Professional Works & Involvement
E.D.G.E. Business Environments
Many environments impact the
decisions that leaders consider day in and day out. General environments, those
that have a macro influence, and task environments, those that affect the daily
business of a company, are pertinent to credible and reliable decision making.
Comprehensively, economic and technological conditions affect domestic and
foreign affairs to the extent of their stability and their innovative
capabilities, respectively. In particular aspects of business, government
regulations, financial institutions, competitors, and customers maintain direct
interaction with companies, and thus indirectly shape organizations’ policies
and procedures by their mere influence. Though these few external forces
mentioned provide substantial resources when considering their impact relative
to business strategy, decisions, or short or long-term success, there are
several other unspecified factors that enterprises must refer to for overall
survival as well. For now, the two general ambiances and the four task forces
stated serve as a partial illustration for how each generates clout among
leaders’ assessments.
A key point in factoring general environments into a leader’s situational assessment is by considering the societal effects. To emphasize the economy’s role in business decisions, or lack thereof, Abercrombie & Fitch, a clothing retailer, is currently under the microscope of their investors as sales have been declining. Chief Executive Officer (CEO) Michael Jeffries is noted for his success in the 1990s, but has yet to catch up with the new fashion demand. More significantly, their high prices do not fit the needs of their central market, which are teens and college students. According to Bloomberg Business Week (BBW), A&F shut down 70 stores in 2011 with plans to shut down more this year, and their sales dropped 2.5% in the first half of 2012. The company’s inaction concerning their outdated clothing apparel and high prices in a perpetuating economic recession is not only costing them in sales, but is also creating more unemployment and investor losses. As a result, the ineffectiveness of Michael Jefferies affects job creation and investor capital within the firm, and potentially could cost him his job. Another aspect to take into account is how effective technology changes the way multiple businesses increase efficiency within their company. The Vice President of Innovation at IBM did this when he led researchers in the development of Watson, the smart computer. IBM’s intended market at the moment is corporations because they want their product specialized as a personal assistant for each business, which will expand the invention’s capabilities, and in turn make it more valuable to each consumer. The purpose of Watson is to answer complex questions that can be utilized in daily business transactions that would otherwise require lengthy research. Such productivity would decrease time, and thus decrease an expense for many companies. In other words, technology has a widespread effect on businesses at large. While economics and technology encompass only two broad aspects of a leader’s resources, other more specific factors that play a direct force in individual companies are also significant instruments.
Correspondingly, task environments provide organizational guidelines that allow for input and output to exist within the company. One of those environments consists of government regulation, which mandates the ethics in business to protect consumers and the natural environment. Therefore, it is important that all businesses take congress into consideration when constructing plans. For instance, Allegiant Travel, founded in 1997 in Las Vegas, is a discount airline and disadvantaged by unpredictable fuel costs. CEO Maurice Gallagher risked federal regulations rejecting his plan that offered customers the option of buying a permanent higher priced ticket or a low-cost ticket that would be subject to increase or decrease in price relative to the gas rates at the time of travel. The Department of Transportation responded two months later making it illegal for any company to implement “post-purchase price hikes” as written in BBW. Allegiant Travel had to renege and go back to the drawing board immediately. Furthermore, financial institutions are a source of capital for many corporate entities, sometimes making them dependent on their funding ability. CEO Kevin Jones of HedgeCheck, had several big clients who were set up on open accounts, but his slow cash turnover affected his ability to meet current obligations. Jones began with factoring his invoices to short-term investors, but later found an expedited process by auctioning his invoices with an online company referred to as Receivables Exchange. This allowed Jones to maintain financial stability and ensured perpetuated growth and profit within his firm. Of similar importance is considering your competition in order to stay ahead of the curve in market demand. General Motors (GM) rolled out their midsize eco version 2013 Chevy Malibu in February 2012, a whole two seasons prior to their competitions’ scheduled showcasing, in order to increase customer attraction. Although, GM’s CEO Daniel Akerson didn’t anticipate the customer bias toward the cheaper basic of the models when introducing the more luxurious version of the two, he did consider being the first on the market for 2013 editions; and BBW reports their sales in excess 7% from their estimated 10% goal for August 2012. In relation to competition, the purpose for a company’s competing tactic is the customer. Customers set the demand, and indirectly influence the supply. Consequently, an effective leader must regard their desires as mutually imperative as any other function of the environments would be. McDonalds is a supreme example of adapting to customer demand. This fast-food industry expanded their business to two-hundred and seventy-one stores throughout India. By doing so they had to change their original menu to reflect the eating habits of that region. India is composed of religions, such as Hindu and Sikhs that maintain plant diets. McDonalds was able to completely revise their menu, obliterating any meat products. In other words, the consumer environment better helps leaders yield decisions and/or plans.
A final area of interest is how internal stakeholders view the decisions implemented by their leaders. In reference to the above General Motor’s example, the CEO decided to release the flashier model instead of the more economical style. Stockholders and employees probably assumed a lack of substantial impact because they knew consumers would be more inclined to purchase the less expensive version. Thus, investors and employees, especially those workers who get commission for every sale they make, may have preferred releasing the basic Chevy first to more considerably sway sales.
As illustrated, the externalities of business must be heavily utilized when analyzing information germane to a decision or plan. Some leaders are proactive and others are inactive, but success come from the ability to adapt to new markets and ever changing environments.
