External/Internal Factors PaperThere are many external and internal factors that impact the planning functions of management. We must all be mindful of these factors because they could have an enormous impact on organizations productivity. The process of assessing the external and internal factors that an organization will face can be vital to the planning function of management.
One must determine a set of issues and constraints and then list the assumptions that will impact the implementation of the plan. The environmental assessment develops understanding of external and internal processes that influence the organizations success rate. The purpose of the environmental assessment is to identify and analyze the key trends, forces, and phenomena having a potential impact on the formulation and implementation of strategies. In effect, the environmental assessment attempts to prepare the organization to acclimatize to environmental changes to take advantage of opportunities and to minimize the adverse effects of threats. Once the environmental assessment is complete, it is analyzed to prioritize issues, constraints and assumptions that could influence the planning function of management.
The assessment of external factors analyze outside the physical confines of the enterprise. These factors are beyond the control of the enterprise, and could have significant impact on the planning function of management. The external assessment is performed at a worldwide level and at a metropolitan area level. At the worldwide level, the assessment includes economic trends of national and local economies, social trends, government policies of national and local influence, and technological advancements of the world at large. This includes the impact of our global market, technology advancements throughout the world, and e-business that is rapidly growing.
Macro elements are analyzed to uncover issues, constraints and assumptions that could influence the integrated planning function of management. At the metropolitan area level, the assessment includes industry trends, market trends, customer expectations, competitor performance, competitive alternatives, and supplier capabilities. The internal environmental evaluation closely parallels the external evaluation of the environment. The internal evaluation requires gathering and assimilating information about the firm’s management, marketing, finance, operations, research and development, and information systems operations.
Strengths and weaknesses come from the internal environment of the firm. Strengths can be exploited, built upon and made key to accomplishment of mission and objectives. Strengths reflect past accomplishments in production, financial, marketing and human resource management. Weaknesses are internal characteristics that have the potential to limit accomplishment of mission and objectives. Weaknesses may be so important that they need to be addressed before any further strategic planning steps are taken. A basic determination of a firm’s relative strengths and weaknesses is often the first step in the internal evaluation.
A hidden benefit in internal evaluations is the opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization. A manager’s forced communications that occur across departmental lines produces an additional benefit in improving communication within the organization. The assessment of internal factors analyze inside the physical confines of the organization. These factors are within the control of the organization. The internal assessment considers plan implementation, structure, culture, innovation, diversity, ethics, processes and technology.
All of the factors can have a grave impact on the success of an organization. This is why the planning function of management is so important. Technology is rapidly changing, and for a business to succeed it must change with the time to adapt to technologies advancements. In today’s society we are so diverse and globalization is on the rise. Our communication systems must be able to adapt to the world not just our own country.
The globalization of the market place reaches far beyond our borders it reaches around the world, and because of this e-business is also on the rise. A company stands to gain more in the global market place when it has the proper tools and techniques in place. With the changes in our world we must be mindful of the global market and do more to understand each other universally. This brings us to diversity and communication throughout the world.
The social-culture element includes the norms, values, beliefs and behaviors associated with the demographic characteristics of a given area or region. Multinational companies in particular are faced with the challenge of diverse social cultural differences in the countries in which they operate. Social-cultural considerations are subject to change, so domestic firms must be aware of this aspect of the external environment as well as multinational firms. We live in a diverse world where more than ever communication with the world is key to our business and societies success. One should become more familiar with the world that surrounds us, because we do no surround the world. Our global market continues to grow, and we must do everything in our power to keep up.
All organizational improvement programs have one thing in common; their success depends on the effectiveness of many collective efforts, rather than any single or individual heroic effort. Contrary to what many managers think, this collective effectiveness cannot be dictated, facilitated, delegated, or otherwise achieved in any instance through direct managerial action alone. This collective effectiveness can only be inspired, balanced and sustained indirectly through the operating environment’s ethics and culture, with management as its champion. When managers are champions of projects, some things get done.
Also, when managers are champions of improvement programs, some more things get done. But when managers champion the culture, a much bigger thing happens. The projects, the programs, the quality journey over time, and the organization, all flourish, and the organization truly transforms itself into a higher quality organization. Because organizations operate as open systems, a relationship between external and internal forces will always exist. Managers must recognize that external and internal forces can be highly interrelated.
When managers are able to identify change as well as the external and internal settings in which the change is taking place, the organization will be able to appropriately respond and adopt strategies that will enable the organization to be effective. One should always think critically, and have a mission for your company as a manager. A company without a clear understanding of our global market is a company destined to fail. Set goals for your company. Establish teams to do research and carry forth organizations visions.
