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Chapter3 Environmental Appraisal SM

The document provides an overview of an environmental appraisal submitted by Mehak Raheja, Reema Wanwani, and Ekta Suri to Mrs. Archana Deshpande. It defines the environment, describes the characteristics and sectors of the environment, and discusses tools for analyzing the environment like SWOT analysis and environmental scanning.

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Sunny Rekhi
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238 views25 pages

Chapter3 Environmental Appraisal SM

The document provides an overview of an environmental appraisal submitted by Mehak Raheja, Reema Wanwani, and Ekta Suri to Mrs. Archana Deshpande. It defines the environment, describes the characteristics and sectors of the environment, and discusses tools for analyzing the environment like SWOT analysis and environmental scanning.

Uploaded by

Sunny Rekhi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Environmental Appraisal

Submitted To:
Mrs. Archana
Deshpande

Submitted By:
Mehak Raheja
Reema Wanwani
Ekta Suri
Charanjeet Singh

What is environment
Environment means the surroundings, external objects,
influences or circumstances under which someone or
something exists.
The environment of any organization is the aggregate
of all conditions, events and influences that surround
and affect it

Characteristics of environment
Environment is complex: The environment consist of
number of factors, events, conditions and influences
arising from different sources. All these do not exist in
isolation but interact with each other to create an
entirely new set of influences.
Environment is dynamic: The environment is
consistently changing in nature. Due to many and
varied influence operating, there is dynamism in the
environment causing it to continuously change its
shape and character

Environment is multi faced: What shape and character


an environment assumes depends on perception of
observer. A particular change in environment or a new
development may be viewed differently by different
observers.
Environment has a far reaching impact on
organizations. The growth and profitability of an
organization depends critically on environment in
which it exists. Any environmental change has an
impact on organization in several different ways.

SWOT ANALYSIS
TYPES

INTERNAL
ENVIRONMENT

EXTERNAL
ENVIRONMEN
T

Strength: It is an inherent capacity which an


organization can use to gain strategic advantage.
Eg good reputation among customers, resources, assets,
people, experience.
Weakness: It is an inherent limitation or constraint
which creates strategic disadvantages.
Eg gaps in capabilities, financial deadlines, low morale
etc

Opportunity: It is a favorable condition in


organizations environment which enables it to
consolidate and strengthen its position.
Eg economic boom, favorable demographic shifts, arrival
of new technologies etc
Threat: It is an unfavorable condition in organizations
environment which creates a risk for, or causes damage
to organization.
Eg economic downturn, demographic shift etc

Benefits of SWOT analysis


Simple to use
Low cost
Flexible and can be adapted to varying situations
Leads to clarification of issue
Development of goal alternatives
Useful as a starting point for strategic analysis

Environmental sectors
1.
2.
3.
4.
5.
6.
7.
8.

Economic environment
International Environment
Market Environment
Political Environment
Regulatory Environment
Socio Cultural Environment
Supplier Environment
Technological Environment

Economic Environment

1.
2.

3.

4.
5.

The economic environment consists of macro level factors


related to means of production and distribution of wealth that
have on business of organization
Some important factors are :
Economic stage in which country exists
Economic structure adopted like Capitalistic, socialistic or
mixed economy
Economic policies such as industrial monetary and fiscal
policies
Economic planning such as five year plan, annual budget etc
Infrastructural factors such as banks, mode of transportation
etc

International Environment
The international environment consists of all those
factors that operate at cross cultural and across border
level, having impact on business of organization e.g.
1.
2.
3.
4.
5.

Globalization, its process, content and direction


Global economic forces, block and forum
Global trade and commerce, its process and trend
Global financial system, sources of financing
Geopolitical situation, equation, alliances and
strategic interests of nations

Market Environment

1.
2.
3.

The market environment consist of factors related to


group and other organization that compete with and
have an impact on an organizations market
Some factors are as below :
Customer or client factors such as need, preference
Product factors such as demand , image
Marketing intermediary factors like delivery systems

Political Environment

1.

2.
3.

4.

The political environment consist of factors related to


management of public affairs and impact on business
organization.
The political system and its features like nature of
political system
The political structure, its goals and stability
Political processes like operation of party system,
elections
Political philosophy, govt role in business etc

Regulatory environment

1.
2.

3.
4.

The regulatory environment consists of factors related


to planning, promotion and regulation of economic
activities
The constitutional framework , directive principles
Policies related to licensing, monopolies and foreign
investment
Policies related to distribution and pricing and control
Policies related to import and exports

Socio Cultural environment


The socio cultural environment consists of
factor related to human relationship within
society, the development, forms and
function of such relationship and learned
and shared behavior of groups of human
being having a bearing in business of
organization

1.

2.

3.
4.

Some of important factors and influences


operating in social environment
Demographic characteristics like
population, density
Socio cultural attitudes and values such as
expectation of society from business, social
custom
Family structure and changes in it
Role and position of men, women, children
and aged in family and society

Supplier environment
The supplier environment consists of factors related to
cost, reliability and availability of factors of production or
services that have impact on business of an organization
Some important factors are :
1. Cost availability and continuity of supply of raw
material
2. Cost availability of finance
3. Cost , reliability and availability of energy used in
production
4. Cost ,availability and dependability of human resource

Technological
Environment

1.

2.

3.

The technological environment consist of those factors


related to knowledge applied and material and machines
used in production of goods and services that have impact
on business of an organization
Some important factors are :
Sources of technology like company source , external
sources and foreign sources
Technological development, stages of development change
and rate of change of technology
Communication and infrastructural technology in
management

Environmental scanning
Environmental scanning can be defined as
process by which organizations monitor
their relevant environment to identify
opportunities and threats affecting their
business for purpose of taking strategic
decisions.

Factors to be considered for


scanning :
The external environment in which an organization
exists consists of a bewildering variety of
factors. These are as below:
1. Events are important and specific occurrences
taking place in different environmental sectors
2. Trends are general tendencies or the courses
action along which events take place.
3. Issues are current concerns that arise in
response to events and trends.
4. Expectations are demands made by interested
groups in light of their concern for issues.

Approaches to environmental
scanning
Kubr has suggested three approaches which
could be adopted for sorting out information
for environmental scanning.
These three approaches are

Systematic
approach

Ad hoc
approach

Processed-form
approach

Systematic Approach
Under this approach, information for environmental
scanning is collected systematically. Information related
to markets and customers, changes in legislation and
regulations that have a direct impact on organizations
activities etc.
It could be collected continuously to monitor changes
and take the relevant factors into account. Continuously
updating such information is necessary not only for
strategic management but also for operational activities.

Adhoc Approach
Using this approach an organization may conduct
special service and studies to deal with specific
environmental issues from time to time. Such studies
may be conducted for instance when an organization
has to undertake special project, evaluate existing
strategies or devise new strategies.

Processed-Form Approach
For adopting this approach the organization uses
information in processed form, available from different
sources both inside and outside the organization. When
an organization uses information supplied by Govt.
agencies or private institutions, it uses secondary
source of data and the information is available in
processed form.

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