Changes in the external and internal environment of the enterprise. Internal and external environment of organizations. Functional management structure

Any enterprise is influenced by the factors that are generated by the internal and external environment, and functions with their consideration. Internal and external environments differ from each other in the same way as entering and exiting, or up and down.

DEFINITION

External environment is a combination of socio-political, economic and other factors that can influence the organization.

Internal environment, in turn, consists of factors of the internal composition of the enterprise.

Internal environment of the organization

The internal environment includes situational factors in the company. Because an organization is a human-made system, internal variables are mainly the result of decisions taken... The main variables of the organization that require constant management attention: employees of the enterprise, goals and objectives, structural component and technology.

An organization is seen as a group of people with deliberate shared goals. Organization is also a means of achieving goals, which represent certain end states (desired outcomes) that team members strive to work together.

DEFINITION

Organization structure is a logical relationship between management levels and functional areas, which are built in a way that allows you to achieve the goals of the company with high efficiency.

One of the directions of the division of labor of any enterprise is the formulation tasks, which represent a certain work (a series or part of work), necessary to perform in a predetermined way and within a specific time frame.

Another internal variable is technology, which includes a set of means (processes, operations, methods), with the help of which incoming elements are converted into outgoing ones. The technology is represented at the enterprise by machines, mechanisms and tools, skills and knowledge.

An organization represents people whose abilities are used to achieving goals... In carrying out work in the area of ​​coordinating the efforts of personnel towards the effective achievement of organizational goals, managers need to consider the personality of the employees, including needs, expectations and values.

External environment of indirect and direct impact

One of the ways to identify the environment in order to facilitate the study of its influence on enterprises is the separation of environmental factors into the environment of direct and indirect impact.

Direct exposure environment consists of factors that have a direct impact on the operations of the enterprise. These factors include suppliers, consumers, competitors, labor market resources, laws and government regulatory agencies.

Indirect impact environment includes factors that do not have a direct and immediate impact on operations, but do affect them. These can be economic and political factors, socio-cultural factors, events on the world stage, as well as achievements of scientific and technological progress.

Characteristics of the external environment of the enterprise

The main determinants of the environment of external influence are the indeterminate state, mobility, the relationship between the factors, as well as their complexity.

The interconnectedness of factors is the level of force with which a change in one factor will affect other factors.

The interconnectedness of various environmental factors contributes to the transformation of the environment modern enterprises in a rapidly changing environment. Leaders should not look at external factors in isolation, they are all interconnected and subject to change.

Complexity of the external environment represents the number of factors to which the enterprise is obliged to respond, as well as the number of options for each of them.

Mobility of the environment represents the rate at which changes are made to the company's external environment.

Uncertainty of the external environment is considered a function of the amount of information available to an organization (or a person) about the relevant factor, as well as a function of confidence in this information.

Examples of problem solving

EXAMPLE 1

The word "environment" is ambiguous and has more than three meanings, which vary depending on the scope of the term. So, this word can mean both the day of the week and the social environment in which a person is at a given moment in time and space.

However, in relation to the economy, this term acquires the following interpretation: environment (economic) - a set of economic conditions for the development of business, entrepreneurship. E.S. presupposes the existence of economic freedom, free movement of resources, the existence of significant incentives to work. […]

At the same time, it should be noted that any firm operates precisely in the economic environment, which, when considering its structure, is subdivided into internal and external environment. Both of them are inherent in almost any economic entity and play a crucial role in its functioning. The author decided to tell about each of the environments in more detail.

External environment of the enterprise

To reveal the essence of the enterprise's external environment, the author has selected two definitions that interpret this concept more or less completely.

The external environment of the 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: factors of direct impact (immediate environment) and factors of indirect impact (macroenvironment).

And Anna Tyurina gives such a definition of the external environment of the enterprise: it is a set of elements, conditions, factors and forces that affect the organization from the outside, thereby changing its behavior. The external environment is of great practical importance. IN market economy it is extremely dynamic, therefore, its study allows an organization to rebuild its internal structure, adapt to changing conditions, which in general ensures the efficiency of functioning and competitiveness.

