Concept and Nature of Environment and Auditing Environmental Influences

Concept and Nature of Environment

• Environment shape the nature of competition and influence the availability of resources.
• “Environment includes factors outside the firm which can lead to opportunities for or threats to firm.”- Jauch & Glueck
• “Business environment is the aggregate of all the conditions, events and influences that surround and affect it.”- Keith Davis

Auditing Environmental Influences 

• Audit is a tool to measure, analyze, evaluate and report the performance systematically. 
• After finding out the significant factors that can significantly impact the organization, each factor has to be studied in detail. 
• The result of audit helps to correct the current strategies. 
• Auditing of environmental influences are done to understand the strategic position of an organization. 
• Helps to identify the opportunities and threats. 

Scenarios 

• Scenarios are detailed and probable views of how the business environment of an organization might develop in the future based on key drivers for change where there is a high uncertainty. 
• Scenarios strengthen a manager’s strategic management tool box: 

1. Traditional methods focus on the past. 
2. Scenario planning focuses on the future. 

• Combining both the past and the future makes thinking about strategy stronger and promotes: 

1. Responsiveness. 
2. Flexibility. 
3. Competitive advantage. 

• Scenarios allow a shared view of the future to be developed. 
• Provide the opportunity for an organisation to consider how it wants to position itself in that future. 

Structural Analysis of Competitive Environment

• The environmental forces that influence the competitive advantage of a firm is known as structural drivers. 
• The structural analysis of competitive environment is done through “Five Forces Framework” which is known as Porter’s Diamond. 
• This framework helps to identify the sources of competition in the industry. 
• This framework states that the competition is a composite of five forces. 
• This framework is used to formulate strategy at the level of strategic business unit. 
• This framework helps to: 

1. Identify key forces that drive competition. 
2. Assess strength and weaknesses of competitors. 
3. Identify attractiveness of specific industry. 
4. Develop competitive strategy. 

 

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About Dinesh Lamichhane

"राम्रो भोलिको लागि, आज सिकौं र सिकाऔं" भन्ने उध्येश्यका साथ संचालित, यो बल्ग शिक्षा, सञ्चार, जागरूकता, जानकारी, समन्वय, पुस्तकहरु, कक्षाहरू, आदि र समग्रमा लोकसेवा र कलेजको विद्यार्थी सँग सम्बन्धित ब्लग हो। देशमा बढीरहेको बेरोजगारी र नेपाली प्रशासनमा कमजोर कर्मचारी को समस्यालाई ध्यानमा राखी यो बल्ग निर्माण गरिएको हो । यहाँ हामी सके सके-सम्म सम्पुर्ण बिषयबस्तुहरु समावेस गर्ने प्रयास गरिरहेका छौ। जस्ले गर्दा कुनैपनि लोकसेवाको तयारी गरीरहेका र कलेज पढ्दै गरेका विद्यार्थीहरुलाई धेरै उपयोगी हुनेछ भन्ने हाम्रो विश्वास रहेको छ। तपाईपनि आ-आफ्नो ठाँऊबाट हामीलाई सहयोग गरिदिनुहुन अनुरोध गर्दछौ । तपाई सँग एदी कुनै लोकसेवाको लागी सहयोगी सामाग्रीहरु साथै बिभिन्न संकायका शैक्षिक सामाग्रीहरु छन् भने हामीलाई lcdinesh57@gmail.com र dineshlamichhane57@gmail.com मा मेल गरी सहयोग गर्न सक्नुहुन्छ ।