An examination of three key external influences impacting or likely to impact the organisation’s activities. (AC 1.1)

 

 In order to successfully navigate the dynamic business environment, it is crucial for my organisation, Al Barak Shipping Company, to continuously assess external factors and adapt its policies accordingly. Operating within a well-rounded framework, numerous factors impact company behaviour and decision-making, shaping the contemporary corporate ecosystem.

Political Factors

Organisational functioning is greatly impacted by political factors. Companies can be significantly impacted by changes in legislation, taxes, import regulations, and finance rates. State regulations on borrowing costs have a significant impact on financial institutions, which in turn affects company financing costs and overall economic conditions. It is crucial for Al Barak Shipping to stay attuned to the ever-changing political landscape, as state legislation can have both favourable and unfavourable consequences.

Economic Factors

Indicators like GDP, inflation rates, and per capita income offer valuable insights into the growth or decline of the economy. High inflation rates have the potential to discourage investment and impact the allocation of resources, which in turn can have an adverse effect on the growth of various sectors. Employment trends and skill acquisition are also impacted by economic conditions. Al Barak Shipping should align its policies with economic indicators, taking into account factors such as inflation and growth (Burns, Dagnall & Holt, 2020).
Social Factors
Consumer behaviour is influenced by various social factors such as health awareness, security, demographic trends, values, goals, and generational differences. Companies can enhance their marketing strategies by comprehending and adjusting to these social elements. For example, Al Barak Shipping must adjust their operations and marketing strategies to accommodate changes in consumer purchasing patterns during the holiday season (Burns, Dagnall & Holt, 2020).

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