Internal and external environment of the enterprise. External and internal environment of enterprises External and internal environment of a company briefly
Any enterprise is located and operates in a certain environment, and each of its actions is possible only if the environment allows it. The enterprise is in a state of constant exchange with the external environment, thereby providing itself with the opportunity to survive, since the external environment serves as a source of production resources necessary for the formation and maintenance of production potential. Environmental factors are uncontrollable by the enterprise and its services. Under the influence of events occurring outside the enterprise, in the external environment, managers have to change the internal organizational structure, adapting it to changing conditions.
External environment of the enterprise – these are all conditions and factors that arise regardless of the activities of the enterprise and have a significant impact on it. External factors are usually divided into two groups:
· direct impact factors (immediate environment)
· indirect impact factors (macroenvironment).
TO factors of direct impact include factors that have a direct impact on the activities of the enterprise: resource suppliers, consumers, competitors, labor resources, state, trade unions, shareholders (if the enterprise is a joint-stock company).
Factors of indirect impact do not have a direct effect on the activities of the enterprise, but taking them into account is necessary to develop the right strategy.
The most significant indirect impact factors include:
political factors– the main directions of state policy and methods of its implementation, possible changes in the legislative and regulatory framework, international agreements concluded by the government in the field of tariffs and trade, etc.;
economic forces– the rate of inflation or deflation, the level of employment of labor resources, the international balance of payments, interest and tax rates, the value and dynamics of gross domestic product, labor productivity, etc.
social factors external environment – the population’s attitude to work and quality of life;
technological factors, analysis of which allows us to foresee opportunities associated with the development of science and technology, timely switch to the production and sale of a technologically promising product, and predict the moment of abandonment of the technology used.
Internal environment of the enterprise determines the technical and organizational conditions of the enterprise and is the result of management decisions. The purpose of analyzing the internal environment of an enterprise is to identify the strengths and weaknesses of its activities, since in order to take advantage of external opportunities, the enterprise must have a certain internal potential. At the same time, you need to know the weak points that can aggravate the external threat and danger.
The internal environment of organizations includes the following main elements: production, finance, marketing, personnel management, organizational structure.
The main elements of the internal environment of the enterprise are:
Production (in foreign economic literature - operations management): volume, structure, production rates; product range; availability of raw materials and materials, level of reserves, speed of their use; available equipment fleet and the degree of its use, reserve capacity; production ecology; quality control; patents, trademarks, etc.;
Personnel: structure, qualifications, number of employees, labor productivity, staff turnover, labor costs, interests and needs of employees;
Organization of management: organizational structure, management methods, level of management, qualifications, abilities and interests of top management, prestige and image of the enterprise;
Marketing, covering all processes associated with production planning and product sales, including: manufactured goods, market share, distribution and sales channels, marketing budget and its execution, marketing plans and programs, sales promotion, advertising, pricing;
Finance is a kind of mirror that reflects all the production and economic activities of an enterprise. Financial analysis allows you to reveal and evaluate the sources of problems at a qualitative and quantitative level;
Culture and image of an enterprise are poorly formalized factors that create the image of an enterprise; a high image of an enterprise allows you to attract highly qualified workers, stimulate consumers to purchase goods, etc.
4. Fixed assets of the enterprise. Their structure and classification
Fixed assets include means of production that are repeatedly involved in the production process, while retaining their natural form, transferring their value to the manufactured products in parts as they wear out. These include means of production with a service life of more than 12 months.
These include machines, equipment, tools, production and household equipment, and other production tools with the help of which the production process is carried out.
Fixed assets also include capital investments for radical improvement of land (drainage, irrigation and other reclamation works) and investments in leased fixed assets.
Fixed assets include land plots owned by the organization and environmental management facilities (water, subsoil and other natural resources).
For accounting, analysis and evaluation, fixed assets are grouped by:
· functional purpose;
· by industry;
· according to the material and natural composition;
· according to the degree of participation in the production process
Fixed assets do not include and are not objects for depreciation:
· machinery, equipment and other similar assets listed as finished products (products) in the warehouses of manufacturing organizations;
· assets listed as goods in the warehouses of organizations engaged in trade and purchasing activities;
· assets listed as wearable items that last less than one year, regardless of their value, as low-value items
· assets handed over for installation or to be installed and in transit;
· capital and financial investments.
Fixed assets are classified into the following groups:
1. Buildings. These include:
Industrial buildings and buildings occupied by shops, workshops or installations performing production functions
Buildings occupied by batteries, tanks and pools for industrial purposes, etc.;
Mechanized laundries, buildings and structures for performing administrative and economic functions of the organization - offices, warehouses, storerooms, etc.
2. Facilities. This group includes:
Pumping stations, arches, chimneys on separate foundations, cooling towers, bunkers, etc.
3. Transmission devices that are designed to transfer electrical, thermal or mechanical energy from engine machines to working machines, as well as transfer liquid and gaseous substances from one inventory object to another. This includes: oil and gas pipelines.
4. Machinery and equipment:
5. Vehicles. These include vehicles that are designed to transport people and goods.
6. Tools, production and household equipment and accessories. This includes: tools - mechanized and non-mechanized general purpose labor tools, as well as objects attached to machines used for processing materials (cutting, impact, pressing and compacting tools)
7. Other types of fixed assets:
· library collections, museum valuables, etc.
· costs of leased fixed assets recorded on the lessee's balance sheet; draft animals used as means of labor (horses, oxen, camels, donkeys and other animals); etc.
Depreciation of fixed assets
Depreciation characterizes the aging process of existing fixed assets, both physically and economically. Depreciation of fixed assets is determined and accounted for buildings and structures, transmission devices, machinery and equipment, vehicles, production and household equipment, draft animals, perennial plantings that have reached operational age, and intangible assets.
Depreciation of fixed assets is determined for a full calendar year (regardless of what month of the reporting year they were acquired or constructed) in accordance with established standards. Depreciation is not charged in excess of 100% of the cost of fixed assets. Accrued depreciation in the amount of 100% of the cost of objects (items) that are suitable for further use cannot serve as a basis for writing them off due to wear and tear.
There are two types of wear and tear - physical and moral.
Physical wear and tear is a change in the mechanical, physical, chemical and other properties of material objects under the influence of labor processes, natural forces and other factors. To determine the physical wear and tear of fixed assets, two calculation methods are used:
· in terms of the volume of work, it is based on the comparability of actual and standard service life or volumes of work.
I= (Tf*Pf)/ (Tn*Pn),
where: Tf – the number of years actually worked by the machine;
Pf – average volume of products actually produced per year;
Tn – standard service life, years;
Pf – annual production capacity (or standard productivity) of equipment
· service life is based on data on the technical condition of labor equipment established during the inspection process. The physical depreciation coefficient can be applied to all types of fixed assets.
I = Tf / Tn,
Obsolescence manifests itself in the loss of economic efficiency and feasibility of using fixed assets before the expiration of complete physical wear and tear. Obsolescence of the first type is a decrease in the cost of machinery or equipment due to the reduction in the cost of their reproduction in modern conditions.
I = (Фп – Фв)/ Фп,
where: Фп – initial cost of fixed assets, rub.;
Fv – respectively, the replacement cost of fixed assets, rub.
Obsolescence of the second type is due to the creation and introduction into production of more productive and economical types of machinery and equipment.
Wu = (Vs * Pu) / Ps,
where: Vu and Vs – replacement cost of outdated and modern machines, rub.;
Pu and Ps are the productivity (or production capacity) of outdated and modern machines, respectively, in kind. units
Partial obsolescence is a partial loss of use value and value of the machine. Its constantly increasing size may be the reason for using this machine in other operations, where it will still be quite effective.
Complete obsolescence is the complete depreciation of the machine, making its further use unprofitable.
Analysis of the internal environment of an organization has the following implications for the organization:Information about the internal environment of the company is necessary for the manager to determine the internal capabilities and potential that the company can count on in competition to achieve its goals;
- analysis of the internal environment allows us to understand the goals and objectives of the organization;
- indicates that in addition to the production of products and the provision of services, the organization provides the opportunity for subsistence for its employees and creates certain social conditions for their livelihoods.
The internal environment of an organization is a set of processes as a result of which the organization transforms existing resources into goods offered to the market. The internal environment can be divided into two parts: the resource part and the operational part. The resource part of the organization is the totality of resources that the organization has to carry out its activities. The resource part includes management as a resource that determines the organization of management processes (managers and their qualifications, management methods and technology, information necessary for making management decisions, etc.), finance as a resource that determines the possibilities for acquiring the necessary resources for its development, personnel as a labor resource. The operational part of the organization is a set of processes associated with the transformation of initial resources into finished goods. The operational part includes processes related to the analysis of the state of target markets, processes of conducting scientific research and development of new goods (works, services), processes of supply of production resources, production and sales of products.
Such a structure of the internal environment makes it possible to identify the composition of control objects, but does not answer the question about control technology. For this purpose, a different definition of the internal environment can be used. The internal environment is the situational factors within the organization that are influenced by management decisions. The following elements of the internal environment are distinguished: production, personnel, management organization, marketing, finance and accounting.
Production: volume, structure, production rates; product range of the enterprise; provision of raw materials and materials, level of inventories, speed of their use, inventory control system; available equipment fleet and the degree of its use, reserve capacity, technical efficiency of facilities; location of production and availability of infrastructure; production ecology; quality control, costs and quality of theriology; patents, trademarks, etc.
Personnel: structure, potential, qualifications; quantitative composition of employees; labor productivity; staff turnover; labor costs; interests and needs of workers.
Organization of management: organizational structure; control system; management level; qualification; the abilities and interests of senior management; corporate culture; prestige and image of the company; organization of a communications system.
Marketing: products produced by the company; market share; the ability to collect the necessary information about markets; distribution and sales channels; marketing budget and its execution; marketing plans and programs; innovations; image, reputation and quality of goods; sales promotion, advertising, pricing.
Finance and accounting: financial stability and solvency; profitability and profitability (by product, region, distribution channel, intermediary); own and borrowed funds and their ratio; an effective accounting system, including cost accounting, budget formation, and profit planning.
For successful development, an organization must constantly identify existing and potential opportunities for the most effective use of its resources (intellectual, information, labor, material, financial, etc.). It is these resources that make up the organization's market potential. They are always limited and unevenly developed both quantitatively and qualitatively. The development of one type of resource can represent a strength in relation to the chance that has opened up from the environment (high scientific and technical potential in the market of knowledge-intensive products), and, conversely, the lack of any of the resources can pose a threat to the existence of the organization (lack of reliable supplies of material resources leads to interruptions in production and missed deadlines for fulfilling orders, loss of potential customers and market positions).
The main task of the organization is to realize the favorable opportunities (chances) that open up in the external environment, by highlighting its strengths, and limiting external threats to the existence and development of the organization, by neutralizing its weaknesses. Its effective solution determines the content of the organization’s management.
