Internal and External Environmental Forces affecting Business Operations

Business is a single identity operating on its own. All operations of the business are carried out within a certain environment, either external or internal environment. Therefore, means that they are internal and external forces which affects the business operations (Charles and Katuse, 2018). The internal forces are under control of the business management meaning that they are controllable. External environment forces are beyond the control of the management, therefore are not easily controlled by the management. These external environmental forces includes: political forces, economic forces, social forces, geographical forces, technological forces, and legal forces. All these environmental forces both internal and external they require a good scan for the success of the business (Gregg and Parthasarathy, 2017).

In this scenario, Qantas airway is the business under consideration. Qantas airway is the airline organization in Australia which needs to cope with environmental changes and remain at the frontline of its competitors. The history of Qantas airways is very long and detailed, since, is the biggest and oldest existing airline in Australia. This business has kept all his eyes on the means of maintaining a good relationship with external factors within the environment. Customers’ behavior has been a challenge to the organization since the organization competitors are coming up with new strategies to attract new customers and maintain the existing one happily. Economic factors have affected negatively the income of the customers thus reducing the turnover in the transport. Not only that, the government has allocated resources and efforts to support the airline sector regarding to the condition and policies of operation. However, the same government regulations are affecting the business negatively, therefore, reducing competitive edges (Iroham, Ogunkoya and Owolabi, 2017). Other effects are from competitors’ strategies, several competitors are offering several and similar products which acts as alternative advantages to the customers. This becomes the biggest challenge to the Qantas Airways to operate smoothly within the environment.

In this report is going to respond to the environmental risk which was discussed on part A of the environmental scan. Therefore, the following discussion are the solution of the environmental challenges facing Qantas airway in Australia.

For the business to operate successfully in the environment should be ready to accept the input from the environment and process them, later on, give the result to the environment (Wingo, Ivankova and Moss, 2017). Therefore in order to survive and succeed, the organization should match its environmental input with the conditions of output. The business should have strategies in place to face any changes from the environmental factors. Those strategies are supposed to be flexible so as to change as the environment changes. Failure to change these forces will force out the business from the market.  Therefore, a good strategic plan is required for Qantas airline to survive in airline industry. The following are challenges and solutions on how Qantas will handle this challenges to survive in the environment of operation.

Challenges Faced by Qantas Airways

As discussed in Part A, the market territories of Qantas airline is across the world, therefore affected by the different political factors across the territories of operation (Tur-Porcar, Roig-Tierno and Llorca Mestre, 2018). One of the biggest challenges, which is the main issue, here is that different political disruption are arising toward one organization. Political disruption results to free sky boundaries to be interfered with and the normal route of operations brings problems. Another challenge which affects Qantas airline negatively is terrorist in Middle East regions.

The required strategy. The solution to this challenge is that both the Qantas airline and Australia government should be involved in dealing with it. The government first, should set favorable conditions and policies which will govern the airline transport industry. This is collaborative with several bodies which are relatively involved in the airline industry together with lawmakers’ body of Australia government. They should come up with new and improve the old policies both targeting to achieve Qantas organization objectives. From this point, the government should put a strong support to the airline companies by forming common rules and regulation governing worldwide airline transport. If this is agreed across all countries network Qantas airline operates, it will reduce political disruption amongst skyline boundaries. Also, the Australian Government should support Qantas airline to establish headquarters in every country lands to act as an ambassador. These headquarters offices will assist in influencing the decision making of the country they belong since the company will employ the original citizen of those countries.

The terrorism in the Middle East should be reduced or eliminated for better operations of the Qantas airline. This is only done by encouraging peace within the country and the Australian government should enter in between to act as a peacemaker on those countries. If the Australian government will manage to intervene peace in the Middle East, the Qantas airline company will operate smoothly without obstacles within those countries. All this will encourage a favorable relationship on political factors for both the Australian government and another government airline industry operates.

