Principles of Hotel Management

E
XTRA
K
NOWLEDGE
Every organisation needs to study and understand its
environment. Survival and success of an organisation largely
depends on its ability to understand and anticipate its own
environment accurately. Briefly, the need for study of environment
arises due to the following reasons :
1. To understand complexities of environment.
2. To obtain information about the changes that are taking
place in the environment.
3. To know and understand environmental fluctuations.
4. To know and evaluate the amount of risks associated
with the organisation.

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Basics of Management
37
5. To understand the mutual effect of the environmental
factors.
6. To evaluate the plans under execution.
7. To prepare strategic/corporate planning.
8. To prepare action plans.
9. To obtain information about opportunities and threats for
the organisation.
10. To evaluate strengths and weaknesses of the
organisation.
11. To make the organisation environmental friendly.
12. To prepare for organisational change.
13. To ensure overall managerial effectiveness.
D
IFFERENT
S
ETS
Organisational environment can be classified under the
following heads :
The internal environment means the environment
composed of the conditions and forces within the
organisation. In other words, internal environment
is a result of the internal forces and conditions. It
influences the actions and behaviour of the persons
internal to the organisation. The main components/
elements of internal environment are as follows:
1. Purpose or objectives of organisation.
2. Counter value system and philosophy of organisation.
3. Policies, rules and regulations of organisation.
4. Nature, composition and structure of management
including the Board of Directors.
5. Authority relationships in organisation.
6. Human resources of organisation.
7. Physical assets and production facilities of organisation.

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38
Principles of Hotel Management
8. R & D and technological strengths of organisation.
9. Finance strength of organisation.
10. Market standing and brand equity of organisation. Internal
environment is largely controllable. Hence, managing
this environment is not regarded as a serious challenge
for managers.
External environment consists of the forces and conditions
outside the organisation. Such an environment influences the
actions and behaviour of the entire organisation. It is beyond
the control of the organisation. The components of external
environment are being discussed under the next heading.