Thus, it can be noted that special discrepancies in the interpretation of this concept no, and during the existence of a market economy in the Russian Federation, the scientific community was able to develop relatively clear signs of the organization's external environment. The external environment is subdivided into:

• 1) Microenvironment - an environment of direct influence on the enterprise, which is created by suppliers of material and technical resources, consumers of products (services) of the enterprise, trade and marketing intermediaries, competitors, government bodies, financial and credit institutions, insurance companies and other contact audiences;
• 2) Macroenvironment affecting the enterprise and its microenvironment. It includes the natural, demographic, scientific and technical, economic, ecological, political and international environment.

Rice. one

However, to understand the mechanisms that operate in the external environment of the enterprise, definition alone is not enough. To represent the structure of the external environment more clearly, it is required to study those factors that affect the organization in this environment (a complete list of them is presented in Fig. 1. Such factors in the study of the macroenvironment are divided into direct and indirect.

Rice. 2

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 joint stock company). (fig. 2)

• · Suppliers - these are different business entities that provide the enterprise with 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 agencies (wholesale buyers of products for government needs);
  • - international (foreign buyers in the previously listed types of clientele markets).
• · Marketing intermediaries- these are companies that help the company in the promotion, marketing and distribution of its products among customers . These include resellers, distribution companies, marketing agencies and financial institutions.
• · Competitors- the rivals of the enterprise in the struggle for more favorable conditions for the production and sale of goods, for the receipt of the highest profit. For the production of competitive products, enterprises need to constantly study their competitors, develop and comply with certain market strategies and tactics.
• · Contact audience- 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), media, various government agencies representative and executive power, population and citizens of the action group (public organizations).

It should be noted that the economy of the Russian Federation still retains the features of transition, and the specifics of the state system and public policy is such that it is on the state that the efficiency of enterprises' activities largely depends, first of all, the creation of a civilized market and the rules of work in this market.

• 1. Establishment and enforcement of the legal foundations of a market economy, including private property rights.
• 2. Maintaining market competition and consumer protection.
• 3. Addressing issues related to externalities: costs and benefits.
• 4. Provision of public goods and services
• 5. Stimulating economic growth and stabilizing the economy.
• 6. Distribution and redistribution of national income and provision of socio-economic support.
• 7. Participation in business activities.

Indirect factors, in contrast to direct factors, do not have a direct effect on the activities of the enterprise, but taking them into account is necessary to develop the right strategy.

To the most significant factors indirect effects include:

• 1. Political factors - the main directions of state policy and methods of its implementation, possible changes in the legislative and regulatory and technical framework, international agreements concluded by the government in the field of tariffs and trade, etc.;
• 2. Economic factors - the rate of inflation or deflation, the level of employment of labor resources, the international balance of payments, interest and tax rates, the size and dynamics of the gross domestic product, labor productivity, etc. These parameters have a different effect on different enterprises: that one organization appears to be an economic threat, the other perceives it as an opportunity. For example, stabilization of purchase prices for products Agriculture for its producers it is seen as a threat, and for processing enterprises - as a benefit;
• 3. Social factors the external environment - the attitude of the population to work and the quality of life; customs and traditions existing in society; values ​​shared by people; mentality of society; level of education, etc.;
• 4. Technological factors, the analysis of which makes it possible to foresee the possibilities associated with the development of science and technology, to reorganize in a timely manner to the production and implementation of a technologically promising product, to predict the moment of abandonment of the technology used.
• 5. 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 rational use and reproduction of natural resources.
• 6. Environmental factors. This environment is characterized by: increased pollution the environment and strengthening of interference in the process of rational use and reproduction of natural resources, tightening of state control over the quality and safety of goods.
• 7. Demographic factors. The demographic environment is characterized by: an increase in mortality, a decrease in the birth rate, an aging population, an increase in the number of employees, etc.

To study the external environment, its analysis is usually used. But usually its implementation, as well as summing up the results, is always difficult due to the fact that the external environment is always mobile, complex and cannot always be fully defined. Situation around modern organizations is subject to changes that occur with increasing speed, which makes ever increasing demands on the analysis of the external environment and the development of a strategy that would take into account all the opportunities and threats of the external environment to the maximum extent.

