own advantage. An inability to do so can put organizations in positions where
their short- and long-term survival is jeopardized. The business environment is
the setting within which a business operates, formulates policies and makes
decisions. It is usual to distinguish between the internal and the external
environment. The former usually comprises the various assets and resources
possessed by the organization. That is its workforce, plant and machinery, knowhow,
financial resources, etc. The latter refers to people, institutions and
developments, etc. which exert an external influence on how the organization
performs. Of course, with the emergence of strategic alliances and networks
such a definition of boundaries does tend to become more blurred.
Firms need to know all about the business environment in which they operate.
It is essential that they can anticipate the changes that are likely to take place in
the marketing environment in the foreseeable future. However, as noted above,
it is not simply a matter of adapting to change. Organizations can also exercise
their own influence on the environment. Among the ways that this can be
achieved is the development and commercialization of new technological ideas.
These new technologies then become part of the business environment and in
their turn have an impact upon what other organizations can do.
Considerable control can be exercised over its internal environment by a
firm, but a firm cannot exert control in the same way or to the same extent over
the external environment. It can only attempt to influence it. There are various
ways of influencing events in the external environment. These may include
activities such as lobbying among legislative groups. The latter is what
organizations often do when trying to influence the formulation of European
Community directives which can have an impact on such things as product