The changing nature of the general business environment offers organisations both opportunities and threats. We can identify key drivers for specific organisations within this environment.  The monitoring of the environment is a key activity for all businesses. We need to look at the competition and what is happening in the competitive environment, the environment that is closest to the organisation and has the most immediate impact on it. Once we have analysed the competitive environment, we need to develop strategies, and then formulate and implement actions to put the strategy into practice. This will require change, so we look briefly at some of the factors concerned with successful change in an organisation.

Stakeholders are the customers, suppliers, employees, owners, shareholders, pressure and consumer groups, regulators, professional organisations, competitors and any individual or organisation that has an interest in what an organisation does and how it does it. Some of these groups, such as consumer and pressure groups, are part of what we term the business environment. Some stakeholders such as employees are part of the organisation but, as customers, shareholders, members of pressure groups and members of professional organisations, they are also part of the competitive environment. So, not only are the boundaries between the business and competitive environment blurred, but these influential stakeholders also blur the boundaries between the organisation and the competitive environment. Therefore, before we look in depth at the competitive environment and how the organisation can respond to changes in it, we need to investigate stakeholders in more detail as they affect what the organisation is and what it does, and how it responds to the opportunities and threats in the business and the competitive environment.

We usually view the organisation as discrete and distinct from its environment. However, the precise boundaries of the organisation flex and change at the interface between the organisation and its environment. This occurs as the requirements of the organisation, the interests of the people of influence in the organisation and the shape of the environment changes. We use Porter’s five forces model to analyse an organisation’s immediate environment, its industry, and the activities of the organisation’s competitors in the industry. We identify some responses the organisation can make.

We look at the sources of environmental information. We need to select and use appropriate information from the vast amounts of available data. We analyse an organisation’s competitive and general environments, identify what we need to do with this information and see how the organisation responds to subsequent changes. This leads into an overall discussion of the nature of change in an organisation.

In the final section, we look at the way that business has been changing over recent years and identify some current trends that may provide direction for the future. In today’s competitive world, the concept of competitive advantage needs to become an integral part of the culture of an organisation; one that manifests itself in the structure and in all functions. Success is achieved by efficiency in all business functions, in good overall co-ordination within the organisation and by effectiveness in achieving the mission and corporate objectives.

• identify stakeholders, evaluate the impact of stakeholder power and identify areas of conflict

• analyse Porter’s five competitive forces for an organisation in its industry

• identify sources of environmental information appropriate for a range of organisations

• conduct a full environmental analysis for any given organisation

• evaluate the environmental factors driving change

• appraise why organisations need to manage change

• describe some sources of resistance to change

• summarise the key trends in the business world and their implications for an organisation.