ENVIRONMENTAL

FORCES AND
ENVIRONMENTAL
SCANNING
Suzaine Polancos
Ivy Christine Viernes
Environmental Scanning- seeking for and
sorting through data about the environment
External Business Environment-refers to the
factors/elements outside the organization which
may affect, either positively or negatively, the
performance of the organization
Internal Business Environment- refers to the
factors/elements within the organization which
may affect, either positively or negatively, the
performance of the organization
 Components of the External Business Environment:
General and Specific
Systematic monitoring of the major external forces
influencing organizations is necessary to improve the
management of companies. Failure to consider a
company’s general and specific business environments
may affect the strategies that management will make
and use.
The general business environment includes the
economic,sociocultural,politicolegal,demographic,technol
ogical,and world and ecological situations; all these
must be considered as managers plan, organize, staff,
lead, and control their respective organizations.
Inflation, rates of interest, changing options in stocks markets, and people’s spending habits
are some examples of factors/ elements of economic situations. Economic situations may
affect management practices in organizations.
 Sociocultural situations include the customer’s changing values and preferences; customs
could also affect management practices in companies.
Politicolegal situations refer to national of local laws, international laws, and rules
regulations that influence organizational management.
 Demographic situations such as gender, age, education level, income, numbers of family
members, geographic origin, etc., may also influence so managerial decisions in
organizations.
 The technological situations of companies involve the use of varied types of electronic
gadgets and advanced technology such as computers, robotics, microprocessors, and others
that have revolutionized business managements; e-commerce, teleconferencing, and
sophisticated information systems have rapidly changed the ways that business is conducted
in the 21st century.
 World and ecological situations are related to the increasing number of global
competitors and markets, as well as nature and conditions of the changing natural
environment.
Meanwhile, the specific business environment focuses on stakeholders, customers, pressure
groups, and investors or owners and their employees.
 Stakeholders are parties likely o be affected by the activities of the organization
 Customers are those who patronize the organization’s product and services
 Suppliers are those who ensure the organization’s continuous flow of needed and
reasonably priced inputs or materials required for producing their goods and rendering
their services
 Pressure group are special- interest groups that try to exert influence on the
organization’s decisions or actions
 Investors or owners provide the company with the financial support it needs
 Employees are comprised of those who work for another or for an employer in
exchange of salaries/wages or other considerations