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Jelissa Edwards

Sasha Chatar

MGMT 0100

Monday, 8 September 2014

Influential Factors of the Internal and External Environment of Business

The external environment consist of those forces outside of an organization that may

have some influence on the way an organization functions internally, while the internal

environment consist of the factors within an organization that may affect its functionality. The

general external environment has several factors that can affect an organization. According to

tutor2u.net these factors are referred to as PESTI, which represents the words/terms political,

economic, societal, technological, and international (Riley). On the other hand, the internal

environment also consists of factors that can interfere with and affect an organization. A few

internal factors are employees, supervisors, shareholders, organizational culture & climate, and

the like. This paper will discuss two factors of the external environment, that is, the technological

and societal factors, and two factors of the internal environment, that is, organizational culture

and climate.

One example of an external social factor is one currently taking place within my country.

Recently, the Bahamas has completed and begun the use of its new sports stadium, built and

gifted to the Bahamas by the Chinese Government. In a documented interview, found on

tourisumtoday.com, the minister of youth, sports, and culture, Desmond Bannister believed that

once the stadium was completed it would accrue economic benefits as well as provide

opportunities for sports tourism and host international events, trade shows, and exhibitions

(Lightbourne). Lately, the Bahamas hosted a football event for an American University

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competition, and months prior it was able to host a national track and field event which sparked a

large flow of tourists. This flow of tourists helped increase consumer consumption for businesses

such as restaurants, hotels, and the like. Increased population is a social factor, and businesses

are now forced to accommodate the Bahamas growing population.

Apart from the external social factor, there is also the external technological factor.

Approximately four years ago, the Bahamas had no smart phones. Therefore, there was no

constant access to apps such as ibuildapp or Facebook. Since the introduction of smart phones

and 4G networks, almost every Bahamian has access to the Internet. Some organizations

adjusted to this new technology and used it to their advantage for things such as using Facebook

for advertising and apps like ibuildapp to communicate and keep customers up to date. With the

increase in new technology, other organizations were forced to hop on board the technology train

in order to better compete.

As mentioned earlier, internal factors are those within an organization that may affect the

way it functions. One example is culture and climate. I once resigned from a business because of

its environment. The work hours were 8:00 a.m. – 5:00 p.m. for all employees, including my

manager, and we were reprimanded and sometimes dismissed for lateness. During my

probationary period, I noticed that not every employee was reprimanded for being late, and

lateness was my manager’s middle name. This made me feel as if my employer favored some of

the employees more. Apart from the business’s poor culture, the environment was very

competitive, unfriendly, and uptight. Prior to my resignation, the business had been searching for

employees, and they still are today. I’ve used my personal experience to show that as in this

business, organizational culture and climate can prevent highly trained employees from feeling

comfortable and committing to an organization.

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A social factor such as the growing population of an economy can affect businesses by

helping increase consumer demand, while the technological factor of increasing and new

technology forces businesses to adjust in order to remain competitive. Both factors are

considered a part of the external environment. Poor organizational culture and climate can also

affect an organization internally by preventing highly trained employees from feeling

comfortable or welcomed. Organizational culture and climate are two factors of the internal

environment of business.

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Works Cited

Lightbourne, Keva."Minister speaks to economic benefits of National

Stadium."Tourismtoday.com. N.p, n.d. Web. 19 September 2014.

Riley, Jim. "PEST Analysis."Tutor2u.net. N.p, 23 Sept. 2012. Web. 19 September 2014.