Impact of Environmental Factors

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The external environment is separated into two components, the general environment and the specific environment (Robbins, et al, 00, Schermerhorn) Both can be influencing factors/forces in and organisation. Robbins describes the general environment as the background conditions, such as the economic, legal-political, socio-cultural and technological conditions, that may influence an organisation. They describe the specific environment as directly relevant to the achievement of an organisations goal. The main components include customers, competitors, suppliers, and pressure groups. Robbins(1) notes that elements in the environment can change with conditions

Judy faced high environmental uncertainty as Middleton embarked on its first venture into the wine and export industry and the Asian market place. Vecchio, Hearn & Southey (1) explain that is possible to control elements of the external environment after understanding and establishing links to it. Judy sought to limit external environment influences by understanding and establishing links to the new environment. As she new nothing about the wine industry she decided to hire one of Europe’s leading wine and management experts, Doug York. The customer base in Asia, competitors, suppliers of resources and government agencies were all elements in the specific environment that confronted Judy.

Beverland (00) identifies some of the difficulties in selling wine in the SE Asian markets complicated distribution channels, archaic legal systems, different cultural values, different languages and an uncertain economic future. The legal-political environment . The economic environment confronted Judy as exchange rates, inflation rates and differing tax policies between Australia and Malaysia became relevant Robbins et al (00) note that in order to minimize the tax obligation of the organisation, precise knowledge of tax laws in the countries in which they operate is essential.

Customers are important as they determine an organisations success. The customer base in South East Asia, presented a challenge to Judy through cultural and language barriers. Beverland (00) makes the point that Asian culture is distinctly different from Western culture and that culture strongly influences consumer behaviour. To be successful Judy had to invest time and resources to understand the needs of her Asian clients.

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