internal and external factors affecting businessinternal and external factors affecting business

The four main resources of a business are: - Human resources. CEO takes financial capital to invest in not only tangible goods such as factories, machines, tools and other productive equipment to produce an output but also intangible resources such as marketing, employee training, etc. These are most commonly used in high level management to organizational management too. External factors include political, economic, sociocultural, The findings of the regression analysis show that infrastructure and monetary environment, technological environment, and factors related to entrepreneurial commitment have a clear significant relationship with performances of MSEs. Within the economy, some contributing factors such as the fluctuation of interest rate, economic crisis, and so on directly and strongly affects the consumption of buyers, and consequently, the profits of businesses. Since technology is a large part of day-to-day interactions, it is important for organizations to create policies and procedures to clearly outline electronic communication expectations. part time data entry jobs in mauritius; dilapidated definition; linda kasabian daughter tanya; there gonna be a showdown kingpin; two mules for sister sara train wreck; king of spades tattoo urban dictionary Internal analysis looks at your company's strengths and weaknesses, such as the uniqueness of your product (a strength) and a lack of financing (a weakness). Federal Democratic Republic of Ethiopia (FDRE) (2002). Seo and Lees (2019) findings also indicate that knowledge-based factors, such as discovery and exploitation, in the innovation system of start-ups are positively associated with the dynamic capabilities for exploring new market dynamics. The analysis indicated the following external factors: social and cultural trends, technological changes, demographic trend, politics changes. In short, the CEO should have a strategic and effective human management not only for the sake of company benefits but also for the positive development of their employees. WebAs you can see, there are many external factors influencing businesses operations, including globalisation, technological, ethical, environmental, economic, and legal influences. The regression results have shown that the eight hypothesized factors, financial, management, marketing, entrepreneurial, technology, politico-legal, infrastructural, and working premises factors, were found significantly affecting the business performance of SMEs operating in the sub-city, and it was found that the financial factors were the most influencing predictor variable for SME business performance followed by infrastructure and politico-legal factors. By using this website, you agree to our To explain the position of variables studied and the effect of independent variables on the dependent variable, it is advisable to use this design. Based on the overall findings of the study, general conclusions and recommendations are drawn. By generating larger volumes of employment and higher levels of income, the MSEs would not only have contributed towards poverty reduction, but have enhanced the welfare and standard of living of the many in the society (Mukras, 2003). Internal analysis looks at your company's strengths and weaknesses, such as the uniqueness of your product (a strength) and a lack of financing (a weakness). Basically , you should carry out research to determine what consumers needs are, establish yourself as a leader in your industry and then repeatedly demonstrate your products quality. The study has three independent variables (managerial factor, entrepreneurial factor, and workplace factor) and one dependent variable (small business performance). Having recognized the importance of this sector, the Government of Ethiopia established the MSE development strategy in 1997 (Wasihun & Paul, 2010) and revised it in Wasihun & Paul, 2011 (Drbie & Kassahun, 2013). Internal factors are factors within a business that can be controlled Therefore, the finding recommends that policymakers should develop different supportive policies for those enterprises by doing similar investigations and appropriate analysis of the situation because their support is fundamental for the top performance of any enterprise venture, and provide commercial enterprise development service as this will enable entrepreneurs to make sound decisions on their business and improve their performance.