Thus, the significance of the external environment lies in the fact that it forms the very space for the activities of the enterprise and consolidates its relationship with external economic agents (see Fig. 1).

External and internal environment enterprises

1. Analysis of the external environment of the enterprise

   Analysis of the internal environment of the enterprise

Conclusion

List of used literature

INTRODUCTION

Any organization is located and functions in the environment. Every action of all organizations without exception is possible only if the environment allows its implementation. The internal environment contains the potential that makes it possible for an organization to function, and therefore, exist and survive in a certain period of time. But the internal environment can also be a source of problems and even death of the organization if it does not provide the necessary functioning of the organization.

The external environment is the source that feeds the organization with the resources necessary to maintain its internal potential at the proper level. The organization is in a state of constant exchange with the external environment, thereby providing itself with the possibility of survival.

In order to determine the strategy of the organization's behavior and to implement this strategy in life, management must have an in-depth understanding of both the internal environment of the organization and the external environment, its development trends and the place occupied by the organization in it. At the same time, both the internal environment and the external environment are studied by strategic management primarily in order to reveal those threats and possibilities which the organization should take into account when defining its objectives and achieving them.

1.External and internal environment of the enterprise

1.1. Analysis of the external environment of the enterprise

The external environment in strategic management is considered as a combination of two relatively independent subsystems: microenvironment and macroenvironment.

Microenvironment is an environment of direct influence on an enterprise, which is created by suppliers of material and technical resources, consumers of products (services) of an enterprise, trade and marketing intermediaries, competitors, government agencies, financial institutions, insurance companies, and other contact audiences.

Suppliers 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, manufacturers, intermediate sellers who purchase goods and services for their subsequent resale at a profit for themselves, government agencies (wholesale buyers of products for government needs).

Marketing intermediaries are firms that assist an enterprise in promoting, marketing and distributing its products to customers. These include resellers, distribution specialists, marketing agencies and financial institutions.

Competitors are the rivals of the enterprise in the struggle for more favorable conditions for the production and sale of goods, for the receipt of the highest profit.

For the production of competitive products, enterprises need to constantly study their competitors, develop and comply with certain market strategies and tactics.

Contact audiences are organizations that show real or potential interest in an enterprise or that influence its ability to achieve its goals. These are financial circles (banks, investment companies, stock exchange, shareholders), media, various state institutions of representative and executive power, population and citizens of action groups (public organizations).

In the macro-environment of an enterprise, a much larger number of factors operate than in the micro-environment:

Natural factors;

Demographic factors;

Scientific and technical factors;

Economic factors;

Environmental factors;

Political factors;

International factors.

1.2. Analysis of the internal environment of the enterprise

Internal environment an organization is that part of the overall environment that is within the organization. It has a constant and most 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 those capabilities that the organization has. Personnel a cut of the internal environment covers such processes as the interaction of managers and workers; recruitment, training and promotion of personnel; assessment of work results and incentives; creating and maintaining relationships between employees, etc. Organizational the cut includes: communication processes; organizational structures; norms, rules, procedures; distribution of rights and responsibilities; hierarchy of subordination. IN industrial cut includes product manufacturing, supply and warehouse management; maintenance of the technological park; research and development. Marketing a cut of the internal environment of the organization covers all those processes that are associated with the sale of products. This is a product strategy, a pricing strategy; product promotion strategy on the market; selection of sales markets and distribution systems. Financial cut includes processes related to ensuring efficient use and movement Money In the organisation. In particular, this is maintaining liquidity and ensuring profitability, creating investment opportunities, etc.

CONCLUSION

As follows from the above, environmental analysis is very important for developing an organization's strategy and is a very complex process that requires careful monitoring of processes occurring in the environment, assessing factors and establishing a connection between factors and those strengths and weaknesses, as well as opportunities and threats that lie in external environment. Obviously, without knowing the environment, an organization cannot exist. However, she does not float surrounded, like a boat that does not have a rudder, oars and sails. The organization studies its environment to ensure that it is progressing successfully towards its goals. Therefore, in the structure of the strategic management process, after the analysis of the environment, the establishment of the organization's mission and its goals follows.

