Business Studies
Discussion must be in current APA format and must include a reference list. Reference sample make sure to include DOI-Drollinger, T., Comer, L. B., & Warrington, P. T. (2006). Development and validation of the active empathetic listening scale. Psychology & Marketing, 23(2), 161-180. https://doi.org/10.1002/mar.20105 There needs to be 2 scholarly references (2017-2022) and 1 biblical references from the King James bible in the paper Minimum of 275 words in the body Minimum of 2 sources from the literature in addition to course texts Current APA format must be used. Content must include: • Summary of the author’s Thread – no less than 150 words • What you agreed with, did not agree with and why – no less than 125 words • Support your factual assertions with citations.
Discussion to Reply to:
The External Business Environment
According to Keller (2014), a business’s primary responsibility is to contribute to the common good in the neighborhood in which it is located. Unfortunately, there are groups whose only goals are financial gain and increased influence (Keller, 2014). Earning as much money as possible without breaking the law is the ultimate objective (Keller, 2014). Polluted rivers, unfair pay, bosses with an entitlement mentality, meaningless work, demeaning organizational structures, power struggles, poor customer service, and petty betrayal are all symptoms of this organizational culture (Keller, 2014). Fortunately, organizations with a gospel focus may respond to this organizational workforce (Keller, 2014). The gospel-centered company focuses highly on service quality, product attributes, and an ethical workplace free of antagonistic relationships and exploitation (Keller, 2014). However, tactics that help sustain corporate revenues and influence prudently are essential for operating a business with a gospel-centered attitude (Keller, 2014). The external environment in which a business works has a direct bearing on the structure that exerts so much sway inside that business, and the process of the analysis of the environment starts with a PESTEL analysis (Gamble et al., 2020). Despite careful planning and execution, a company’s bottom line might take a severe hit if the external environment is not well-investigated and strategically aligned to the organization’s goals through decision models such as a strategic group map (Gamble et al., 2020). Although the effects of such macro forces may not be significant enough to affect all businesses, it might be to the company’s advantage to pay careful attention to them nevertheless (Gamble et al., 2020).
Evaluation of the External Environment
To succeed in the modern business world, it is essential to constantly assess and adapt to the external environment (Yüksel, 2012). While conducting business, companies are urged to consider the broader world around them (Yüksel, 2012). Company decision-makers may better satisfy these demands by developing a strategic framework for managing macroenvironmental incidents, happenings, and activities (Gamble et al., 2020). Organizations may benefit from data-driven strategic management of company operations using a PESTEL study of the macro environment (Yüksel, 2012). Yüksel (2012) notes the significance of environmental analysis in gaining a competitive advantage, spotting potential dangers, and opening doors for fruitful collaboration with other businesses. When running a business, PESTEL analysis serves two primary purposes. One advantage is that it reveals information about the context in which the firm functions. The second primary role is to provide the firm with knowledge and data to help it foresee potential challenges and opportunities (Yüksel, 2012). Examining the political, economic, social, technical, environmental, and legal or regulatory contexts within which an organization function is part of the process known as assessing the external environment (Gamble et al., 2020). To illustrate how to conduct a PESTEL study to monitor the external environment for potential shifts, consider the following items (Yüksel, 2012):
P (Political): Data on government actions in the economy, tariffs, tax laws, and trade policies are all available for business analysis. In addition to the present political and financial institutions’ involvement.
E (Economical): Current interest and unemployment rates, inflation rates, and the per capita domestic product might impact organizational strategy. The market’s size, growth, stock market bonds, and exchange rates all matter in the present economic environment.
S (Sociocultural): This data includes studies of social values, changes in attitudes, and cultural variables as shown in people’s ways of living. Moreover, considering the current population size, projected population growth, and age distributions, the organization might be impacted.
T (Technological): While not every business will be affected by this topic, it is vital to consider issues like R&D, patent protection, and copyright regulations. The government’s engagement in online activities is another concern.
E (Environment): Weather, climate change, water scarcity, and ecological concerns are all environmental themes that fall under the environmental factors.
L (Legal & Regulatory): This is crucial in analyzing consumer, labor, and anti-trust legislation. As well as rules concerning workplace safety and, in certain situations, minimum wage requirements. (Gamble et al., 2020)
Key Sources of Power and Weakness
In the second section of Good Strategy/Bad Strategy, Rumelt (2017) explains that a good strategy gives an organization authority. Further, Rumelt (2017) says that power sources may be used tactically and strategically. In the short term, it may be possible to address operational concerns using existing tools and procedures. In the long run, these tools and rules may be used to build up skills for the organization that would be useful in the future (Rumelt, 2017). The organization’s influence comes from its policies, resources, and short-term or long-term activities. According to Rumelt (2017), who elaborates on the concept of power’s conceptual foundations, organizational sources of power are the confluence of ideas, efforts, and deeds that may be utilized as bargaining chips. A critical pivot point is the largest source of power in an organization since it is the moment these levers may be pushed to make a significant impact (Rumelt, 2017). According to Gamble et al. (2020), competition among sellers is fostered by the presence of competitive forces in an industry, and according to Rumelt (2017), a competitive advantage results when a company can produce at a lower cost, giving more excellent perceived value, or a combination of the two. To fully grasp the business’s competitive advantage, leaders must know their external and internal surroundings concerning their rivals (Rumelt, 2017). The organization may better comprehend their competitors’ vulnerabilities and avoid their own when planning strategic initiatives once they have analyzed their external and internal surroundings (Rumelt, 2017). Finding the organization’s competitive edge requires leaders to zero in on what sets them apart from the competition (Rumelt, 2017).
