General and external environment

Essay by issiaka21University, Bachelor'sB+, January 2007

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The general environment is composed of many conditions in the external environment that businesses encounter. The general environment is characterized by two main groups. The environmental uncertainty which is known to be lack of completes information about the environment and the specific environment which is all the elements the organization interacts with such as the population, stakeholders etc. This general environment is also made up of all the factors outside the organization that organizations take into consideration while making its decisions. Some of the external environment factors that influence organizations are social- cultural, political, economic, legal, technological and competitive environmental conditions. On the other hand the specific environment the people whom the organization interacts with.

Political and legal activities have profound effects on organizations' decision making. An organization's legal responsibility is to obey the law. There laws and ethical behavior that companies must adapt to and maintain in order to exist.

Consider this example, the law today created a minimum wage for employees generally in every workplace. It states that no employer should pay an employee under $6.75 per hour. Clearly laws are created to protect both organizations and individuals. In a humanistic view, most people regard stealing, robbery, racketeering, money laundering etc as unethical, therefore there are laws against such behaviors and ways of punishing those who commit the acts.

In the socioeconomic view organizations must be concerned within the broader social welfare and not just with profits. Here organizations encounter stakeholders and its social responsibility in its environment. Stakeholders are groups, individuals and other organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance. The organization's social responsibility is to balance its commitments to groups and individuals in its environment, as well as customers, employee and local community.