These are factors which influences consumer behavior, production and interest rates, income, inflation and employment opportunities of the country (Adams, Shumway and Getchis, 2011). The main issue is the economic slowdown in Australia has affected a lot the Qantas operations. This situation brings in the challenge of dealing with a high cost in flying. Other challenges are that profitability and market share of Qantas is affected negatively by an increased budget of airliners. Also, the other challenge is due to the increased price of fuel and the number of competitors in the market. All this has negatively affected the revenue of Qantas Airline Company. The possible solution may be:

Proposed Strategies to Address the Challenges

The required strategy. All this economic downfall has been influenced by money circulation in the economy (Bryant and Nguyen, 2017). They are several ways to overcome these challenges. The government should influence and improve the tourism sector in Australia. Should find means of increasing tourism in the country which means, the same time the money circulation in the country will increase perpendicularly. Also, the Qantas airline company will improve its revenue by transporting many tourists inside the country. The government also should encourage exports within the country, which will influence the inflow of foreign currencies to the economy. The exchange rate gains from foreign currencies can be used to improve the economic sector by paying government debts and reducing transport cost. The government should minimize the production cost in all organizations thus reducing the consumer cost which results in standard life for all (Shen, Zhang and Zhang, 2017). This will make sure all citizen in Australia have to afford flight since the production cost of fuel will be of low cost thus lowing the flight cost. The Qantas airline can manage this economic factor by reducing extra expenditure where is not necessary therefore maintaining the income inflow in the organization plus among the employees. Also, the government has to control the expenses in different fields within the government like investing heavily in weapon military and salaries towards executive positions should be avoided.

These social factors influencing the business include, economic social status, believes and customs, lifestyle, religions and the cultural shape of the society (Kim, Jang and Yang, 2017). The main challenge is, Qantas airline has been affected by this factor in many ways and becoming a challenge to handle them. Qantas airline is a business which deals with the customer of high social economic class in Australia and worldwide. Also, the customers’ demand is rapidly changing and becoming difficult for Qantas airline to adopt those changes in the industry. The customers are demanding hospitality services of high class not only the transport services.

The required strategy is that Qantas airline should be ready to provide extra services which will make customers happy. These will be auxiliary quality services like Juices, accommodation, and other foods to the customer while in flight or waiting to serve. These services will be of subsidized price or free of charge. Other major area of which needs to be handled is about security (Medina Munro and Belanger, 2017). Qantas must ensure customer have total security throughout the services provided. This is by proving different types of security equipment and personnel. To maintain social factor influence positive to the organization, the Qantas should use its advantage of having a good image to the market since it is the biggest and oldest airline in Australia.

Political Factors

This is the rapid change of technology which influences customers, society and business behavior in general (Tchamyou, 2017). This is accompanied by research, innovation, and creativity which is introduced in the business sector, therefore, influencing its operations. The challenge of Qantas airline experiencing from this force is that, is dynamically rapid changing and growing with high speed which is the main issue with Qantas.

The required strategy, is that the Organization should ensure that, it has quality personnel in the technology field. This team will help in doing research in all fields related to the Qantas airline and update the system accordingly (Kraslawski and Hallikas, 2017). Also, this will help to stay ahead of the competitor since, the new technology will make operation easy and produce quality services within less time. Also to overcome this technological challenge, the Qantas airline should be ready to invest heavily and timely in this sector of technology.

These are factors which are very important in the organization. They are used to determine organizational success worldwide. These factors are rules and regulation imposed by the government and other related bodies (Jernström, Karvonen and Hallikas, 2017). For example, the main issues here is, the outlines of how the business should operate within certain conditions towards the company and government benefits. Like rule on tax collection and required for business to operation. The challenge of Qantas is from the usage of carbon which is taxed according to the emission. This tax is very high since the emission of carbon is a must to be available in the airline industry.

The required strategy. To overcome this challenge is impossible since is unavoidable for carbon usage in the airline industry. The management of Qantas should manage the use of carbon well which it will attract less tax. Another alternative is, if possible to come up with another product which is less expensive and will not attract tax in usage will be good. Meanwhile, Qantas airline should set conditions which will allow them to use carbon at its rate of comfortability zone. Other ways to overcome legal factor from affecting the organization negatively is only to be ready to adhere to them accordingly (Kabakova and Plaksenkov, 2018).

These are factors which affect the physical environment of the business. For examples like pollution, noise, air, destruction of physical objects and all mechanism which can be seen and touched (Babatunde and Adebisi, 2012). Therefore, regulations and policies are set by different bodies to protect this destruction of the environment. The challenge to the airline industry is that are the main pollinators of the environment both noise and air. Therefore, Qantas being one of the airlines is affected by the regulation and standards of the environment.  

