An organization within a Business must have the ability to examine and make changes based on internal and external environmental factors that affect its performance. The use of tools to analyze these environmental factors is the key to a successful organization.
There are two types of influences: internal environmental factors and external environmental factors. Internal environmental factors are events that occur within an organization. Generally speaking, internal environmental factors are easier to control than external environmental factors, because they are able to control the situation how they would like to. Some examples of internal environmental factors include: Management changes, Employee morale, Culture changes, financial changes and/or issues
External environmental factors are events that take place outside of the organization and are harder to predict and control. External environmental factors can be more dangerous for an organization given the fact they are unpredictable, hard to prepare for, and often bewildering. Changes to the economy, Threats from competition, Political factors, Government regulations, the industry itself, are all External influences.
Internal influences affect companies like Woolworths, a well-known Nation-wide company that was affected due to not making the amount of profit predicted by the half-year mark. This has been made a result as though there is extra pressure in making sure that the company will have to make the rest of yea profit, plus, the amount of growth was not made from the last half. This issue may have been caused from customers changing to their rival companies like Coles and Aldi, due to a closer distance for the consumer, more affordable, slack in products (meaning they are not of better quality as they were in the previous year), or simply just rather the business culture of the other companies more. Woolworths therefore need to go through the last year records against this year records and figure out the difference in sales. This may mean making the products cheaper so the consumer believes it is the better option to purchase.
Businesses like Mining is a risky business to invest in, it has many ups and downs when it comes to booms and Busts. Mining giants move on and their workforce follows, meaning a sudden decrease in tenants. Property investors then find themselves in an oversupplied property market, which leads to diminishing capital growth, high vacancy rates and low rental returns. The worst thing is that this error usually happens very quickly therefore it is difficult to continue as a boom.
The causes of a ‘bust’ are many and varied, but some of the main factors that affect a mining region’s continued success relate to fluctuations in foreign exchange rates, the value of specific minerals and the discovery of alternate mineral deposits.
Many commentators agree that Australia’s mining sector is not, in fact, considered to be in a ‘boom’ phase, as this implies short, sharp growth generally followed by a fast decline. Instead, it is believed Australia’s mining sector is entering a long-term growth phase that will be sustained into the future. Some have gone so far as to refer to the economic growth in Australia’s mining regions as an ‘economic transformation’.
External influences are much harder for the company to keep afloat, for example, interest rates that are cut, are very hard to control due to the fact that the economy changes so much. In this Article, it explains how “Wage growth has dropped to its lowest level since the current data series began in 1997”, this means that the average pay for an Adult employee has dropped down to the cost of life. Companies should pay their employees the 3% more than the current interest rate so that they are able to pay for their living. Though it is a curacy to do this, it is not compulsory to do so, therefore the company could lose employee’s as they may