These are the four key areas that you should pay special attention to when looking to grow your business, business structure, and management. A business concept that looks perfect on paper can be imperfect in the real world. Sometimes, failure is due to the internal environment: the company's finances, staff, or team. Sometimes it's the environment that surrounds the company.
Knowing how internal and external environmental factors affect your business can help you thrive. Unless it's a sole proprietorship, its employees are an important part of the company's internal environment. Your employees need to be good at their jobs, whether it's writing code or selling products to strangers. Managers must be good at treating lower-level employees and overseeing other parts of the internal environment.
Even if everyone is capable and talented, domestic politics and conflict can ruin a good company. Its internal culture consists of the values, attitudes, and priorities that guide its employees. A ruthless culture in which all employees compete with each other creates an environment different from that of a company that emphasizes collaboration and teamwork. Business culture usually flows from the top down.
Your staff will deduct your values based on the type of people you hire, fire, and promote. Let them see the values you want your culture to embody. The economy, politics, competition, customers, and even the climate are uncontrollable factors that can influence an organization's performance. This is compared to internal factors, such as people, company culture, processes, and finances, which seem to be within easy reach.
After completing a PESTEL analysis (also known as PESTLE analysis), you will be given a thorough environmental analysis that will identify the external and uncontrollable factors that your organization must prepare for. This process is not unique to Fortune 500 companies, but it is especially important for small and medium-sized companies that do not have the recognizable brand or stable revenues of large companies and that may be more susceptible to the influence of external factors. Taking into account the analysis in step 2, rate each factor based on its possible overall impact on the company (high or low) and the probability of its occurrence (high or low). The controllable and uncontrollable aspects that affect a company can be classified into internal and external factors, respectively.
Proposed legislation at the federal and state levels could legally require a company to make changes to its operations and, therefore, become a fundamental success factor.
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