Environment Scanning

In the lecture notes the various external environment factors that affect business operations. The following 6 components are discussed in the notes:

1. Economic environment

This refers to the changes in the economic cycles and economic growth and includes factors such as the inflation, tax rates, unemployment rates, and income levels. When the external economy is performing well for instance when the income levels of people go up then a business will perform well and vice versa.

2. Social environment

These includes the characteristics of the population such as their lifestyle, education level, values and attitudes. The social factors influence what products the people will demand more of.

3. Political environment

The political climate is also another critical factor that the management of organizations should consider in decision making. When there is political instability or unrest businesses will be affected negatively and when there is political stability a business will be affected positively (Kuzmin et al., 2021).

4. Legal/ regulatory environment

These includes the set of laws and regulations that govern an entire country and the industry within which an organization. Some laws could act as an opportunity while some other laws are a threat to a business.

5. Technological environment

Technology can be referred to as the application of the science and engineering skills in the solution of production and organizational problems. The software and new equipment affects businesses through the improvement of the production process (Yakubu et al., 2019). Technology advancement leads to new innovations and affect the business positively.

6. Competitive environment

Competitors are the businesses in an industry that compete with a business for customers. When competition is stiff managers are required to create strategies to help them beat the competition. Lack of competition sometimes could mean that an industry is undesirable.

Unemployment Rate in the United States

US population

U.S internet users

References

Kuzmin, E. A., Vinogradova, M. V., & Zinatullina, E. R. (2021). Macro Environmental Factors

in the Development of Public-Private Partnership in Russia. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 12(10), 1-12.

Yakubu, S., Yalo, M. I., & Halilu, U. (2019). Analysis of Environmental Factors Affecting

Manufacturing Small and Medium-Size Enterprises in Kogi State Nigeria. Journal of Social Economics Research, 6(2), 85-96.

Unemployment Rate