Assignment 2: The effects of internal and external factors on four functions of management Introduction: In the world of management, there are many internal and external factors that affect the effectiveness and efficiency of management. For a management job, a manager has missions to deal with the following functions: Planning, organizing, influencing, and controlling. Hence, it is crucial for any managers to understand those factors clearly and comprehensively to conduct their jobs with expected outcomes.
This paper will emphasis on how internal and external factors influence the four functions of management through the five factors, namely globalization, innovation, diversify, technology, and ethics. Moreover, this paper will take some company in reality as examples to prove theoretical points of view. Globalisation affects significantly four functions of managements; however organising and influencing are the most noticeable factors which attract managers to maintain its power and targets oversea. Meanwhile, diversify is normally considered as a part of globalisation.
However, diversify is one way to reduce risk in operating; there are many ways of diversifying, and with each ways, there is a relative diversifying strategy. Accordingly, each strategy will affect four functions of management differently. In addition, technology affects the functions in the way that improving the effectiveness and efficiency of each function. For example, in controlling process, computing pregame can be useful to maintain the work-attending rates. Similar to technology, innovation noticeably affects the productivity in businesses.
A new idea in products can drive the key concepts of planning process; Apple with a concentration on innovation bases on the creatively forehead products: Iphone, Ipad. Lastly, ethics affects the influencing function with highest outcomes, but it also influences other function, organising for example with the consideration of ethical issues to build the operation management process. Globalisation: First and foremost, globalisation is an ongoing process in which an international spanning network of exchange intergrades step-by-step regional economies into one globally bigger market.
There is widely known that a company should have a clear plan or set of actions, which comes along with the aim and target of a company, in order to obtain success. Hence, this factor has a huge effect on a multinational corporation, which aims to go globally. For planning function, a manager should consider the following common components, which are different with a domestic company: import/export, license agreement, direct investing, and joint ventures. These elements are related to the term of new market.
Planning for newly particular market, thus, is a key factor for success. This is due to the fact that with each market, there are differently typical features resulting from economical, cultural, political environment within the market. The features, hence, affect the four components of a multinational company. At the same time, the process of organizing is also affected significantly in the way that changes the decision for management attitude with a determined planning for a market. In term of influencing, globalisation affects this function through cultural differences.
Based on particular cultural system in the market where company conducts businesses, the ways of influencing can be modified to meet the difference. For example, managers in foreign operation must have a standard knowledge in term of language in order to have an effective communication, which is important for present influencing on employees. Controlling is also complicated in globalisation since it relates to currencies difference and geographical distance. Hence, the choice of management in this term to maintain management power may be reinvoicing centers.
This approach is used to avoid scrutiny of government. (Sharpiro, 2006) The example for this viewpoint is the case of Target Corporation. The company did not establish any branches and stores internationally. However, Target has shown a great level of globalized business outside United States. The first step started in 2005 when the company showed its appearance in India and Bangalore. This step was conducted through license agreements with customer service representatives and team service, or Internet support and technical support.
Although claims that these activities could be considered as outsourcing, Target Corporation has been used a strategic planning process. According to Target (2005), globalisation is a hard step to go globe, which breaks a number of barriers which comes from difference in culture, political issues, economical circumstance and competition, to achieve the company’s target and provide the best service to its customers. In addition, the method of organizing its appearance abroad based on ethnocentric attitude, in which the management practices are based on mother company location, in this case is United Stated.
Target only set up sale representative outside US and provide Internet support. This can maintains the management power of the company to its branches Target (2010). Diversify: Coming together with globalisation process is the diversify issue which affect the functions of management. Diversify is a popular techniques in modern management to reduce costs and risks which are related to regional risks such as political risk, exchange risk, operational risk and economical risk. Diversify can be conducted in operation or location.
Diversify is a crucial factor which should be understood in planning process. Managers should notice that business should be run differently in different regions and different group of customers since there are various characters of customers, which require a diverse in products and service to serve the difference. Disney Entertainment Company is an example of this issue. The company shows its wide range of products and services to meet a number of various tastes. Moreover, all products of Disney are available in many languages. Diversify also plays an important part in other functions.
