Lierature Review essay

Impact of External Environment on Organizational Performance Student: Professor: Course Title: Date: Impact of External Environment on Organizational Performance Capon (2009) pointed out the evolution of organizations changes the system of management in regards to planning. This, therefore, requires new means of business orientation for normal operations, and attainment of the organization’s goals (Voiculet et al., 2010). In addition, it demands the continuous adaptation to the environmental changes that are taking place within and outside the business environment (Voiculet et al., 2010). The external environment of an organization comprises of a set of factors, ‘actors’ and interest groups that affect the operations of the organization in regards to performance directly or indirectly. Therefore, under such circumstances, it is vital to ensure that there is harmony between the external and internal environment of the organization (Voiculet et al., 2010). The external environment is made up of several factors that greatly impact the organization’s performance. These include competitors, suppliers, government laws and regulations, customers, and technology (Capon, 2009). The business manager in today’s modern society operates in an increasingly dynamic environment where there is a rapid and unpredictable change in the external environment (Olarewaju & Folarin, 2012). The economic variables have become increasingly complex with both consumers and the clients showing complex behaviors with the most dramatic change being on the competitive pressures. The competitors have been applying multiple strategies to adapt to the unpredictable and dynamic business environment in order to improve the organizational performance (Olarewaju & Folarin, 2012). It is of note that the single most significant influence on organizational performance is the external environment of the organization (Olarewaju & Foralin, 2012). Organizations are essentially established to attain certain goals. The organization’s activities are influenced by the external environment and these determine the performance of the organization. The external environment of companies is today increasingly complex, turbulent and dynamic (Olarewaju & Foralin, 2012). Organizational performance is among the most critical objectives for any organization. As a result, it is widely recognized and accepted that the organizational structure and decision-making process are significantly influenced by the complexity as well as volatility of the external environment (Olarewaju & Foralin, 2012). Moreover, organizations that align their strategies with the demands of the external environment often outperform those that do not achieve such alignments. Therefore, conducting an assessment of this environment is an essential activity and strategy to ensure that the strategies and the internal environment of the organization are aligned. This consequently ensures that there is optimal organ...