Sectors And Elements Of External Environment Commerce Essay

This study shows how external sectors and environments influenced the alteration of my administration. I am presently working in the group of colleges offering finance & A ; accounting, concern, information engineering, technology and professional classs for both Malaysian and international pupils. It has 6,000 pupils analyzing on its campus. Introducing alteration in my administration bing system and procedure is a hard occupation. Pull offing alteration is even more hard. No affair how good is the alteration, the opposition to alter from employee still exists. Therefore the successful of implementing a alteration plan depends on how good the direction and employee understand the demand for alteration and do usage of good alterations and intervene if a alteration seems damaging.

Sectors and elements of external environment which I consider to hold had the most influence on the alteration within my administration are as follows:

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A PEST analysis ( Gerry Johnson and Kevan Scholes, 2002 ) mentioning to the political-legal, economic, technological and socio-cultural factors that influence on the alteration within administration.

Social Factors

The first moral force in PEST ‘s analysis is societal and cultural environment. Organizational leaders are concerned with things like demographics, faith, life styles, instruction and age distribution of population.

It is of import for pedagogue to understand their territory demographics which is concerned with statistical informations of pupil population. Student population can be increased dramatically through technological progresss which pupil can analyze the plan online through cyberspace. Student population can besides be increased due to increase in mobilisation of pupil traveling out from place country to town country. Increasing of demand for happening support beginnings for those pupils who came from low income household besides is another of import demographic to be considered as a alteration in the educational sector.

Another alteration in pupil demographics is the increasing of pupil from abroad analyzing in Malaysia universities or colleges. As a consequence, the registration of international pupil in my colleges has increased by 20 % . It is predicted that the addition will go on within the following few old ages.

Technological Factors

Since 1990s, information engineering has played an of import function in the educational sector. The popularity of distance acquisition has given people opportunity to analyze for making or new calling in their trim clip. More and more people can now analyze grade or professional classs online. Lectors are now required to put all instruction stuffs online for pupils to entree outside the regular talks and tutorials categories.

Due to the progresss in Internet, more and more traditional schools or colleges expanded their online classs. Universities that fail to run into the demands of today ‘s society and technologically will endure from reduced registration and accordingly, federal and province support will besides be decreased.

Economic Factors

Economic factors that affect concerns are income, rising prices, recession, involvement rate and exchange rate. Because of the economic downswing, houses and companies try to scale down the operation and cut costs. Government has come out with new economic policy to get the better of the crisis but sometimes this policy is non productive.

Peoples excessively, cut costs on all outgo. Many become unemployed which force them to pass much lesser. All these affected the concern of an educational sector.

Political Factors

Another factor that influences the alteration within administration is the authorities policy on scholarship and National Higher Education Fund Corporation ( PTPTN ) . Purpose of puting up a PTPTN instruction loan strategy was to supply instruction loan to pupils prosecuting surveies in local establishment of higher acquisition. With the proclamation of Malaysia Budget 2013, pupil who can settle full loan within a twelvemonth get downing from 1 October 2012 until 30 September 2013 is giving price reduction of 20 % on their loan.

For those pupils paying PTPTN loan systematically as per their refund agenda, a 10 % price reduction per annum on the refund sum will be given get downing from 1 October 2012. As a consequence, registration in my colleges has increased dramatically. The PTPTN has allocated entire amount of RM5.8 billion loans to pupils prosecuting their surveies within Malaysia this twelvemonth. There was an addition of RM2 billion from over RM4 billion being disbursed to 210,000 pupils last twelvemonth. This figure will go on to increase as PTPTN is one of the chief financers in the state, although there are besides other province authorities bureaus supplying such loans. PTPTN had disbursed RM24 billion to 1 million over pupils in the state since 1997. Due to increasing support in PTPTN, my administration has reformulated its selling scheme to concentrate more on enrolling local pupils.

Competition Factors

One of the of import parts of external appraisal is to place rivals and to determine their strengths, failings, chances, menaces, aims and schemes. Failings of rivals can go 0pportunities, while major competitory strengths can go menaces to the company. It is more advantageous for a company to roll up more competitory information as it possesses a good footing for schemes preparation and execution.


As seen above, educational sectors are affected by external factors which explored through the analysis of Johnson and Scholes ; viz. , political, economic, technological and socio-cultural. As such, university executives and board of managers must closely supervise things go oning around them in order to plan suited schemes for their several establishments. Merely by cognizing present and future motion in the external environment and reacting in a proactive mode, it will be able to offer plans that meet the demands of the market.

The advantages and disadvantages of the alteration are as follows:

Change in an organisation is inevitable in order to keep its endurance and success. However, there are advantages and disadvantages associated with the alteration depending on the beginning of alteration.

