External/Internal Factors Paper
Rhonda Augustus, Mia W. Brewer, Marsena Harvey, Bryant Jackson, Tammie Templeton
University of Phoenix - Charlotte Campus
Management: Theory, Practice and Application
Mr. William Crigger
November 08, 2008
In order to demonstrate how external and internal factors can have an impact on the four functions of management: planning, organizing, leading and controlling, our team has chosen to analyze the banking and finance industry.
There are external and internal factors or environments that impact the four major functions of management. External factors are defined as any type of occurrence outside of boundaries of a company's domain. Managers must be mindful of these factors, because these factors could have a substantial impact, whether it is positive or negative on the productivity of the organization (Bateman & Snell, 2008). For example, the recent issues pertaining to our country's leading financial institutions in regards to subprime lending, and other lending improprieties are external factors that have had a negative effect on the entire financial state of the economy. These are situations where no individual manager, for any single institution had control of the ultimate outcomes. This type of situation can have an overwhelming effect on how managers perform their duties. Situations of this magnitude have to be handled cautiously and analyzed carefully. In addition to the external factors impacting the phases of management, managers must also handle the internal factor or environment as well.
The internal factors or environment of the financial market consists of the organizational resources available to accomplish the company's goals. While embarking on these tasks the management of each financial institution is in competition with other financial institutions offering the same business structure. Organizational resources are therefore limited and the success of management depends on how well these resources are both acquired and used (McNamera, 1997-2008.).
A manager's analysis of the external and internal factors that an organization can face is instrumental in all phases of management. The manager must determine the issues, and document the necessary steps that must be followed to implement a course of action (Pakhare, 2007). In the Financial Services industry some common internal and external factors that affect management are; globalization, technology, innovation, diversity and ethics. As a team we will briefly discuss how each of these factors has an effect on the management in this industry.
Globalization is defined as a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. Globalization allows financial institutions the opportunity to utilize the foreign resources available to transition and...