Explain How External Environment Influence Essay Example for Free

Explain How External Environment Influence Essay External environment aims to help an organisation to obtain opportunities and threats that will affect the organisation’s competitive situation. External opportunities are characteristics of the external environment that have the potential to help the organization achieve or exceed its strategic goals. External threats are characteristics of the external environment that may prevent the organization from achieving its strategic goals. Therefore, organisations must formulate appropriate strategies to take advantage of the opportunities while overcome the threats in order to achieve their strategic goals. The external environment consists of variables that are outside the organization and not typically within the short-run control of top management. They may be general forces within the macro or remote environment, which consists of political-legal, economic, socio-cultural, technological forces – usually called PEST. Political-legal force influences strategy formulation through government and law intervention. For example, the environment law requires the world’s automobile manufacturers to reduce emission of green house gasses, and therefore these manufacturers have to reformulate their product strategy. Economic force influences strategy formulation through economic growth, interest rates, exchange rates and the inflation rate. For example, exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy, and thus influence strategy formulation of exporters. Socio-cultural force is about the cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social-cultural factors affect the demand for a companys products and how that company operates. For example, increasing health consciousness can influence strategy formulation of fast-food companies that may have to adopt product innovation strategy. Technological factors include technological aspects such as R;D activity, automation, technology incentives and the rate of technological change. For example, rapid development of the information technology has significantly influenced the strategy formulation of logistics service providers who are now able to provide superior express services. There may be specific forces within the micro or near environment, which involves analyzing the threat from the new entrant, rivalry among the existing players, pressure from the buyers, pressure from the suppliers and pressure from the substitutes. This is introduced in Porter’s Five-Forces Model. Profitable markets that yield high returns will attract new firms which eventually will decrease profitability for all firms in the industry unless the entry of new firms can be blocked by incumbents. The existing firms therefore need to formulate new strategies against potential entrants. For most industries, the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. For example, high intensity of competitive rivalry in the automobile industry forces competitors such as Ford, Honda, to form strategic alliances or adopts the strategy of M;A. The bargaining power of buyers is the ability of customers to put the firm under pressure. For example, strong bargaining power of buyers in the computer industry put Dell under pressure. To deal with such pressure, Dell has to focus on relationship marketing strategy by offering value-added services to its customers. The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or charge excessively high prices for unique resources such as Microsoft software and Intel chips which affects the formulation of price strategy of PC makers. The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives. In order to retain customers, companies must formulate appropriate strategies to compete with the substitutes. For example, milk producers compete with soy milk producers. However, strategy formulation is also influenced by the degree of turbulence of the external environment. A high degree of turbulence exists if changeability is high and predictability is low. Companies need to formulate strategies based on the planned prescriptive approach if turbulence is low, whereas based on the unplanned emergent approach if turbulence is high. How organizations overcome environmental changes? Organisations need to deal with environmental changes with appropriate strategies. First, organisations may choose to wait and see. Such strategy has its advantages and disadvantages. For example, facing a significant technological change, some companies may choose to integrate the new technology into their products. If they are successful, the rest companies’ ‘wait and see’ strategy is obviously unwise. However, if they failed, the rest companies’ ‘wait and see’ strategy appears wise. As a result, strategic decision making is impacted on and opportunities may either be lost or capitalised on. Second, organisations may choose to change in response to environmental changes through either proactive or reactive. Proactive change involves actively attempting to make alterations to the work place and its practices. Companies that take a proactive approach to change are often trying to avoid a potential future threat or to capitalize on a potential future opportunity. Reactive change occurs when an organization makes changes in its practices after some threat or opportunity has already occurred in the external environment. As an example of the difference, assume that a hotel executive learns about the increase in the number of Malaysians who want to travel with their pets. The hotel executive creates a plan to reserve certain rooms in many hotel locations for travelers with pets and to advertise this new amenity, even before travelers begin asking about such accommodations. This would be a proactive response to change because it was made in anticipation of customer demand. However, a reactive approach to change would occur if hotel executives had waited to enact such a change until many hotel managers had received repeated requests from guests to accommodate their pets and were denied rooms. In reality, companies may use a combination of both proactive and reactive approaches. Proactive approach is highly common when an industry is new with little or no change. The bellwether company entering the industry is making all