External and internal environment
Creation of a legal basis for the life of the country, including the development, adoption and organization of implementation of economic legislation;
ensuring law and order in the country and its national security;
stabilization of the economy (primarily reducing unemployment and inflation);
ensuring social protection and social guarantees;
protection of competition.
Political factors - the main directions of government policy and methods of its implementation, possible changes in the legislative and regulatory framework, international agreements concluded by the government in the field of tariffs and trade, etc.;
- economic factors - inflation or deflation rates, the level of employment of labor resources, the international balance of payments, interest and tax rates, the size and dynamics of gross domestic product, labor productivity, etc. These parameters have a unequal impact on different enterprises: what one organization imagines an economic threat, the other perceives it as an opportunity. For example, stabilization of purchase prices for agricultural products is considered as a threat for their producers, and as a benefit for processing enterprises;
- social factors of the external environment - the population’s attitude to work and quality of life; existing customs and traditions in society; values shared by people; mentality of society; level of education, etc.;
Information about the internal environment is necessary in order to determine internal capabilities, the potential that an enterprise can count on in competition to achieve its goals;
analysis of the internal environment allows you to better understand the goals and objectives of the organization.
Production (in foreign economic literature - operations management): volume, structure, production rates; product range; availability of raw materials and materials, level of reserves, speed of their use; available equipment fleet and the degree of its use, reserve capacity; production ecology; quality control; patents, trademarks, etc.;
personnel: structure, qualifications, number of employees, labor productivity, staff turnover, labor costs, interests and needs of employees;
management organization: organizational structure, management methods, level of management, qualifications, abilities and interests of top management, prestige and image of the enterprise;
marketing, covering all processes related to production planning and product sales, including: manufactured goods, market share, distribution and sales channels, marketing budget and its execution, marketing plans and programs, sales promotion, advertising, pricing;
Finance is a kind of mirror that reflects all the production and economic activities of an enterprise. Financial analysis allows you to reveal and evaluate the sources of problems at a qualitative and quantitative level;
culture and image of an enterprise are poorly formalized factors that create the image of an enterprise; a high image of an enterprise allows you to attract highly qualified workers, stimulate consumers to purchase goods, etc.
Internal environment of the organization
The internal environment of an organization is that part of the general environment that is located within the organization. It has a constant and direct impact on the functioning of the organization. The internal environment has several sections, each of which includes a set of key processes and elements of the organization, the state of which together determines the potential and capabilities that the organization has.The personnel profile covers: interaction between managers and workers; hiring, training and promotion of personnel; assessment of labor results and incentives; creating and maintaining relationships between employees, etc.
The organizational cross-section includes: communication processes; organizational structures; norms, rules, procedures; distribution of rights and responsibilities; hierarchy of subordination.
The production section includes the manufacture of the product; supply and warehousing; technological park maintenance; carrying out research and development.
The marketing section covers all those processes that are associated with the sale of products. This is the product strategy, the pricing strategy; product promotion strategy on the market; selection of sales markets and distribution systems.
The financial section includes processes related to ensuring the effective use and flow of funds in the organization.
The internal environment is completely permeated by organizational culture; it can contribute to the fact that the organization is a strong structure that can sustainably survive in the competitive struggle. But it may also be that organizational culture weakens the organization if it has high technical, technological and financial potential. Organizations with a strong organizational culture tend to emphasize the importance of the people who work within it. An idea of organizational culture comes from observing how employees work in their workplaces, how they interact with each other, and what they prioritize in conversations.
The activities of an organization are carried out under the influence of many factors that exist inside and outside the organization.
Internal factors are called variables of the internal environment, which is regulated and controlled by management.
Main elements of the internal environment:
1) goals - a specific final state or desired result towards which the organization’s efforts are aimed. The general or general goal is called the mission with which the organization declares itself in the market. Goals are set during the planning process;
2) structure - the number and composition of its divisions, management levels in a single system. Its purpose is to ensure the effective achievement of the organization's goals. It includes communication channels through which information is transmitted for decision making. With the help of the decisions made, coordination and control over individual structural divisions of the organization is ensured;
3) task - work that must be completed in a predetermined manner and within a specified time frame. Tasks are divided into 3 groups: working with people, working with information, working with objects;
4) technology - the accepted order of connections between individual types of work;
5) people - the collective of the organization;
6) organizational culture - a system of collectively shared values and beliefs that influence the behavior of individual employees, as well as work results.
All noted variables interact with each other and help ensure the achievement of the organization's goals.
Internal environment analysis
When analyzing the external environment, changes are studied that may affect the current strategy, factors of threats and opportunities for the chosen strategy. It is advisable to begin the analysis of the external environment of the enterprise in accordance with the recommendations for choosing a mission with an analysis of the immediate environment and, first of all, with consumers. Consumers - individuals and organizations purchasing goods for personal consumption or resale, government and public organizations, buyers located outside the country. The main task in consumer analysis is to identify the target group and satisfy its needs better than a competitor. At the same time, it is necessary to concentrate your strengths on the weak area of the competitor and constantly look for an unmet need. Every success is achieved by overcoming a deficit. When analyzing consumers, they also find out: what is the level of demand for the industry’s products and the purchasing power of consumers, what requirements for product quality are imposed, the ability of consumers to navigate the industry’s products, etc.Knowing the strengths and weaknesses of competitors, you can assess their potential, goals, current and future strategy. And, therefore, accurately identify their weaknesses and strengthen their advantages. It is necessary to concentrate your strengths against the weaknesses of your competitors.
An analysis of the competitive situation in the industry can be carried out according to the following scheme:
1. General characteristics of the industry: what stage of development it is at, how much demand depends on prices, what strategies are used.
2. Classification of competitors (active, passive, potential, competitors by product, sales, price, communications).
3. The number of competitors in the industry, the size of the competitors’ enterprises, the total share of the 3 largest firms in the market in percentage, the main competitor, special services offered by competitors, the strengths and weaknesses of competitors are determined.
4. Analysis of the activities of the main competitor: goals and strategy of the competitor, product characteristics, structural flexibility, logistics organization, marketing capabilities, production potential, financial capabilities, economic indicators, level of research and development, innovation potential, management system, quality of management personnel, company culture, system motivation and control, know-how, location, etc., competitor's strengths and weaknesses.
5. The likelihood of new competitors and substitute products entering the market. It is determined by: entry barriers and the response capacity of existing enterprises. Entry barriers include the amount of costs required for a new competitor to enter the market, the propensity of buyers for a well-known brand, the level of required investments in research and development, the amount of costs incurred by the consumer when changing suppliers, the need to create their own sales network, and the advantages of old competitors that are unattainable for newcomers. The response potential of existing enterprises is characterized by the capabilities of old enterprises, the degree of connection of existing enterprises with an industry that they cannot abandon without significant gain, the possibility of loss of profit by old enterprises, and the tradition of meeting any intrusion into a given industry. The possibility of substitute products limits industry profit potential, which can lead to pricing pressure on existing products.
Suppliers are separate organizations and individuals who provide material and technical support for the production, scientific and technical activities of the company. The restrictions that arise on their part include prices for resources, their quality and contractual conditions. The stronger the power of suppliers, the more likely they will try to increase purchase prices for goods or reduce their costs by reducing quality.
Contact audiences can have a significant impact on the situation in the industry, changing the image of the industry, its attractiveness for development and capital investments through the media, the system of taxes, customs benefits, by introducing bans and restrictions on products, through organizing investments in the form of loans or purchasing shares and bonds etc.
The distant environment determines the conditions for the activities of any enterprise in the industry. The main thing in the analysis is to identify the most important trend for the industry.
Analysis of the legal environment involves studying the laws that govern activities in a given sector of the economy and their impact on the results and attractiveness of the industry. When studying the state-political environment, the priority directions for the development of the economy of the country and region, the interests of the state and political leaders are clarified. To operate successfully in the long term, any enterprise must have information about scientific advances and technologies used in the industry, adapt to technological changes and use these changes to gain advantages over competitors. The main factors that lead to the need to change the technology of production of goods or services are demand for the product and competition. When analyzing the economic environment, the rate of inflation, the level of employment of the population, the state of the economy, the taxation system and the degree of their influence on the industry are determined. Analysis of the social environment involves studying the structure of the population (age, professional groups, income level, etc.), the structure of needs, lifestyle, habits and traditions, and possible trends in their development. The study of the ecological environment allows us to take into account the climatic and geographical characteristics of the country and region, the influence of legal acts and the population on environmental protection issues.
The external environment analysis must determine what changes in the external environment affect the organization's current strategy; what factors pose a threat to the organization's current strategy. An analysis of the external environment should provide a list of external threats and opportunities, ranked by the degree of impact on the organization.
An analysis of an organization's internal factors should evaluate whether internal strengths will allow it to take advantage of opportunities and what internal weaknesses may complicate future problems associated with external threats. The method used to analyze internal factors is called management survey. For strategic planning purposes, the survey includes six integrated factors: marketing, finance, production, personnel, organizational culture and organizational image.
It is advisable to consider the “marketing” factor in the following areas: market share and competitiveness; product range and quality; market demographics; market research and development; pre-sales and after-sales customer service; sales, advertising, product promotion; profit.
The choice of an organization's development strategy largely depends on its financial condition. A detailed analysis of the financial condition allows you to identify existing and potential weaknesses of the enterprise and determine what actions the organization will make it possible to resist them.
Production analysis should be aimed at implementing the organization's strategy and timely adaptation of its structure to changes in the external environment. It is necessary to evaluate your capabilities in comparison with competitors in the field of enterprise equipment, product quality control, reduction of inventories and acceleration of product sales, and reduction of production costs.
The solution to many problems of a modern organization depends on the provision of both production and management with qualified and energetic specialists.
When analyzing labor resources, you should pay attention to the competence of the organization's top management, the current system of training and retraining of specialists, and the system of employee motivation.
Organizational culture is a holistic system of behavior patterns, morals, customs and expectations developed in an organization and characteristic of its members. The image of an organization, both internally and externally, is determined by the impression created by employees, customers and public opinion in general. A good impression helps an organization retain customers for a long time.
Having identified strengths and weaknesses and weighed factors in order of importance, the organization's management concentrates efforts on dangerous areas in order to overcome disruptions in the implementation of the organization's strategy. “SWOT analysis” involves further study of the strategic potential of the enterprise, taking into account the realities of the external environment. The purpose of this method is to study the strengths and weaknesses of the enterprise, opportunities and threats emanating from the external environment, as well as their impact on the performance of the enterprise (SWOT - abbreviation: strength - strength, weakness - weakness, opportunities - opportunities and threats - threats) . The sequence of actions involves: identifying the strengths and weaknesses of the enterprise, opportunities and threats and establishing connections between them, which can be used in the future when choosing a development strategy for the organization, developing a strategic plan and its implementation.
