Impact of External and Internal Factors on Organisation's Sucess Assignment Sample

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Impact of External and Internal Factors on Organisation's Sucess Assignment Sample

Introduction of Impact of External and Internal Factors on Organisation's Sucess Assignment

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External and internal factors have a major impact on an organization’s successes and failures. External factors are beyond the power of company leaders; however, they should be competent to evaluate and respond to them in order to maintain their businesses on pace. Company executives, on the other hand, have tremendous power over internal factors which affect the company, and the manner they address those internal factors would have a substantial influence on the company's performance.

Internal Factors


Leadership in the retail industry applies to individuals who decide all the crucial financial, budgetary, sales, market, and human resource initiatives.

Retail companies having excellent leadership get a clear sense of direction, a strategy for achieving their objectives, and a method to evaluate performance that can be quantified.

They also establish a managerial method that empowers staff to feel engaged while achieving sales and profit targets. It'll be tough for leaders who lack a solid strategy and are unable to effectively handle their personnel to reach their objectives

Stakeholders and owners

The stakeholders and owners, and often the executive members are among the most influential internal factors.

This group decides who gets fired and is employed, the organizational values, the firm's economic state, etc. Replacing the owners, stakeholders, or management team is extremely difficult (Dragni?, 2014).

It's critical for a person on the team to be thoughtful and self-aware about their views and behaviors. If the incorrect pattern is followed, it might have long-term consequences for the company.


A firm is made up of its employees. They're the people that generate new ideas, carry them out, and resolve issues when they arise (Dragni?, 2014).

This internal factor becomes more obvious when a business necessitates a vast amount of skilled personnel.

To take advantage of this intrinsic factor, organizations need to establish an amazing working atmosphere, guide and support the employees on a regular basis and have good hiring methods focused on HR analytics and data.

External Factors

Environmental Factors

As customer concerns regarding the environment keep growing, many businesses have responded through a number of approaches to helping consumers think more with their purchase decisions. As a result, numerous retailers that sell items made from recyclable material are growing. They've even changed the method their goods are packaged, aiming toward more eco-friendly alternatives.


Every retailer aspires to be the single retailer of a product—they like to provide consumers with new values. Customers, on the contrary, want choices—a competition that reduces costs and gives them a better option (Toppinen ert al.,2019).

Healthy rivalry isn't negative, but in the digital world, several merchants are noticing shifts in how competitiveness impacts their revenues.

Customers nowadays can effortlessly compare costs and place orders digitally. Approximately 80% of the consumers consider making their purchases digitally, that's why shops must be aware of both local and online competitiveness.

Technological factors

Businesses might face difficulty dealing with them as technology evolves or may profit from technological advancements. Each element of human life is influenced by technology, and the retail industry is no different. Although the deluge of data obtainable to retailers could be beneficial, there are drawbacks for retailers, particularly small stores. Customers can now compare prices anytime and discover what alternative options they have (Dragni?, 2014).

The Internet of Things (IoT), AI, and big data have transformed the landscape of several businesses. E-commerce, online payment, big data, and targeted advertising have all witnessed significant transformations in retail. Technology will have a more important role in the manner people purchase in the future, and businesses must be equipped.

How a business can impact the external environment?

Social Capital

A business may be regarded as influencing 'social capital' because of its effects as well as reliance on people. The word "social capital" has been classified in many distinct forms throughout the years. To its greatest possible extent, it refers to people's stockpiles of information, expertise, experiences, health, as well as well-being, and perhaps even the stockpiles of interpersonal connections, institutions, common interests, or rather moral standards. The stream of social capital is the social repercussions, that come from the economic output which could reduce or enhance social capital, just like every other capital (Hanggraeni et al.,2019).

Businesses may have a positive impact on society. The critical functionalities, the facilities as well as the commodities it offers, and also the endeavors facilitated by much more globalized as well as complicated supply chain processes may all help it preserve and generate social capital.

Work-based mentoring, along with services or products, could indeed be used to improve or sustain competencies. Both in domestic and international marketplaces as well as supply chains, lifestyles may well be sustained through commodities and employment, which can also make a significant contribution to individual empowerment, alleviation of poverty, as well as better quality of life and health (Hanggraeni et al.,2019).

Notwithstanding, when management continues to fail, rules are often not implemented, concerns are therefore not handled, and perhaps public norms about what might be appropriate change from the current situation, social capital could be degraded or eliminated. Unsafe workplace circumstances, a disregard for human rights and labour norms, and maybe even unfair treatment of communities or people are all examples of how business operations can harm individuals physically or psychologically. Products might have had a detrimental impact on the well-being and health of customers. Organizations might place a strain upon public infrastructure or even the areas where they conduct business.

Environmental Effects

Businesses are similar in many aspects which use natural resources to generate benefit through providing a service or product in return for money to their consumers.

This necessitates a supply chain made up of some of the other businesses that would do the same, consumers who are made up of either similar businesses or people who use natural resources, as well as associate firms which help the first business use natural resources. Each of these commercial players as well as shareholders consumes environmental resources which have to be mined along with generating environmental damage that seems to have an adverse impact on the environment (Hanggraeni et al.,2019).

Businesses, on the other hand, could either employ methods that diminish or have beneficial environmental consequences.

Businesses may have a beneficial impact on the environment by considering environmental resources and reducing environmental damage. The mechanisms that produce these good benefits, on the other hand, will also have negative consequences.

Businesses have an environmental impact through the exploitation and use of natural resources, along with pollutants emitted as a result of such activities.


To conclude, there are a number of contributory aspects to the performance of a retail firm that originates both from the outside and inside. For the firm’s growth, external and internal factors are both significant. The business world and factors that impact business are made up of these factors. If a company wants to run efficiently and consistently, it must examine all these factors before reaching any move. It's important to remember that businesses can't and don't function in a vacuum. A variety of internal and external factors impact business at any moment and in any circumstances, so it must function tactically to accomplish its objectives.


Dragni?, D., 2014. Impact of internal and external factors on the performance of fast-growing small and medium businesses. Management-Journal of Contemporary Management Issues19(1), pp.119-159.

Ibrahim, E.B. and Harrison, T., 2020. The impact of internal, external, and competitor factors on marketing strategy performance. Journal of Strategic Marketing28(7), pp.639-658.

Hanggraeni, D., ?lusarczyk, B., Sulung, L.A.K. and Subroto, A., 2019. The impact of internal, external and enterprise risk management on the performance of micro, small and medium enterprises. Sustainability11(7), p.2172.

Toppinen, A., Sauru, M., Pätäri, S., Lähtinen, K. and Tuppura, A., 2019. Internal and external factors of competitiveness shaping the future of wooden multistory construction in Finland and Sweden. Construction Management and Economics37(4), pp.201-216.

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