization’s stability,
development, progress and overall efficiency and effectiveness?
A. Lower-level managers C. Top-level managers
B. Middle-level managers D. Unit-level managers

_____8. Which of the following managerial levels responsible for

supervising the organization’s day-to-day activities?
A. Lower-level managers C. Top-level managers
B. Middle-level managers D. Unit-level managers

_____9. How would you categorize the interpersonal managerial role?

A. Disseminator, disturbance handler, liaison
B. Leader, liaison, figurehead
C. Monitor, negotiator, resource allocator
D. Resource allocator, leader, liaison

_____10. How would you categorize the informational roles?

A. Disseminator, figurehead, leader
B. Disseminator, monitor, spokesperson
C. Entrepreneur, negotiator, resource allocator
D. Monitor, negotiator, resource allocator

Prepared by: Mr. Roseller T. Cabasag – Teacher II

DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)

Prepared by: Mr. Roseller T. Cabasag – Teacher II

DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)

Prepared by: Mr. Roseller T. Cabasag – Teacher II

DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)

Prepared by: Mr. Roseller T. Cabasag – Teacher II

DepEd-Polanco NHS: Senior High School Learning Activity Sheet (LAS)

Prepared by: Mr. Roseller T. Cabasag – Teacher II