The list of opportunities and threats is compiled based on an analysis of information obtained from studying the immediate and distant environment, the attractiveness of the industry and business conditions. Not all opportunities and threats have the same effect on the enterprise and can be realized in reality.
Internal environmental factors
The internal environment of an organization is indicated by internal variables, i.e. situational factors within the organization. Accordingly, from the position of American economists Meskon, Albert and Khedouri, the main internal variables in any organization are goals, structure, task, technology and people (employees).Goals are a specific, final state or expected result of an organization (group). There is considerable variation in goals depending on the nature of organizations. It should be remembered that each service and divisions have their own goals.
Structure is the relationship between management levels and types of work (functional areas) performed by services and departments. Here the vertical and horizontal sections of work in the organization are combined. It is possible to distinguish between a high and a flat structure of an organization.
Tasks (Task) are types of work that need to be completed in an appropriate manner and at a given time. This is work with objects of labor, tools of labor, information and people.
Technology is a way of processing input elements (materials, raw materials) into output elements (product, products). Historically, technology has been shaped by three revolutions: the industrial revolution, standardization, mechanization and automation through the use of conveyor assembly systems.
British researcher Joan Woodward divided technologies into three groups:
Technology of small-scale and individual production;
Technology of mass and large-scale production;
Continuous production technology.
According to the approaches of the American sociologist James Thompson, we can distinguish:
Multi-link technology (eg car assembly);
Intermediary technologies (banking);
Intensive technologies (film editing).
In Ukraine, there are individual, small-, medium- and large-scale, mass and mass-flow technologies.
People are the most important situational factor in an organization. Its role is defined:
1. abilities;
2. needs;
3. knowledge;
4. behavior;
5. attitude towards work;
6. position;
7. understanding of values;
8. environment (composition of the group that includes);
9. presence of leadership abilities.
In order to make a profit, businesses must formulate goals in the following areas:
Market share;
- development or sale of products;
- quality of services;
- preparation and selection of managers;
- social responsibility.
To set a goal, two starting positions are possible: Drawing up a kind of forecast - desires. Senior management sets its own goals. At first, they take the form of what is desired, then during the development process they take the form of specific detailed plans and the setting of specific tasks for individual areas of the enterprise. These global plans and goals are correlated with existing capabilities.
Mirrors the first one. Here, the means and capabilities are first assessed, and then the goal is specified.
There are two possible strategies for choosing a goal:
Bottleneck elimination strategy. It consists of identifying the main bottleneck and eliminating it.
- Strategy for not missing chances. It allows you to select and use the most favorable of the available opportunities.
The structure of an organization is the logical relationship and connections of management levels and functional areas, built in a form that allows the organization's goals to be most effectively achieved.
The structure of any organization must perform a number of functions:
Ensure that the organization achieves maximum profitability;
- cover the minimum number of intermediate links;
- provide conditions for training managers for the future.
The purpose of an organizational structure is to ensure that the organization's objectives are achieved.
Most organizations use a bureaucratic management structure. It has advantages and disadvantages.
What are the advantages of a bureaucratic management system:
Clear division of labor;
- hierarchical mobility of employees;
- professional growth based on competence;
- an orderly system of rules and standards.
What are the disadvantages of a bureaucratic management system:
Clarity of behavior;
- difficulty of communication within the organization (lack of horizontal connections);
- inability to innovate;
- lack of technological subordination.
Internal environment of the enterprise
The internal environment of an organization is a set of built-in elements that determine the ability and degree of integration of the organization into the external environment. The internal environment can be considered both in a static state, highlighting the composition of elements and culture, and in dynamics, studying processes occurring under the influence of a number of factors.Elements of the internal environment include the goals and objectives of the organization, the employees themselves and the technologies used in production, financial and information resources, as well as organizational culture.
People occupy a special place in the internal environment. Their abilities, level of education and qualifications, work experience, way of thinking, motivation and dedication determine the final result of the organization.
As you know, the main factor of production and resource in an organization is labor itself.
The workforce, i.e. workers engaged in labor activities, are the basis of the activities of the entire organization. Personnel and their relationships determine the social subsystem of the organization.
The production and technical subsystem includes a set of fixed assets (machines, equipment), various types of raw materials, materials that go into the manufacture of a product, tools necessary for creating goods, converting materials into a finished product. The main component of the production subsystem is electricity: it powers the equipment and serves as the only source of lighting. Light is one of the necessary conditions for successful performance of work.
The elements characterizing this subsystem are:
1) technologies used. In order to develop effectively, an organization must regularly master the latest achievements of science and technology, introduce new technologies into production;
2) labor productivity - a qualitative characteristic of labor costs and an indicator of their effectiveness. The higher this indicator, the better the organization functions;
3) production costs - the total expenses of the enterprise both for the purchase of necessary resources and equipment, and for the payment of workers (wages, bonuses). In addition, costs also include tax deductions;
4) product quality – a set of properties that make it suitable for consumption in accordance with its intended purpose. This indicator directly depends on the quality of the raw materials, methods of processing and qualifications of workers. Product quality is a factor in an organization’s competitiveness in the market;
5) the volume of inventories at the enterprise - necessary for unforeseen additional production of a product when demand for it significantly exceeds supply.
The financial subsystem of the internal environment represents the movement and use of funds in the organization (for example, creating investment opportunities, maintaining profitability, and ensuring profitability). The marketing subsystem was developed in a market economy (from the English Market - “market”). This subsystem is designed to establish connections between the organization and the market: meeting customer needs, creating a sales system and effective advertising.
Thus, the internal environment of an organization is a set of subsystems that, functioning as a whole, ensure the competitiveness of the organization.
The subject of management science and practice is enterprises, as economic units isolated as a result of the social division of labor, capable of independently or in interaction with the external environment satisfying the needs of potential consumers with the help of the goods and services they produce.
The integrity of the organization and its openness as a system determine a clear separation of the internal and external environment, the organization’s dependence on external factors, the interaction of the internal and external environment, and varying degrees of influence of parameters of the internal and external environment and their management.
Every organization has both an internal and external environment. The internal environment of an organization unites all functional elements within the system, interconnected, to achieve a common goal. With all the variety of types of organizations, they have common, universal elements (internal variables).
All organizations have a mission (the public purpose of the company) and pursue certain goals. It is the goals that are the initial stage of the life of the organization. Goals are the desired end result of the activity. And the mission of an organization is the clearly expressed reason for the existence of the organization. This is the social status of the company. An organization cannot exist successfully in a competitive business environment if it does not have certain guidelines indicating what it strives for and what it wants to achieve. Such guidelines are set with the help of a mission. Most Russian managers do not care about choosing and formulating the mission of their organization, considering it unnecessary. However, as practice shows, an organization where there is a clear idea of the purpose of its existence has a greater chance of success than one where there is none.
Analysis of the internal environment of the organization
Analysis of the internal environment of an enterprise covers the following aspects:1) accumulation of general information about the enterprise, including:
industry affiliation and type of activity;
form of ownership;
number of employees, including management personnel;
authorized capital and cost of fixed assets;
main consumers of finished products (services) and main suppliers.
2) analysis of production and material flows, production technologies and equipment used, organization of production and labor of industrial personnel;
3) analysis of the economic situation (financial analysis) affecting profitability, profitability, turnover of funds, the availability of free financial resources and the possibility of obtaining them;
4) analysis of the management system, affecting:
distribution and assignment of specific and special functions to structural units;
organizational management structure;
predominantly used management methods;
dominant management style;
the established methodology for making management decisions.
5) analysis of the enterprise personnel, including assessment of:
knowledge, skills and qualifications of employees;
cohesion (corporate spirit) of the organization;
prevailing interests of employees and their possible changes.
The main goal of analyzing the internal environment is to determine the degree of efficiency in using available resources. The main attention is paid to the relationships and interactions of resources and results, efforts and achievements, costs and income.
Sources of information for analyzing the internal environment of an enterprise can be divided into objective and subjective.
Objective sources are the results of production and economic activities reflected in accounting and statistical reporting. Their main advantage is the opportunity for objective analysis, and the main disadvantage is the difficulty of identifying problems of any specific activity in an enterprise from the total set of problems of the enterprise.
Subjective sources - the results of surveys, testing, interviews with managers, specialists and external experts. Their main advantage is the ability to concentrate on specific problems of various services of the enterprise and the possibility of obtaining undocumented information, and the main disadvantage is the not very high degree of reliability.
The internal environment of an organization is that part of the general environment that is located within the organization. It has a constant and direct impact on the functioning of the organization. The internal environment has several sections, the state of which together determines the potential and opportunities that the organization has.
The personnel profile of the internal environment covers such processes as:
Interaction between managers and workers;
hiring, training and promotion of personnel;
assessment of labor results and incentives;
creating and maintaining relationships between employees, etc.
The organizational profile includes:
Communication processes;
organizational structures;
norms, rules, procedures;
distribution of rights and responsibilities;
hierarchy of subordination.
The production section includes:
Product manufacturing;
supply and warehousing;
technological park maintenance;
carrying out research and development.
The marketing cross-section of the organization’s internal environment covers the following parties that are related to the sale of products:
Product strategy, pricing strategy;
product promotion strategy on the market;
selection of sales markets and distribution systems.
The financial section includes processes related to ensuring the effective use and flow of funds in the organization:
Maintaining an adequate level of liquidity and ensuring profitability;
creation of investment opportunities, etc.
The internal environment is, as it were, completely permeated by organizational culture, which should also be subject to the most serious study.
The study of the internal environment is aimed at understanding how the organization has strengths and weaknesses. Strengths serve as the basis on which an organization relies in its competitive struggle and which it must strive to expand and strengthen. Weaknesses are the subject of close attention by management, who must do everything possible to get rid of them.
J. Pearce and R. Robinson (Pearce and Robinson, p. 187) identified a set of key internal factors that can be a source of both strength and weakness of an organization. Analysis of these factors allows us to get a comprehensive picture of the internal environment of the organization and its strengths and weaknesses. Below is a list of these factors and key questions for analyzing them.
Along with the study of various aspects of the internal environment of an organization, the analysis of organizational culture is also very important. There is not a single organization that does not have an organizational culture. It permeates any organization through and through, manifesting itself in how the organization’s employees carry out their work, how they relate to each other and to the organization as a whole. Organizational culture can contribute to the fact that the organization is a strong structure that can sustainably survive in the competition. But it may also be that organizational culture weakens the organization, preventing it from developing successfully even if it has high technical, technological and financial potential. The particular importance of analyzing organizational culture for strategic management is that it determines not only the relationships between people in the organization, but also has a strong influence on how the organization builds its interaction with the external environment, how it treats its customers and what methods it chooses to conducting competition.
