business environment lpu pdf – what is called a company environment? see the next continuation

Topic – business environment lpu pdf

A. Understanding the Business Environment

The environment could be interpreted as all elements that can be interconnected and affect one another in certain circumstances and activities. The environment consists of physical and nonphysical elements. In the business world, physical elements such as technology, natural conditions and suppliers while non-physical elements could be in the proper execution of community customs, economic conditions and norms.

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business environment lpu pdf

Business consists of all activities and businesses to make a profit by providing items and services necessary for the economic system. The essence of any business venture is the exchange between the buyer and the seller.

From the above mentioned two definitions we could draw the conclusion that the understanding of the Business Environment are factors that could affect directly or indirectly the management of the business or business activities.

B. Division of Business Environment

business environment lpu pdf – Organizational environments may be distinguished over external environments and internal environments. The external environment contains factors that affect the corporation from outside the boundaries of the organization, while the internal environment includes factors within the corporation that affect the management of the organization.

The external environment of an organization is generally distinguished over the overall environment and a unique environment (also called a task environment) that features suppliers, customers, competitors, regulators, and unions. Meanwhile, the inner environment includes factors of mission vision, corporate culture, management style, organizational policy, employees, inter-divisional relationships, and informal organizations.

C. External and Internal Environmental Relations with Organizations

External environment as a source for suppliers of resources and consumers of output. Simply how much this environment can support an organization can have an effect on the organization’s operations and performance. A great relationship with suppliers will further ensure an easy influx of needed resources and satisfied customers will support demand for the goods and services produced.

The internal environment directly affects the level of capability along the way which includes all three subsystems in the organizational system, namely input, transformation, and output.

D. General Environment

The overall environment contains background conditions in an external environment that can have a major influence on the operational activities of an organization. These environments include:

Economic Conditions

Namely the overall condition of the economy related to interest rates, inflation, currency konvertibility, per capita income level, gross domestic policy, monetary and fiscal policy, tax system, population, unemployment, wage level and other related economic indicators.

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Socio-Cultural Conditions

The typical condition of the prevailing social values concerning human rights, customs, norms, values, beliefs, languages, attitudes, behaviors, languages, religions, tastes, aspirations, educational tend and related social institutions.

Legal Conditions – Politics

Namely political ideology, party and political orgnization, kinds of government, hokum, government laws and regulations that affect business transactions, agreements with other Countries, patents and trademarks.

Technological Conditions

That is the overall condition of the development and accessibility to technology in the environmental surroundings, such as the advancement of science.

Natural Environmental Conditions

It is just a common condition of nature and physical environmental conditions.

The difference in these related factors will undoubtedly be very noticeable for organizations operating internationally. The conditions in the general environment differ a great deal in a single Country with another. Successful managers of organizations operating internationally can understand these differences and assist the business to make the required operational adjustments.

E. Special Environment

A special environment contains organizations, groups, actual people with whom an organization must interact to be able to operate and thrive. Once called a task environment, this environment differs for every organization, with regards to the unique operating situation and domain of the organization.
Important elements in a organization’s specific environment include:


That’s, certain groups of an individual and consumer organizations or customers who buy goods from organizations and or use their services.


Certain human resources, information and finances and raw materials are expected by the corporation to operate.


Certain organizations offer the same or similar goods and services to the exact same group of consumers or customers.

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Government agencies or representatives at the neighborhood, regional and central levels as hokum penegsk and perturan that affect the operational activities of the organization.

Trade Unions

It is definitely an organization that gathers workers to fight for the aspirations of its members.

F. Internal Environment

These are factors within the organization that affect the management of operations. The influence of the internal environment on the corporation could be briefly ed as follows:
Vision is defined as an summary of the situation or portrait into the future (long term) that an organization will go to. For the time being, there’s a record concerning the intent and philosophy of the organization or the reason for packing a current orgaization. Each degree of management must fully understand what the vision and mission of the business is.

Corporate Culture

Culture is really a system of mutual values, beliefs, and habits within an organization that interacts with formal structures that produce behavioral norms within the organization. It’s the social and psychological climate of corporate ebuah, and its existence can be an open or open culture. In a closed culture the sentness of cendrung is produced by a higher level of management. Managers lack rely upon subordinates, lots of secrecy throughout the organization’s ranks, and employees are not compelled to be creative or take part in problem solving. Conversely, within an open culture decisions are created at less amount of management, rely upon subordinates or employees is considerable and employees are encouraged to be keatif and contained in problem solving.

