External Environment That Can Impact

¶ … external environment that can impact the organization. Among them are:

Government intervention

Social factors

Competition

Lee Iacocca, for example, took a Chrysler company that was under threat from Japanese car makers and secured government intervention to assist the company. The government can be a force for good for any business as well as bad. Proper government management techniques can help to achieve a positive outcome, such as that which helped Chrysler fight the Japanese automakers in the 1970s.

There are social factors at work as well. The media has become a significant influencer on business today. CEOs are expected to perform for the media. But with this increased exposure comes increased scrutiny as well. Mistakes are highlighted just as much as successes. This is especially true now with CEO pay being so high -- that invites additional scrutiny. CEO's today have the social and media profile of a politician or any other public figure, and should conduct their public and private behavior accordingly or the entire firm may face adverse consequences.

CEOs need to have different skills in order to help the company be successful, given these external influences.

Media presence/communication/public relations

Organizational skills

Anticipate competitive pressures

Public relations is a critical role for the new CEO. For many firms the CEO is the steward of the firm's public image. This is a double-edged sword, so the CEO needs to keep that fact in mind. Mistakes will look bad not only personally, but will reflect poorly on the company as well. Therefore, the CEO needs to play the role of the PR flak. People respond to leaders who project a strong image of the firm and therefore the CEO can be an excellent source of good publicity.

The video highlighted the achievements of Lee Iacocca and Norman Schwarzkopf with caveats about the assistance they had. Yet, it was the organizational skills of those leaders that led to the achievements. It is important to remember not who the media assigned credit for the success but how that success was achieved -- this is the way the CEO should approach the issue of organizational skills.