Since organizational culture has no obvious manifestation, it is difficult to study. However, there are nevertheless several stable signs that help to assess the strengths and weaknesses that organizational culture gives rise to in an organization. Information about organizational culture can be obtained from various publications in which an organization presents itself. Organizations with a strong organizational culture strive to emphasize the importance of the people working in it and pay great attention to explaining their philosophy and promoting their values. At the same time, organizations with a weak organizational culture are characterized by the desire to talk in publications about the formal organizational and quantitative aspects of their activities.
An idea of organizational culture is also given by how employees work in their workplaces, how they interact with each other, and what they prefer in conversations. To understand organizational culture, it is important to know how the career system in the organization is structured and what criteria are used to promote employees. If in an organization employees are promoted faster and based on individual achievements, then it can be assumed that there is a weak organizational culture. If the employees’ careers are long-term and preference for promotion is given to the ability to work well in a team, then such an organization has clear signs of a strong organizational culture.
Understanding organizational culture is facilitated by studying whether there are stable commandments, unwritten norms of behavior, ritual events, legends, heroes, etc. in the organization. and how aware all employees of the organization are about this, how seriously they take all this. If employees are knowledgeable about the organization's history and take rules, rituals, and organizational symbols seriously and with respect, then it is safe to assume that the organization has a strong organizational culture.
Elements of the internal environment
All organizations operate in the external environment. Any action of an organization is possible only if its implementation is permitted by the environment in which it operates.It is known that an organization is an open system, since it interacts with the external environment and receives resources from it in the form of raw materials, materials, labor, information, etc. Part of the resources received from the external environment is processed, converted into products that are subsequently transferred to the external environment in the form of goods or services.
Thus, any organization carries out three key processes:
Obtaining resources from the external environment;
production of products (internal transformation of resources);
transfer of products to the external environment.
The internal environment of an organization is part of the external environment located within the organization. In the course of its activities, the organization experiences constant direct influence from internal environmental factors. The internal environment includes the goals and objectives of the organization, its structure, employees, equipment and technologies used in production, internal information, organizational culture and other elements.
In the internal environment of the organization, the following subsystems are distinguished:
Social - this includes all employees of the organization along with the complex of their relationships;
organizational - covering communication processes; subordination, distribution of powers, norms, work schedule, etc.;
information - a set of organizational and technical means that provide the organization with the information necessary for its normal functioning;
production and technical - it includes a complex of means of production (equipment, raw materials, materials, etc.);
economic - a set of economic processes (movement of capital and property rights, cash flow).
Despite the importance of all components of the internal environment, people occupy a special place in any organization. Since the result of an organization’s activities directly depends on the abilities, qualifications, attitude to work and motivation of its personnel.
The external environment of an organization is the main source of resources necessary for the functioning of the organization. The external, or environment, includes a huge number of components that have an impact on the organization of varying nature, degree and frequency. While some environmental components provide an organization with opportunities for development, others create serious obstacles to its activities. The external environment includes economic, political, legal, political, technological, social and other components. There are two relatively autonomous parts of the external environment, which have different impacts on the organization - the macroenvironment and the immediate environment.
The macro environment is part of the external environment common to all organizations. There are global, international and national levels of the macroenvironment.
The main components of the macroenvironment are:
The economic component determines the general level of economic development, market relations, competition, in other words, the conditions in which the organization operates. The main indicators of macroeconomic processes are: the value of gross domestic product (GDP), inflation rates, unemployment rates, etc. Changes in these indicators entail fluctuations in demand for certain products, price levels, profitability of enterprises, determine investment policy, etc.
- The political component determines the direction and pace of social development, the dominant ideology, the foreign and domestic economic policy of the state, etc. The political system has a significant impact on the functioning of organizations, creating new opportunities or difficulties for the development of various areas of business.
- The legal component, through legislation, establishes acceptable standards of business relationships (rights, obligations, responsibilities of organizations, etc.).
- The social component reflects social processes and trends in social development that directly affect the activities of the organization. These include: social values, traditions, ethical standards, people’s attitudes towards work, tastes and consumer behavior.
- The technological component represents the level of scientific and technological progress. Analysis of the technical components of the external environment allows for the timely application of developments that can significantly contribute to increasing the competitiveness of an enterprise in a constantly developing market.
The immediate environment of an organization is also called the “business environment.” The business environment includes everything that, being outside the organization, directly interacts with it, having a direct impact on both the organization as a whole and its individual elements. At the same time, the organization itself can have a significant influence on the nature and content of such interaction, taking a direct part in shaping the business environment.
The business environment is formed as the organization operates and, depending on various factors, can undergo significant changes. The business environment may change when the organization’s strategy or field of activity changes, the range of products manufactured, entry into new markets, etc.
The following components of the business environment are distinguished:
Consumers are direct buyers of products (works, services) produced by an organization. The impact of consumers on the activities of an organization can manifest itself in different forms: in the form of requirements for the quality of goods and forms of payment; in preference to specific types of goods and brands. Consumer demand largely determines the pricing and production policy of an enterprise.
Suppliers are organizations and individuals who supply the organization with the necessary resources (raw materials, materials, energy, etc.). Suppliers can significantly influence the organization's activities by changing supply volumes and prices for resources, creating resource dependence.
Competitors are enterprises selling homogeneous goods (services, works) in the same market. There is also the concept of "potential competitors"; This is the name given to companies that only intend to enter the market with a product similar to the company’s products. In addition to the obvious threat from direct and potential competitors, a danger to the organization’s activities can be posed by companies that produce goods that can replace or completely displace its products.
Infrastructure is a part of the business environment that supplies the organization with the financial, labor, information and other services necessary for its normal functioning. The infrastructure consists of numerous organizations: banks, stock exchanges, auditing firms, personnel, security and advertising agencies, tenants, etc.
Authorities - various bodies of state and municipal government. The influence of these bodies on the activities of the enterprise can manifest itself to varying degrees and differ in content. It can range from regulation of the scope of activity to direct intervention in the affairs of the organization.
The internal and external environment of an organization are the subject of mandatory analysis for an organization that expects to continue its activities in the long term. A correct understanding of the conditions in which the organization finds itself contributes to the development of the most effective strategy for its development.
Internal management environment
The internal environment is a set of characteristics of an organization and its internal subjects (strengths, weaknesses of its elements and connections between them) that influence the position and prospects of the company. These include the mission, strategy, goals, objectives and structure of the organization, distribution of functions (including management itself), rights and resources, intellectual capital (including organizational and human potential, learning ability, expectations, needs and group dynamics, including leadership relationships) , management style, values, culture and ethics of the organization, as well as systemic patterns of interrelationships of all mentioned characteristics. Almost all of these components of the internal environment will be discussed further. Therefore, here we will focus only on the integral characteristics of the internal management environment, its models, and orientations.Formalized models are dominated by unilateral methods of influence, top-down incentives and compulsions: autocratic (submission to the will of the manager), technocratic (submission to a given production process), bureaucratic (submission to organizational order, instructions of behavior).
Personalized models are dominated by multi-subject mutual influences, motivating type orientations: democratizing (with freedom of maneuver in making and implementing management decisions, with numerous feedback loops), humanizing (an organization is a family, where a specific employee and his creative potential is the main resource of the organization), innovative (support for innovation, empowerment for creative search, creation of a creative environment, etc.).
A special place among the characteristics of an organization’s environment is occupied by its image. The image is formed and changes in the external microenvironment of the organization, radiates into the macroenvironment, and characterizes both relations with external counterparties (primarily on the problems of sharing the results of activities) and the internal environment of the organization. The image belongs to the organization, reflects its features and activities, but is formed in the minds of external entities and directly determines the attitude of counterparties towards it, and indirectly the behavior of employees and groups within the organization.
The image of the organization in the mentality has its own coloration:
Production (produced and offered to contractors only what and how the organization is accustomed to producing and offering);
- sales (sell goods or get a client by any means);
- competitive and opportunistic (focus on the behavior of competitors and demand, as they have already manifested themselves in the market);
- marketing - taking into account the strategic positions of partners and competitors in the development, correction and implementation of strategy and the active formation of demand in the consumer environment, the priority of long-term contracts and recurring transactions that are beneficial to all its participants, including manufacturers, intermediaries and consumers.
Internal environment is a set of characteristics of a company and its internal subjects (strengths, weaknesses of its elements and connections between them) that influence the position and prospects of the company.
Components of the internal environment: mission, strategy, goals, objectives and structure of the organization, distribution of functions (including management ones), rights and resources, intellectual capital (including organizational and human potential, learning ability, expectations, needs and group dynamics, including leadership relationships ), management style, values, culture and ethics of the organization, as well as systemic patterns of interrelationships of all mentioned characteristics.
Formalized models are distinguished by the fact that they are dominated by unilateral methods of influence, incentives and compulsions along the “top-down” line:
1. technocratic (characterized by subordination to a given production process);
2. autocratic (submission to the will of the leader);
3. bureaucratic (submission to organizational order, instructions of behavior).
Personalized models contain multi-subject mutual influences, motivating type orientations:
1. humanizing (an organization is a family, where a specific employee and his creative potential are the main resource of the organization);
2. democratizing (characterized by freedom of maneuver in making and implementing management decisions, with numerous feedback loops);
3. innovative (characterized by support for innovation, provision of authority for creative search, creation of a creative environment, etc.).
External environment is a set of external entities and factors that actively influence the position and prospects of an organization, but are not subject to its management. Composition of the external environment: the external management environment includes the entire macroenvironment and part of the microenvironment.
The macroenvironment is the same for all subjects of management in a given country, region, for specific organizations, goods and services. Feature: elements of the external environment - consumers, competitors, intermediaries, etc., can be considered as a whole, i.e. as a macro environment and as a micro environment.
Main characteristics of the external management environment:
1. multicomponent;
2. growth of complexity, mobility, uncertainty;
3. increasing interconnectedness of factors (a change in one of them leads to a change in other factors);
4. globalization.
Globalization is a complex of cross-border interactions between organizations, individuals, institutions and markets, the creation of a single global, internationalized information, commodity, financial space, the integration of a wide variety of subjects into global processes.
The main directions of globalization:
1. growth and strengthening of the influence of international civil society institutions;
2. expansion of technologies and financial resources, flows of goods;
3. expanding the scope of information exchanges via the Internet;
4. activities of transnational corporations;
5. internationalization of certain types of criminal activity.
Internal management environment
In most cases, management deals with organizations that are open systems and consist of many interdependent parts. Let's consider the most significant internal variables of the organization.The main internal variables traditionally include: goals, structure, tasks, technology and people:
1. A goal is a specific end state or desired result that a group of people working together strives to achieve. In the course of work, management develops goals and communicates them to the employees of the organization, and this process is of great importance because it allows members of the organization to know what they should strive for. Common goals unite the team and give awareness to all work.
Organizations have a variety of purposes, and their nature largely depends on the type of organization:
Commercial organizations. The goals of such organizations should reflect the commercial result in the form of profit (profitability), income, labor productivity, etc.
