Explain the components of the organizational environment and how PESTEL analysis helps a Sri Lankan firm.

1. 1 · Define. The organizational environment is all the forces inside and outside an organization that affect its performance.
2. 2 · Internal environment. Owners, board, employees, culture, structure and resources.
3. 3 · Specific environment.
   • Customers
   • Suppliers
   • Competitors
   • Pressure groups
4. 4 · General environment through PESTEL.
   • Political: government policy, import controls.
   • Economic: inflation, interest and exchange rates.
   • Social: demographics and lifestyles.
   • Technological: digital payments, automation.
   • Environmental: climate, floods, sustainability.
   • Legal: the Companies Act No. 7 of 2007, labour laws.
5. 5 · Draw the layers. [Three circles: internal inside specific inside general environment]
6. 6 · Scanning and uncertainty. Managers scan to spot change early; uncertainty rises with change and complexity.
7. 7 · In Sri Lankan business. In 2022, firms that read the rupee fall and import controls early protected their supplies and prices.
8. 8 · Close. Knowing the environment lets managers turn threats into opportunities.

Scoring tip: Give a real Sri Lankan example for every PESTEL letter. Examples show understanding, not just memory.