Explain the internal information and external information in the context of business
organizations with examples.
When business organization search their information, it is basically two places; inside the organization (internal information) or outside the organization (external information). In a nutshell external information can be gathered outside the organization, either by interviewing customers or examining published data. These are known as primary and secondary research. Internal information could come from variety of source within the business organization such as different department. A lot of internal information is connected to accounting systems - but is not directly part of them, for example:
1. Records of the people employed by the business (personal details; what they get paid; skills and experience; training records) 2. Data on the costs associated with business processes (e.g. costings for contracts entered into by the business) 3. Data from the production department (e.g. number of machines; capacity; repair record) 4. Data from activities in direct contact with the customer (e.g. analysis of calls received and missed in a call centre)
And there are several categories of external information:
1. Information relating to way a business should undertake its activities. Businesses need to keep records so that they can collect taxes on behalf of the government. So a business needs to obtain regular information about the taxation system and what actions it needs to take. A business needs to be aware of key legal areas. There is a whole publishing industry devoted to selling this kind of information to businesses. 2. Information about the markets in which a business operates. This kind of external information is critically important to a business. It is often referred to as "market". Most of the external information that a business needs can be obtained from marketing research.