Non-profit organizations (associations, foundations). By definition, the activities of these organizations are not aimed at making a profit. Their purpose is mainly determined by their social orientation, so the goals can be formulated as protection of rights, development of a scientific direction, support of the culture of the region, etc.
State (municipal) organizations. For these organizations, making a profit is not the dominant goal. The goals of supporting the existence and development of the state (region) often prevail. Organizations develop within the established budget (country, region, district). Therefore, the goals are determined by the territorial authorities and can be formulated as the development of secondary education, ensuring the commissioning of new hospital complexes, supporting public catering, etc.: It should be noted that making a profit as such can be of great importance, but the money earned is invested in things that are significant for state objects. The goals of the departments are also the object of attention of managers.
2. In general, the entire organization consists of several levels of management and various units that are interconnected. This is usually called the structure of the organization. All divisions of an organization can be classified into one or another functional area. Functional area refers to the work performed for the organization as a whole: marketing, production, finance, etc. Obviously, marketing can be carried out by several divisions and even, for example, by a manufacturing division if it is developing a new product for the consumer. When considering structure as a component of the internal environment, two issues are usually focused on: division of labor and control.
The division of labor is carried out not on the principle of using any free worker for a specific job, but on the basis of considerations of attracting a specialist in a given field. Thus, when organizing a new marketing department, it is not advisable to use released engineers or technicians without appropriate retraining. The advantage of specialized distribution of labor is obvious, and how exactly to implement the division of labor in an organization is a question that relates to the most significant management decisions. There is a horizontal and vertical division of labor. Horizontal - division of labor at specialized levels, for example, supply manager, sales manager, human resources manager, etc. Vertical distribution of labor (scope of management) is carried out on the principle of having work to coordinate the execution of a task. This distribution results in a management hierarchy or number of management levels. Hierarchy permeates the entire organization, going down to the level of non-managerial personnel.
The number of persons subordinate to one manager is called the sphere of control. In an organization, each manager has his own sphere of control. Organizations with a flat structure have fewer layers of management and a wider span of control than comparable organizations with a multi-level structure.
3. A task is a prescribed job that must be completed in a prescribed manner and within a specified time frame. Every position in an organization includes a number of tasks that must be performed to achieve the organization's goals.
Tasks are traditionally divided into three categories:
Tasks for working with people;
tasks for working with machines, raw materials, tools, etc.;
tasks for working with information.
In an age of rapid growth in innovation and innovation, tasks are becoming more and more detailed and specialized. Each individual task can be quite complex and in-depth. In this regard, the importance of managerial coordination of actions in solving such problems increases.
4. The next internal variable is technology. The concept of technology goes beyond such a common understanding as production technology. Technology is a principle, a procedure for organizing a process for the optimal use of various types of resources (labor, material, temporary money). Technology is a method that enables some kind of transformation. This may relate to the field of sales - how to most optimally sell a manufactured product, or to the field of information collection - how to most competently and at a lower cost collect the information necessary for enterprise management, etc. Recently, information technology has become a key factor in obtaining sustainable competitive advantage when doing business.
Two classifications of technology are usually considered: the Woodward classification and the Thompson classification.
Woodward classification:
Single, small-scale or individual production;
mass or large-scale production;
continuous production.
Thompson classification:
Multi-link technologies, characterized by a series of interrelated tasks that are performed sequentially;
mediation technologies characterized by meetings of groups of people. For example, sellers connect product manufacturers with consumers (in this case we are dealing with sales technology);
intensive technology, characterized by the use of special techniques to change the state of a material (for example, intensification of production).
5. People are the central link in any management system.
There are three main aspects of the human variable in an organization:
Behavior of individuals;
behavior of people in groups;
the nature of the leader's behavior.
Understanding and managing the human variable in an organization is the most complex part of the entire management process and depends on many factors.
Let's list some of them:
1. Human abilities. According to them, people are most clearly divided within the organization. Human abilities refer to the characteristics that are most easily amenable to change, such as training.
2. Needs. Every person has not only material, but also psychological needs (for respect, recognition, etc.). From a management point of view, the organization must strive to ensure that satisfying the employee’s needs leads to the realization of the organization’s goals.
3. Perception, or how people react to events around them. This factor is important for developing various types of incentives for employees.
4. Values, or shared beliefs about what is good or bad. Values are ingrained in a person from childhood and are formed throughout his entire activity. Shared values help leaders unite employees to achieve the organization's goals.
5. The influence of the environment on the individual. Today, many psychologists say that human behavior depends on the situation. It has been observed that in one situation a person behaves honestly, but in another he does not. These facts point to the importance of creating a work environment that supports the type of behavior desired by the organization.
In addition to these factors, groups and managerial leadership influence a person in an organization. Every person strives to belong to a group. He accepts the norms of behavior of this group depending on how much he values his belonging to it. An organization can be considered as a kind of formal group of people, and at the same time, in any organization there are many informal groups that are formed not only on professional grounds.
In addition, in any formal or informal group there are leaders. Leadership is the means by which a leader influences the behavior of people and causes them to behave in a certain way.
Characteristics of the internal environment
As you know, dependence on the internal and external environment of an organization is one of the most significant characteristics of absolutely any organization. Not one organization can work in isolation, relying only on internal factors and reserves; this happens precisely because of its direct dependence on the external environment. At the same time, internal variables are mainly the result of management decisions made.Accordingly, the internal environment of an organization is nothing more than a set of interrelated variables that characterize the situation within the organization and affect the level of its controllability.
It is worth paying attention to the issue of goals as a priority in any organization. Goals are the final states or desired results that the organization strives for in a given period of time. All goals are developed by the manager during the planning process. As a rule, goals are public in nature and are not part of confidential information - this is a very important factor for coordinating the activities of employees, since each member of the organization must clearly understand why he is working.
Let's consider the typology of goals:
1. According to the establishment period:
strategic;
tactical;
operational;
2. By content:
economic;
social;
organizational;
political;
personnel;
innovative;
scientific;
3. By scope:
internal;
external;
4. By priority of achievement:
especially important;
priority;
deferred;
5. By measurability:
quality;
quantitative;
6. By hierarchy (goals of the highest, middle and lower management levels):
goals of the organization;
goals of structural units;
7. By life cycle stages:
goals of the creation period;
growth period goals;
goals of the maturity period;
goals of the period of decline;
renewal period goals.
In addition to goals, tasks are also important. The term “task” itself means a prescribed work (part or series of work) that must be completed within a certain time frame with the required level of quality.
In general, tasks are divided into 3 large categories:
1) Working with people;
2) Working with objects;
3) Working with information.
In addition, tasks are not a constant parameter; they can, rather even should, change their nature and content as the organization develops and passes through the stages of its life cycle.
The next component - Resources - is the thread that very closely connects the internal environment with the external one. Resources include material base, information, finance, personnel, intellectual resources; resources can be called energy coming from outside.
Technology - usually this term, among organizations, means a method of transforming resources.
Structure, in the context of the internal environment, implies a logically thought-out system of relations of various levels among themselves, aimed at achieving all the goals.
Culture - moral, ideological, ethical standards that have value in a given organization.
Undoubtedly, a positive internal environment of an organization is very important for the successful operation of the entire organization as a whole; then we will dwell in more detail on each element of the internal environment, and now we will move on to the issue of the external environment.
The external environment of an organization is a set of external factors that influence the organization and change its properties. This environment has the following characteristics:
1. The interconnectedness of factors, that is, the level of force with which a change in one factor affects other factors.
2. The complexity of the environment is the number of factors to which the organization must respond, as well as the degree of variability of a single factor.
3. Mobility - the speed with which changes in factors occur.
4. Uncertainty - the relationship between the amount of information about the environment that the organization has and the accuracy of this information.
The external environment of an organization is heterogeneous; it consists of factors of direct impact (immediate environment) and factors of indirect impact (macroenvironment).
Among these two groups of factors, first of all, attention should be paid to the external environment of direct influence, since these are sources of power that directly affect the organization; all activities must be adjusted to their requirements.
In turn, the environment of indirect influence - sources of power that influence the organization indirectly, through other factors, or only under certain conditions, is also worth considering.
Elements of the indirect impact environment include:
1. Economics;
2. International situation;
3. Political factors;
4. Level of scientific and technological progress;
5. Socio-cultural factors.
Despite the abundance of various factors, only a few of them have a pronounced impact on the organization. The task of the manager, as well as management personnel at different levels, is to maintain a balance of relationships. If the most important problems in the interaction of an organization with the external environment are issues related to uncertainty and resource dependence, then the task of management personnel is to maintain a balance of resource input and product output (information, goods, services).
Naturally, these days the level of uncertainty is also very high, so you, as leaders (present or future), should work towards reducing dependence on uncertainty, you need to learn how to reduce the level of existing dependence.
The manager does not have many tools for this, but we can primarily recommend the following measures:
A. Try to strengthen the degree of relationships with environmental elements;
b. Using available means, try to increase the level of awareness about the state of the environment in which your organization operates;
c. If the existing strategy is clearly outdated and is not able to quickly adapt to changing conditions, do not be afraid to choose a new strategy, but you will have to work it out thoroughly;
d. In some cases, an extremely effective way to improve your position is to change your organizational structure.
Internal environment of the company
Any enterprise is located and operates in a certain environment, and each of its actions is possible only if the environment allows it. The enterprise is in a state of constant exchange with the external environment, thereby providing itself with the opportunity to survive, since the external environment serves as a source of production resources necessary for the formation and maintenance of production potential. Environmental factors are uncontrollable by the enterprise and its services. Under the influence of events occurring outside the enterprise, in the external environment, managers have to change the internal organizational structure, adapting it to changing conditions.The external environment of an enterprise is all the conditions and factors that arise independently of the activities of the enterprise and have a significant impact on it. External factors are usually divided into two groups: direct impact factors (immediate environment) and indirect impact factors (macroenvironment).
Factors of direct impact include factors that have a direct impact on the activities of the enterprise: resource suppliers, consumers, competitors, labor resources, the state, trade unions, shareholders (if the enterprise is a joint-stock company).
In the conditions of the transition economy of Russia, the efficiency of enterprises’ activities largely depends on the state, first of all, the creation of a civilized market and the rules of the game in this market.
Main functions of the state:
Creation of a legal basis for the life of the country, including the development, adoption and organization of implementation of economic legislation;
- ensuring law and order in the country and its national security;
- stabilization of the economy (primarily reducing unemployment and inflation);
- ensuring social protection and social guarantees;
- protection of competition.
Factors of indirect impact do not have a direct effect on the activities of the enterprise, but taking them into account is necessary to develop the right strategy.
