Stakeholders and the external environment
(Originally published on the OUBS Blog)
You have an internal environment in your company as well as a near external (clients, suppliers, …) and the far external which is STEEP:
\- Social
\- Technological
\- Economic
\- Environmental
\- Political
You can control the internal, influence the near and respond to the far external environment. Remember that these boundaries are not fixed but they can move dependant on outsourcing, internal happenings, world-wide changes, …
Stakeholders are people/groups with a legitimate interest in the activities of your company. They can:
\- be internal or external
\- have different and possibly conflicting interests
\- feature certain groups who are likely to be dominant.
Morgan (1988) emphasized the importance of anticipating change and being proactive rather than reactive with your environment. You might not be in a position to influence your companies response to an external environment change but understanding the changing environment can help you manage your company.
1. Social Factors: Demographic changes, patterns of work, household structure, patterns of consumption, gender roles
2. Technological Factors: lowering barriers of time and place, creates new industries, nature of internal services has been transformed.
3. Economic Factors: growth rate, interest rate, inflation, energy prices, exchange rates, unemployment.
4. Environmental Factors: legislation, information, employees, shareholders, pressure groups, customers
5. Political Factors: legislations, trading relationships, government as customer, level and nature of public services, governments in commercial sectors, regulation, permissions, taxes.
Several forecasting techniques exist. Such as:
Extrapolation; extension of an existing trend.
Market research; both quantitative and qualitative information.
Judgement
Models
Scenarios
Remember. Models are there to improve understanding, stats cannot judge, when no forecasting possible then monitor, judgements need objectivity or they are too optimistic, never do single-point-forecasts, you are never 100% correct.