List of used literature

1.O.S. Vikhansky, A.I. Naumov, Management: person, strategy, organization, process, M., 1995

2. Yakushina O.A., Fundamentals of Psychology, M .: Infra M, 1997

3. Shmalen G. Fundamentals and problems of enterprise economics: Per. with him. / Ed. prof. A.G. Porshnev, 2002 - 512s.

4. Economy of a trading enterprise: Textbook for trade universities. / Grebnev A.I., Bazhenov Yu.K., Gabrielyan O.A., Gorina G.A. - M .: Economics, 1996.238p.

5.Economics of the enterprise: Textbook / Ed. prof. O.I. Volkova. - M .: IN-FRA-M, 2003. -520s.

6. Economy of organizations. / Ed. Khudokormova A.G. - M .: INFRA-M, 2003-160s

The internal environment of the enterprise includes functional structures that ensure the development and testing of new products, production, promotion of goods to the consumer, sales and service maintenance, personnel training, establishment of optimal relationships with suppliers of raw materials, materials, financial and other organizations. The internal environment is characterized by correct use and staff qualifications, an effectively tuned feedback system, flexibility of the structure in relation to changes in the market situation and the external environment.

The efficiency of the enterprise is determined by the efficiency of the functioning and use of each element of its functional subsystem. The basic factors of the internal environment affecting the efficiency of the enterprise were identified in the work. They are: manufacturing, finance, marketing, personnel, innovation, management.

Classification of factors depending on the functional scope of the enterprise and their analysis will allow to identify areas for improving the functioning of the enterprise, to determine the main sources of enterprise efficiency. The significance of such a classification of factors also lies in the fact that on its basis it is possible to model economic activity, carry out a comprehensive search for on-farm reserves. Let us consider in more detail the external factors and their influence on the efficiency of the enterprise.

The main factor that significantly affects the results of the functioning of the enterprise is production. This factor characterizes the totality of equipment, infrastructure, tools and related technical knowledge, qualifications required to implement the desired transformation of materials.

Successful implementation challenge financial activities the enterprise, its effective organization is also important, since the financial capabilities and results of the financial activities of the enterprise reflect not only the success financial sector but also its capabilities and results in almost all other areas. The influence of financial factors is manifested in the value of the company's capital, the value of its shares, cash flow, liquidity, solvency, financial independence, etc.

Financial activity provides for an objective assessment of the cost of economic assets that are at the disposal of the organization, analysis of the state and level of efficiency of funds and sources of their formation in order to search for reserves to improve the results of the financial activities of the enterprise.

Marketing area activity covers all stages of promoting the company's product innovations to the market, forecasting demand based on studying consumer needs, developing a product range of the enterprise. Marketing brings the resources of the enterprise in line with the requirements and opportunities of the market. Marketing tasks include reducing production costs, determining the nature and scale of production, as well as ways to profitably use the production capacity of the enterprise and engineering and technical capabilities, subject to the sale of products. Hence, a factor such as marketing precedes production and investment decisions.

The solution to many problems of increasing the efficiency of an enterprise depends on the provision of both production and the management of qualified specialists. The factor "personnel" includes work with labor collective, its selection, placement, training, remuneration of employees of the enterprise. The most important goal of this functional subsystem of the enterprise is to create a high interest of employees in solving the general tasks of the enterprise and creating a favorable climate for this.

According to many scientists, in modern conditions innovation activity enterprises acts as one of the main means of increasing efficiency and achieving competitive advantages of the enterprise. Innovations are associated with qualitative changes aimed at creating a new product, technology and are the result of innovation in the form of an improved organizational and management and production and technological process. Especially effectively, innovation activity can affect the final performance indicators when macroeconomic factors change, primarily those associated with the market conditions for manufactured products.

Effective operation and subsequent development industrial enterprises is possible only through the use of a modern management mechanism, which has a strategic focus and provides the development of alternative options for achieving it, the choice the best option, its consistent implementation. Enterprise management is a scientific process of planning, interaction, motivation and management to achieve the goals of the enterprise. Efficiency is the effectiveness of the functioning of the system and the management process as the interaction of two systems: control and controlled, that is, the integrated result of the interaction of control components. The effectiveness of management shows the extent to which the governing body realizes the goals and achieves the planned results.