Advantages of alteration

Change allows companies to vie better with their rivals and develop new accomplishments or merchandises which can convey higher net income. With execution of a alteration direction methodological analysis, it allows alteration direction squads to cover with any proposed new way by supplying equal preparation and guidelines.

Change direction besides helps persons to recognize why alteration is needed so that they will accept the alteration and travel frontward. Change can be good for employee since it will convey them the chance to larn something new and gain new accomplishments ( Colin Carnall, 2007 ) .

Change besides creates chance for growing, merely for those who recognize it and prehend it. Without alteration, concerns would non be able to vie with their challengers and run into the demands of what most required by loyal clients.

With promote of unfastened communicating and treatments by alteration direction methodological analysis, persons ( clients, employees and stakeholders ) will hold a greater opportunity in the result since they have participated in the execution of the program. People by and large do non defy to things which they have involved.

Change reduces the outlook of position quo, and can assist growing in a positive manner. One of the jobs we face today is people get used to work within their ain small comfort zone and go comfy with their position quo outlook. Peoples used to work in the same manner and ever thought that job can merely be solved by using same patterns.

Change can assist in pull offing hazard and making eventuality systems to safe-guard successful motion and sequence. Risk direction is a procedure of placing hazard, mensurating, developing, choosing, implementing and pull offing options for turn toing. This procedure is designed to cut down or extinguish any hazard that may happen during the operation.

Change can besides advance flexibleness. Flexibility is really of import for a concern to go on lasting in a rapid changing environment. Therefore, a concern must be able to do alterations on occasion from programs to schemes. Merely by being able to alter and holding the option to alter will do our concern more flexible. Flexibility is needed to suit the alteration as concern is ever unsure and hazardous.

Impact of alteration can be both positive and negative. Negative internal and external drive forces can be responded by taking an appropriate alteration technique. “ Driving forces ” are state of affairss which concerns are affected by either a positive or negative manner. There are two driving forces i.e. internal and external drive forces. Internal drive forces are state of affairss which occur inside the concern by and large within the control of the company. Examples of internal drive forces are works and machinery, capacity of engineering, organisational civilization, direction system, etc. External drive forces are state of affairss which occur outside the company and normally beyond the control of the company. Examples of external drive forces are economic system, demographics, competition, political, etc.

Change creates chance to develop strategic planning and tactical manoeuvres. Strategic planning determines where an administration is traveling over the following twelvemonth or more. What are we seeking to carry through? Change helps to better the efficiencies of an organisation, to concentrate its resources on overall ends.

Change in concern is good, but if alteration is non managed good, it will destruct the administration. Directors frequently conceive ofing the possibilities of result and the positive impact could hold on their organisation without recognizing that the alteration might non be suited to their administration.

Disadvantages of alteration

Change consequence might non accomplish the cardinal ends of the administration. Many companies emphasize on uninterrupted betterment by implementing alteration trusting that the alteration can better its ‘ ability to accomplish cardinal ends. However, planned consequence may non be achieved at the terminal of the alteration procedure. Every administration can be improved farther but a director must ever inquire the inquiry, “ How the intended alteration can better my organisation ‘s current ability to accomplish our cardinal ends? ”

Benefit- to- cost ratio. Change is ne’er free and ever has chance cost ; passing equipment budget on new computing machines which means we have to set aside the program of upgrading the computing machine systems and there are intangible costs associate with it such as quality and client satisfaction during the period of accommodation. Determine whether the benefit of alteration can outweigh the cost of alteration before implementing it.

Internal Resistance. Generally, people resist alteration is due to miss of cognition about alterations and fright of the unknown. No affair how much the benefit of the alteration might give, the opposition to alter still exists. The cardinal tools used in pull offing this job are wholly honesty and timely communicating with our work squad, clear communicating of the intent of the alteration, and forbearance with our squad as they need clip to gone through an inevitable accommodation stage.

Choosing incorrect solution. Organizations will ever originate alteration as and when they face job. But it is unsafe to presume the root cause of job without look intoing it and implement the solution prematurely. This attack incurs extra cost of alteration without bring forthing the intended benefit ; moreover, it can bring forth jobs in countries which were already working good.

A bad alteration direction program can besides impact an organisation negatively. Change direction is merely to pull off alteration. If the alteration is transporting out without a proper program to cover with every individual measure of alteration i.e. before, during and after, the alteration scheme could neglect at any clip which could perchance conveying down the full company.


While alteration can be hazardous, the benefits still far outweighing the possible booby traps. Change allows organisations to go on lasting in an unsure market.

The beginnings of opposition to alter and how did the direction attempt to battle them are as follows:

Beginnings of opposition to alter can be categorized into single and organizational responses.

In each organisation, there are four types of people responded to alterations:

Peoples that initiate alterations.

Peoples that accept alterations.

Peoples that reject alterations

Peoples that apathetic towards alterations.