of the strategic decisions or being proactive. However, because of its success, competitors gradually enter the market, resulting in the turbulent change of the competitive environment. Consequently, the reactive change is on the part of the new competitors as well as the bellwether company. To overcome environmental changes, companies may also choose the merger or acquisition strategy. A merger is defined as the joining of two or more organizations to constitute a new combined, legal entity. An acquisition is defined as the purchase of more than 50 percent of the voting shares of one organization by another, but the two organizations are still separate legal entities with the acquiring organization running as the parent company and another as a subsidiary. For example, recent study discloses that the merger and acquisition strategy in the global automobile industry will be further enhanced in the near future in order to deal with the threat of global financial crisis which decreased the consumers’ disposable income and increased the debt of auto makers and suppliers that have to save their organisations through merger and acquisition Ddiscuss the importance of organisational culture in strategy implementation Organisational culture can be defined â€Å"as the system of shared beliefs and values that guide and direct the behaviour of members, can have a strong influence on daily organisational behaviour and performance. † (1) Reflection to leadership Successful strategy implementation needs strategic leadership. Strategic leadership is the ability of influencing others to voluntarily make decisions that enhance prospects for the organisation’s long-term success while maintaining short-term financial stability. It includes determining the firm’s strategic direction, aligning the firm’s strategy with its culture, modelling and communicating high ethical standards, and initiating, shaping and implementing changes in the firm’s strategy, when necessary. Strategic leadership sets the firm’s direction by developing and communicating a vision of future and inspires the organization’s members to move in that direction. (2) Enable to create mission vision The vision is the source and the main idea of a company. The mission aims to give the direction which presents the unique scope of business, its vision nd specific competence competitive advantages, and to tell employees, consumers, and shareholder what the firm is. For example, IBM’s vision is: solutions for a small planet. Mission is: At IBM, we strive to lead in the invention, development and manufacture of the industrys most advanced information technologies, including computer systems, software, sto rage systems and microelectronics. Create a shared vision to manage strategic change: objectives and vision of both individuals and organization should coincide. There should be no conflict between them. Senior managers need to constantly and consistently communicate the vision not only to inform but also to overcome resistance through proper communication. Strategy implementers have to convince all those concerned that the change is not superficial. The actions taken have to be credible, highly visible and unmistakably indicative of management’s seriousness to new strategic initiatives and associated changes. (3) Help to create a better strategy (4) Staff motivation Strategy implementation requires special motivation to achieve objectives. The motivation system functions according to the qualities and mechanisms of motivation, which is developed during the stage of entry strategy preparation. First and foremost, this system has to inspire employees involved in the process of strategy development and implementation to orient their mindset toward a strategic way of thinking. Formalizing the strategic motivation system includes establishing a system of daily incentives for employees, especially those who are responsible for strategy development and implementation. The formal system is presented in a document, where all suggestions about motivation and incentives are developed and described. It includes all moral, social, and financial instruments of motivation of individual employees and groups of employees. Special recognition and awards should be given to those who go above and beyond in creating and implementing strategic ideas. (5) Increase or enhance adaptability skills How to use organisation culture to develop competitive advantages 1. Develop CA An organization that is able to maintain a positive culture is likely to enjoy many benefits. When organization members identify with the culture, the work environment tends to be more enjoyable, which boosts morale. This leads to increased levels of teamwork, sharing of information, and openness to new ideas. The resulting increased interaction among employees activates learning and continuous improvement because information flows more freely throughout the organization. Additionally, such a culture helps to attract and retain top employees. For example, Wal-Mart’s founder, Sam Walton, showed concern and respect for his employees from the company’s inception. This created an environment of trust that persists to this day. Walton also modeled the behavior that he desired from his employees, especially customer service (both to internal and external customers), by visiting his stores, meeting customers, and greeting employees by their first names. Walton also embraced and encouraged change in order to remain competitive, and developed employees by having them work in a variety of positions. Wal-Mart considers its culture the key to its success, and to this day employees continue to think about how Sam would have done it’’ when making decisions. 2. Proactive ; reactive Today’s globally-competitive business environment has made a positive corporate culture a critical aspect of success for firms. No longer just a competitive advantage, it has become a prerequisite for success, allowing companies to attract and retain top employees. Therefore, where the culture is serving to lower morale, it is recommended that management take proactive rather than reactive steps to change the corporate culture using a top-down approach, establishing a new vision and demonstrating new behavior consistent with the revised vision. 2. Ability to change 3. Strong learning curve

