The External Environment directly affects

Topic: BusinessLeadership
Sample donated:
Last updated: October 30, 2020

To this end a leader needs to identify what external factors would influence the performance of the organization and then devise strategies within to overcome adverse factors and capitalize on complementary factors always peeping in mind that these same factors keep changing from day-to-day. Therefore, the observation by Daniel A Wren in 1979 that “Managers today face the ultimate paradox: keeping everything running efficiently and profitably while at the same time changing everything” gives an indication of the complexity of a leader’s task.In this context Jostler’s writings serve to strengthen the argument put forward by topic under discussion in this paper.

The argument is further strengthened by another marketing guru Malcolm McDonald in his book _ Marketing Plans – How to prepare them, how to use them _ where prior to conducting an “internal audit” of the organizations abilities and structure etc. He proposes that an “external audit” is conducted on the consumer, the market and the environment in general so as to develop an understanding of the needs and wants that exist and how best an organization can fulfill those same needs and wants.In the units on International Management and International Business conducted within the ICE MBA(I) programmer, both text books have cited globalization as the biggest influence on an organizations performance and is a key consideration in any planning and decision making activities that the leaders of organizations have to make. The diversity and dynamism that comes with globalization conveys the complexity and variety of challenges that can appear virtually on a daily basis to today’s leaders.In the unit on Leadership & Change Management also conducted within the ICE MBA(I) programmer the importance of change management as a part of the contemporary leader’s make-up is stressed as absolutely essential. The course material and texts go on to detail the integration of leadership and the management of change. The continuous transformation witnessed in the world today has also caused revolutionary ideas to emerge. One such idea is the ” Blue Ocean Strategy” introduced by W.

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Chain Kim Renee Unbroken in their book _Blue Ocean Strategy – How to Create Uncontested Market Space and Make the Competition Irrelevant. The main proposition of this book is that taking into consideration all the external factors that influence a particular business it is sometimes more appropriate for a leader to decide to redefine his market and his business so as to offer a totally new experience to its consumers. For the purpose of this paper we will utilize the commonly used PESTLE analysis as described above (we could also use Porter’s 05 forces model or Porter’s Value diamond). They consist of : POLITICAL The policies of governments determine the manner in which an organization can operate. For instance in Sir Lankan the current government’s policy is to foster domestic production of certain items and increase GAP.

To this end they have introduced tariffs and restrictions on imports for certain products hat Sir Lankan is locally capable of producing such as agricultural products and tares.The Government also continues protectionist policies of previous governments whereby certain other products that form an integral part of our export revenue, such as tea, rubber and coconut are not permitted to be imported. ECONOMIC The Economic stability of the Country also has a major impact on the operations of an organization. If inflation is not kept low then it becomes increasingly difficult for consumers to purchase non-essential goods and services and cheaper options are sought thereby increasing price imputation.

A prime example of this is the Automobile industry in the United States of America where consumers had begun to switch to smaller and more economical vehicles due increasing economic hardship. SOCIO/CULTURAL When the existing Socio/Cultural environment within a Country is influenced by another country’s socio/cultural norms and subsequently commences evolving likewise, then the general populace’s purchasing habits too start to evolve. This can be witnessed in the Food & Beverage industry where diverse styles of cooking such as Western & Chinese food are “fusing” together to roved consumers with a new type of cuisine called fusion cuisine.

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