Organization and Management

1. ENVIRONMENT FORCES &
ENVIRONMENTAL SCANNING
Mrs. Kathleen C. Abaja
Republic of the Philippines
Department of Education
Taguig-Pateros
PRES. DIOSDADO MACAPAGAL HIGH SCHOOL
SENIOR HIGH SCHOOL
Organization and Management

2. Objectives
• Identify various forces/elements of the
firm’s environment.
• Summarize these forces using the
Political, Economic, Social and
Technological Analysis (PEST) and
Strength, Weaknesses, Opportunities and
Threats (SWOT) analysis framework.

3. In or Out?
What are the internal and external factors that may lead
to the fall or success of a business enterprise?
INTERNAL EXTERNAL
Suppliers
Promotional StrategyRelationship with Employees
Management
Customers
Human
Resource
Financial Resource
Image Competitors
Plans &
Policies
Government
RegulationsPeso
Depreciation

4. Key Answer
INTERNAL EXTERNAL
Suppliers
Promotional Strategy
Relationship with
Employees
Management
Customers
Human
Resource
Financial Resource
Image
Competitors
Plans &
Policies
Government
Regulations
Peso Depreciation

5. What is business
environment?
Let’s find out…

7. TWO BUSINESS
ENVIRONMENTAL FACTORS

8. INTERNAL ENVIRONMENT
 Internal environment includes internal factors of the business.
 The components of internal environment are controllable.
Plans and policies Human resource Financial resource
Corporate image Plant and machinery
labor-
managementrelationship
Promoter’s vision

9. FACTORS OF INTERNAL
ENVIRONMENT
Plans and Policies
• The plans and policies of the firm should be properly framed
taking into consideration the objectives and resources of the
firm. Proper plans and policies help the firm to accomplish its
objectives.
Human Resource
• The survival and success of the firm largely depends on the
quality of human resources. The social behavior of the
employees greatly affects the working of the business. The
characteristics of human resource like skill, quality, morale,
commitment can contribute to the success of the
organization.

10. FACTORS OF INTERNAL
ENVIRONMENT
Financial Resource
• Capital is the lifeblood of every business. Finance
relates to money. A firm needs adequate funds to meet
its working capital and fixed capital requirements. There
is a need to have proper management of working
capital and fixed capital.
Corporate Image
• A firm should develop, maintain and enhance a good
corporate image in the minds of employees, investors,
customers etc. Poor corporate image is a weakness of
the firm.

11. FACTORS OF INTERNAL
ENVIRONMENT
Plant and Machinery
• Plant and machinery is the internal part of the business
firm. If the machines are obsolete or outdated, they
should be replaced by a new one, or that adversely
affects the business firm.
Labor and Management Relation
• Better Labor- Management relationship helps in
increasing the morale of the employees and motivates
them to put efforts in the business. Such strong
relationship enhances organizations development.

12. FACTORS OF INTERNAL
ENVIRONMENT
Promoter’s Visions
• The promoter should have far
sight vision to forecast
opportunities and threats in the
business so that the opportunities
are properly grabbed and threats
are diffused off in time.

13. EXTERNAL
ENVIRONMENT
 External factors are unpredictable and uncontrollable.
They are beyond the control of the company.
 According to William Glueck and Jauck, “In environment
there are several factors which constantly bring
opportunities and threats to the business firm. It includes
social, economic, technological and political conditions”.
 External environment is further classified as:
– Micro Environment
– Macro Environment

14. EXTERNAL ENVIRONMENT
MICRO FACTORS
Consumer is
the king of
the market
The company
has to identify its
competitor’s
activities.
Information must
be collected
about
competitors in
respect of their
prices, products,
and promotion
and distribution
strategies.
It is
necessary to
have reliable
source of
supply for the
smooth
working of
the firm.
The members
of the society
include:
Financial
institutions
Shareholders
Government
Employees
General
public
include agents
and brokers
who help the
business firm
to find the
customers

15. EXTERNAL ENVIRONMENT
MACRO FACTORS

16. • a measurement tool which is used to assess markets
for a particular product or a business at a given time
frame.
• These can influence marketing and relationships that a
company has worked hard to develop. Knowing ahead
of time that a change may be occurring will help in
making better business decisions.

18. Factors/Elements of Firm’s Environment
1. According to the Labor Code of the
Philippines (Presidential Decree No.
442), every employee shall be paid a
night shift differential of not less than ten
percent (10%) of his regular wage for
each hour of work performed between ten
o’clock in the evening and six o’clock in
the morning.
Answer: POLITICAL FACTOR

19. 2. Imports will be more expensive (any
imported good or raw material will increase
in price).
Answer: ECONOMIC FACTOR
Factors/Elements of Firm’s Environment

20. 3. Muslims perceptions of Halal products
Answer: SOCIAL FACTOR
Factors/Elements of Firm’s Environment

21. 4. The use of Facebook page to increase the
marketability of the product
Answer: TECHNOLOGICAL FACTOR
Factors/Elements of Firm’s Environment

23. SWOT Analysis
POSITIVE NEGATIVE
EXTERNALINTERNAL
STRENGTHS
THREATS
WEAKNESSES
OPPORTUNITIES
 Experience and
knowledge
 Competence and
capabilities
 Quality and reputation
 Leadership
inadequacy
 Gap in skills and
knowledge
 Low morale among
team members
 Innovation and
technology
development
 Diversify the business
 Market demand
 Loss of major customers
 Strong competition,
competitive pricing
 Loss of alliance and
partners
 Economic condition
 Loss of key staff
POSITIVE
EXTERNALINTERNAL
STRENGTHS

24. SWOT Identification
1. Weak Leadership
2. Strong Competition
3. Popular Brand
4. Competitive Salary
5. Incompetent Manager
6. Wide Range of Customers
7. Reasonable Price
8. Money Devaluation
9. Unskilled Workers
10. High Cost of Importation of Raw Materials

25. KEY ANSWER
1. Weak Leadership - Weakness
2. Strong Competition - Threat
3. Popular Brand - Strength
4. Competitive Salary - Strength
5. Incompetent Manager - Weakness
6. Wide Range of Customers – Opportunities
7. Reasonable Price – Strength
8. Money Devaluation – Threat
9. Unskilled Workers – Weakness
10. High Cost of Importation of Raw Materials - Threat

27. Create Your Own
• Make your own SWOT and PEST Analysis on the business
that you have created. Follow the table below.