Environmental factors of the company

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The environmental factors of a company are all internal and external factors of the organizational environment that can positively or negatively affect the development of its projects.

Indeed, every business project is carried out within an organization. It has its own culture, style and structure. These elements are decisive for the success or failure of the project.

It is important to mention that every project that is carried out, regardless of whether it is small or even a macro-project, will be affected by the company's environmental factors. For that reason, they will affect the expected results.

Indeed, environmental factors are all the circumstances that affect the project during its execution. That is why it can also be said that environmental factors are all conditions that the project team cannot control. Without a doubt, all these factors must be analyzed in the project management process, since they affect differently depending on the type of organization.

Classification of the company's environmental factors

The main environmental factors of a company that can affect the execution of its projects can be classified into internal and external.

Internal factors

Undoubtedly, internal factors are the environmental factors of each of the organizations that may positively or negatively affect the execution of a project. To determine which are the internal factors that may affect the performance of a project, we should ask the following questions:

1. What is the organizational culture of the company?

Of course, knowing the organizational culture is very important because it defines the mission, vision and values ​​of the company, since this will provide the basis for defining the norms of the corporate culture and the type of beliefs that are handled. Likewise, the culture defines the leadership style that is used and the authority practices that are applied.

2. What are the resources available to the company?

Then, in this section, the company considers the resources it has available. One of the most important is the human resource, analyzing the capacities and knowledge that the personnel has. This determines the skills, know-how and job competencies that employees possess. In addition, the IT infrastructure used by the company in its processes is analyzed.

3. What is the geographical location of the company?

If the company is located in a single point or if it is distributed in several different geographical points, this will influence the availability of resources, the control of personnel and schedules.

4. What is the infrastructure of the company?

Finally, the infrastructure of the company is the factor that is related to the equipment, the facilities, the machinery and the hardware and software system available. All of this will provide the necessary support to successfully complete the project.

Environmental factors of a company
Questions to identify internal factors

External factors

Now, external factors are all factors that are outside the organization and that also affect the favorable or unfavorable results of a project. The most important questions to consider are the following:

1. What social or cultural aspects can affect us?

Naturally, an important external aspect is the social and cultural aspect, because changes can occur in values, in lifestyles and in education. These changes can modify attitudes towards the acceptance of certain products.

2. What standards must be met?

Standards set by the industry or the government itself can affect performance. The standards must be met, since it is the way in which a group of companies in a certain industry agree to work or because the government requires it.

3. What legal restrictions are there?

Similarly, another aspect that may affect the performance of the project could be the existing regulations within the industry where it is competing. Legal restrictions are one of the most important factors that must be taken into account, because every project is framed in a legal context.

The legal framework that can affect the project can be national or international. All of this will depend on where the organization is located and distributed.

4. What is the risk tolerance?

On the other hand, risk tolerance is determined by the level of risk that stakeholders are willing to take. This in order to carry out the project.

5. How does the market operate?

Generally, in this section you should review the level of competition, the number of suppliers and customers. The organization competes within a market, which may have many competitors or, conversely, few participants.

Similarly, there may be many or few suppliers, which will positively or negatively affect the supply of raw materials and supplies required to complete a project. The customer is another relevant factor or perhaps the most important to be successful in the competitive market environment. The organization must not forget that it must focus on better satisfying the customer's need.

6. What is the general environment?

In the general environment, aspects such as the economic conditions of the country or the world should be considered, depending on the competitive environment. Elements such as purchasing power, inflation rates, the exchange rate and economic growth in general are considered.

In addition, demographic, geographical and environmental conditions that may have an impact on the performance and good execution of the project must be taken into account.

Environmental factors of a company
Questions to identify external factors

To conclude, it can be said that the environmental factors of the company must be considered as a decisive element in the achievement of the success or failure of a project.

For this reason, it is important to correctly identify them from the moment a project is planned. Therefore, good project management supposes an adequate identification of these environmental factors to avoid problems, delays or failure in the execution of projects.

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