Internal and external environment

Internal and external environment
See also
Risk and opportunity Project environment Analysis of project Resource dependence theory Lack of support Sources of risk Construction project risk Change in scope Project management environment

Internal environment of a project is composed of all factors internal to the project team such as the project manager, team members, resources, stakeholders, and project timeline. The internal environment is the environment within the project team and will influence the success of the project.

External environment of a project is all factors outside the project team that can influence the project, such as the industry, economic, political, legal, and social factors. The external environment is the environment outside the project team and will affect the project's success. Understanding the external environment is important to the success of any project.

Example of internal and external environment

• The internal environment of a project may include the project manager, team members, resources, stakeholders and the project timeline. For example, a project manager may be responsible for setting the project timeline and ensuring that the team works together and achieves the goals of the project. The team members will be responsible for completing the tasks within the project timeline and ensuring that the project is completed on time. The resources available to the team, such as financial resources and technological resources, will also play a role in the project's success. Stakeholders, such as customers and investors, will have an interest in the project's progress and may provide input about the project's progress and completion.
• The external environment of a project may include economic, political, legal, and social factors. Economic factors may include changes in the cost of materials or labor, or changes in the market or consumer demand. Political factors may include changes in laws or regulations that could affect the project. Legal factors could include any legal issues that could arise during the project. Social factors may include changes in public opinion or sentiment that could affect the success of the project. It is important to understand the external environment in order to anticipate potential risks or changes that may affect the project.

Types of internal and external environment

Internal environment of a project consists of all factors internal to the project team such as the project manager, team members, resources, stakeholders, and project timeline. The internal environment is the environment within the project team and will influence the success of the project. The following are the types of internal environment:

• Project Manager - The project manager is responsible for overseeing the project and ensuring that deadlines are met, tasks are assigned, and resources are allocated effectively.
• Team Members - The team members are the individuals responsible for completing the tasks associated with the project.
• Resources - Resources are the physical and non-physical resources available to the project team, such as equipment, time, and money.
• Stakeholders - Stakeholders are individuals or organizations that have an interest in the project and are affected by its outcome.
• Project Timeline - The project timeline is the timeline of tasks and milestones outlined for the project.

External environment of a project is all factors outside the project team that can influence the project, such as the industry, economic, political, legal, and social factors. The external environment is the environment outside the project team and will affect the project's success. Understanding the external environment is important to the success of any project. The following are the types of external environment:

• Industry - The industry in which the project is being undertaken can influence the outcome of the project.
• Economic - The current economic conditions can impact the success of the project.
• Political - Political factors can have a significant impact on the success of a project.
• Legal - Legal factors such as laws and regulations can affect the project outcome.
• Social - Social factors can also have an effect on the success of a project.

Advantages of internal and external environment

The internal and external environment of a project can have a great impact on the success of the project. By understanding and taking into consideration both environments, project teams can maximize their chances of success. Below are some advantages of considering both the internal and external environment of a project.

• Internal Environment: By understanding the internal environment of a project, project teams can more accurately assess the resources available to them, better manage their timeline, and more easily coordinate with stakeholders.
• External Environment: By understanding the external environment of a project, project teams can more easily anticipate potential industry changes, better respond to external demands and internal pressures, and stay up-to-date with the latest legal and regulatory requirements.

Overall, understanding both the internal and external environment of a project can help project teams achieve success. By gaining an understanding of both environments, project teams can more accurately assess their resources, anticipate potential changes, and respond more effectively to external demands.

Other approaches related to internal and external environment

One approach to consider the internal and external environment of a project is to use the SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This approach looks at a project's internal and external environment by focusing on its strengths and weaknesses, its opportunities and threats.

• Strengths are the internal factors within the project team that give it an advantage over other projects. Examples of strengths include project skills and knowledge, resources, and access to technology.
• Weaknesses are the internal factors within the project team that may impede its success. Examples of weaknesses include limited resources, lack of experience, and lack of technology.
• Opportunities are external factors that the project team can take advantage of. Examples of opportunities include new markets, new technologies, and access to new resources.
• Threats are external factors that may put the project at risk. Examples of threats include competition, changes in the industry, and changes in the political or economic environment.

Using the SWOT analysis approach can help project teams identify their internal and external environment and develop strategies to address them. By understanding and analyzing the strengths, weaknesses, opportunities, and threats of a project, teams can develop a plan to maximize their chances of success.

Suggested literature

• Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.