Business And Management Internal Environment – Factors, Analysis And Decision Making

Internal Contextual Factors that Impact Business

Discuss about the Business and Management Internal Environment.

Businesses exist to make the profit. In the process of realizing investment returns, the observance of efficiency and effectiveness in the whole procedure is very vital. Therefore, the analysis of the critical aspects that may influence the management of the business functions becomes one of the fundamental issues to be addressed by the businesses.  Management should scrutinize all the impactful aspects of the business environment to aid the business in achieving its core objectives. It is through these internal businesses factors whereby the tactical and strategic management decisions are made. This paper focuses on exploring the critical factors that impact management within the business context. Alternatively, the report will also determine how the managers can use these factors to make beneficial decisions for the success of the business.

Business environment differs from one company to another. Likewise, impactful forces within the business vary from one to another. For example, there are internal factors that are more challenging than the others. Therefore, the management should make strategic and tactical decisions based on the effects of the internal factor to the operation of the business (Caldwell, 2006). This approach will help the management to establish varying degrees of controlling these factors. Alternatively, the management can make an effective decision which will enhance the condition of the internal business factors. Below, this paper is going to discuss how the understanding of the internal business factor is important for decision making within the context of the business.

Internal Communication

Business culture is built on internal communication (Kronsbein, Meiser, & Leyer, 2014). Internal communication includes aspects such as policies, philosophical statements, newsletters, training materials and interpersonal relationships. Employees will be motivated if the internal business communication is courteous and shows respects to one another. Through internal communication, employees’ achievements will be recognized. Alternatively, effective internal communication facilitates dissemination of instructions by the management to the employees. This enables the subordinates to execute their roles effectively as per the instructions of the supervisor. Again, internal communication offers an opportunity for the company management to issue company goals and missions and ensure that the company employees conform to them on long term basis.

Structure

Business structure affects day to day operations of the company (Tran & Tian, 2013). Besides, organization structure determines how the activities are undertaken and managed within the business context (Herath, 2007). For example, the business structure may be sorted out in teams or departments. On the other side, the organization can be structured in such a manner that the company employees work with outsourced contractors. The structure will be impactful on the number of employees the company should hire, roles of employees, the collaboration of departments, the levels of hierarchy and the competency of employees to be engaged by the company. Therefore, the management should decide to adopt to the organisation structure based on the operations and activities of the business. For example, if the company aims to reduce the cost of workers the management can choose a structure that is based on contractual work. 

Internal Communication

Organization Leadership

Business leadership is one of the most impactful business internal factors. The leadership style adopted by the company management affects how the operations and activities. Besides, it influences the process of decision making within the organization and how employees interact with each other. Dawson (2006) noted that organization direction has cultural implications that determine the value of the company employees, the effectiveness of communication, the level of friendliness within the organization and either or the positive business internal environment. Therefore, the managerial leadership decisions should ensure that the critical leadership aspects that influence the success of the business are given priority. Alternatively, the organization leadership should be forward looking to for effective decision making.

Employees’ Strengths.

The vision of any company is to acquire highly qualified and competent personnel that will help the company to achieve its set objectives.  The business with employees who possess the above qualifications which experience improved operations compared to the competitors. To improve the value and strength of business employees, management should establish strategies that will ensure that workers optimize their forces as they strife the company goals. Studies have found that highly motivated and talented employees tend to perform much better than unmotivated and less talented employees. Having found that employees’ impact effectiveness and efficiency of the business operations management should establish recruitment and selection policies and procedures that will enable the company to acquire best, competent and qualified employees.  The management should also set up motivation mechanism to encourage the hard working employees. 

Financial Resources

Finance falls into the category of one of the limited resources that the company may have. If the company is well financially endowed, it is likely to have a high competitive advantage compared to the competitors. However, this will only be possible if the company management can make a sound decision on the usage of the available financial resources.  For example, the allocation of resources in the various department within the organization should be based on the requirements. Alternatively, the authority to use resources should be approved by an authorized officer to minimize misappropriation of these scarce resources. Failure to observe this internal factor may lead to the failure or closure of the business before it has attained either its short term or long term goals. 

Business decision making occurs at all levels of the company (Lunenburg, 2011). In support Bonito (2012) noted that there is no one unique way of arriving at a decision and thus a manager should not assume that whatever decision he makes is always right. Instead, business decisions should be made according to the situation at hand. Again, it should be noted that decisions affect the people working in the organization and thus participatory decision making will be effective for the success of the business (DuBrin, 2012). In the following discussion, this paper will analyze how effective decision making can be achieved within the business context. Some of the steps that the management should put into consideration include;

Structure

Identifying the Problems.

Before making any decision, the management should strive to establish the root problem (Shra’ah, 2015). Failure to trace the critical issue facing the facing may lead to wrong decisions (Gilboa, 2011). As the paper has noted above business is the collaboration of people, and therefore the manager should involve all employees in the process of identifying the problem derailing the operations of the business.

Multiple Perspective Analysis.

Once the problem is identified, the manager can make a decision based on the several approaches (Ehrgott, 2011). For example, the manager can base the making on the decision to counteract the reactions of the people to the new decisions. This means a manager will make decisions which are people friendly. On the other side, a manager can make a decision based on his or her creativity or experience.

Short-Term Decisions

Operational decisions help the business in carrying out day to day activities (Eisenfuhr, 2011). These decisions help to solve immediate problems resulting from the actions of the employees. Management should have these decisions in pale to govern the operations of the business.

Follow up.

Making a decision and failing to implement the same will be the wastage of time and resources. Therefore, the management should make a follow up to ensure that the decisions are implemented. Besides, a manager should obtain the feedback from the employees involved in the implementation.

Conclusion

Organization Internal factors are impactful to the operations of the business. They affect both short-term and long-term decisions of the company. Management should have a full knowledge of all these factors to ensure that business goals are achieved with efficiency and effectiveness. When making the decisions to resolve problems that may arise in the event of carrying out the business, the management should observe the four critical steps discussed in this paper.

References

Bonito, J. (2012). Interaction and influence in small group decision making. New York: Routledge.

Caldwell, R. (2006). Agency and Change: Rethinking Change Agency in Organisations. London: Routledge.

Dawson, P. (2006). Beyond conventional change models: A processual approach. Asia Pacific Journal of Human Resources, 34(2), 57-70.

DuBrin, A. J. (2012). Leadership: research findings, practice, and skills. Mason: Cengage South-Western.

Ehrgott, M. (2011). Trends in multiple criteria decision analysis. New York: Springer.

Eisenfuhr, F. (2011). Decision making. New York: Springer.

Gilboa, I. (2011). Rational choice. Cambridge: MIT Press.

Herath, S. K. (2007). A Framework for Management Control Research. Journal of Management Development, 26(9), 895-915.

Kronsbein, D., Meiser, D., & Leyer, M. (2014). Conceptualisation of Contextual Factors for Business Process Performance. Proceedings of the International MultiConference of Engineers and Computer Scientists, 2, 12-14.

Lunenburg, F. C. (2011). Decision Making in Organisations. International Journal of Management, Business, and Administration, 15(1), 1-7.

Shra’ah, A. E. (2015). The Impact of Decision Making Styles on Organizational Learning: An Empirical Study on the Public Manufacturing Companies in Jordan. International Journal of Business and Social Science, 6(4), 55-61.

Tran, Q., & Tian, Y. (2013). Organisational Structure: Influencing Factors and Impact on a Firm. American Journal of Industrial and Business Management, 3(3), 229-236.