managerial response to changes in business environment
Answers
Answered by
25
Business Environment: Importance of Study and Response to Changes
Importance of the Study of Business Environment:
Smooth functioning of business cycle depends on availability of inputs and disposal of output.
Business enterprises obtain inputs like raw-materials, machines, technology, manpower etc. from the society (which is part of business environment); and dispose of output i.e. finished goods to society.
Hence, business managements must study business environmental factors so as to be aware of changes in input supplies, changes in social factors like consumer behaviour, state of competition in industry etc. to ensure smooth functioning of their business cycles.
Some examples of opportunities for gain might be:
1. Export concessions offered by the government.
2. Rising demand for many products (due to expanding markets)
3. Availability of skilled man-power (due to rising levels of education in society).
4. Availability of latest technology etc.
Managerial Response to Changes in Business Environment:
Managerial response to changes in business external environment means how a business enterprise cope with environmental uncertainties. A business which cannot manage environmental influences successfully may disappear in the short-run or long-run.
Some of the means through which business managements can respond to changes in business environment are suggested below:
(i) Installation of MIS (Management Information System):
For scientific decision making under conditions of environmental uncertainties, accurate, precise and timely information is needed by management. This purpose may be well-served by installing a MIS. MIS is a planned and well organized information system; under which vital information for management decision-making is collected, processed, evaluated and timely supplied to executives – needing such information.
(ii) Forecasting:
Systematic forecasting of relevant business environmental factors may help management in taking sound strategic decisions. Statistical and mathematical techniques like probability, index numbers, correlation, regression, time-series etc. may be used for purposes of scientific forecasting. Of late, much management experts have also conducted forecasting on the basis of astrology.
(iii) Recruitment of Experts:
Experts from social, economic, financial and political fields may be recruited by business enterprises; that may help management in skilled decision-making – by providing the advantage of their expert knowledge.
(iv) Innovations:
Management may try to manoeuvre business environmental influences by coming out with innovations, which may include:
1. Development of new shapes, sizes and designs of old products
2. Expansion of old markets, by introducing new products.
3. Discovery of new markets – for old and new products.
4. Development of a new process or technique of production.
5. Suggesting new uses of the old product.
(v) Path of Least Resistance:
This is a strategic device to cope with business environmental forces. Under the approach of ‘path of least resistance’, a business enterprise may follow a new course of action to continue with its operations successfully rather than confronting with environmental forces.
For example, finding intense competition in the urban market for its products, a firm may start searching rural markets for selling its products where there is less acute competition.
(vi) Acquisitions, Mergers and Joint-Ventures:
This again is a strategic measure devised for coping with business environmental influences. Acquisitions, mergers and joint ventures are a sort of business combinations, which make business units stronger by combining with one another; and enable them to face environmental pressures and uncertainties with more strength and confidence.
(vi) Systematic Adaptation:
Intelligent business managements, adopt a policy of ‘systematic adaptation’ to business environmental changes. In the light of the trend of environmental changes, they may evolve certain techniques to more successfully managing environmental forces.
Some such techniques may be:
1. Gradual de-centration of authority to lower levels of management which are in a better position to feel the pulse of the market.
2. Introducing flexibility in organisational structure.
3. Emphasizing more on social responsibilities, to win the popularity of general public’s, in their favour
4.Gradually switching over to new technology etc.
Importance of the Study of Business Environment:
Smooth functioning of business cycle depends on availability of inputs and disposal of output.
Business enterprises obtain inputs like raw-materials, machines, technology, manpower etc. from the society (which is part of business environment); and dispose of output i.e. finished goods to society.
Hence, business managements must study business environmental factors so as to be aware of changes in input supplies, changes in social factors like consumer behaviour, state of competition in industry etc. to ensure smooth functioning of their business cycles.
Some examples of opportunities for gain might be:
1. Export concessions offered by the government.
2. Rising demand for many products (due to expanding markets)
3. Availability of skilled man-power (due to rising levels of education in society).
4. Availability of latest technology etc.
Managerial Response to Changes in Business Environment:
Managerial response to changes in business external environment means how a business enterprise cope with environmental uncertainties. A business which cannot manage environmental influences successfully may disappear in the short-run or long-run.
Some of the means through which business managements can respond to changes in business environment are suggested below:
(i) Installation of MIS (Management Information System):
For scientific decision making under conditions of environmental uncertainties, accurate, precise and timely information is needed by management. This purpose may be well-served by installing a MIS. MIS is a planned and well organized information system; under which vital information for management decision-making is collected, processed, evaluated and timely supplied to executives – needing such information.
(ii) Forecasting:
Systematic forecasting of relevant business environmental factors may help management in taking sound strategic decisions. Statistical and mathematical techniques like probability, index numbers, correlation, regression, time-series etc. may be used for purposes of scientific forecasting. Of late, much management experts have also conducted forecasting on the basis of astrology.
(iii) Recruitment of Experts:
Experts from social, economic, financial and political fields may be recruited by business enterprises; that may help management in skilled decision-making – by providing the advantage of their expert knowledge.
(iv) Innovations:
Management may try to manoeuvre business environmental influences by coming out with innovations, which may include:
1. Development of new shapes, sizes and designs of old products
2. Expansion of old markets, by introducing new products.
3. Discovery of new markets – for old and new products.
4. Development of a new process or technique of production.
5. Suggesting new uses of the old product.
(v) Path of Least Resistance:
This is a strategic device to cope with business environmental forces. Under the approach of ‘path of least resistance’, a business enterprise may follow a new course of action to continue with its operations successfully rather than confronting with environmental forces.
For example, finding intense competition in the urban market for its products, a firm may start searching rural markets for selling its products where there is less acute competition.
(vi) Acquisitions, Mergers and Joint-Ventures:
This again is a strategic measure devised for coping with business environmental influences. Acquisitions, mergers and joint ventures are a sort of business combinations, which make business units stronger by combining with one another; and enable them to face environmental pressures and uncertainties with more strength and confidence.
(vi) Systematic Adaptation:
Intelligent business managements, adopt a policy of ‘systematic adaptation’ to business environmental changes. In the light of the trend of environmental changes, they may evolve certain techniques to more successfully managing environmental forces.
Some such techniques may be:
1. Gradual de-centration of authority to lower levels of management which are in a better position to feel the pulse of the market.
2. Introducing flexibility in organisational structure.
3. Emphasizing more on social responsibilities, to win the popularity of general public’s, in their favour
4.Gradually switching over to new technology etc.
Answered by
4
The managerial response to changes in business environment includes the following.
Explanation:
- Some of the managerial roles and responsibilities o the change in the business environment includes:
- Anticipation and adaptation, that is they can adapt to the expected changes in the environment. With the availability of the information gained from forecasting. Such as hotels and restaurants and located on the hills stations have a large number of tourists.
- Smoothing and leveling that is in order to increase the sales throughout the year during the time of low demands may offer discounts on prices et.
- Competitive advertising, firms may focus on competition such as Pepsi and cola have increased their market shares. Upgrading technology as the latest technology can prove a competitive edge in the market.
Learn more about the managerial response to changes in business environment.
- brainly.in/question/4280088 answered by kiranteja2.
Similar questions