For example, organizing and influencing are related to various issues race, gender, age, personality, organizational function, etc. An illustration for this point is the diverse in assign tasks within the company. After a period of applying diverse in task assigning, the company realized that employees, who may not have full-required skills, could be reassigned to appropriate tasks. Rather than recruit new employees, who can create huge costs for the company, Disney can employee diversifies their human resource to avoid those costs.
According to this diversified strategy, determined recruitment goals of the group are the main elements of diversify planning. This planning process, thus, require the corporation with human resource manager to obtain greater representation level. For organizing, managers should match the process of recruiting, hiring, retention with the determined planning. In addition, with the aim of using the strategy effectively, managers should also support and encourage employee to participate the diverse tasks or group.
Beside, employees should be engage in the strategy actively to acquire skills and techniques within the tasks. In the term of controlling, managers should monitor the operation, which make the real tasks on the line with the strategy and the control measurement to be used to conduct the controlling with the best results. United Way shows its core value statement, which is the key for diverse planning, herein: “Diversity and Inclusion are core values for United Way.
We aspire every segment of the community in every aspect of our work and to demonstrate our commitment to and accountability for an inclusive environment in which differences are recognized, respected, valued and celebrated”. (United Way, 2008). With that statement, diverse organization provided company with a great opportunity obtains its goals and values in order to develop and retain higher level of diverse in human resource. Ethics What is more, ethics is another important factor, which affect functions of management. According to Bateman & Snell (2004, pp. 38), “ethics is the system of rules that governs the ordering of values”. The target of ethics is to apply the rules in organization to lead employee acting with an appropriate manners. In planning, ethics is a crucial factor, which should be included, to determine objective and target. Since ethics can be used to govern the employee’s actions, including decrease in attitude to jobs, decrease in commitment or fear for job loss due to globalisation or outsourcing, managers should include suitable human resource practices the planning to avoid those possibly negative points.
Consequently, ethics have positive outcomes on employees since employees are influenced significantly. An example is that when a company employs new practices, which enhance employee’s health, it can lift the working attitude in all employees. Furthermore, ethics can also have positive outcomes through affecting outside stakeholder, including customers and suppliers. For example, a company can have more customers when they can build up a positive image in customer’s eye under an ethical viewpoint. Lastly, ethics can influence management functions through the term of “government regulation”.
Once the company is considered as ethically strong and effective, there are less legal scrutinizes on the company’s activities. From these points, managers can apply a very different set of management practices in the four functions of managements. An illustration for the case of ethics effects is in Disney corporation ethics practices. According to Disney (2008), the company showed that business and ethical standards are crucial in any operations. In any functions of management, Disney has provided a clear set of ethical standards and rules for all employees to conducts their missions.
In addition, the company not only requires ethically activities in employee’s actions, but also built an ethical environment in which ethical are committed to be used to achieve a “balancing environmental stewardship with the company’s corporate goals and operations worldwide (Disney, 2008). Moreover, to retain ethical aims in corporate management, Disney showed its corporate responsibility on it website as “responsible for maintaining the ethical standards… these standards govern how to treat everyone with whom we have contract. These standards of integrity, honesty, trust, respect, fair play, and teamwork”(Disney, 2008).
Disney reported that since applying the ethics in employee’s missions, this leads to huge increase in company’s productivity and efficiency (Disney (2010)). In order to get that result, the corporation does not just show the ethical standards in its plan, it did have a number of steps in organizing, adjusting, and improving the ethical collection to serve its employees and society. Technology: General speaking, technology is considered as the techniques, methods, systems to be adopted to convert input (material) to output (product and service) (Bateman & Snell, 2009).
Technological advances play key roles in business such as using the internet to broaden market and reach new customers. Target, for example, has decided to end its partnership with Amazon when its contract expires in 2011, opting to build its own proprietary platform in-house. Target executives decided that in order to deliver a customized experience for their guests, best practices would be to assume full control over the design and management of the e-commerce technology platform, fulfillment and guest services operations to remain competitive with its competition (Bustos, 2009).
With this change, Target could accept multiple payments options not available on the Amazon platform (like PayPal, for example) and could even use pay-with-Target-points and other custom payment types. Target, like its competitor Wal-Mart, is active in the social media (Facebook, MySpace) and this change in strategy will help for campaigns like back to school, summer and Christmas sales. However, this method is going to require a great financial commitment in the areas of IT resources and ecommerce expertise.