Economic Factors

The required strategy. Qantas airline cannot failure to operate because of these regulations. The organization should be ready to adhere to those standards and policies so as to ensure smooth operations of the business (Charles and Katuse, 2018). Also, Qantas airline should be ready to incur any expense towards those standards, like permit license due to the pollution. Therefore, Qantas as they prepare expense and profit records, how to achieve Qantas objective and others, they should be ready to face environmental factors knowing are unavoidable.

Conclusion

External environmental factors are factors which affects the organizational activities without any or limited control form the management. To overcome these forces is very difficult, only the solution is to reduce the effects to a certain level. However, when the organization comfortably accept the influence and handles them keenly the effects will be enjoyable and positive to the organization operations. Therefore, if Qantas will apply the possible solution alighted above, it will achieve its goal without much struggle despite the effect from the external environment. The Business, government and other related bodies should be ready to work together tirelessly to avoid negative influence from environmental factors. The organization should have a good strategic plan outlining the objectives to be achieved within a limit time and set them in such a way that are flexible towards external environment forces if arises.

References

Adams, C.M., Shumway, S.E. and Getchis, T., 2011. Biofouling in marine molluscan shellfish aquaculture: a survey assessing the business and economic implications of mitigation. Journal of the World Aquaculture Society, 42(2), pp.242-252

Babatunde, B.O. and Adebisi, A.O., 2012. Strategic Environmental Scanning and Organization Performance in a Competitive Business Environment. Economic Insights-Trends & Challenges, 64(1).

Bryant, S. and Nguyen, T., 2017. Major factors affecting knowledge sharing in emerging economies: a theoretical study. International Journal of Management & Human Resources, 5(1).

Charles, K.M. and Katuse, P., 2018. Work Environmental Factors Affecting Employee Job Satisfaction in Public Institutions in the Energy Sector in Kenya: A Case of Rural Electrification Authority, Nairobi. Journal of Human Resource & Leadership, 2(4), pp.59-76.

Charles, K.M. and Katuse, P., 2016. Factors affecting the long-term survival of eBay ventures: a longitudinal study. Small Business Economics, 49(2), pp.405-419.

Gregg, D. and Parthasarathy, M., 2017. Factors affecting the long-term survival of eBay ventures: a longitudinal study. Small Business Economics, 49(2), pp.405-419.

Iroham, C.O., Ogunkoya, O.A. and Owolabi, J.D., 2017. Survey data on factors affecting negotiation of professional fees between Estate Valuers and their clients when the mortgage is financed by bank loan: A case study of mortgage. Valuations in Ikeja, Lagos State, Nigeria. Elsevier, 12, pp.447-452.

Kraslawski, A. and Hallikas, J., 2017. The main factors affecting the entry of SMEs into bio-based industry. Journal of Cleaner Production, 141, pp.1-10.

Jernström, E., Karvonen, V., and Hallikas, J., 2017. The main factors affecting the entry of SMEs into bio-based industry. Journal of Cleaner Production, 141, pp.1-10.

Kabakova, O. and Plaksenkov, E., 2018. Analysis of factors affecting financial inclusion: Ecosystem view. Journal of Business Research, 89, pp.198-205.

Kim, S.H., Jang, S.Y. and Yang, K.H., 2017. Analysis of the Determinants of Software?as?a?Service Adoption in Small Businesses: Risks, Benefits, and Organizational and Environmental Factors. Journal of Small Business Management, 55(2), pp.303-325.

Medina Munro, M. and Belanger, C., 2017. Analyzing external environment factors affecting social enterprise development. Social Enterprise Journal, 13(1), pp.38-52.

Shen, L., Zhang, Z. and Zhang, X., 2017. Key factors affecting green procurement in real estate development: a China study. Journal of Cleaner Production, 153, pp.372-383.

Tchamyou, V.S., 2017. The role of knowledge economy in African business. Journal of the Knowledge Economy, 8(4), pp.1189-1228.

Tur-Porcar, A., Roig-Tierno, N. and Llorca Mestre, A., 2018. Factors Affecting Entrepreneurship and Business Sustainability. Sustainability, 10(2), p.452.

Wingo, N.P., Ivankova, N.V. and Moss, J.A., 2017. Faculty Perceptions about Teaching Online: Exploring the Literature Using the Technology Acceptance Model as an Organizing Framework. Online Learning, 21(1), pp.15-35.