“Management’s Understanding of the Environment in Which an Organisation Operates Is Critical to the Success of That Organisation.” with Reference to an Organisation Known to You, Discuss This Statement Using the Tools

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“Management’s understanding of the environment in which an organisation operates is critical to the success of that organisation.”

With reference to an organisation known to you, discuss this statement using the tools introduced in 113amg, in terms of the macro- and micro-environment. (1250)

A successful business needs to be able to survive in two different environments – macro and micro. The macro environment relates to external factors that affect the company; Mullins states that 'external environment factors are largely outside of the control of the management' (Mullins, 2007-423) – for example these could be governement decisions or changes to the economy. The internal factors that affect companies are considered the micro environment, relating to the 'culture and climate' (Mullins, 2007-422) of the company, as well as the atmosphere that a company gives. There are two ways to asses the internal and external factors affecting a company. The first deals with the internal factors, analysing the strengths, weaknesses, threats and opportunities (SWOT) of the company. Secondly, the analysis of the political, economical, social and technological (PEST) factors affecting the company asseses the external factors.

Proper Music Distribution (PMD) were formed in 1988, supplying HMV with over-stock CDs and deleted titles for their sales campaigns, under the name of Sale People Ltd. In 1990, a second company – Cee Dee Sales Ltd – formed, distributing CDs to independent retailers. These two companies were merged in 1995, extending their faculties to export goods also. In 2000, the acquisition of company Direct Distribution by Cee Dee Sales Ltd led them to become a distributor of third party record labels. This sparked a move to bigger premises and a name change to Proper Music Distribution Ltd. Since 2000, PMD have become the largest independent distributor in the UK – winning the industry publication Music Week's Distributor of the Year award at the 2009 and 2010...