Essentials of Strategic Management in Organisation - Essay Example

Organizations and Management Name: Institution: Organizations and Management Managers in any organization must understand the environment surrounding them and their organizations if they expect to become successful managers. Business environment greatly influences business operations and processes, including development and implementation of strategies, accomplishment of intended goals, and internal operations. The environment involves internal and external factors or forces that influence or determine the operations, decisions, processes, performance, and strategies of an organization. While internal environment comprises of elements within the control of the management, external environment consists of elements beyond the control of management. Despite the difference, managers must clearly understand the external forces acting on the organization as they have real or potential impacts on the firm’s ability to accomplish its business objectives. Since managers lack control over them, the extent to which the managers devise strategies to adapt to the external forces largely determines the success of an organization (Lamb, Hair, & McDaniel, 2011). From a different perspective, the success of a firm largely depends on the ability of managers to develop and adjust the internal environment to exploit the opportunities presented by the external environment and to control the risks presented by it. This essay explores some of the reasons making it essential for managers to be aware of the external environment surrounding them and their companies. According to Hill and Jones (2008), the most significant reason why managers should be aware of external forces is to identify opportunities and threats presented by such forces to the organizations. Usually, businesses operate in external environments characterized by dynamic forces that greatly affect or influence their success. Among others, these forces may include competitive pressures, changing government regulations, changing customer preferences and wants, and technological advancements. This dynamism exposes organizations to opportunities and threats, which can negatively affect organization’s performance if not identified effectively and efficiently. Thus, managers should understand the external environment in order to discover opportunities for the organization and take advantage of them to enhance organization’s performance and market share. The understanding can also help them to identify threats present in the environment, making them stand in a better position to act accordingly. For example, changing customer preferences presents both opportunities and threats to an organization. It creates opportunities in terms of new products or services, as the organizations will have opportunity to expand their range of products to meet the emerging needs of consumers. At the same time, it presents threat to existing products and the sales volume of an organization because it may lead to increased levels of unsold inventory as well as obsolescence of the old products. Thus, managers should scan, monitor, and understand customer demands in order to be aware of the changes in consumer preferences and accompanying opportunities and threats. This demonstrates that such understanding can help the managers in the planning process. Managers need to understand the external forces to assist them to carry out planning, one of the key responsibilities of managers in any organization. The responsibility requires information from every aspect of an organization. While internal forces provide managers with information about available resources, the external environment provides them with information essential for formulation of strategies and making of decisions (Williams, 2010). External forces helps them to identify, plan, and implement the right decisions and strategies that will enable their organizations to take advantage of the emerging opportunities and at the same time, control potential threats. For example, it is essential for today’s managers to understand a particular technological change (an example of external force) within their industries. Such an understanding can help them to identify the impacts of the technology on their organizations and business operations. In addition, it can assist them to know how the technology can be used to enhance operations and activities within the firms. Consequently, the managers can stand in a position to make decisions and develop strategies that will enable their organizations to exploit the new or enhanced technology to improve their performance as well as their competitive advantage in their respective industries. It is important for managers to know external forces to their organization in order to develop successful and competitive strategies. As noted earlier, external forces occur outside the boundaries of any organization and therefore, managers have no control over them. Managers or organizations lack control over factors such as social and economic trends, cultural norms and values, and political climate, among others. As such, they should develop strategies that will enable their firms to adapt to the resulting external environment. Awareness of the external forces gives the managers the ability to identify, develop, and implement the right strategies to adapt to the external environment. The successful managers include those who stand in a position to effectively and efficiently establish, evaluate, and respond to the different opportunities and threats within the environment of their organizations. They are expected to continuously assess the ever-changing and complex external environment and then align their objectives, activities, and strategies (as well as those of their firms) to the requirements presented by the external forces. Another major reason why managers should know the external forces is to manage the internal environment effectively. Normally, the external forces shape the internal environment in which an organization operates or the managers carry out their responsibilities. As a result, the managers need to be familiar with the external forces in order to understand how the forces interact or influence forces within the organization. For instance, today’s businesses operate under increased pressure from globalization and technological revolution. Besides increasing competition, these forces have made the business environment more uncertain. In turn, managers are continuously relying on the external forces to create internal environments in a bid to make their organizations survive the competitive pressure. For instance, Williams (2010) notes that technological revolution has compelled managers to adopt teamwork as a principal component of corporate culture. Through teamwork, the managers encourage their employees to work collaboratively and exchange information through information and communication technologies. Moreover, others encourage virtual collaboration where workers can interact at work or at home through internet-enabled computer systems. This demonstrates that an understanding of the external forces can assist the managers to determine the right kind of internal environment to enhance or sustain the performance of their organizations. Lamb et al. (2011) observe that it is essential for managers to be aware of the external forces surrounding them and their firms in order to stand in a position to effectively plan for the future. Majority of external forces change from time to time, while others are cyclic in nature. Managers need to constantly monitor the forces to identify and evaluate possible trends that will help them to understand the possible impacts that the forces will have on their decisions, organizational strategies, and processes in future. For example, customer demand keeps on changing according to the level of living standards, demographics, income level, and other factors. Such changes inevitably affects the decisions that managers make regarding the product development and manufacturing, provision of services, marketing activities, and other related business decisions and strategies. In order to be able to predict the performance of their organizations in future, the managers need to scan and monitor the environment to obtain the relevant information that can help them formulate and implement the right decisions and strategies. At individual level, understanding external forces associated with the society in which the organization operates enables managers to determine the right way to lead and manage people around them (Williams, 2010). In any organization, managers play a leading role whereby they lead other business stakeholders, including employees, consumers, investors, and suppliers, among others, in business operations and activities. As such, they interact frequently with the stakeholders in executing their responsibilities. This implies that they have to understand the external environment in which these stakeholders come from in order to identify the best way to lead them. To a larger extent, the sociocultural environment in which individuals live influence their behaviors and attitudes. Individuals from a particular sociocultural environment will take and perceive happenings around them differently from others in a different sociocultural context. For example, people from individualistic cultures value independence and autonomy than those from collectivistic cultures, who emphasize more on relationships with others. Thus, managers need to be aware of such external forces in order to understand the attitudes, preferences, and behaviors of their subordinates and followers. In conclusion, managers should be aware of external forces to stand in a position to identify opportunities and threats presented by such forces to the organizations. Such an understanding also assists them to carry out planning, one of the key responsibilities of managers in any organization. Moreover, it is important for managers to know external environment to their organization in order to develop successful and competitive strategies that will help the firms adjust effectively to the ever-varying business environment. Another major reason why management should know the outside forces is to manage the internal environment effectively. At individual level, understanding outside environment associated with the society in which the organization operates enables managers to determine the right way to lead and manage people around them. References Hill, C., & Jones, G. (2008). Essentials of strategic management. (2nd ed.). Florence, KY: Cengage Learning. Lamb, C.W., Hair, J.F., & McDaniel, C. (2011). Essentials of marketing. (7th ed.). Florence, KY: Cengage Learning. Williams, C. (2010). Management. (6th ed.). Florence, KY: Cengage Learning. Read More