preview

External And Internal Environments : Contingency Theory

Satisfactory Essays

External and Internal Environments

Contingency theory affirms that a firm’s performance contributes to the match between its strategic behaviors and its internal and external environmental conditions. Some of the matches may require the adoption of organizational processes and strategies to emulate the particular circumstances confronting the firm. Contingency theory views the firm as an open system, where information is exchanged through the input-process-output procedure. Firms should not disregard the conditions that affect their organizational ability derived from information integration to make informed decisions. The conditions are in regard to the situations caused by firms’ internal operating characteristics. These are …show more content…

This improvement was due mainly to higher mortgage-related charges. This included over $18 billion dollars in representations, warranties, good will impairment charges and other related mortgages costs. Businesses that produced home loans continued to profit, however due to the higher costs of managing troubled loans, that were either in default or delinquent, which resulted in a total net loss for CRES for the quarter (Investor Relations, 2012).
Considering the five (5) forces of competition, choose the two (2) that you estimate are the most significant for the corporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past.

Banking is a very competitive industry when it comes to being profitable and being the best player in supplying services to consumers. Two of the most important forces of competition for Bank of America are “Supplier Power” and “Competitive Rivalry”. Supplier power has to do with the number of suppliers a bank has, how innovative their products are, and the flexibility to change from each suppliers’ technology. This encourages competition and ensures a more reliable product. Competitive rivalry has to do mainly with the number of competitors who are capable of offering more or less of similar products. With this type of competition, the buyer and supplier demand increases and they will ultimately have the power to pick and choose

Get Access