MGC1020 Assignment #1
Which is more difficult to gauge accurately: the general environment or the task environment? Why is it important for a manager to make a clear assessment of these environments?
The general environment and task environment are the two components that make up an organisations external environment. The external environment of an organisation includes influential elements that both directly and indirectly shape and impact its future, and as of late, has developed into an area of increasing importance to managers worldwide. However, how do managers accurately assess these environments? More importantly, why is the assessment of an organisations external environment so crucial? It is through research and
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Aldrich, 1979; Lawrence & Lorsch, 1967; Rumelt, 1974, as cited in Hurtado & Mukherji (2001) are in agreement, acknowledging that 'there is indeed a close relationship between strategic and organisational choices made...and the characteristics of an organisation's environment'. One way in which the general and task environments can be assessed is to 'consider the objective environment and to consider that it exists in an absolute form' (Porter, 1985 as cited in Hurtado & Mukherji, 2001). This means that managers generally assess the external environment under the assumption that anything and everything is likely to occur. However, it should be noted that this would obviously require large amounts of time and resources, and as argued by Aharoni, Maimon & Segev (1978), 'a full and permanent search...of all environmental forces is both too costly and intractable in terms of management time' (p.949). Another way in which an assessment of the external environment can be made is through the identification of dominant components of the environment, as discussed in Aharoni, Maimon & Segev (1978). Aharoni, Maimon & Segev (1978) also argue that by focussing on dominant environmental components, not only would it be a more effective and efficient strategy, but it would also be beneficial for a manager to increase autonomy within the organisation. Hurtado & Mukherji, (2001) also highlight the importance of a manager's assessment of the external environment when
An organization’s external environment is terribly important and must be studied and understood for the organization to truly succeed. Through such study and understanding, a manager would be able “mitigate threats and leverage opportunities” that are caused by the six segments identified as macro-level external forces: (1) political, (2) economic, (3) sociocultural, (4) technological, (5) ecological, and (6) legal (Rothaermel, 2013, pp. 56-57). Since the manager’s decisions, or firm effects, have a greater impact than those external forces mentioned only when the manager accounts for them and builds a strategy around them, the manager must be aware of and understand these forces to be
When manipulating a business’s strategy, it is important to focus on the external factors in the environment. An external analysis is where a business conducts environmental scanning that present a company with the key external forces influencing the organization. The facets of external forces examined are the business environment, remote environment, or the competitive environment. A business environment is all of the external factors in the general environment that a firm cannot control, but can affect their strategy. The remote environment is the forces that affect most firms. Lastly, a competitive environment is the firm’s specific industry and its entirety. The external analysis is pertinent to a company called Dick’s Drive- In; without it, Dick’s would not be a thriving popular business today.
The external environment affects a firm’s strategic actions. Essentially, if a company decision has created a disaster in the environment, they
The environment of any organization consists of internal and external factors. An organization should conduct a scan of its environment in order for it to determine development, and a forecast on the factors that may influence the success of the organization. Scanning the environment refers to the possession and utilization of the information that an organization has about trends, patterns, occasion and the external and internal relationship that are within an organization. A scan of the environment may assist the management team of an organization in making a decision about the future path of the
The importance of the analysis determines what outer factors that mold or influence management’s future strategic decisions. Accordingly, the general environment analysis incorporates several divisions, such as the economic circumstances, political/legal effects, socio-cultural powers, technological dynamics, and physical conditions (Gamble, Thompson, Peteraf, 2015). Most importantly, each segment will be centered on what significant areas that are correlated to the bed and mattress
In the diversity Australian environment, business finds that itself experiences a rapidly change and the awareness of putting environmental factors into management is becoming necessary. Thus, for Coles supermarket, when planning strategically, it is important to take the interaction of organization and it environment into management. In so doing, long- term planning becomes geared toward future events and it brings planning more systematic and integrated (Gideon Nieman, Alf Bennett, 2006, pp.27). The business environment includes all the internal and external variables which exert affect on the operation of the business. In addition, the management cannot be carried out effectively and efficiently without taking external factor into consideration. And the internal environment, on another hand, which encompass many areas such as the strategy, business function, management task, setting goals, resource abilities and expectations of interest group must be taken into account.
A business organization cannot survive in its industry if it does not keep an eye on what is happening in its internal and external business environment. The analysis of business sector or environment acquaints an organization with the issues, challenges, and external factors that have a direct or indirect impact on its business operations and profitability. On the basis of this analysis, the organization can formulate its future strategies and compete in the industry in a more effective and vigilant manner (Cadle, Paul & Turner 2010).
I think it is important to assess the environment opportunities associating them to the strengths and weaknesses of the organisation resources.
Grant (2010) states, “For a strategy to be successful, it must be consistent with the firm’s external environment, and with its internal environment – its goals and values, resources and capabilities, and structure and systems.” (Grant, 2010, p.13).
In continuation, Duncan’s framework for assessing environmental uncertainty, which examines the environment from environmental change and complexity perspective, will be used to further analyze the type of external environment and thus methods to overcome and adapt to it. All resources from external environment will be adopted to Fayol’s 4 management functions starting from planning, organizing, leading and controlling. The aftermath of this adoption would result in completing best performance for the organization and thus compete effectively. The model is shown at the figure below:
External environment refers to external aspects of the surroundings of business enterprise, which have influence on the functioning of business. The external environment can provide both facilitating and inhibiting influences on organizational performance. Key dimension of the external environment principally consists of a micro environment and a macro environment.
Internal Environment is the review that looks at the company operations, internal guidance as well as mission. Internal environment does consist of the value – chain analysis as well as the research based view tool.
To assure the success of a business over a long period of time the business must be able to conduct regular analysis of their success. They must be able to determine where they are today and have a goal of where they would like to see themselves 5-10 years down the road. In order to conduct a true analysis of the company, one must complete an environmental scan of their organization. Thus scanning for events, trends, issues and expectations that they may be faced with in the future. Furthermore, examining all internal and external environment challenges. Internal environmental challenges may be with employees, shareholders or board of directors or the overall culture of the organization. External environmental
An analysis of the external environment includes the factors in a business’s external environment about a business's industry, competition, and political and social environments, and affects the firm’s strategy (Aaker, 2001).
An organization is an open system; therefore it interacts with its environment. To manage the relationship with the environment, a large part of strategic planning is concerned. The environmental factors can be divided to 2 main categories, which is MACRO and MICRO .Macro environmental factors seriously affect an organization business practice, profitability and future progress. It can