The most significant indirect impact factors include:
Political factors - the main directions of government policy and methods of its implementation, possible changes in the legislative and regulatory framework, international agreements concluded by the government in the field of tariffs and trade, etc.;
- economic factors - rates of inflation or deflation, level of employment of labor resources, international balance of payments, interest and tax rates, value and dynamics of gross domestic product, labor productivity, etc. These parameters have different effects on different enterprises: what one organization sees as an economic threat, another perceives as an opportunity. For example, stabilization of purchase prices for agricultural products is considered as a threat for their producers, and as a benefit for processing enterprises;
- social factors of the external environment - the population’s attitude to work and quality of life; existing customs and traditions in society; values shared by people; mentality of society; level of education, etc.;
- technological factors, the analysis of which allows us to foresee opportunities associated with the development of science and technology, timely switch to the production and sale of a technologically promising product, and predict the moment of abandonment of the technology used.
Analysis of the external environment of an enterprise is complicated by the fact that the main characteristics of the external environment are its uncertainty, complexity, mobility, as well as the interconnectedness of its factors. The environment of modern enterprises is changing at an increasing speed, which places increasing demands on the analysis of the external environment and the development of a strategy that would take into account to the maximum extent all the opportunities and threats of the external environment.
The internal environment of an enterprise determines the technical and organizational conditions of the enterprise and is the result of management decisions. The purpose of analyzing the internal environment of an enterprise is to identify the strengths and weaknesses of its activities, since in order to take advantage of external opportunities, the enterprise must have a certain internal potential. At the same time, you need to know the weak points that can aggravate the external threat and danger.
The internal environment of organizations includes the following main elements: production, finance, marketing, personnel management, organizational structure.
The importance of analyzing the internal environment is explained by the following circumstances:
Information about the internal environment is necessary in order to determine internal capabilities, the potential that an enterprise can count on in competition to achieve its goals;
- analysis of the internal environment allows you to better understand the goals and objectives of the organization.
The main elements of the internal environment of the enterprise are:
Production (in foreign economic literature - operations management): volume, structure, production rates; product range; availability of raw materials and materials, level of reserves, speed of their use; available equipment fleet and the degree of its use, reserve capacity; production ecology; quality control; patents, trademarks, etc.;
- personnel: structure, qualifications, number of employees, labor productivity, staff turnover, labor costs, interests and needs of employees;
- management organization: organizational structure, management methods, level of management, qualifications, abilities and interests of top management, prestige and image of the enterprise;
- marketing, covering all processes related to production planning and product sales, including: manufactured goods, market share, distribution and sales channels, marketing budget and its execution, marketing plans and programs, sales promotion, advertising, pricing;
- finance is a kind of mirror that reflects all the production and economic activities of the enterprise. Financial analysis allows you to reveal and evaluate the sources of problems at a qualitative and quantitative level;
- culture and image of an enterprise are poorly formalized factors that create the image of an enterprise; a high image of an enterprise allows you to attract highly qualified workers, stimulate consumers to purchase goods, etc.
The main link of the economy is the enterprise - an independent economic entity created to produce products for the purpose of making a profit and satisfying social needs. An enterprise is characterized by a number of characteristics and has its own goals and objectives, determined primarily by the state of the internal and external environment.
The entire set of enterprises operating in the economy can be classified according to a number of characteristics (by industry, production structure, resources and products, by organizational, legal and technological characteristics).
The efficiency of an enterprise is largely determined by its structure - the composition and relationship of its internal links. In economics, there are three types of production structure (technological, subject and mixed), as well as several of its types. The parameters of the production structure depend on the range and characteristics of the product, the scale of production, the level of specialization and cooperation.
The production process at an enterprise involves the combination of living labor with the means of production. The condition for the optimal organization of the production process is its rational distribution among workplaces and over time. The organization of the production process is closely related to the type of production.
The enterprise operates in an external environment, the factors of which are uncontrollable by the enterprise. Analysis of the external environment is necessary to develop an enterprise development strategy that takes into account the complexity, uncertainty and mobility of the environment.
Structure of the internal environment
The internal environment of an organization is built from the elements that form its production and economic system.The elements are grouped into the following blocks:
1) product (project) block - areas of activity of the organization and their results in the form of products and services (projects and programs);
2) functional block (block of production functions) - operator of transformation of organizational and management resources into products and services in the course of work of enterprise employees at all stages of the product life cycle, including R&D, production, sales, consumption;
3) resource block - a complex of material, technical, labor, information and financial resources of an enterprise;
4) organizational block - organizational structure, process technology for all functions and projects, organizational culture;
5) control unit - general management of the organization, management system and style.
The internal environment includes those conditions for the production and sale of products (services) that can be regulated by the organization in the process of intra-company planning and management. This is the main difference between the internal environment and the external environment (the factors of the latter must be taken into account in the work of the organization, but it is not capable of influencing their change).
Internal environmental factors include the structure of the organization, its goals and objectives, production technology and people - with their abilities, needs, and qualifications. All internal factors are interconnected. Changing one of them affects all others to a certain extent.
The manager must clearly understand the degree of influence of each internal factor on the success of the business and change it, if necessary, in the right direction. Therefore, internal environmental factors require constant attention of the organization's management.
Let us briefly consider their main characteristics. At the center of the entire set of internal factors are the goals of the organization. And not by chance, since goals are a specific final state or desired result that the team of a given organization strives for by working together. During planning, the organization's management develops goals and communicates them to the team. This process is a powerful mechanism for coordinating the actions of all team members because it makes it possible for them to know what they need to achieve. The orientation determined by goals permeates all subsequent decisions of the organization's management.
Based on the goals of the organization, they are developed for each of the divisions. At the same time, the goals of the latter should make a specific contribution to the development of the enterprise and not conflict with the objectives of other departments.
The most important element of the internal environment is the structure of the organization, which refers to the logical relationship of management levels and functional areas, built in a form that allows the organization’s goals to be most effectively achieved.
The challenge is to create an organizational structure that not only allows the organization to continually adapt to change, but also actively facilitates this process. This means that the structure follows the organization's strategy (and therefore market demands) and not the other way around. To make such an adaptation process possible, an organizational structure is needed that is fully compatible with environmental conditions.
The construction of the structure is based on the division of labor. Dividing all work into components is called horizontal division of labor. This makes it possible to produce much more output than if the same number of people worked independently. The degree of horizontal division of labor varies across different enterprises; it depends on the scale and complexity of production. The larger and more complex the organization, the higher the degree of division of labor, and vice versa.
Based on the horizontal division of labor, organizational units are formed that perform specific specific tasks. They are usually called departments or services.
Because the work of people in an organization is broken down into its component parts, someone must coordinate it in order for it to be successful. For this purpose, a vertical division of labor is carried out.
Thus, in the organization there are two internal organic forms of division of labor. The first is the division of labor into components that make up parts of the overall activity, i.e. horizontal division of labor. The second is called the vertical division of labor, and it separates the work of coordinating people's actions from the actions themselves.
Another area of division of labor in an organization is the formulation of tasks. A task is a prescribed job, series of jobs, or piece of work that must be completed in a predetermined manner within a predetermined time frame. From a technical point of view, tasks are not assigned to the employee, but to positions. Based on management's decision about the structure, each position includes a number of tasks that are considered as essential contributions to achieving the organization's goals. It is believed that if a task is completed in a prescribed manner and within a predetermined time frame, the organization will perform successfully.
The most important internal variable is technology. Technology can be defined as the combination of skills, equipment, tools and related technical knowledge necessary to bring about desired changes in materials, information or people.
Tasks and technology are closely related. Completing a task involves using a specific technology as a means of converting an input material into an output form. Essentially, technology is a method that allows you to convert source materials (raw materials) into the desired output product.
No technology can be useful and no task can be accomplished without the cooperation of the team. Management achieves the organization's intended goals through other people. Therefore, people are the central factor for success. Understanding and managing the human variable is very difficult. Human behavior in society is the result of a complex combination of individual characteristics of the individual and his environment.
Internal Marketing Environment
The greatest interest when conducting marketing research is the study of the marketing environment. The marketing environment constantly presents surprises - either new threats or new opportunities. It is vital for every company to constantly monitor ongoing changes and adapt to them in a timely manner. The marketing environment is a set of active entities and forces operating outside the boundaries of the company and influencing its ability to successfully cooperate with target customers. In other words, the marketing environment characterizes the factors and forces that influence an enterprise's ability to establish and maintain successful cooperation with consumers. These factors and forces are not all and are not always subject to direct control by the enterprise. In this regard, a distinction is made between external and internal marketing environments.The marketing environment is everything that surrounds the enterprise, everything that influences its activities and the enterprise itself.
The company's marketing environment is a set of entities and forces operating outside the enterprise and influencing the enterprise's ability to establish and maintain successful mutually beneficial cooperative relationships with target customers.
The marketing environment is usually divided into internal and external environments.
The external marketing environment of a company consists of a microenvironment and a macroenvironment. It includes all objects, factors and phenomena that are located outside the enterprise, which have a direct impact on its activities. The firm's microenvironment includes the firm's relationships with suppliers, intermediaries, customers and competitors. The macroenvironment of a company is represented by factors that are more common to most companies, mainly of a social nature. These include factors of demographic, economic, natural, political, technical and cultural nature.
The internal environment characterizes the potential of the enterprise, its production and marketing capabilities.
The essence of marketing management of an enterprise is to adapt the company to changes in external conditions, taking into account existing internal capabilities.
The internal marketing environment includes those elements and characteristics that are located within the enterprise itself:
Fixed assets of the enterprise.
Composition and qualifications of personnel.
Financial opportunities.
Management skills and competence.
Use of technology.
Enterprise image.
Experience of the enterprise in the market.
One of the most important parts of the internal environment is the characteristics of marketing capabilities. They depend on the presence of a special marketing service of the enterprise, as well as the experience and qualifications of its employees.
To simplify the consideration of the external environment of an enterprise, it should be distinguished into macro-external and micro-external.
The micro-external environment (direct impact environment) of marketing includes a set of subjects and factors that directly affect the organization’s ability to serve its consumers (the organization itself, suppliers, marketing intermediaries, clients, competitors, banks, the media, government organizations, etc.). The micro-external environment is also directly influenced by the organization.
When the organization itself is considered as a factor in the external marketing environment, it is meant that the success of marketing management also depends on the activities of other (except marketing) divisions of the organization, the interests and capabilities of which should be taken into account, and not just marketing services.
The macro-external environment (the environment of indirect influence) of marketing is a set of large social and natural factors that affect all subjects of the micro-external environment of marketing, but not in an immediate, direct way, including: political, socio-economic, legal, scientific, technical, cultural and natural factors. Political factors characterize the level of stability of the political situation, the state’s protection of the interests of entrepreneurs, its attitude towards various forms of ownership, etc.
Socio-economic characterize the standard of living of the population, the purchasing power of individual segments of the population and organizations, demographic processes, stability of the financial system, inflationary processes, etc.
Legal - characterize the legislative system, including regulatory documents on the protection of the natural environment, standards in the field of production and consumption of products. This also includes legislation aimed at protecting consumer rights; legislative restrictions on advertising and packaging; various standards affecting the characteristics of manufactured products and the materials from which they are made.