Thus, the six factors of the internal environment can be conditionally divided into three groups:

Factors of material and resource support of production, which determine the resources and capabilities of the enterprise. The main ones in this group are production factors(buildings, structures, machines, mechanisms, equipment, land, raw materials and materials, fuel, energy, information);

Factors of economic and technical development of the enterprise (innovation, investment, organization of labor and production of advanced training of workers);

Collateral factors high level profitability (effective commercial and sales activities associated with the effectiveness of market relations).

It should be noted that among the selected factors, a large number of factors of an intensive and extensive nature affect the efficiency of the enterprise, among which one can single out the parameters of living labor (the number of employees, labor productivity), the parameters of materialized labor (the cost of the main production assets, capital productivity), the general influence of the parameters of living and materialized labor (capital-labor ratio, capital productivity).

The presence at the enterprise of the listed factors of the internal environment and their interaction do not yet indicate the efficiency of the enterprise. Since enterprises operate in conditions of the negative impact of the external environment, then successful activity on the market is possible only if there is a certain economic stability of the enterprise, namely the level of stability of its functional subsystems.

Like the factors of the internal environment, the factors of the external environment are interrelated. The interconnectedness of environmental factors is understood as the level of force with which a change in one factor affects other factors.

In addition to interconnectedness, the external environment is characterized by complexity (the number of factors that the firm is obliged to respond to), mobility (the speed with which changes occur in the environment), uncertainty (a function of the amount of information that the organization has about a particular factor, as well as the function of confidence in this information ).

The study of the immediate environment of the organization is aimed at analyzing the state of those components of the external environment with which the organization is in direct interaction. In doing so, it is important to emphasize that an organization can have a significant impact on the nature and content of this interaction and thus actively participate in the formation of opportunities and in the prevention of threats to its further existence.

The environment of direct influence forms such subjects that directly influence the activities of a particular organization.

All suppliers can be divided into several groups - suppliers of materials, capital, labor.

Many laws and government agencies affect organizations. Each organization has a specific legal status as a sole proprietor, company, corporation or non-profit corporation, and this is what determines how an organization can conduct its business and what taxes it must pay. No matter how the leadership relates to these laws, he has to adhere to them.

As you know, the state in a market economy exerts on organizations both indirectly, primarily through the tax system, state property and the budget, and directly through legislative acts.

All the variety of external factors is reflected in the consumer and through him affects the organization, its goals and strategy. The need to meet customer needs affects how an organization interacts with suppliers of materials and labor. Many organizations target the large customer groups on which they are most dependent.

Various associations and associations of consumers, which influence not only demand, but also the image of firms, are also gaining importance in modern conditions. It is necessary to take into account the factors influencing the behavior of consumers, on their demand.

The influence of such a factor as competition on the organization cannot be disputed. The management of each enterprise clearly understands that if the needs of consumers are not met as effectively as competitors are doing, the enterprise will not stay afloat for a long time. In many cases, it is not consumers but competitors who determine what kind of performance can be sold and what price can be asked for.

Underestimation of competitors and overestimation of markets lead to even largest companies to significant losses and to crises. It is important to understand that consumers are not the only competition between organizations. The latter can also compete for labor, materials, capital and the right to use certain technical innovations. Such reactions to competition depend on internal factors, as working conditions, remuneration and the nature of the relationship between managers and subordinates.

The modern development of science and technology in the conditions of scientific and technological revolution has significantly exacerbated the competition between firms. The most important condition for the prosperity of the company is its constant improvement and, above all, on the basis of modern achievements of science and technology. Scientific discovery or fundamentally new product or a service can elevate the firm to the pinnacle of success.

At the same time, it should be noted that competition sometimes pushes firms to create agreements of various types between them, from the division of the market to cooperation between competitors.

Indirect environmental factors (macroenvironmental factors) usually do not affect the organization as noticeably as direct environmental factors. However, management needs to take them into account.

The indirect environment is usually more complex than the direct environment. Therefore, when studying it, they usually rely primarily on forecasts. The main environmental factors of indirect impact include technological, economic, socio-cultural and political factors, as well as relationships with local communities.

