Internal Environmental forces
i. The personnel
Change in work attitude and commitment - ways to improve relationship, recruitment
techniques.
This refers to changes occurring in workers attitudes, values and levels of motivation ii. Organisational structure
Existing structure may not be meeting pressure of implementation of a strategy.
There may be too many organization layers leading to stifling of managerial initiative and slow
decision making process. The head office may be exercising too much power over branches and
other operational decisions, (i.e. decentralisational).
iii. Systems
There may be inadequate procedures for tracking progress of organizational activities e.g.
ineffective control systems.
iv. Technology
Changes may be introduced in the organizations manufacturing system because the existing
technology may be obsolete.
v. Financial
The company may be facing cash flow problems or increase in the cost of capital budgets
hence the need for a change on the budgeting activities of the company.
vi. Marketing and sales
Marketing research may fail to give early notice of key development in consumer
tastes/competitors behaviours. Sales personnel may also fail to meet agreed targets.
vii. Products/services
This is where new products are introduced which would require different production,
marketing and accounting methods.
External Environmental forces
i) Political/Legal Constraints:
Laws regulate every dimension of human existence. They prevent or stop the abuse of power. In
exercising their power over resource, managers increasingly come into conflict with societal
expectations and objectives. Business managers therefore face multitude of law as that limit their
various powers.
ii) Economic Constraints:
These include availability of capital, inflation, interest rates on deposits and loans and similar
factors that affect management practice. Business firms are increasingly influenced by
government/donor imposed economic policies e.g. Structural Adjustment Programmes (SAPs)
iii) Socio-Cultural Constraints:
These consist of the value system, socio-demographic characteristics and other basic
characteristics of people comprising the society. Such characteristics include attitudes, desires,
expectations, level of education, beliefs, religion, traditions, habits and customs of people in a
society. The population structure, for example, would influence decisions on what products to
produce by a business concern.
iv) Technological Constraints:
Technology refers to the sum total of the knowledge we have of ways of doing things, inventions
and techniques in areas of processes, machines and tools. Technology is the key to an
organisation’s transformation processes affecting processing speed as well as quality of the final
output.
Technology can offer organizations a competitive edge.
v) Ethical Constraints:
Ethics refers to the code of morals of a person or groups that set standards as to what is good or
bad, right or wrong in one’s conduct.
Management ethics are standards and principles that guide the actions and decisions of managers
and determine if their actions and decisions are good or bad. Ethical behaviour is fair conduct
that goes beyond laws and regulations.
vi) Ecological Constraints:
This refers to the protection of the ecosystem. This is currently becoming more critical as
environmental awareness increases globally.
vii) Constraints imposed by labour unions:
Through contracts negotiated with management, labour/trade unions may restrict what
management may want to do about wages, retirement plans, working conditions and employment
policies.
viii) Constraints imposed by competitor’s action:
A competitor through his actions places restrictions on what an organization can do. Pricing
decisions in many firms often reflect the pricing decisions of a leading competitor. Also, if a
competitor holds patent rights, he may restrict other organizations actions.
Kavungya answered the question on May 17, 2019 at 12:57