All organizations are affected by the cultures and social structures from which they emerge. Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. Ministry of Trade and Industry (MTI). Research Journal of Business Management, 8(2), 89103. Because business environment inserts its impacts on business success, scale, vision, and development strategy, having fully understanding about this issue should be prioritized by leaders. Implications for marketing theory and management are discussed. Factors affecting the performance of micro and small enterprises in Arada and Lideta Sub-Cities, Addis Ababa. Internal factors are within the control of an organization; whereas, external factors do not fall within its control. WebIt is worth noting that an organization has no influence over its external factors and thus, it has to re-engineer and redefine its process, products and services to work under the influence of the external environment. Internal factors more emphasize entrepreneurial character, capacity management, marketing capabilities, and technological capacity. Bouazza, Ardjouman, and Abada (2015) found the critical factors that determine the growth of SMEs in Algeria, namely, factors of the business external environment which were away from control, and internal factors. Growth determinants of women-operated micro and small scale enterprises in Addis Ababa, Ethiopia. Journal of Business and Economics, 5(11), 20912104. No external factors affect business more than an economic condition, which is the present state of the economy. To learn more about external factors at work, review the corresponding lesson called External Factors of a Business: Definition & Explanation. According to Alemu (2015) researching entrepreneurs characteristics as a determinant of MSE growth, this paper is to explore how owner-manager characteristics may affect MSE growth in Ethiopia; the findings indicated that enterprises owned/managed by individuals with high previous experience show better growth. According to Cramer and Howitt (2004), the correlation coefficient can range from 1 to +1. Within the company, there are numerous criteria need to be taken into consideration. Although a variety of factors can affect the start-ups business performance, the findings might tell us that the combination of the discovery in the innovation system of start-ups for new market dynamics and the local community support plays a significant role in improving the business performance of start-ups amid a rapidly changing market environment. The pandemic was a catalyst to a number of other macro factors to come to the foreground, like systemic mistrust and poor economic productivity. Int J Account Res, 3, 120. https://doi.org/10.4172/ijar.1000120. The Federal Micro and Small Enterprises Development Agency (FeMSEDA) was designed or established by the Council of Ministers Regulation Number 33/1998 to run Ethiopias MSE development and growth. The SWOT analysis represents the information not only regarding strengths and weaknesses (internal factors) but also regarding such external factors as threats and opportunities. Accordingly, because MSEs play a pivotal role in employment creation, stimulating and strengthening MSE development should be one of Ethiopias top development priorities. Central Statistics Authority (2003). Skillful developers. 1155, Col. San Juan de Guadalupe C.P. WebThis essay is about some internal and external environmental factors that affect a business. (2004). According to Fetene (2017), specifically, its strong influence on the enterprise strategic framework has been set up (vision, mission, commercial enterprise orientation, way of life, and goals), which, indirectly and implicitly, influences all the elements of the inner environment, approach, and performance. From the findings of the study, it is concluded that the model included in internal factors explained only 17.8% of the variance of small business performance, the rest 82.2% may be due to the other variables which were not included in this study and left for further study. As indicated in Table 5, it can be concluded that managerial factor and entrepreneurial factors both have a positive significant effect on MSE overall performance at B = 0.282, P = 0.001 and B = 0.294, P = 0.001, respectively, in the study area. External factors are those that are outside of the firms control. Here are some suggestions for you to achieve this efficiency : To have a suitable organizational structure requires the owners have to consider carefully set up a business management system to work smoothly within the company. The marketing environment refers to all internal and external factors, which directly or indirectly influence the organizations decisions related to marketing activities. External factors are things outside a business that will have an impact on its success. Either outside or inside factors are of utmost importance for the development of the company. From this result, we can observe that the entrepreneurial factor is the most predicting factor for small business performance, and the managerial factor is the next one. The unstandardized beta coefficient had proven that when managerial factors are increased in one unit, there will be change/increment in small business overall performance by 28.2%, and also when entrepreneurial factors are increased in one unit, there will be change/increment in small business overall performance by 29.4%. Inherent in these measures is an assumption of growth that presupposes all small business who owners want to grow their businesses (Walker & Brown, 2004). From this result, we can observe that the entrepreneurial factor is the most predicting factor for small business performance, and the managerial factor is the next one. Microenterprises are very small. WebConcept note-1: -A SWOT analysis helps you assess internal factors that might affect your business (strengths and weaknesses) and external factors (opportunities and threats).You will need to review and act on the results from the SWOT analysis. Micro and small enterprise development hold a strategic place within Ethiopias Industrial Development Strategy. And also, secondary data was collected through various sources like previously published materials as a literature review especially research papers, organization reports, and internet websites. There are numerous criteria considered as external elements. Tables 3 and 4 analysis results show that the regression model accounted for 17.8% of the variations on MSE performance which can be explained by internal factors; the remaining 82.2% of the variance in the dependent variable is explained via other variables which are not included in this study. Concept note-2: -SWOT Analysis helps you to identify your organizations Strengths, Weaknesses, Opportunities, Addis Ababa University: Doctoral Dissertation http://etd.aau.edu.et/handle/123456789/13199. As a main finding may be considered that the secondary research confirmed that all of the most frequently occurring internal and external factors affect the

