Dada Adefolami

The social environment
The organization is also influenced by changes in the nature, habits and attitudes of society.
1. Changing values and lifestyles.
2. Changing values and beliefs.
3. Changing patterns of work and leisure.
4. Demographic changes.
5. Changing mix in the ethnic and religious background of the population.

Technological influences
This is an area in which change takes place very rapidly and the organizations need to be constantly aware of what is going on. Technological change can influence the following:
1. Changes in production techniques.
2. The type of products that are made and sold.
3. How services are provided.
4. How we identify markets.

Environmental
This concerns issues regarding factors that could impact on the ecological balance of the environment and could include such issues as climate change and pollution
Legal environment
How an organization does business:
1. Law of contract, law on unfair selling practices, health and safety legislation.
2. How an organization treats its employees, employment laws.
3. How an organization gives information about its performance.
4. Legislation on competitive behavior.
5. Environmental legislation.

Therefore, when surveying the external environment think through Porter’s five forces and PESTEL factors and you will have a fully comprehensive framework with which you can assess the case.
In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply. In a perfect market, an excess of demand will prompt sellers to increase prices until demand at that price matches the available supply, establishing market equilibrium. In economic terminology, a shortage occurs when for some reason the price does not rise to reach equilibrium. In this circumstance, buyers want to purchase more at the market price than the quantity of the good or service that is available, and some non-price mechanism determines which buyers are served. So, in a perfect market the only thing that can cause a shortage is price.
Pareto efficiency, or Pareto optimality, is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off. The term is named after Vilfredo Pareto (1848–1923), an Italian engineer and economist who used the concept in his studies of economic efficiency and income distribution.

• Dada Suraju Adefolami, Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: [email protected]; 08052043855