Business Organisations Environments Exist Business Organizations Environments Essay
- Length: 6 pages
- Sources: 4
- Subject: Business - Management
- Type: Essay
- Paper: #63461293
Excerpt from Essay :
Business Organisations Environments Exist
Business Organizations Environments
Organisations have changed their normal horizon of working and they have transformed their general perspective to work. In the current era strategies have been transformed and effectiveness prevails in the international business arena. This paper would solely focus on the aspects of internal and external environments within the organisation and how these environments affect the general procedures of an organisation in the longer run. The evaluation of this paper is based on several questions and these questions are answered below in detail.
Internal pressures in an organisation and quite critical and complex. At times they can change the entire scenario of a worker and they have the tendency to either bring laurels for the company or they can also tarnish the career of an individual. That is the reason why all these aspects should be kept in mind when an individual is working on all these scenarios (Kinicki & Kreitner, 2009). The organisation that is currently selected for evaluation is Wal-Mart. It is a well-known well organisation and possesses a reputation of a giant in the retail industry. The organisation possesses a forward looking approach and they are ready to change their policies and general procedures because of which they can achieve mammoth success in the longer run. Like every other organisation they have embraced technology and they are planning to revamp their production setup. Internal pressures at times can be counterproductive for an organisation but at times they can be beneficial for an organisation depending on the intensity of these pressures. The decision makers of Wal-Mart were about to launch a robotic system for the production of their products and they were decentralizing their entire information technology department. Employees were worried about this fact because they were having a fear that they might lose their jobs as robotics will be their substitutes.
Employees on the other hand were forming unions and they were united in their cause that they cannot leave this organisation as they have worked for this organisation for several. Wal-Mart was facing a dilemma that how can they replace effectiveness without losing their employees. They were internally pressurized by the employees that people will resign from their organisation if they implement this technology and lay off workers. Several misconceptions were initiated in this regard and that is the reason why the management was confused how to deal with this hectic situation. The entire organisation brainstormed together and this approach was quite healthy for the current environment of this organisation. After several discussions and meetings they came up with an idea that employees should be shifted from one department to another department and those who are unaware about e-commerce should be trained so that they can learn the art and easily manage their skills. Finally, if there are certain employees still left in the organisation that cannot be fitted in then in this scenario they would be transferred to other business ventures of this organisation. This would clearly depict that a prospective organisation like Wal-Mart was pressured internally and they came out with a valiant solution that they have to incorporate all the employees in the organisation in such a way that it can be a win-win strategy for both of them. Such a strategy was followed by them that it can be beneficial for them in both the short and the long run.
A management Guru Henry Fayol believes that internal change usually comes after a certain period of time and different factors are involved in it like growth and integration, political and internal pressures, integrity and collaboration etc. (Judge & Robbins, 2010). In the similar manner MintzBerg on the other hand believes that change is initiated through internal pressure from the workers and no change can result in success if there is no internal pressure. Therefore, it can be said that all the aspects that were discussed above were linked with these thoeratical approaches.
Question 2: Besides internal pressures there are certain external pressures that play their vital role in the decision making process. External pressures are associated with the external environment of the organisation and external environment is of utmost important because it incorporates all the external players that are directly associated with the organisation. External pressures are levied on organisations usually in their actual countries but these external pressures are endorsed more and more when these organisations are entering into the international area.
Considering the situation of Wal-Mart that they are the leaders of the retails industry and their growth is enormous as compared to other organisations of this sector. The management of Wal-Mart has decided to go for Asian countries and they have selected India as their next target. They have to enter this nationalist country but they are aware of the fact that their entry will result in several direct and indirect external pressures from the forces that are present in that nation. In India international organisations especially retail oriented face several issues related to tax and political forces because in this nation their own organisations and preferred and government don't want international brands to take over the local market. That is the reasons why heavy taxes are levied on international players and besides taxed they have to pay several other fees associated with entry.
Evaluation of different thoeratical models are essential in this regard like the PESTEL model, isomorphic theory and several regulatory requirements are essential to assess in this scenario. The PESTEL model evaluated the macro environment of an organisation and it would evaluate that how the external environment can play their role in the entire decision making process (Johnson & Scholes, 2008). The PESTEL itself stands for political, economic, social, technological, environmental and legal factors. The political factors associate aspects like stability of the government, tax policies, entry mode regulations etc. In the scenario of Wal-Mart the political factors can be considered like when Wal-Mart is entering into India they have to face several external pressures and issues like tax regulations and they have to face heavy financial ups and downs because entry mode in India is not that easy because of political factors.
Similarly, Economic factors associate aspects like disposable income of the buyers, inflation in the economy, unemployment rates etc. Wal-Mart have to keep this in mind that they are entering a non-developed country in which the inflation rate is high and the unemployment rate is high too therefore they have to face the issue of purchasing power disparity. Social factors include scenarios like educational level, lifestyle changes etc. Wal-Mart must have studied this factor when they are entering in this nation that it is an educated country and they will easily adopt a quality brand but besides that price can play its role as life styles of this nation is changing.
Technological factors are linked with aspects like pace of innovation, new innovations and other factors like environmental and legal factors are linked with scenarios like environmental protection laws, product regulations etc. Wal-Mart has to keep all these aspects in their mind when they are entering this nation because there have to face environmental laws and legality associated with entering a new nation.
In the similar manner it can also be said that isomorphic theory affects the entry strategy of an organisation. There are generally two sources of isomorphic pressures that are inserted on an organisation. The first one is the international environment of the host country and the second one is the internal institutional environment of that country (Davis & Desai, 2000). Same is the case with Wal-Mart as they have to keep special care of these aspects when they are entering in a country like India.
Question 3: Organisations and environments are both interrelated with each and other and in effective decision making process organisations should assess their respective environments closely so that they can easily benefit from it. Both the internal and external environments are of utmost importance for an organisation and that is the reason why organisations that have a broader vision stress a lot on these aspects. All the thoeratical models that are associated with the entry strategy clearly depicts that an organisation should initially focus on the entry strategy and they should highlight and understand the underpinning factors of that nation. An organisation should be well aware about the political strategies, societal scenarios, legal scenarios etc.
Personally it can be said that it solely depends upon the size of the organisation. If an organisation possesses a giant structure than they should focus on all the strategies and all these aspects should be applied proactively by them. However, if an organisation possesses a medium structure then they should manage some of these aspects and they should not worry about other external aspects because their size is not that much to focus on these aspects. The theoretical approaches have really helped in the understanding of these aspects. If these theories were not present than it is highly probable that students should not…