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Introduction

Management involves dealing with the internal environment of the organisation and its operations; that is, considering what is happening in the workplace and what managers can do to make sure that resources are being utilised both effectively and efficiently.

Consideration of the internal operations is only part of successful management, however. Events that occur outside of the organisation also influence operations. Therefore, an effective manager, along with all the organisation's employees, should be aware of external influences on the business and their implications; and develop techniques for dealing with them.

The external environment consists of all those elements outside of the organisation that are relevant to, and influence the operation of the organisation. Your organisation is influenced by customers, suppliers, competitors, shareholders, unions and by economic, political, legal, social, technological and international variables.

The purpose of this chapter is to examine the nature of the environment in which modern managers function. We discuss how to keep informed of the changes in the external environment. We also consider the role of managers in adapting to, and taking advantage of, these changes. By way of example, think about the following issue that is part of any shipping organisation's external environment.

Example

Of the many forces influencing business today, one that is having a significant impact is to concept of quality. At the Quality Shipping Conference, organised by the European Commission in Lisbon in June, ICS emphasised that EU policy makers should not overlook the fact that shipping is an international industry and perceptions of what constitutes acceptable practices inevitably differ across the world.

As noted in Mariscene (1998) ICS supports the commission initiative to explore alterative and non-regulatory means of eliminating sub-standard operators. But it is important that the position of the rest of the world is taken into account and that the efforts to improve quality of shipping are not interpreted as an attempt to set standards which other countries cannot afford and thus act as non-tariff barriers to trade.

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