Foreign Policy :: essays research papers

Progressive era foreign policy was motivated by a variety of factors including racial and national superiority, business and economic interests, strategic concerns, and idealism. Excerpts from For the Record provide various examples supporting the concerns that led to America’s foreign policy.   Ã‚  Ã‚  Ã‚  Ã‚  The idea of national superiority was evident in the belief of manifest destiny. This doctrine basically stated that America was a superior nation that was designed to expand. The nationalist argument is best depicted in Albert Beveridge’s â€Å"The March of the Flag† which states, â€Å"The rule of liberty that all just government derives its authority from the consent of the governed, applies only to those who are capable of self-government.†(For the Record p.117) This supports America’s superior views that it could govern a country better than the country’s native citizens. Frederick Jackson Turner further enhanced the feeling of national superiority in, â€Å"The Frontier in American History.† His writing explained that the frontier had been essential in establishing American independence and individualism. He also claimed, â€Å"The frontier is the line of most rapid and effective Americanization.†(For the Recor d p.49-50) The implication that expansionism leads to positive Americanization further displays the superior mindset. Racial superiority was obvious in the â€Å"White Man’s Burden.† This suggested that it was the responsibility of the American people to spread democracy and Christianity to civilize the â€Å"savages† and â€Å"inferior races†; those people included anyone of color.   Ã‚  Ã‚  Ã‚  Ã‚  Business and economic interests were also a driving force in foreign policy. â€Å"The March of the Flag† epitomizes the American viewpoint. It explains the problems of overproduction in the country: â€Å"Today, we are making more than we can use†¦there are more workers than there is work; there is more capital than there is investment†¦we need more circulation.†(For the Record p.117) All of these factors contributed to America’s need to expand to foreign markets. By establishing trade with other countries, America could import natural resources in order to produce manufactured goods at cheaper costs. This expansion of the economy would provide a market for the overproduction of goods and also increase jobs.   Ã‚  Ã‚  Ã‚  Ã‚  Additionally, strategic concerns were contributing factors in expansionism. Since the U.S. wanted to expand and trade with foreign countries, it ensured that other countries were stable and open to trade. This was demonstrated in China and the Open-Door market. There was also the belief that Europeans would dominate the market if America did not become involved. Finally, Americans used their involvement in wars with foreign countries to build the U.

