internal and external factors Essay

Submitted By angel796
Words: 1086
Pages: 5

The four functions of management are the planning stage, organizing, leading, and controlling. Internal and external factors affect these management functions in every company. Some internal and external factors that influence these management functions are globalization, technology, innovation, diversity, and ethics.

AOS is a small family run company that provides refurbished Herman Miller cubicles and new and used office furniture. Until recently the owner has focused her time in organizing and leading the company and little time planning for the future and in the controlling stage. The owner of the company is close to retirement and did not want to take on new projects, but she has recently lost her largest account to another company. This one account brought in close to a million dollars in revenue a year. This change has required her to look at new developments and establishing new goals for the company.

Globalization is an external factor that affects this business because the company’s competitors have started using a manufacturer that imports products from China. Cubicles and furniture imported from China are not made as well as the products the company is currently using. But the prices of these products are much more reasonable. The company is having a hard time competing with the higher prices although she carries a better product. The refurbished Herman Miller product will last longer than the imported product, but customers are looking for ways to cut costs. Companies are able to get new cubicles imported from China much cheaper than she can refurbish them. To stay competitive, the owner has been re-evaluating her current business model. She is working with her son on a plan for the future to be able to offer a similar product that her competitors are using. Changing the business model will also require re-organizing her current staff. Employees will need to be retrained, other positions eliminated, and new jobs created in the company.

Currently, all the company’s competitors offer cubicles from the company, Friant. The owner is in the planning stages with a new company to offer her customers an innovative product line that is similar to Friant, but that will keep the business different from her competitors. The main concern in offering a new innovative product line is in the organizing and planning stage. To offer a new range of products the owner and her son has had many planning sessions with the new company. The owner has had to coordinate the financial resources needed for a large initial investment required to enter into a new exclusive contract with Devon Furniture. Once the new product line arrives, additional training will be required for the current installers and production workers. “The need for innovation is driven in part by globalization” (Bateman & Snell, 2011, p. 10). After the new product line has been rolled out to customers, she will need to monitor the success of this new product line. She needs to be flexible to adapt quickly to any changes needed for the rollout of the product line to be successful. Potentially there will need to be changes done with the organizational structure of the employees and current positions may need to be changed.

Ethics affects the management function of organizing and leading. Since the business is a family run, the owner will often put her family first before the best interest of the business. The company recently hired the son’s best friend as the production manager. Many complaints from his staff have been made to the owner, but she feels there is nothing that she can do about it because he is her son’s best friend. Her son has been with the business for a long time and will be taking over when she retires. This management style adversely affects how she can lead the employees in the company. The employees recognize that he receives special treatment because of who he is. Employees have not left yet, but they can potentially lose valuable employees in…