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Management style

The attitude and preferentiality of the boss affects what sort of task is carried out. The issue can be if the managerial type of the higher manager is different from the low level manager. Generally speaking, lower-level managers have to regulate to the style of the boss.


The policy sets limits as a limitation consequently of creating decisions. Policies developed by lower-level managers must be aligned with those of higher managers. Policies tend to be meant to ensure consistency used such as for example when and how performance is assessed.


Employees vary from person to person in various ways such as proficiency, attitude, personal goals, and personality. Consequently, a successful manager’s behavior with an employee might not be effective with another employee. In extreme cases employees may change from each other making it almost impossible to manage as a group. To be able to be effective, managers must consider differences, both individual and group.

Informal organizations

Members of the corporation will encounter two forms of organizations within the company, namely formal and informal.Formal organization is indicated by a graph of organizational structures and job descriptions. Informal organizations are evolving relationships and patterns of human interaction within organizations which are not officially defined. Informal organizations may have an optimistic or negative effect on the span of the business’s activities.

Relationships between units

Managers must properly understand the partnership between existing divisions or departments and must maximize of the relationships. If the task of a division depends upon another division in the flow of work, then the manager must understand that cooperation with other divisions is urgently needed if the task is usually to be completed efficiently or the productivity of the division wants to be improved.

G. Environment and Competitive Advantage

According to Schermerhorn (1996), management’s attention in working with complex and constantly changing external environments is increasingly based on the idea of competitiveness. Competitive advantage is defined as a particular advantage that enables the organization to take care of market and environmental forces a lot better than its competitors.


No organization is immune to the influence of economic factors. More and more today, competition to search for consumers and get rare resources is getting harder and more merciless. Managers should direct companies to compete and win them, both at any given time once the economy is in recession and once the economy is growing.
Therefore today’s managers must understand and follow and be tuned in to the development of the world economy. Corporate leaders now realize that competitive excellence must be performed with full understanding, both on issues and opportunities from the international dimension in management.

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Socio-cultural issues

business environment lpu pdf – Any manager who discusses the excellence of competitiveness must acknowledge the importance of people. This relates to commitment and effort in using organizational resources that’ll determine the best amount of performance achievement. Good managers recognize that talented and diligent workers are essential to the excellence of long-term competitiveness. A manager must also make good decisions when recruiting and selecting workers from labor sources, both externally and internally.

Legal-political aspects

All efforts made by managers to pursue competitive advantage must be done with techniques which can be relating with the expectations of town, namely to uphold ethics and social responsibility, and to be within the framework of hokum and government regulations that support those expectations.
Managers are also required to understand various laws and regulations at the district, provincial and national levels including related government agencies. Organizations operating internationally will face greater complications since the laws and regulations vary from country to country.

Technology aspects

Today, we live and work in a century of information technology. Specifically for managers, the usage of technology and information is just a key theme of daily life. Computer and information technology continues to expand its influence on manufacturing and service processes. People feel that the excellence of competitiveness through technology would have been a key driver for the business within the next few years.
It must be acknowledged that the rapid ness of technology will bring about a variety of changes that continue in the wider community. As managers, employees and consumers we must strive to carry on to check out and understand every step of development and change.

Natural environment

Environmental issues rank second highest on social priorities after education. The outcomes of the survey reveal that the business enterprise world must take an active role in helping to resolve environmentally friendly problems which can be now facing the world community. Business leaders and pogresive governments recognize a large amount of the world’s industries count on natural resources for the root of the products it produces. They understand the huge possibility of green marketing concerning the sale of eco-friendly products.


The business environment has a huge affect the business’s operations and organizational management. For a manager this becomes both an opportunity and a challenge. The ever-changing environment requires management and organizations to be responsive and progressive.
So widespread and kopleksnya the environmental surroundings faced by way of a company demands professionalism from every human resource that exists in the company. Managers must always keep up with the flow of modernity, mastering technology and information to be able to gain a competitive edge.
Organizations that do not wish to constantly learn gradually will experience setbacks and deaths from losing competition meets the demands of the market.

That is expanation about business environment lpu pdf, hopefully useful

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