Mullins (2005) contends that organisations comprise 'people, objectives, structures' and 'management'.
External: These are the factors which on which an organisation may not be able to exert much of its control. These include, the legal and political scene prevailing within the state/ country of its operations, number and types of competitors, suppliers in the market, terms and conditions from financial institutions, alternative products available in the market, newer technological innovations etc. Worthington (2006) places greater importance on political developments occurring at different levels - local, national and international.
Organisations resort to strategic planning to take care of these factors and. Organisations learn a lot from there environment and prevailing circumstances. But the strategic intent alone cannot be planned all in advance. It has to be a continuous evolutionary process depending upon the experiences. Henry Ford said, "Failure is the opportunity to begin again more intelligently"1
Environment Analysis: It involves studying and analyzing the surroundings to identify the competitors, the threats and opportunities. Maslow's hierarchy of needs argued that the driving force for human actions is the urge for satisfaction of one or the other need. These needs go on changing depending upon a number of factors. ...