For any business to grow and prosper, managers of the business must be able to anticipate, recognise and deal with change in the internal and external environment. Change is a certainty, and for this reason business managers must actively engage in a process that identifies change and modifies business activity to take best advantage of change. That process is strategic planning. The following diagram provides examples of factors that are agents of change and need to be considered in the strategic planning process. Explanation of these factors is found below. Internal and External EnvironmentAll businesses have an internal and external environment. The internal environment is very much associated with the human resource of the business or organisation, and the manner in which people undertake work in accordance with the mission of the organisation. To some extent, the internal environment is controllable and changeable through planning and management processes. The external environment, on the other hand is not controllable. The managers of a business have no control over business competitors, or changes to law, or general economic conditions. However the managers of a business or organisation do have some measure of control as to how the business reacts to changes in its external environment. Internal Environment FactorsTable 1 below identifies important aspects of the internal environment that can significantly impact on the well-being of a business or organisation. Generally the strategic planning process will examine the strengths and weaknesses of the organisation (see SWOT analysis), and it is likely that significant discussion will center on the relative strength of internal environment factors.
External Environment Factors
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