Over the next two years Target will have to plan its integration strategy, gather its requirements and build its technological infrastructure to have a successful launch. According to Osten (2001), technology is considered as backbone of management system, which is used to increase effectiveness. It provides employees and managers useful information and method to adopt the information in learning knowledge; this leads to greater influence on organization change to acquire goal and capacity building. The effects of technology can be found in all functions of management.
For example, technology in planning can be seen in the successful application of technology in planning to support activities within the process; in order to achieve a effective plan, a manager must possess have a great stream of information in order to conduct a plan which can meet the business objectives(Geertman & Stillwell, 2009). The reason is that planning fucntion of management requiremnt a process of collecting, arranging and analysing a great source of data; this step can be done more efficiently with technology.
For example, financial budgeting software package can provide useful assisstance for manager to present a informed budgeting planing in detail. Moreover, another examples are demand forecasting, logistic planning tool. These tools not only make the management task simply, but also more reliable. In addition, in monitoring process to keep the business on track, technology can help manager to supervise the business process and track any mistakes happened.
For example, software applied in plants managing can determine any broken products and errors step in the plant quickly which can reduce the costs and enhance the monitoring proces (Gomes et al , 2009). However, the effects of techonology can be found the most frequently and clearly in controlling process (Demirkan et al (2008)). With a good technological system, managers can conduct their task much more easily and efficiently. Currently, technology adopted in organisation through an information system.
Since a particular function of management require particular informations to fullfill the demand of tasks. Information system can provide data for a particular task. For example, in controlling cost managing, financial managers can acquire information immidiately from the accounting reports, which are available weekly, monthly, or quarterly. Baed on this information, the managers can make their decision to give out appropriate influcing actions and re-organising operational activities, if needed, in order to meet the determined aims and objectives(Dunk (2007)).
Furthermore, with each level of management technology has different effects; and, a piece of information can be useful for one management function, management circumstance, but may not appropriate for others. According to Dunk (2007), the level of appropriateness depends on the activities for the manager using information, and the company’s plan assigned for the manager. Innovation: The last factor examined in this paper is the term of innovation in management functions. General speaking, innovation is considered coming together with the term of technology.
Technology and innovation, thus, are proved to have a great impact on management functions. However, in organization managing, innovation can be referred with creativity; innovation is a process to make creative viewpoint effectively. Hence, both factors are important for enhancing efficiency in organization. In planning process, innovation can be viewed to have many useful new ideas, including products, process, management, and technology ideas. This can drive the planning process significantly.
With comprehensive innovative products, a company can even terminate the currently strong business to enter new business objective and plan. For example, in the recent years, technological companies, IBM for instant, have many new innovative ideas in the computing world. Meeting other objective and innovative trend, the laptops and smart equipment become the new business area. Hence, in planning for business recently, IBM decided to leave the desktop computing field and put more investment in smart technology. Furthermore, in organizing process, innovative, somewhat, show some effects in utilize resources with appropriate manners.
For example, total quality management is newly recent innovation, which can be applied in organizing process to assign tasks with highest concentration on outcomes (Bossink, 2002). In influencing process, innovation can provide assistance for manager to affect employee through new useful approach. For example, a new package of software of accounting standards, which can help financial manager to identify the key issues in financial aspects in that year? In term of controlling functions, a new approach can affect the process and increase productivity of employees.
Incentive, for instant, is applied in almost companies in the past decades. This action, obviously, increases the working attitude; thus, increase the overall productivity of the organization (Imberman, 1998). CONCLUSION: This paper has presented a number of issues regarding to the relationship between internal an external factors, which affect the four management functions, namely planning, organizing, influencing, and controlling. Overall, all those factors were proved to have great impact on management functions in the sense that increase the efficiency an effectiveness of the functions.
Meanwhile, technology and innovation can bring a new approach in all managing steps, globalisation and diversify can positively affect the functions through the way that provides more opportunities for business and reduce risk of operation. Furthermore, ethics can be used in all functions in order to enhance the company’s image in public places as well as retain a strong human resource in the organisation. From these findings, this paper suggests that managers in modern business world should employee those factors more frequently to increase the organization’s performance.