A key point in factoring general environments into a leader’s situational assessment is by considering the societal effects. To emphasize the economy’s role in business decisions, or lack thereof, Abercrombie & Fitch, a clothing retailer, is currently under the microscope of their investors as sales have been declining. Chief Executive Officer (CEO) Michael Jeffries is noted for his success in the 1990s, but has yet to catch up with the new fashion demand. More significantly, their high prices do not fit the needs of their central market, which are teens and college students. According to Bloomberg Business Week (BBW), A&F shut down 70 stores in 2011 with plans to shut down more this year, and their sales dropped 2.5% in the first half of 2012. The company’s inaction concerning their outdated clothing apparel and high prices in a perpetuating economic recession is not only costing them in sales, but is also creating more unemployment and investor losses. As a result, the ineffectiveness of Michael Jefferies affects job creation and investor capital within the firm, and potentially could cost him his job. Another aspect to take into account is how effective technology changes the way multiple businesses increase efficiency within their company. The Vice President of Innovation at IBM did this when he led researchers in the development of Watson, the smart computer. IBM’s intended market at the moment is corporations because they want their product specialized as a personal assistant for each business, which will expand the invention’s capabilities, and in turn make it more valuable to each consumer. The purpose of Watson is to answer complex questions that can be utilized in daily business transactions that would otherwise require lengthy research. Such productivity would decrease time, and thus decrease an expense for many companies. In other words, technology has a widespread effect on businesses at large. While economics and technology encompass only two broad aspects of a leader’s resources, other more specific factors that play a direct force in individual companies are also significant instruments.
Correspondingly, task environments provide organizational guidelines that allow for input and output to exist within the company. One of those environments consists of government regulation, which mandates the ethics in business to protect consumers and the natural environment. Therefore, it is important that all businesses take congress into consideration when constructing plans. For instance, Allegiant Travel, founded in 1997 in Las Vegas, is a discount airline and disadvantaged by unpredictable fuel costs. CEO Maurice Gallagher risked federal regulations rejecting his plan that offered customers the option of buying a permanent higher priced ticket or a low-cost ticket that would be subject to increase or decrease in price relative to the gas rates at the time of travel. The Department of Transportation responded two months later making it illegal for any company to implement “post-purchase price hikes” as written in BBW. Allegiant Travel had to renege and go back to the drawing board immediately. Furthermore, financial institutions are a source of capital for many corporate entities, sometimes making them dependent on their funding ability. CEO Kevin Jones of HedgeCheck, had several big clients who were set up on open accounts, but his slow cash turnover affected his ability to meet current obligations. Jones began with factoring his invoices to short-term investors, but later found an expedited process by auctioning his invoices with an online company referred to as Receivables Exchange. This allowed Jones to maintain financial stability and ensured perpetuated growth and profit within his firm. Of similar importance is considering your competition in order to stay ahead of the curve in market demand. General Motors (GM) rolled out their midsize eco version 2013 Chevy Malibu in February 2012, a whole two seasons prior to their competitions’ scheduled showcasing, in order to increase customer attraction. Although, GM’s CEO Daniel Akerson didn’t anticipate the customer bias toward the cheaper basic of the models when introducing the more luxurious version of the two, he did consider being the first on the market for 2013 editions; and BBW reports their sales in excess 7% from their estimated 10% goal for August 2012. In relation to competition, the purpose for a company’s competing tactic is the customer. Customers set the demand, and indirectly influence the supply. Consequently, an effective leader must regard their desires as mutually imperative as any other function of the environments would be. McDonalds is a supreme example of adapting to customer demand. This fast-food industry expanded their business to two-hundred and seventy-one stores throughout India. By doing so they had to change their original menu to reflect the eating habits of that region. India is composed of religions, such as Hindu and Sikhs that maintain plant diets. McDonalds was able to completely revise their menu, obliterating any meat products. In other words, the consumer environment better helps leaders yield decisions and/or plans.
A final area of interest is how internal stakeholders view the decisions implemented by their leaders. In reference to the above General Motor’s example, the CEO decided to release the flashier model instead of the more economical style. Stockholders and employees probably assumed a lack of substantial impact because they knew consumers would be more inclined to purchase the less expensive version. Thus, investors and employees, especially those workers who get commission for every sale they make, may have preferred releasing the basic Chevy first to more considerably sway sales.
As illustrated, the externalities of business must be heavily utilized when analyzing information germane to a decision or plan. Some leaders are proactive and others are inactive, but success come from the ability to adapt to new markets and ever changing environments.
Professional Organizations
Beta Gamma Sigma
Beta Gamma Sigma is the international honor society serving business programs accredited by AACSB International - The Association to Advance Collegiate Schools of Business. Membership in Beta Gamma Sigma is the highest recognition a business student anywhere in the world can receive in a business program accredited by AACSB International
The Mission of the International Honor Society Beta Gamma Sigma is to encourage and honor academic achievement in the study of business, to foster personal and professional excellence, to advance the values of the Society, and to serve its lifelong members.
For more information regarding this organization please visit http://www.betagammasigma.org/
Beta Gamma Sigma is the international honor society serving business programs accredited by AACSB International - The Association to Advance Collegiate Schools of Business. Membership in Beta Gamma Sigma is the highest recognition a business student anywhere in the world can receive in a business program accredited by AACSB International
The Mission of the International Honor Society Beta Gamma Sigma is to encourage and honor academic achievement in the study of business, to foster personal and professional excellence, to advance the values of the Society, and to serve its lifelong members.
For more information regarding this organization please visit http://www.betagammasigma.org/