Understanding the organisation's operating environment

  1. Home
  2. Docs
  3. Principle 1
  4. Understanding the organisation’s operating environment

Principle 1

Understanding the organisation’s operating environment

Being aware of the environment an organisation operates in is vitally important.

The operating environment for organisations is continually changing.  This change may be in government policy or in social trends, it may be legislative.  The Management Committee has a key role to play in ensuring that an organisation is aware of the operating environment.  This can be done through being well linked in with other organisations and individuals and ensuring that committee members are keeping up to date with trends and changes in the environment.  New policies or services may need to be developed to keep the organisation current and compliant with the legal and regulatory framework. Risks in the operating environment need to be identified and managed.

Key issues in the external environment might include:

  • Demographic changes (e.g. more older people)
  • Economic changes (e.g. increased poverty or unemployment)
  • Changes in the beneficiary group and/or its needs (e.g. increasing mental health issues)
  • Changes of government, or government ministers (e.g. following an election)
  • Changes in legislation (e.g. new laws affecting your client group or your services)
  • Changes in government/statutory strategies/policies (e.g. a new mental health strategy)
  • Changes in the regulatory environment (e.g. new health & safety or safeguarding regulations)
  • Changes in public procurement (e.g. social value clauses in tenders)
  • Changes in the funding environment (e.g. the opening of new funding streams)
  • Changes in public attitudes or public awareness (e.g. changing awareness of non-binary issues around gender/sexuality)
  • Changing research evidence of ‘what works’ (e.g. results of robust evaluations showing the impact of particular kinds of services)
  • Technological changes (e.g. new ways of communicating online)
  • New opportunities (e.g. tenders expected to be published)
  • Changing risks (e.g. loss of funding or tendered service)
  • Actions or decisions of other organisations in your area of work (e.g. another organisation starting to provide services to your client group)
  • Changes in the physical environment (e.g. climate change)

The Committee is responsible for leading the organisation through a changing environment and making sure it is fit for purpose.