I have been conducted an analysis of opposition to alter in my administration. There are many factors that caused such a phenomenon to organizational alterations but I merely select those factors that are most relevant to my administration:

Lack of understanding around the aim for a alteration. Analysis indicated that the chief ground for employee opposition to alter was that employees did non clearly understand why alteration was needed for the peculiar undertaking. Employees did non hold reply from Management for inquiries like, “ what should I make in the procedure of alteration? “ How will the proposed alteration impact my day-to-day work? ” “ How will I derive from the alteration? “ .

Employee comfort with position quo and fright of unknown. The current direction, processes and its systems seemed all right and acceptable by employees. They felt comfy with what they are making now. They were opposed to the alteration because they were afraid of being forced out of the comfort zone. The comfort zone conditions them to follow known way, and fear alteration.

Corporate history and civilization. Organizational civilization grows over clip. Employees are comfy with the current organisational civilization and current public presentation. Employees were non sensitized to alter enterprises, as many had been implemented and failed. The alteration was seen simply as “ spirit of the director, ” and employees expected it goes off like those occurred in the yesteryear.

Change creates resistance to new engineerings, procedures and demands. Some employees resisted the alteration because they felt that the alteration will increase their occupation burden, adding unwanted occupation, duty and answerability although alteration can better public presentation and procedure measuring of their work. Some employees opposed to new systems, processes or engineerings because they felt that the alteration will non work out the job.

Employee fright of occupation loss. Employees view alteration as a menace to their occupation which may do them losing their occupation. Some employees even think that the alteration will take the demand for their occupation, while others were non certain of their accomplishments and abilities will run into the demand of the new environment.

The top-four grounds for director opposition to alter were:

Fear of losing power and control. The chief ground of opposition to alter from director was fright of losing power. Directors view alteration as an riddance of power and control. Some directors even think that they are no longer holding power in dialogue and determination devising.

Overload of current activities and increasing day-to-day undertakings force per unit areas. Directors felt that alteration was non a alleviation but an extra load to their current occupation burden. The alteration enterprise seemed like an excess work and excess load when the force per unit areas of day-to-day undertakings were already high. In many alteration undertakings, directors were required to go on transporting out their current responsibilities in add-on to the new responsibilities of implementing the alteration.

Directors are deficiency of needed accomplishments and experience to pull off the alteration efficaciously. Directors were fearful of new demands and duties being placed to them by the new concern systems, processes or engineerings. New demands will likely necessitate new accomplishments and tremendous experience. However, some directors may non possess the needed accomplishments. As a consequence, they were non comfy with their function in pull offing the alteration.

Disagreement with the alteration. Some directors disagreed with the alteration. They did non experience that by implementing a alteration will merely work out the job. Directors who did non affect in the design and planning phases will be given to defy the solution. Some resisted the alteration merely because of the solution does non come from their thought ( “ non invented here ” ) .

There are several actions that the direction can take which will cut down the opposition to alter due to uncertainness and insecurity to work. ( John P. Kotter and Leonard A. Schlesinger, 2008 ) explained that there are six different attacks for covering with opposition to alter as follows:

Education and communicating. Management must explicate to employees why alteration is needed, place and present the benefits of alteration to persons and sections, and willing to reply all inquiries as and when they arise. Subjects like ‘why am I making this and how is it traveling to profit me? ‘ Or ‘what are the hazards and issues that I will hold to confront? ‘ must be covered and answered. Communication between direction and employees can be carried out in the signifier of treatment, memoranda, one to one meeting, formal studies, scheduled meetings, etc.

Participation & A ; Involvement. Every employee must take part in the alteration program. This engagement starts from top to bottom ; hence a good leading manners is indispensable for successful alteration procedure. One pessimist on the leading squad can endanger the full procedure.

Facilitation & A ; Support. Directors must pull off the alteration in a manner that employees can get by with it. Directors must responsible to ease, and to assist employees to understand the grounds of alteration. This can be done by supplying particular preparation and guidance.

Negotiation and Agreement. Successful execution of alteration should be acknowledged by manner of compensation and acknowledgment. Directors can offer inducements to employees non to defy alteration or alteration resistances can besides be offered inducements to go forth the company early before the termination of the contract of service.

Manipulation and Co-optation. Directors can fall back to pull strings information, resources and favours to get the better of opposition. This besides involves choosing defying single to take part in the alteration attempt and giving them desirable function in the alteration procedure.

Explicit and Implicit Coercion. Directors can explicitly and implicitly hale employees into accepting alteration by stating them that alteration was non a pick to them and must be committed. Every employee affected by alteration plan must be accountable for implementing his or her single alteration activity. Failing of meeting that duty will be reprimanded. Directors sometimes dismiss or transfer employees who against the alteration.


Overlooking any one of the above points diminishes the opportunity of successfully implementing the alteration plan.


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