How Do Environmental Factors Impact Managers and Leaders of Organizations - Essay Example

An organization survives due to its powerful external and internal environment. Organizational environment consists of many such elements which have a direct or indirect influence upon the performance and reputation of all or some parts of the organization. This paper tends to identify and analyze important internal and external environmental factors that have a significant impact upon managers and leaders of organizations. Internal Environment Analysis An organization’s internal environment is of great importance, and lays out such strategic plans that guarantee that all internal factors are working properly and in nice coordination.

Internal environment is defined as “the conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees” (WebFinance, Inc, 2011). Internal factors mainly include the mission statement, leadership, organizational culture comprising of employees and management, and resources. These internal factors have a direct influence upon managers and organizational leaders, and will continue to influence in future, because they have to make strategic decisions that satisfy all these factors.

For example, managers and leaders must make sure that their employees are working in harmony with each other with fewest possible organizational conflicts. Research suggests that the major causes of workplace conflicts are stress, reduced budget, short deadlines and heavy workload. Whatever the cause, it is necessary for the managers and leaders of the organization to deal with the conflicts efficiently to improve teamwork and productivity (Dana, 2001; Weinstein, 2001). This will be more important in future because of the increasing competitiveness in market.

External Environmental Analysis External environment of an organization consists of all those elements in the remote, industrial and external operating environment that impact upon the design of its strategic plans and define its competitive position in the market. 1. In the remote environment, most important are the technological and legal forces. Changes in the technological world define the competitive situation of the organization, thus convincing organizational leaders and managers upon implementing new technologies that help the organization bring together its clients and legal service providers on a collaborative platform. 2. In the industrial environment, competitors and potential entrants in market are important factors.

The managers and leaders have to keep constant check on the changes occurring in the competitive market so that such decisions should be made that keep the organization at par with its competitors. 3. The operational external environment involves customers whose requirements must be satisfied for the sustainability of organization. Hence they are one of the most important external environmental factors affecting managers’ and leaders’ strategic decisions. Also in future, as their preferences will continue to change due to change in technology, hence managers and leaders must be very proficient in adjusting their plans and decisions according to their customers.

Conclusion In short, the internal and external environment needs great consideration if the managers and leaders of an organization want to achieve success and progress in the current and future competitive market. Environmental factors influence decisions and strategic plans necessary for the sustainability of the business. References Dana, D. (2001). Conflict Resolution: Mediation Tools for Everyday Worklife. USA: McGraw-Hill Professional. WebFinance, Inc. (2011). Internal environment. BusinessDictionary.com. Retrieved February 29, 2012, from http://www.

businessdictionary.com/definition/internal-environment.html Weinstein, R.J. (2001). Mediation in the Workplace: A Guide for Training, Practice, and Administration. USA: Greenwood Publishing Group.