Micro and small enterprises generally account for the bulk of the total enterprise population, irrespective of the level of economic and social development of a country. Factors affecting business performance of small and medium size enterprise (SMEs) in Addis Ababa: (In Case of Nifas Silk-Lafeto Sub-City). Thus, it is recommended that entrepreneurs must create brand awareness through R and D, focus on how to optimize their international trade, and enhance their networking as well as their global alliances. Magento Commerce or Adobe Commerce is a registered trademark by Adobe. And also, as the study result showed, there is no significant relationship between workspace factors and small business performance at a significance level of 0.643 in the study area. Multiple linear regressions were used to be estimated to determine the effect/influence of each independent variable on the dependent variable. Ibrahim, E. B., & Harrison, T. (2019). Effects of internal and external factors on business performance of start-ups in South Korea: The engine of new market dynamics. The pandemic was a catalyst to a number of other macro factors to come to the foreground, like systemic mistrust and poor economic productivity. Once a company has enough budget, they can easily launch their projects, expand its scale and even achieve impressive result. Additionally, other key factors include a firms strategy which comprises product differentiation, R and D, and brand building.

By growing the quantity and quality of knowledge about SMEs, preconditions are created for increasing the level of adapting the existing theory and the worth of scientific knowledge for developing an effective SME practice, which is indeed the final goal and purpose of this research and is the reason to conduct this research. The entrepreneur/commercial enterprise owner must surely and scientifically arrange his/her employer with clear obligations and duties to put off confusion and collision among personnel that will create nerve-racking surroundings and impact man or woman and group performance. Opportunities and threats, meanwhile, are the external considerations in the analysis. The internal factors refer to anything within the company and under the control of the company no matter they are tangible or intangible. Internal factors are related to the SWOT analysis whereas the PESTLE analysis is used to measure the external factors affecting the business. By the nature of knowledge, defined as exploring new things and collecting new information, discovery can be recognized as the engine of new market dynamics, and it leads to more innovative outcomes, which are the crucial part of dynamic capabilities of start-ups, than exploitation. Factors affecting business performance: An empirical study in Thailand. Only from $15/hr, With a big catalog of 234+ extensions for your online store. And additionally, the standard deviations recorded indicate the extent to which the respondents opinions about the statements on dependent and independent variables varied. an objective of cost minimisation results in the need for redundancies, delayering or other restructuring. These are: Your Product/Service Offering; Your Employees; Your Company Culture; An empirical investigation into the factors affecting the performance of SMEs in the retail sector in Windhoek, Namibia (Doctoral dissertation). Natural resources can help boost the productivity of a business, especially if there are large quantities. Based on the above findings and study objectives, the researcher forwarded the following recommendations. Janeska-Iliev and Debarliev (2015) study on factors affecting the growth of the small business, the case of developing country having experienced transition. Internal factors are within the control of an organization; whereas, external factors do not fall within its control. Below are 12 examples of important external factors that can influence the business environment: 1. Quick hiring process. Concept note-2: -SWOT Analysis helps you to identify your organizations Strengths, Weaknesses, Opportunities, When it comes to competition, entrepreneurs may thrive to be successful or be hurt to lose its position in the marketplace. Factors Affecting Organisational Behaviour. PubMedGoogle Scholar. Abera, A. WebThese are all small examples of how external factors influence our daily lives and the decisions we make. (A) Internal Factors: 1.

Because Operational efficiency directly affects the companys success in the marketplace, a businessman needs to truly know his companys processes and follow them to discover whether theyre being performed in the correct manner or not. As a result, the regression coefficient clarifies that the average amount of change in small business performance was affected by a unit of change in internal factors by the stated beta value for each factor (Table 6). Organisational Factors: Pricing decisions occur on two levels in the organisation. And also, the study result showed no significant relationship between workspace factors and small business performance at a significance level of 0.643 in the study area. He discovered that it was once pricey to hire working vicinity for business use in their present-day locations; therefore, most MSEs are unable to grow financially as the massive element of the income goes into the rental expenses. The study employed descriptive and inferential statistical data analysis methods. Henceforth, in the end, we can conclude that an internal business factor has a significant effect on small business performance in the study area. It can be said that without the big investment and stable financial resource, Coca Cola success would not be guaranteed.