Technology is both an intrinsic variable and an extrinsic factor of great importance. As an external factor, it reflects the level of scientific and technological development that affects the organization, for example, in the fields of automation, informatization, etc. Technological innovations affect the efficiency with which products can be manufactured and sold, the rate of obsolescence of the product, how it is possible to collect, store and distribute information, as well as on what kind of services and new products consumers expect from the organization. To maintain competitiveness, each organization is forced to use the achievements of scientific and technological progress, at least those on which the effectiveness of its activities depends.

Management should also be able to assess how general changes in the state of the economy will affect the operations of the organization. The state of the global economy affects the cost of all inputs and the ability of consumers to buy certain goods and services.

Any organization operates in at least one cultural environment. Therefore, sociocultural factors, among which attitudes prevail, life values and traditions affect the organization.

Socio-cultural factors influence the formation of the demand of the population, on labor Relations, level wages and on working conditions. These factors include the demographic state of society. Great importance the organization also has a relationship with the local population where it operates. In this regard, they also distinguish as a factor in the socio-cultural environment - independent means mass media that can shape the image of the company and its products and services.

Sociocultural factors also affect the products or services that result from a company's operations. The ways in which organizations conduct their affairs also depend on socio-cultural factors.

Certain aspects of the political environment are of particular importance to the leaders of the organization. One of them is the attitude of the administration, legislatures and courts towards business. Closely tied to sociocultural trends in a democratic society, these sentiments influence government actions such as taxing corporate income, establishing tax breaks or preferential trade duties, requirements for recruitment and promotion practices of ethnic minorities, consumer protection legislation, price and wage controls. , the ratio of the strength of workers and managers of the company.

The factor of political stability is of great importance for companies conducting operations or having markets in other countries.

For almost all organizations, the predominant attitude of the local community towards it, in which this or that organization operates, is of paramount importance as an environmental factor of indirect impact. In almost every community, there are specific laws and guidelines in relation to business that determine where the activities of a particular enterprise can be deployed.

While the environmental factors described above affect all organizations to one degree or another, the environment of organizations operating internationally is more complex. The latter is due to the unique set of factors that characterize each country. Economy, culture, quantity and quality of labor and material resources, laws, government institutions, political stability, level of technological development vary from country to country. In planning, organizing, incentivizing, and managing functions, managers must take these differences into account.

Consideration of the factors of the environment in which international business operates is focused on four main ones - culture, economy, legislation and government regulation, the political environment.

Culture is understood as the dominant system in society of values, beliefs, customs and prevailing attitudes shared by all. Every society has its own culture, the influence of which affects the style of everyday life.

Language is an important aspect of culture, which always creates difficulties for organizations doing business abroad. Differences in meanings attributed to words, as well as translation problems, can create barriers to the exchange of information. The mismatch of language gestures in interacting cultures can increase their impenetrability.

Differences between cultures are also expressed in the mismatch of attitudes about power, the value of work, the role of women in society, and the willingness to take risks. Researchers have found that it is the problems of a person caused by working in a different culture that usually cause failure. Therefore, to succeed, organizations and leaders need to identify cultural differences and change interpersonal behavior accordingly, not to mention changing the style and methods of business and leadership.

Firms operating in an international environment must analyze economic conditions and trends and observe the economies of the countries in which they do or intend to do business. Analyzing the environment can help improve the efficiency of the decision-making and planning process.

Some of the economic factors that can affect doing business abroad include: wages, travel costs, exchange rates, inflation and rates. bank interest, GNP, taxation and the general level of economic development. There are other factors related to the international economic environment, although they do not have a purely economic nature: population size, levels of literacy and professional training, quality and quantity of natural resources, level of technology development, and features of competition.

Just as organizations doing business within a country depend on domestic laws, so do firms that act on international markets are forced to reckon with many laws and regulations. The latter relate to issues such as taxation, patents, labor relations, standards for finished products, pricing and reporting to government agencies.

The internal market is influenced by political events and decisions, similarly, political factors can affect operations in the field international business... Social tensions can disrupt production or restrict marketing if unrest is directed against a foreign-owned plant or product.