In this paper I will explain how internal and external factors affect the four functions of management: planning, organizing, leading, and controlling. I will also include specific examples regarding globalization, technology, innovation, diversity, and ethics.
Internal and external factors affect all business. Normally internal factors originate from inside the control of the organization, like, mergers, board of directors change, or a hiring of a new chief financial officer (CEO). External factors are often caused from external forces beyond the control of the organization, like market conditions. When internal or external factors affect any of the four functions of management, the function affected will need to evolve to continue to be effective. For example, when an external factor of changing market conditions effect planning, the management will need to actively make changes to the goals and activities that an individual, work unit, or the organization itself will pursue. Internal factors that can effect planning would be when the company goes through a merger, acquisition, or when it removes and hires a new CEO, that has a “new idea” on the direction the organization should pursue.
When internal and external factors affect the second function of management, organizing, it will also have similar effects as it does on other functions of management. When internal factors affect organizing, for example, when a company experiences a significant loss of revenue or stock price resulting from an internal factor such as bad management then the organization of the human, financial, physical, informational, and other resources need to be adjusted to compensate for the change. An external factor effecting organization would be if the organization became unionized. The addition of a union would require a change in organizational structure of management.
Leading, the next step in the four functions of management, according to Bateman (2011), “leading is the management function that involves the manger’s efforts to stimulate high performance by employees” (Leading: Mobilizing People). Internal factors effect leading several ways. For example, if any of the other functions listed previously (planning and organizing) then that will also effect leading. For example, when an organization has been changed, change is required in the expectations of the employees and the management’s ability to stimulate high performance by employees. External factors that will effect leading is when new federal or local laws have been implement that limit or change the way an employer can stimulate high performance. For example, when a large corporation goes into insolvency or bankruptcy a temporary trustee often will be appointed that will oversee the company’s assets, liquidation, or restructuring. This trustee can also limit the incentives management may have offered top performing employees. Large corporations, especially in the financial sector will often have sizable...