Strategic Group Map Decision Model
The information provided from the PESTEL analysis could be used to draw a strategic group map decision model to understand best the level of competitiveness amongst the ecological niches, the position of the organizations, and the industry dynamics (Meilich, 2019). The PESTEL analysis will allow for a smooth building of the strategic group map, as the PESTEL analysis provides the necessary information to build the map (Meilich, 2019). Beginning with the industry definition that helps develop strategic qualities to differentiate the organization from the rest will allow for a division of these organizations into smaller groups based on geographic coverage, pricing, services, and ambiance and allow for two primary dimensions to be drawn on the map for these organizations to be placed and then interpreted (Meilich, 2019). The decision model of a strategic group map helps take a competitive landscape that may be complex and place it into a visualization manner that is easy to understand (Meilich, 2019). Also, the group mapping helps simplify the complex dynamics of the environment by focusing on smaller critical strategic competitive factors (Meilich, 2019).
A potential downside to this type of decision model is a thin line between its simplicity and the complexity of the competitiveness of a market (Meilich, 2019). While the map is simple, there may be an unnecessary desire to overcomplicate it and include too many dimensions and strategic factors, thus rendering any strategic group map impossible to read and interpret if it were too cluttered with information (Meilich, 2019). The model would pan out best in the hands of an analyst who can find the happy medium between oversimplification and sketchy details (Meilich, 2019). The strategic group map assumes that traditional business borders remain constant and unchanged (Meilich, 2019). The concept presented here would need to adjust as these business borders move, and the scope of the strategic group map would also need to expand during organizational upheaval times (Meilich, 2019).
While Gamble et al. (2020) suggested that environmental forces may not have a large enough impact on companies to warrant attention, Yüksel (2012) concluded his study that understanding the external factors influencing a sector may help firms gain an edge. Specifically, an examination of internal and external industry aspects is required to comprehend the organization’s strengths and weaknesses concerning its rivals (Rumelt, 2017). When combined with a PESTEL analysis tool, which can help provide the framework and processes needed for external environmental factors (Yüksel, 2012), a business model like a strategic group map can help provide a visualization (Meilich, 2019) of where to align strategies through organizational levers to create a competitive advantage (Rumelt, 2017).
ANSWER
Discussion Reply 770
I agree with the post that the primary responsibility of a business is to contribute to the common good of the community or neighborhood in which it’s located. However, there are organizations whose main goals are influence and financial gain. A company’s operations are influenced by its external environment. The external environment consists of the events and conditions outside the company that influences how they operate (Majid, 2021). The external environment of a business consists of political, economic, social, legal, demographic, technological, and global sectors. The management has to understand the changes in the external environment and the impact of these changes on the operation of a business.
I agree with the post that to succeed in the modern business environment, a company has to constantly evaluate and adapt to the external environment. The process of evaluating an external environment starts with creating a framework that drives the analysis. Developing a framework for managing macro-environmental happenings, incidents and activities help in identifying the potential dangers, gaining competitive advantage, and seeing opportunities. PESTEL analysis is one of the frameworks for studying the external environment. PESTEL analysis allows the business to understand the environment in which it operates and gain knowledge of the potential opportunities and challenges (Janet, 2013). The PESTEL analysis examines the economic, political, technical, social, legal, and environmental contexts in which an organization operates.
The confluence of ideas, deeds, and efforts are effective sources of power. These create a competitive advantage that enables a company to perform better than its competitors. For instance, the competitive advantage results when a company produces at a lower cost, which gives a more excellent perceived value. I agree that an organization needs to find the competitive edge to understand what makes them unique from its competitors.
The Strategic Group Map Decision model entails the use of visual representation of the entire industry, which helps in making decisions. It helps in visualizing and analyzing the rivalry and competitive environment within an industry (Armstrong, 2019). This helps understand the strategic direction of companies in the industry, thus shaping the company’s strategic moves and discovering untapped potentials and opportunities and alternative paths to success. Proverbs 12:15 says that a way of the fool is right in his own eyes, but a wise man listens to advise. In the same way, a successful organization analyzes its environment, which offers advice on the right decisions.
References
Armstrong, R. (2019). Revisiting strategy mapping for performance management: a realist synthesis. In International Journal of Productivity and Performance Management (Vol. 68, Issue 4, pp. 721–752). Emerald. https://doi.org/10.1108/ijppm-08-2017-0192
Janet, T. (2013). The PESTEL Environment and Its Impact on the Value Created. In INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY (Vol. 6, Issue 2, pp. 805–816). CIRWOLRD. https://doi.org/10.24297/ijmit.v6i2.738
Majid, H. A. (2021). Analysis of the External Environment and Internal Control of Company Performance. Inovbiz: Jurnal Inovasi Bisnis, 9(1), 70-77. http://dx.doi.org/10.35314/inovbiz.v9i1.1812
