Briefly comment on the following : (a) Environment and management influence each other. Vivek Economics & Accountancy

 

Briefly comment on the following :

(a) Environment and management influence each other.

Answer 

Correct, there are a number of internal environmental factors that influence the strategic decisions in a business. Some of these factors are:

1.   Value system and ethical standards which the organisation has adopted;
2.   Mission, goals and objectives of the companies as they determine the priorities, direction of development, philosophy, etc. of the business;
3.   Organisational structure determining the extent of professionalization of management, characteristics of available human resources like skill, morale, commitments, attitudes, etc.;
4.   Physical assets and facilities like nature of available technology, production capacity, hold on distribution logistics, which has a direct bearing on marketing efficiency;
5.   Financial factors such as financial position, composition of funds, sources of funds, capital structure, financial policies, etc. of the company; and
6.   Corporate image and brand equity which the company has created over the years.

 These internal sources of a company determine the degree of strength or weakness which a company has. Every company is supposed to make an efficient use of these sources to adapt its strategies to the external environment within which it operates.

Briefly comment on the following :  (a) Environment and management influence each other. Vivek Economics & Accountancy