Analysis of the External Environment of Business
The Technological Environment
The external business environment consists of four elements, they are as follows: Political,
Economic, Social and technological. It would be impossible to analyse the whole
environment in one essay, I have therefore decided to focus my essay on the technological
environment. I have chosen this area to focus on because as Palmer and Hartley point out,
it is one area that is forcing immense change in the external business environment.
The business environment is at present moving through a dynamic and turbulent phase
driven by technological change, globalization and increasingly competitive markets
(Palmer and Hartley 2002).
I will be researching and analysing the major changes that have taken place in the
technological environment over the last ten years and explore how they have affected
business practice. I will also be discussing how these changes have implicated on the
Public Relations Industry.
Technology is defined as:
the sum of knowledge of the means and method of producing goods and services (Bannock
et al 2003).
This authoritative definition of technology assumes technology only refers to the artifacts
themselves rather than the way they are used and the theories governing their application.
Human knowledge however, is an essential ingredient of technology and I therefore prefer
the following definition:
The application of available knowledge and skills to create and use materials, processes
and products (Needle 2004)
This wider definition relates the application of knowledge to the wider processes of
business practices i.e. the production and promotion of goods and services. Further it
indicates how technological developments are relevant to public relations.
Technology refers to the organisation of production as well as the actual techniques of
production itself. Investment in technology and innovation is frequently seen as a key to
the success of an enterprise and has been used to explain differences in the relative
competitiveness of different countries. As Worthington and Britton point out:
the development of quartz watches, which allowed Japan to enter the market and compete
with Switzerland (Worthington and Britton 2003)
As this example shows the more Japan invested in technology the more competitive they
became with Switzerland.
Technological changes over the last ten years have transformed many business activities
and created entirely new ones. Some of the major changes have been in I.T (information
technology) which has affected many every day business activates.
Administration is one area that has been transformed by developments in I.T. Due to the
drop in cost of computers and the increased use of e-mail as the primary form of
