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Strategic Management (External Environment)
Strategic Management (External Environment)
(External Environment)
The major text content of this presentation draws from the book of Dr. Felina C. Young. In particular,
Young, Felina C. (2015). Strategic Management Made Simple, Rex Book Store Inc. (RBSI).
Learning Objectives
• Analyze and evaluate the
External environment
• Identify external forces
that may prove beneficial
or detrimental to an
organization
• Assess challenges in the
external environment
Scanning the Environment
• Organizations exist to survive; they need to
be clear, deliberate and strategic. They
should develop organizational intelligence.
• Organizational intelligence refers to the
expertise, insight, and wisdom possessed by
an entity.
• Environmental Scanning is the study and
interpretation of the forces existing in the
external and internal environments
Constraints
• For informal scanning, experience and
expertise will help make the process
effortless and straightforward
• ES can be demanding, comprehensive and
needs accurate information. It depends on:
1. Speed of Organization to conduct ES
2. Availability of complete information
3. Physical and Financial capability
EXTERNAL ENVIRONMENT FORCES
• These forces may
• POLITICAL influence an
organization, an industry,
• ECONOMIC or any entity
• SOCIAL • Environmental scanning
• TECHNOLOGICAL is carefully monitoring
the surroundings with the
• LEGAL end goal of ascertaining
• ENVIRONMENTAL indications of prospects
and challenges
POLITICAL Forces
• Geopolitical issues have
become the focus of major
political powers. Political
independence, changing
governments, balance of
power, terrorism, suicide
bombings, global alliances,
and chemical & nuclear
warfare.
POLITICAL INDEPENDENCE and
CHANGING GOVERNMENTS
• Political sustainability becomes the focus of
developed and power-driven countries.
• They fight wars to maintain political supremacy
• Global ideologies are the main determinants of
global support while global power is the main
ingredient of global leadership.
• Changes in government: from COMMUNISM to
SOCIALISM to CAPITALISM; from
DICTATORSHIP to DEMOCRACY.
TERRORISM/SUICIDE BOMBINGS
PRODUCTS
IDEAS GLOBALIZATION &
SERVICES
MONEY
TECHNOLOGICAL FORCES
• Technology is an
important catalyst of
competition
• Technological advances
are observed in the fields
of communication,
business, banking,
education, medicine,
security and in all facets
of everyday living
LEGAL FORCES
• Powers and limitations that arise from legislation
and interpretation of laws, and which impel or
restrain individual or organizational activities
Examples:
1. TRAIN law
2. Court rulings
3. Consumer law
4. Employment law
ENVIRONMENTAL FORCES
• Environmental responsibility is the urgent call of the
global neighborhood. The safety and survival of one
should the concern of others
Examples
1. Climate Change/ use of biodegradable materials
2. Environmental waste management
3. Preservation of rainforest and marine life
COMMENT BELOW!
What external factor have you observed, other than the pandemic, that affects the
businesses/organizations in this time?