Scientific and technical - provide advantages to those organizations that quickly adopt the achievements of scientific and technical progress.
Cultural factors sometimes have the main influence on marketing. Consumer preference for one product over another can only be based on cultural traditions, which are also influenced by historical and geographical factors.
Natural - characterize the presence of natural resources and the state of the natural environment, which both the organization itself and the subjects of the micro-external environment must take into account in their economic and marketing activities, since they have a direct impact on the conditions and possibilities for conducting this activity.
Even if the management of an organization does not like such environmental conditions as, for example, political instability and the lack of a well-developed legal framework, it cannot change them directly, but rather must adapt to these conditions in its marketing activities. However, sometimes organizations take a more active and even aggressive approach in their efforts to influence the external environment; here, first of all, we mean the micro-external marketing environment, the desire to change public opinion about the organization’s activities, establish warmer relationships with suppliers, etc.
The microenvironment of the company is represented by:
Suppliers.
Marketing intermediaries.
Clientele.
Competitors.
Contact audience.
Marketing microenvironment:
External microenvironment - economic entities with which the enterprise has direct contacts in the course of its activities (consumers, suppliers, competitors: direct, potential).
Direct competitors are enterprises offering similar goods and services in the same markets.
Production of substitute goods - enterprises producing goods that satisfy the same need.
Potential competitors are enterprises that can enter the manufacturer's target market.
Contact audiences are government and administrative bodies (federal, regional, etc., media workers, public parties and movements, trade unions, representatives of financial circles).
The external marketing environment is part of the external environment of the organization as a whole or its external business environment, discussed in management courses and characterizing management problems at the organizational level.
Suppliers are subjects of the marketing environment whose function is to provide partner firms and other companies with the necessary material resources. In the context of a network approach to the process of interaction between subjects of the marketing system, it is advisable to study the capabilities of various suppliers in order to select the most reliable and economical supplier in terms of capital and current costs of the company. A comprehensive study of the “supplier - company - consumer” chain is a necessary condition for economic assessment when justifying the choice of supplier.
Competitors are firms or individuals that compete, that is, acting as rivals in relation to other business structures or entrepreneurs at all stages of the organization and implementation of business activities. Competitors, through their actions in the market, when choosing suppliers, intermediaries, and consumer audiences, can influence the results of the activities of a rival enterprise, its position and advantages in competition.
Knowing the strengths and weaknesses of competitors, a company can evaluate and constantly strengthen its production and marketing potential, goals, current and future business strategy.
Intermediaries are firms or individuals who help manufacturing businesses promote, deliver and sell their products to consumers. There are trade, logistics, marketing and financial intermediaries. Resellers include wholesalers and retailers. Logistics intermediaries provide services in the system of warehousing, transportation of goods and flow. Marketing intermediaries provide assistance in the system of interaction of the company with all subjects of the marketing system in the field of organizing marketing research and optimizing demand for goods and services. Financial intermediaries provide banking, credit, insurance and other financial services.
Consumers are firms, individuals or their potential groups who are ready to purchase goods or services on the market and have the rights to choose a product, a seller, and present their conditions in the purchase and sale process. The consumer is the king of the market, so the marketer’s task is to constantly study consumer behavior, his needs, analyze the reasons for deviations in his attitude towards the company’s product and timely develop measures to adjust the company’s activities in order to maintain effective communications with the consumer.
Strategic analysis of the internal environment
Strategic management is a process in constant motion. Change both inside and outside the organization, or both, requires corresponding adjustments to the strategy, so the strategic management process is a closed cycle.The task of evaluating performance and making adjustments is both the end and the beginning of the strategic management cycle. The course of external and internal events sooner or later forces us to reconsider the purpose of the company, the goals of its activities, the strategy and the process of its implementation. Management's job is to find ways to improve the existing strategy and monitor how it is being implemented.
There are many models of the strategic management process that, to one degree or another, detail the sequence of steps in this process, but three key stages are common to all models:
Strategic analysis;
- strategic choice;
- strategy implementation.
Strategic analysis is usually considered the initial process of strategic management, since it provides both the basis for determining the mission and goals of the company, and acts as the most important stage of management in developing an effective strategy and provides a realistic assessment of one’s own resources and capabilities and a deep understanding of the external competitive environment.
Every organization is involved in three processes:
Receiving resources from the external environment (input);
turning resources into products (transformation);
transfer of the product to the external environment (output).
Management is designed to provide a balance between input and output. As soon as this balance is disturbed in an organization, it takes the path of death. The modern market has dramatically increased the importance of the exit process in maintaining this balance. This is precisely reflected in the fact that in the structure of strategic management the first stage is the stage of strategic analysis.
The strategic analysis stage interprets the strategic position of the organization by, firstly, identifying the changes that have arisen in the economic environment of the organization and identifying their impact on the organization and its activities, and secondly, identifying the advantages and resources of the organization depending on their changes. The main purpose of strategic analysis is to assess the key influences on the present and future position of the organization and determine their specific impact on strategic choices.
One of the results of strategic analysis is the formulation of the overall goals of the organization, which determine the scope of its activities. Based on the goals, tasks are determined. They are used to represent strategic planning indicators. Indicators presented in written form may be of a financial or non-financial nature. Financial indicators are numerous, expressed in numbers, convenient for comparing the strengths and weaknesses of various strategic development options, and with their help it is easy to exercise control.
Conducting strategic analysis involves examining the dynamics of the environment and the organization's capabilities. The organization's potential is studied with a view to using it to build competitive advantages. An important role in strategic analysis is played by the identification of core competencies and skills - those skills that give the company a competitive advantage and determine the main directions of its activities.
The need for strategic analysis is determined by several factors:
Firstly, it is necessary when developing an enterprise development strategy and, in general, for the implementation of effective management;
- secondly, it is necessary to assess the attractiveness of the enterprise, from the point of view of an external investor, to determine the position of the enterprise in national and other ratings;
- thirdly, strategic analysis allows us to identify the reserves and capabilities of the enterprise, determine the directions for adapting the internal capabilities of the enterprise to changes in external environmental conditions.
Strategic analysis involves studying:
External environment (macroenvironment and immediate environment);
- internal environment of the organization.
Analysis of the external environment (macro and immediate environment) is aimed at finding out what the company can count on if it successfully conducts its work, and what complications may await it if it fails to prevent in time the negative attacks that may present her with an environment.
Analysis of the internal environment reveals the opportunities, the potential that a company can count on in competition in the process of achieving its goals. Analysis of the internal environment also allows us to better understand the goals of the organization and more accurately formulate the mission, i.e. determine the meaning and direction of the company’s activities. It is extremely important to always remember that the organization not only produces products for the environment, but also provides an opportunity for existence for its members, giving them work, providing them with the opportunity to participate in profits, providing them with social guarantees, etc.
At this stage of the analysis, top management selects the most important factors for the future of the enterprise - strategic factors. Strategic factors are factors in the development of the external environment, which, firstly, have a probability of implementation and, secondly, a high probability of influencing the functioning of the enterprise. The purpose of analyzing strategic factors is to identify threats and opportunities in the external environment, as well as the strengths and weaknesses of the organization. A well-conducted management analysis, which gives a realistic assessment of its resources and capabilities, is the starting point for developing an enterprise strategy. At the same time, strategic management is impossible without a deep understanding of the competitive environment in which the enterprise operates, which requires the implementation of marketing research. It is the emphasis on monitoring and assessing external threats and opportunities in the light of the strengths and weaknesses of the enterprise that is the hallmark of strategic management.
The result of strategic analysis is the formation of an effective enterprise strategy, which should be based on the following components:
Correctly selected long-term goals;
deep understanding of the competitive environment;
a real assessment of the enterprise’s own resources and capabilities.
Organization is a group of people whose activities are coordinated to achieve common goals.
External environment of the organization- these are conditions and factors that arise independently of its activities and have a significant impact on it. External factors are divided into: 1) direct impact environment, 2) indirect impact environment.
Direct exposure environment includes factors that directly affect and are directly affected by the organization's operations. These factors include: 1) suppliers, 2) labor resources, 3) laws and government regulatory institutions, 4) consumers, 5) competitors.
Under environment of indirect influence factors are understood that may not have a direct immediate impact on operations, but, nevertheless, affect them: 1) political 2) sociocultural factors, 3) the state of the economy, 4) international events, 5) scientific and technological progress. 6) climatic.
Internal environment of the organization- this is the environment that determines the technical and organizational conditions of the organization and is the result of management decisions.
The internal environment of an organization is formed depending on its mission and goals, which, in turn, are largely determined by the external environment. The internal environment of an organization can be considered from a static point of view, highlighting the composition of its elements and structure, and from a dynamic point of view, i.e. from the point of view of the processes occurring in it. It includes all the main elements and subsystems that ensure the process of production of goods and services, the management process, which consists of the development and implementation of management decisions, as well as social, economic and other processes that occur in the organization. The internal environment includes: 1) the goals of the organization; 2) the structure of the organization (both formal and informal); 3) people working in the organization; 4) technologies used as methods of processing raw materials and obtaining specific products; 5) management tasks; 6) organizational culture. All internal processes in an organization take place within the organizational structure. The organizational structure assigns tasks, management functions, rights and responsibilities to each structural unit.
Management systems: functions and organizational structures;
Management system is a system for managing resources (human, financial, technical, etc.) to achieve predetermined goals.
Management functions.
Function in management, a special type of management activity is called, with the help of which the subject of management influences the managed object.
1) Forecasting and planning.
Forecasting is the prediction of the course of economic development for the coming period for a specific organization.
Planning is the development of a plan that defines what needs to be achieved and by what levers, consistent with time and space. In the broad sense of the word, planning is the activity of developing and making management decisions. There are three main types of planning.
1) Strategic planning is an attempt to take a long-term view of the fundamental components of an organization.
2) Tactical planning is the determination of intermediate goals on the way to achieving strategic goals and objectives. Tactical planning is based on ideas that were born during strategic planning.
3) Operational planning is the basis of planning. Operational plans include performance standards, descriptions of work, etc. fit into a system in which everyone directs their efforts to achieve the general and main goals of the organization.
2) Organization. The process of determining rational forms of division of labor, distributing work among workers, groups of workers and departments and developing the structure of management bodies;
3 ) Motivation and stimulation. An incentive system is a set of interrelated and complementary incentives, the impact of which activates human activity to achieve set goals. Thus, motivation depends on employees' needs, expectations and perceptions of fair reward for work performed.
4) Control. Through the control function, problems are identified, which allows the organization’s activities to be adjusted to prevent a crisis situation.
5) Coordination and regulation. The essence of this function is to ensure consistency of actions of all parts of the management system, preserving, maintaining and improving the established operating mode of the production mechanism.
Organizational structures.
Organizational structure is the composition and subordination of interconnected management units.
