Mgt/230 Internal and External Factors Essay
Internal and External Factors In a variety of business environments around the world, four management functions are usually found - Mgt/230 Internal and External Factors Essay introduction. The functions are planning, organizing, leading, and controlling. These are used from top-level management to frontline or organizational management. Globalization, technology, innovation, diversity and ethics are factors that affect these business functions. One can examine almost any organization and find this to be true. Wal-mart is one of the leading retail organizations in the world whose management functions are affected by these factors.
Wal-Mart has dominated the global market by operating in 27 countries outside the United States. According to Bateman and Snell (2011, p. 4), “Companies that want to grow often need to tap international markets, where incomes are rising and demand is increasing. ” This is ascertained through internal and external factors of globalization. Internal factors include production, customer service, and marketing strategies. For example, company branding can affect a company’s image.
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One can associate with the quality of products and services with a company’s brand and is often the first thing that people see when interacting with a company like Wal-Mart. External factors include new market environments to which a company must be accustomed, consumer analysis, and market analysis. A new product introduced into a new market depends upon consumer reactions. A company must analyze trends by segmenting markets into different consumers types and identifying their motivation of buying. This enables a company like Wal-Mart to create unique offerings for specific consumer needs.
Market analysis helps determine the size of the market, how it is growing, and creating a presence in the market geared toward profitability. Technology is one of the most important factors Wal-Mart uses in planning, organizing, leading, and controlling to secure its success in the “ever changing” market in this and other areas in the global market. Technology is changing each day and Wal-Mart is staying on top of these changes. By doing so, Wal-Mart is passing other competitors and staying ahead of technology changes.
In 2001 Wal-Mart renovated its technology by changing mainframes and storage products to IBM (Investor’s Business Daily 2001). Making this change helps Wal-Mart keep up with consumer demands. More people are using Internet and shopping online making it critical for Wal-Mart to keep up with technology changes and meeting the markets’ demand. Wal-Mart must see the external factors of technology. Businesses like Wal-Mart are continually developing new technologies to provide the best solutions for the marketplace.
Management has followed and implemented innovators to determine how Wal-Mart can stay ahead in technology and what consumers are requesting. For example, Wal-Mart implemented a Wal-Mart application for Smartphones so consumers can see specific products. This allows the consumer to know if a product is available at the nearest location. This keeps Wal-Mart competitive and helps keep them coming back for more. Wal-Mart has to stay competitive to continue to be successful. Innovation is the introduction of new products and services.
According to Bateman and Snell (2011, p G-4), innovation is also defined as “a change in method or technology; a positive, useful departure from previous ways of doing things. ” Innovation has affected Wal-Mart’s business management functions in both ways. Wal-Mart opened their first store in Rogers, Arkansas, in 1962 under the visionary leadership of Sam Walton (Wal-Mart Corporate, 2012), introducing a new type of department store service to help customers and the community. Since opening in 1962, Wal-Mart has grown to a worldwide organization.
Today they span the globe operating under 69 banners in 27 countries and employ 2. 2 million associates. In each of Wal-Mart’s new stores, LED lights are used to save energy. Stores in Hawaii and California are equipped with solar panels allowing them to produce 30% of their own energy. This type of innovation allows Wal-Mart to be more energy efficient helping the communities and countries of which they are a part (external innovations). Wal-Mart’s innovative leadership includes management teams using Smartphones and state-of-the-art monitoring systems.
These innovations allow management to lead their staff successfully no matter where the managers are. The controlling function of management uses closed monitoring in-store systems, innovative approaches, and computers in the stockroom. Wal-Mart has enacted checks and balances and control of incoming supplies allowing stores to maintain fully stocked shelves to serve consumers better (internal innovations). Another innovation introduced by Wal-Mart Labs on November 14, 2012 was the launch of the “Goodies Co. , a monthly food subscription service for consumers to savor delectable foods and discover new items.
” This is a food subscription that costs only $7 dollars a month, including tax and shipping, allowing consumers to savor delectable foods and discover new items. The Goodies, Co was created by Wal-Mart Labs and underscores Wal-Mart’s commitment to e-commerce and its use of social innovations to create new offerings for consumers (Wal-Mart Corporate, 2012). With Wal-Mart implementing innovations such as this, it is easy to see that internal and external innovations have a positive effect on the four management functions. Another internal factor that influences the four functions of management is diversity.
Diversity represents age, ethnicity, race, gender, education, skills sets, sexual orientation, mental and physical state, and socioeconomic status. An organization can adapt to diversity and employee a diverse workforce to obtain set objectives and goals. By employing individuals from different backgrounds and experiences, organizations can more effectively market to consumers from different racial and ethnic backgrounds, women, and gay or transgender consumers. Diversity is thought to breed creativity and innovation. The goal of diversity is to remove the racial, social, or orientation minority status.
With a diverse workplace, employees learn about each other in ways, such as their likes and beliefs, and they get to know one another. Prejudices usually come from personal experiences, values and norms, the media, and family and friends. Controlling or managing a project can be difficult when working with diverse staff. Issues like language barriers and their beliefs can cause conflict. Staying professional and treating everyone equally will help avoid this conflict. Employees will believe that their performance, ideas, and commitment are respected and appreciated.
With a diverse workplace, Wal-Mart extends access to different customers. Wal-Mart is the store that one can go to and find most everything needed, truly a one stop shop store. Wal-Mart offers food, clothing, gardening, workout equipment, and most everything in between. When one thinks of diversity in an organization, one thinks Wal-Mart because of the wide variety of merchandise they offer used by many different cultures. When working with such a large company such as Wal-Mart, there are many struggles that can occur that affect the flow of the everyday activities.
A factor that can affect both the external and internal functions is ethics. When referencing Wal-Mart, the struggles they face internally with ethics is their employees. Making sure employees understand the policies and compliance rules is important. Certainty that any situation with the customers or employees must be treated with respect is imperative. A small situation can be quickly blown out of proportion if not handled ethically. Staff members must be properly trained and prepared for any negative situations that may occur.
They should know the order of procedure and who to contact for instructions to ensure the situation is resolved quickly. Ethical principles have a large foundation for any organization and are a very broad area to cover. Therefore, it is each individual’s responsibility to interpret and understand how to handle any situation to avoid further implications. Wal-Mart’s strong ethical policies have contributed greatly to the strength of their organization. Wal-Mart is one of many leading retail organizations whose functions of management are affected by globalization, technology, innovation, diversity, and ethics.
They have taken the affect of these factors and created a positive outcome. This has allowed them to grow to a worldwide organization operating under 69 banners in 27 countries and employ 2. 2 million associates with 1. 4 million of those in the United States (corporate. walmart. com, 2012). Very impressive for a single store opened in 1962 in Rogers, Arkansas. Sam Walton’s visionary leadership, along with generations of associates helping customers and communities save money and live better has resulted in an organization spanning the globe and offering these services to people a world away from that little town.
References: Bateman, T. S. , and Snell, S. A. (2011), Management (9th ed. ). Retrieved from the University of Phoenix eBook Collection database Investor’s Business Daily (2001), “Internal and External Factors of Business. ” Retrieved from www. Investors. com Kabel, M. (2006), Wal-Mart Stores creates diversity panel. Retrieved January 19, 2013 from Wake-up Wal-Mart: http://www. wakeupwalmart. com/news/20060424-ap3. html. Wal-Mart Stores, Inc. , Our Story, Global Responsibility (2012). Retrieved January 19, 2013 from http://corporate. walmart. com/.