3.1.6 Interal and external enviroments of LSOs

Question 1

Internal enviroment

Answer 1

Refers to the conditions inside the organisation that affect its performance and is within its control. For example, the internal environment of LMH includes the employees and school policies.

Question 2

Operating enviroment

Answer 2

Is part of the external environment and refers to the outside factors which the organisation relates with when conducting its business. The operating environment of LMH includes students, parents, suppliers and neighbours. The organisation has limited control over the operating environment.

Question 3

Macro enviroment

Answer 3

This environment is part of the external environment. It refers to the broad factors that occur in both society and the economy. The organisation cannot control these factors and control their response. These macro factors include the environment, social attitudes and economic factors. At LMH, the school must ensure that they are meeting the expectations (social attitudes) of students and parents in order to protect enrolments.

Question 4

Employees

Answer 4

INTERNAL Hiring, firing, remuneration packages, recruiting, training, development, determining pay

Question 5

Policies

Answer 5

INTERNAL Writing and developing policies, communicating policies

Question 6

Processes

Answer 6

Policies implemented to the process. They determine their processes.

Question 7

Shareholders

Answer 7

INTERNAL in a publicly listed company ultimately own the organisation and shareholders receive a return on their investments. This could be through dividends (the distribution of the company’s profits), or by capital gain (an increase in the value of the shares due to the strong performance of the company).

Question 8

Corporate culture

Answer 8

INTERNAL Refers to the shared values and beliefs of an organisation. An organisation with a strong and positive corporate culture would attract and retain a high calibre of employees. It would also promote staff to be productive which will ultimately benefit the business.

Question 9

Customers

Answer 9

OPERATING Organisations need to respond to the needs and demands of customers- who expect high quality at competitive prices. High levels of customer service result in improved customer satisfaction. (e.g. question- how do customers engage)

Question 10

Suppliers and creditors

Answer 10

OPERATING Suppliers are the people and businesses that supply resources to an organisation so that it can conduct its operations. Finance is sourced from creditors such as banks, financial companies etc. It is important for any organisation to develop a reliable network of suppliers.

Question 11

Competitors

Answer 11

OPERATING Refers to organisations that offer rival products or services. Organisations need to be aware of existing competitors (thus respond to any change in the actions of competitors) and monitor the environment for potential newcomers.

Question 12

Lobby groups

Answer 12

OPERATING These are groups of people who attempt to convince an organisation to adopt particular policies. Three different types of lobby groups are trade unions, consumer groups and specific issue groups.

Question 13

Globalisation

Answer 13

MACRO Is the effect of hi-tech communications, lower transport costs and unrestricted trade and financial flows turning the whole world into a single market, producing a more integrated global economic system. The challenge many organisations face is that they now find themselves competing on a global scale.

Question 14

Political influences

Answer 14

MACRO With technology organisations can increase efficiency and productivity, create new products and improve the quality and range of products and services. It also assists with communication with customers.

Question 15

Economic influences

Answer 15

Changes in economic activity- downturn (customers wont spend as much), exchange rates, inflation, unemployment and interest rates

Question 16

Social attitudes

Answer 16

MACRO Attitudes on what is right constantly changing. Rapid communication has made world’s population more acutely aware of what organisations are doing, therefore they demand ethics from organisations

Question 17

Legal influences

Answer 17

MACRO Required to comply with laws made by parliament/ rulings set by the courts e.g. environmental and consumer protection, occupation health and safety, industrial relations, trade practices

Question 18

Enviromental factors

Answer 18

MACRO include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.