1) Linear - implements the principle of unity of command. Each department has only one senior manager (in small enterprises up to 100 people).
2) Functional – based on subordination to areas of management activity. A specific unit has several higher-ups, but each of them has the right to influence only in their area of activity (in medium-sized companies from 100 to 500 people).
3) Headquarters (linear-functional) - linear management links are called upon to command, and functional ones to advise, to help in the development of specific issues. Headquarters can be formed at different levels of management - analytical center, legal service (at large enterprises of 500 or more people).
4) Divisional - implies the creation of semi-autonomous production departments, formed depending on the type of product, brand or geographical principle.
5) Matrix - a type of project, in which 2 or more projects are carried out simultaneously. This structure is created by combining 2 types of structures: functional and design.
An enterprise is an open system that can only exist if it actively interacts with the surrounding (external) environment.
External environment - this is a set of active economic entities, economic, social and natural conditions, national and interstate institutional structures and other external conditions and factors operating in the environment of the enterprise and influencing various areas of its activity.
The external environment is divided into:
microenvironment- the environment of direct influence on the enterprise, which is created by suppliers of material and technical resources, consumers of the enterprise’s products (services), trade and marketing intermediaries, competitors, government agencies, financial institutions, insurance companies and other contact audiences;
macroenvironment, affecting the enterprise and its microenvironment. It includes the natural, demographic, scientific, technical, economic, environmental, political and international environment.
An enterprise must limit the negative impacts of external factors that most significantly affect the results of its activities or, conversely, make fuller use of favorable opportunities.
Suppliers - These are different business entities that provide the enterprise with the material, technical and energy resources necessary for the production of specific goods or services.
The main clients of enterprises are consumers of products (services) in different client markets:
Consumer (population purchasing goods and services for personal consumption);
Manufacturers (organizations purchasing products for industrial and technical purposes);
Intermediate sellers who purchase goods and services for their subsequent resale at a profit for themselves;
Government institutions (wholesale buyers of products for government needs);
International (foreign buyers in the previously listed types of client markets).
Marketing intermediaries - these are companies that help an enterprise in promoting, marketing and distributing its products to customers . These include resellers, firms that specialize in organizing product distribution, marketing services agencies, and financial institutions.
Competitors- rivals of the enterprise in the struggle for more favorable conditions for the production and sale of goods, for obtaining the highest profits.
To produce competitive products, enterprises need to constantly study their competitors, develop and follow a certain market strategy and tactics.
Contact audiences- these are organizations that show real or potential interest in the enterprise or influence its ability to achieve its goals. These are financial circles (banks, investment companies, stock exchange, shareholders), the media, various government agencies of representative and executive power, the population and citizens of action groups (public organizations).
A significantly larger number of factors operate in the macroenvironment of an enterprise than in the microenvironment. They are characterized by multivariance, uncertainty and unpredictability of consequences.
Natural factors. The natural environment is characterized by: a shortage of certain types of raw materials, rising energy prices and increased government intervention in the process of rational use and reproduction of natural resources.
Demographic factors. The demographic environment is characterized by: an increase in mortality, a decrease in the birth rate, an aging population, and an increase in the number of employees.
A decrease in the birth rate reduces the need for goods in demographic markets - children's, adolescents, and youth, which forces enterprises to adapt their activities to meet the needs of people of middle, pre-retirement and retirement age. The change in the structure of the population by age group led to a reduction in labor potential, because In many regions, a smaller portion of the population is of working age. This requires enterprises to develop a strategy for saving human labor through technical and technological re-equipment, increasing the level of mechanization and automation of production processes.
Scientific and technical factors. Scientific and technological progress plays a decisive role in the development and intensification of industrial production. It covers all parts of the process, including fundamental, theoretical research, applied research, design and technological development, the creation of samples of new technology, its development and industrial production, as well as the introduction of new technology into the national economy. The material and technical base of industrial enterprises is being updated, labor productivity is growing and production efficiency is increasing.
Economic forces. The main factors of this environment include: the growth and decline of industrial production, the level and rate of inflation, fluctuations in the exchange rate of the ruble relative to the currencies of other countries, the taxation and credit system, supply and demand in the market, the solvency of counterparties, the level and dynamics of prices, unemployment, etc.
Environmental factors. This environment is characterized by: increased environmental pollution and increased interference in the process of rational use and reproduction of natural resources, tightened government control over the quality and safety of goods.
Political factors. The production and social activities of the enterprise are definitely affected by events occurring in the political environment. It is characterized by: legislative regulation of business activities, increased requirements from government agencies that monitor compliance with laws. Sudden changes in the political situation in the country can lead to changes in business conditions, increased resource costs, and loss of profits.
International factors, which include the internationalization of the world economy, changes in the value of the dollar and euro on the world market, the growth of the economic power of individual states, the formation of the international financial system, the opening of new large markets, etc., have an impact on enterprises engaged in foreign economic activity.
The internal environment of a firm is essentially a response to the external environment.
The main goals that a company sets for itself come down to one general characteristic - profit. In this case, naturally, both the internal and external environment of the company must be taken into account. All variety internal environment enterprises can be reduced to the following consolidated areas:
production,
marketing,
financial management,
general management.
This division into areas of activity is conditional and is specified in the general and production organizational structures.
Market - This is the sphere of commodity exchange and the associated set of relations that develop between commodity producers and buyers regarding purchase and sale.
Conditions for the functioning of the market: the implementation of diverse forms of ownership and their equality, the creation of market infrastructure and free competition, which is a regulatory force in a market economy.
The market performs the following functions:
a) regulating (regulates the production and circulation of goods and services);
b) controlling (determines the social significance of the product produced and the labor spent on its production);
c) distribution (establishes the necessary reproduction proportions to ensure a balanced economy);
d) stimulating (encourages reducing individual labor costs and using new equipment);
e) informational (informs about the state of affairs in the economic sphere);
f) sanitizing (cleanses social production of economically weak, uncompetitive economic units).
Market infrastructure is a set of entities that have different areas of activity and ensure effective interaction of all market counterparties. The most important elements of market infrastructure include: commodity, commodity and raw materials, stock and currency exchanges, commercial information centers, banks, transport and warehouse networks, systems and means of communication.
Thus, the external environment of the enterprise is a single market system with private markets:
Consumption;
Scientific, technical, economic, political information;
Capital;
Labor force;
Raw materials, supplies and components.
These markets and the company itself in its internal environment must obey certain “rules of the game” - legal rules and restrictions.
An enterprise, being an integral part of its external environment, is obliged to constantly resolve issues of social development not only of its own workforce, but also of local and national significance.
The behavior of economic entities in the market is regulated principles :
n mutual benefit and equality of business relations;
n responsibility to the end consumer;
n achieving economic and commercial advantage solely through innovation;
n economical housekeeping;
n compliance with the ethical code of entrepreneurship.
Enterprise- a technical, social, economic and environmentally oriented unit that performs the task of satisfying demand on the basis of independent decisions and responsibility.
Internal environment - a set of factors that depend on the activities of the enterprise itself, its goals, structure, actions of managers and personnel.
External environment of the enterprise- a set of systems that are located outside the enterprise.
The systems with which enterprises actively interact are direct impact factors. Factors and conditions that do not have a direct impact on the activities of the enterprise, but predetermine strategically important decisions made by its managers are factors of indirect impact to the enterprise. The complexity of the external environment is characterized by many factors that an enterprise must take into account in order to survive and successfully develop.
Direct environmental factors:
SUPPLIERS. In the process of their operation, enterprises enter the market in search of what they will use to produce products: raw materials, basic and auxiliary materials, components, equipment, etc. Satisfying needs across the entire product range, the company interacts with suppliers. How fully these problems are solved depends on the state of the market for these goods and is determined by the ratio of supply and demand for them.
CONSUMERS. Having produced a product, the enterprise enters the market as a seller and, in connection with this, the problem of sales comes to the fore, i.e. identification of consumers. When solving this problem, it is important how the consumer relates to the enterprise and the product (brand). This is a significant factor that determines the relationship between supply and demand for the company’s products and thereby influences the price and sales volume.
COMPETITORS. Enterprises producing products for the same purpose. The number of competitors and their activity significantly influences the ratio of supply and demand for the company’s products, its price level, and thereby determining the favorable or unfavorable nature of the product environment.
STATE. The state influences the functioning of the enterprise, implementing its state policy, and uses various forms of influence. The state most actively influences an enterprise through the taxation system: the number of taxes, the level of tax rates, preferential rates, customs duties.
· Budget form of influence: investment policy, various forms of subsidies, budget financing, infrastructure development.
· Administrative form of influence: legislative regulation, regulation of the minimum wage, fines and other administrative measures.
· Monetary form of influence: regulation of discount rates, exchange rates and credit policy.
· Industrial form of exposure: placing government orders, regulating prices for products from natural monopoly industries and competition from state-owned enterprises.
Environmental factors of indirect impact:
- Political factors. The state of the political and legal environment is determined by the peculiarities of the political situation in the country. The specifics of the situation arise from the current situation of political forces, which are represented by political parties. In a specific period of time, one of the parties or associations determines the domestic and foreign policies of the state, thus influencing the solution of social and economic problems. The political and legal system may not be favorable for an enterprise if its independence is limited, and, conversely, such an environment can stimulate the business activity of an enterprise through preferential taxation, etc.
- Scientific and technological progress. In a market-type economy, an enterprise can be competitive only if it constantly improves its products, as well as the technology and organization of production. Timely use of scientific achievements is the key to the sustainable functioning of an enterprise.
- The state of the national economy. The economy of any country requires the presence of a financial system, which is represented by the state budget, currency funds, banks, insurance and pension funds, as well as leasing companies, legal entities and individuals. These elements of the financial environment interact with enterprises and among themselves in the financial market.
- Socio-cultural factors. The social sphere is part of the external environment of the enterprise, which qualitatively and quantitatively shapes the labor market. Elements of the social sphere that influence the enterprise: mentality, ideology, religion, level of well-being, crime, health care and traditions. These elements influence the professional and personal qualities of the employee and are formed mainly in the external environment.
- Geographical factors. Each enterprise is located in a certain natural and climatic zone, which has a number of features: temperature, availability of water sources, natural resources, landscape (remoteness of sales markets, sources of raw materials). The level of costs for heating, transportation, and construction of buildings is different for enterprises located in different natural and climatic conditions.
- International environment factor. The globalization processes taking place all over the world cannot but have an impact on the enterprise. The global competitive environment formed by transnational corporations is also an important factor influencing the enterprise.
- Internal environment, like the external one, is movable. For objects of labor in production, the internal environment is external, with which they actively interact. The result of such interaction can be not only a change in the properties and structure of objects of labor, but also the internal environment itself. This manifests itself, first of all, in the wear and tear of the means of production. Any change in the structure and quality characteristics of manufactured products affects the corresponding change in technology, which affects the change in the elements of fixed assets and the qualification composition of workers.
