Political This list can be quite extensive and very complex. The political environment includes such factors as: The prevalent political ideology Power blocks and interest groups National or transnational sovereignty Government policies and regulations towards commerce/trade The legal framework including laws, codes or practice and regulations The degree of political stability conducive or otherwise towards business The degree of altruism in politics as opposed to pure greed and suchlike Nationalism Terrorism Quality standards Health, safety, and so on
Government views/policies towards entrepreneurs and enterprise The political dimension is very important, operating at various levels – international, national and local – and providing the context to the operation. Political stability and ideology will add to the feel’ of business, and laws will give a more formal context to enterprise. Political turbulence is the problem in some countries, while enterprise is strangled by red tape in other regions. Economic This part of the environment should be easier to understand and perhaps less volatile – depending upon the country.
Some features include: The dominant economic system (egg pro/anti nationalization tort example) Intonation/ prices Poverty/income and wealth distribution/standards of living Global economic trends Taxation Economic aid for enterprise development Growth/decline at national level Types of market and so forth Trends in markets Customer type, preference and segments The availability of land, premises, equipment and capital Labor mix/availability Productive levels Fiscal policies impacting on enterprise The economic scene can be ‘managed’ more than the political dimension as the information and intelligence ought to be more available to the entrepreneur. Social/sociological This part of the environment is very much concerned with the cultural and subculture of specific societies/substitutes. To some extent it is linked to the economic aspects of the wider environment. Some issues may include: Value systems Tolerance/intolerance of entrepreneurs/enterprise Views towards risk taking The authority system (at work and in the wider society) Institutions Social mobility Gender and equality Race and equality Morality/ethics in general Views/beliefs in work and leisure
Crime deviance and property Social mobility/immobility Religion and belief structures Social systems Class and social stratification The role of the family The work organization Education and language Views of social responsibility in business Social changes provide tremendous opportunities tort the enterprising opportunists These changes can signal new/markets, new segments, a need for new products/ services of some change in the product/service. Technical/technological There seems to be nothing as consistent as change. Often this change is technologically driven. We are living through another industrial revolution at the moment and the impact on how we work and live is enormous. Change always occurs, but of late, the pact of change has quickened.
For example: The business can be extended by technical innovations Products/services can quickly become obsolescent Information and data is more readily available for everyone (including competitors) Design and development are key areas in most sectors Opportunities can come from the exploitation of innovation (egg new materials) Implications exist for capital, R & D and costs in general Implications exist for labor (egg from redundancy, short-time, deskilling to respelling) Customers may need greater ‘education’ about new technology/changes in the technical sophistication of products/services Environmental What is happening with respect to ecological and environmental issues. Many of these factors will be economic or social in nature.
C] environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. D With major climate changes occurring due to global warming and with greater environmental awareness his external factor is becoming a significant issue for firms to consider. D 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 C] general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.
Legal What is happening with changes to legislation. This may impact employment, access to materials, quotas, resources, imports/ exports, taxation etc. D these are related to the legal environment in which firms operate. In recent years in Australia there have been many significant legal changes that have affected firms’ behavior. CLC The introduction to age discrimination and d ability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle D Legal changes can affect a firm’s costs (e. G. If new systems and procedures have to be developed) and demand (e. G. If the law affects the likelihood of customers buying the good or using the service).