Naturalist and interpretationist social science Essay

The naturalist approach to social sciences is based on content. The naturalist actually pays attention to what people say and considers their life stories as revealing phenomena. On the other hand interpretational approach, if people have beliefs and desires, an interpreter ascribes them. In this approach there are no independent facts of the matter about content. So there should be some way in which the content is interpreted as a set of revealing set of beliefs. In other words, there should be some agent and a system of methods (procedures) with which the interpretation is done. So, the basic assumption in interpretationist approach is that there is an acceptable behavior of the agent whose relation to the environment is understood and that the beliefs of the agent will match those of the subject he is interpreting (Davidson. D, 1993). The basic conflict between these two approaches is that the naturalist approach accepts the contents of the life stories of what people say, on the other hand the interpretationist accepts only those beliefs and desires that are ascribed by an interpreter. The naturalist accepts that independent facts can exist on the other hand the Interpretationalism does not accept independent facts about mental content. The naturalist accepts what people say on the other hand unless ways of interpreting the spoken word is not found Interpretationalism does not accept the set of beliefs that are held by person making the utterances. Let us consider a more general fact that is studied by social sciences, that if the supply of a product decreases then, â€Å"other things being equal† the price for their product will increase. The naturalist may study the life story of a commodity dealer who may give an account of how the prices of the commodities that he dealt with like wheat; barley and rye went up whenever there was a shortage of these commodities. The naturalist may then visit a grocer who may give a lifetime account of how every shortage led to increase in the prices of products he studies. The naturalist may proceed to take several such life stories, statistically significant and establish the cause and effect relationship between the shortage of supply and price increase. In case of Interpretationalism the scientist would approach an interpreter, in case of a commodity market it would not be the commodity dealer but an expert who would interpret the behavior of the dealers. The task of the interpretationist would be to first select the agent (agent) on the basis of his behavior in relationship to the market. The interpretationist would study the relationship of the expert with that of the commodity market, and attempt to ascertain if his beliefs are similar to those of his. Then the expert will interpret the behavior or the utterances of the commodity dealers and reach a conclusion that if the supply of a product decreases, then, â€Å"other things being equal† the price for the product will increase. Currently, using an expert opinion is an interpretationist approach to market research. The strength of the naturalist approach in establishing that that if the supply of a product decreases then, â€Å"other things being equal† the price for their product will increase is that the naturalist gets information direct from the dealers, that is from the people who are the actual actors. In addition, getting information from several actors increases the validity of the study as well as provides scope for statistical analysis. On the other hand the weakness of such an approach is that the naturalist may misinterpret the data from dealers. For, example the dealers may not eliminate the factors relating to â€Å"other things being equal†. It is possible that factors like a substantially increased demand may have led to the increase in prices but because the naturalist depends on the dealer’s accounts he may accept their interpretation that the prices of commodities have gone up because of decrease in supply. The strength of the interpretationist approach is that the interpreter or the agent has the expertise to interpret the utterances of the dealers. His relationship to the market (environment) is such that he has the ability to make a learned interpretation of what the market dealers utter. In addition, the agent is supposed to have beliefs that are similar to those of the interpretationist. In other words he has the sagacity to take into consideration â€Å"other things being equal†. The weakness of this approach is that the interpretationist has to depend on the interpreter or the expert. He does not have the facility of large numbers. It is not easy to subject the information to numerical analysis. In addition, there is a chance of errors in interpretation because the selection of the agent may be faulty. The agent’s relationship to the market (environment) may not be as close as required. In addition, the beliefs of the agent may be at variance with that of the researcher. In both these cases the results would be erroneous. To sum, there is a conflict in the approach of the naturalist and the interpretationist. Each approach has its own advantages and disadvantages.

Juvenile Delinquency Factors That Lead Youth - 1458 Words

Juvenile Delinquency: Factors that lead youth to delinquency It has long been a problem why some children steal, damage properties and not others. Many researches have been done to know the main factor that lead youth to delinquency, and it has been learned that there is no single path to delinquency. Although much of the research on factors that youth face has focused on predicting serious and violent offenses. Many people wonder about the factors that lead youth to commit delinquency. There are many factors that lead to delinquency, but the most known factors are family characteristics, neighborhood influences, and school conditions. Family characteristics such as poor parenting skills, family size, home discord, child maltreatment, and antisocial parents are factors linked to juvenile delinquency. â€Å"Child maltreatment roughly doubles the probability that an individual engages in many types of crime. This is true even if we compare twins, one of whom was maltreated when the other one was not (Currie, Tekin 6). Similarly, having a pare nt who ever struck, hit or kicked them increases the probability of criminal activity, and the effect tends to be greater impact if the parent struck them frequently, and are thought to have many harmful long term consequences that could predispose child to risky, self-destructive or aggression behavior and are more likely relative to children in the general population to engage in delinquency. They focus on crime because it is one of theShow MoreRelatedJuvenile Delinquency : The United States1458 Words   |  6 Pages Juvenile Delinquency in the United States We live in a world where there is a great deal of investment allotted to our children and our culture tend to be overprotective of our youth. Rightfully so, our younger citizens are considered the building blocks of our nation and the carriers of our legacy in the future. But in spite of stringent laws that seem to protect our youth, other factors such as race, poverty, and environment are catalysts for delinquent youth behavior. Juvenile crime isRead MoreJuvenile Crime And Juvenile Delinquency1458 Words   |  6 PagesDay in and day out residents and visitors to the Boston area are affected by juvenile crime and delinquency. Though the crime rates in MA and across the nation are on a steady decline, these juvenile crimes are still considered a serious matter that needs attention. It is thought that juvenile offenders do not cope as well with the criminal justice system as well as adults may be able to and therefore there needs to be a focus on how the system can better aid in the r ehabilitation of these youthfulRead MoreThe Lack of Strong Parental Figures Causes Juvenile Delinquency954 Words   |  4 PagesThe Lack of Strong Parental Figures Causes Juvenile Delinquency Imagine a thirteen-year-old boy living with his mother. 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