Explain how the general environment and industry environment are highly related

Social Science
Sociology
Management

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How are the general environment and industry environment related?
What is the difference between general environment and industry environment?
What is the relationship between business and environment?
What are the 2 types of environmental factors that can influence management?

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The six elements of the external environment are demographic, sociocultural, political/legal, technological. Economic, and global.The demographic element assess statistical information about a population including age, affluence, and ethnic composition. Understanding consumer demographics are important in designing sellable products or services. Sociocultural elements are the values, beliefs, and lifestyles of consumers. Factors include the percentage of women in the workforce and temporary workers and society's concern for fitness and the environment. The political and legal element refers to the creation and use of power and the political processes and regulations businesses' must comply with. Factors include environmental, health care and disability regulations, taxes, and minimum wage. The technological segment refers to the development of new products and services and the improvement to the production processes which often lead to the eventual creation of new industries. Factors include genetic engineering, computer-aided design and manufacturing systems, the use of synthetic or exotic materials, pollution and global warming, miniaturization of computing technologies, wireless communication, and nanotechnology. The economic segment looks at key economic indicators such as interest rates, unemployment rates, the consumer price index, changes in market values, the gross domestic product, and net disposable income. Lastly the global element assess global impact on a company. Factors include foreign market opportunities, currency exchange rates, trade agreements among regions, and increased risks associated with terrorism.

The text defines strategic management as the analyses, decisions and actions an organization undertakes to obtain a competitive advantage. Analysis, decision-making, and actions are ongoing processes. The organization analyzes the strategic goals, which include the vision, mission, and strategic objectives, as well as analyzing the internal and external environment of the organization. Following analysis is the strategic decision making process. Strategic decisions generally pertain to the following questions, "What industries should we compete in?" and "How should we compete in those industries?" After management has made decisions regarding the strategic plans of the company, they must implement their new plans. The four key attributes of strategic management: direct the organization toward the overall goals and objectives, include multiple stakeholders in decision making, incorporate short-term and long-term perspectives, and recognize trade-offs between efficiency and effectiveness. The first key attribute, direct the organization toward the overall goals and objectives, requires management to make decisions best for the organization as a whole, rather than a single area. Include multiple stakeholders in decision-making compels management to think of all stakeholders, both internal and external, in decision-making. Incorporate short-term and long-term perspectives suggests management considers both the short term and long term goals and discourages giving up long-term shareholder value by focusing entirely on meeting short-term performance targets.

The three key activities in the strategic management process are analysis, decisions, and actions. Analysis is the first step in the process, and it involves reviewing the goals and vision of the company, the external environment, such as consumer demographics and competitors, the internal environment, and intellectual assets, such as knowledge workers and patents. During the decisions process, the organization considers the questions "What industries should we compete in?" and "How should we compete in those industries?" Finally the decisions are implemented in the action phase. Management must allocate the resources necessary and design the organization to implement the strategies. Although the three activities are interrelated, it is important that management focus on each separately and independently so they each are adequately planned.

Stakeholder management is the process of identifying and understanding key stakeholders. Stakeholders are any person affected by decisions of the company. Including employees, shareholders, customers, and suppliers. Different stakeholders have different interests and demands. Therefore to meet all demands, evaluating performance must go beyond solely analyzing financial results. Three aspects of stakeholder management are social responsibility, shared value, and triple bottom-line approach. Social responsibility is the expectation of the company to improve the welfare of society. Some issues a company should consider are environmental impact and sustainability, labor standards, health and safety, financial and accounting reporting, and contribution to economic development. Shared value is policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in which it operates. Lastly, the triple bottom line assesses the firm's financial, social, and environmental performance.
Companies must analyze the needs of all stakeholders to avoid making decisions that would negatively affect society and result in alienated employees, increased governmental oversight and fines, and disloyal suppliers.

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What is the difference between general environment and industry environment?

Explanation: General environment refers to the surroundings that includes both the living and non living objects and that continuously interacts with each other. Whereas, industrial environment refers to the harsh and extreme conditions, which is very much different from the general environment.

What is the relationship between business and environment?

The basic function of a business enterprise, input-output conversion, is carried through active interaction with the environment. It receives inputs from the environment, converts them into outputs through productive facilities which are also receive from the environment and sends them back to the environment.