Environmental Forces that Impact the Business-Samples for Students

Question: Describe the organisational structure of the business. Discuss the external and internal environmental forces that impact the business. Answer: Organizational structure means hierarchical arrangement of lines of communications, authority, rights and duties of an organization. Organizational structure is responsible for determining the manner in which power, roles and responsibilities are controlled, assigned and coordinated along determining the flow of information between the various levels of management (Mills, Bratton, Mills Forshaw, 2006). The organizational structure is dependent on the objectives and strategies of the organization (Baligh, 2006). The focus of this essay is on the company Siemens. This essay explores the organizational structure of Siemens, the external and internal environmental forces and risk that impact its business along with suggestions regarding important business functions and business practices decisions for the enhancement of organizational performance and achievement of strategy. Siemens follows the organizational structure of a company where the operations are organized in three sectors with 15 divisions. The structure is managed by the managing board of the organization. The key divisions of Siemens include infrastructure, industry, energy and healthcare. Their positioning along the electrification value chain is maintained by the key drivers of the business of Siemens which include electrical energy, electrification and automation. Moreover, risk mitigation activities are always taken into consideration by way of adopting a risk based approach (Siemens, 2018). The business of Siemen is impacted by various external and internal environmental forces. The external environmental factor includes the economy, competition, politics and customers and suppliers. On the other hand, the internal environmental factors include employees, company culture, finance, etc. (Sherman, 2018). Since Siemens is involved in the business of power generation and transmission, it is significantly affected by the market trends of undertaking sustainable business practices by way of shrinking their carbon footprint and making the use of more renewable energy resources. The business of Siemens is affected by a variety of threats relation to competitors, global environment, political factors, new technology, etc. (Pride, Hughes Kapoor, 2009). Market conditions such as changes in the interest rates and market rates affects Siemens. While performing business in other countries, the profitability of Siemens is severely impacted due to variations in the foreign exchange ra tes. Moreover, when new technologies are introduced in the market or innovations take place, the complete scenario of the market is changed due to which Siemens faces significant variations in the demand of its products. The external environmental forces require Siemens to take into consideration the strategies of the competitors for capturing the market and taking necessary steps for formulating own strategies. Skills are required by Siemens to take necessary decisions and for performing the day to day operations of business. For this purpose, Siemens requires to make the employment of competent individuals who meet the eligibility criteria for employment. Proper consumer, market and industry analysis is required to be performed from time to time in order to take into account the changes taking place on constant basis. Therefore, the environmental forces severely impact the business of Siemens. Various risks are confronted by Siemens such as the volatile nature of the energy prices which has the direct impact on the profit. Moreover, various financial risks relating to interest rates, exchange rates and credit risk impacts its profitability from time to time (Hill, 2008). Since Siemens have spread its operations in the global market, it experiences the risk of competition from the major companies of this sector across the world. The competition risk, if not met effectively, has the capability of leading Siemens towards the closure of its business and loss of reputation. Societal risks are also experienced by Siemens during the expansion of their business in the various parts of the world. The difference in the culture of the foreign markets leads to difference in their needs and requirements (Hamilton Webster, 2015). In case, Siemens do not address and understand the culture of the place of its expansion, then it may face a risk of alienating customers and losing its profi tability position (Ferraro Briody, 2017). When the social structure of the place of business is not a good fit then the business faces a risk in survival. Global economic risk are faced by Siemens due to weaknesses in certain economies, industries and markets which leads to a unexpected fall in demand for its products and cannot be controlled by Siemens. Furthermore, changes in the laws, rules and regulation presents legal risks for Siemens. If proper attention is not paid towards the compliance of these laws, rules and regulations then strict penal actions may apply on Siemens.For the enhancement of the organizational performance of Siemens, certain business practice decisions should be made regarding high performance work practices, benchmarking, employee engagement, etc. Since it is the employees who work for the success of the organization, Siemens should take steps for the purpose of empowering the employees to take better control over the decision making related to operations and work (Macky Boxall, 2007). This will result in motivation among the employees along with an effective flow of communication that will significantly assist them in working as a team. Siemens should also aim at achieving employee engagement by way of restructuring process for making it interesting, challenging and motivating. Proper information should be provided to the employees regarding the performance and operations of the organization in order to make them aware regarding the happening in the company and creating a sense of job security. High performance work practices should include the financial reward to be offered to the employees for their higher performance in order to motivate the employees (Timiyo, 2014). When the employees will get motivated, the performance of Siemen will automatically improve. It should also include innovation or employee suggestion programs where employees are given an opportunity for suggesting their innovative ideas for enhancing organizational performance (Combs, Liu, Hall Ketchen, 2006). High performance work practices also includes HR practices relating to performance appraisals, recruitment, training and development, etc. that focuses on the skill development and human capital investment within the organization (Caruth, Caruth Pane, 2008). Moreover, Siemens should focus on the adoption of best practices that is the best ways of functioning in order to achieve the objectives of the business. This can be done in the form of quality management, information management, stock control, etc. which will result in enhancing the performance of Siemens in the market. Benchmarking will allow Siemens to compare their business with the other businesses which have attained the heights of success for highlighting the areas where there are requirements for improve ment. For the purpose of achieving the strategy of focusing on innovation- driven growth markets, getting closer to the customers and using its power, Siemens need to concentrate on the most important functions within the organization. The strategy will be achieved only when the products will be produced by Siemens in accordance with the requirements of the customers. For this, Siemens should focus on the operations function that will plan and coordinate the resources required for designing, producing and delivering the products to the customers. Siemens should assure that there is availability of enough capital for the different functions performed in the organization including research and development for bringing innovation in the products. Siemens desires to be counted among the best businesses for which it requires to focus on its human resource function for hiring the exceptional employees and creating a motivated, excellent and expert team (Siemens, 2018). The employees will make be st efforts for the organization when Siemens will take steps for their development, by providing them equal opportunities and encouraging cooperation across all borders. Further, Siemens should focus on the marketing function for promoting the products to the target customers and bringing the feedback of the customers to the organization. This will assist Siemens in increasing the sales of the business. When Siemens will have equal focus on all the functions of the business then it will lead the organization toward the achievement if the strategy. Therefore, it can be concluded that the business of Siemens is affected to a great extent by the internal and external environmental forces such as threats, trends, skills, etc. For meeting the requirement of its customers, Siemens need to consider their needs and want, make the employment of individuals and make the production of products in accordance with the needs. Siemens is confronted with a number of risks while conducting the business such as financial, global economic and societal risks. Furthermore, some business practices decisions regarding high performance work practices, benchmarking and employee engagement should be made by Siemens in order to motivate the employees and enhance the performance of the organization. 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