Organizational Culture

Managing External Factors

Companies are not able to eliminate external factors but they do have the ability to manage them. First and foremost, organizations need to stay well-informed on up-to-date information. With daily changes within industry, the economy, and society, there is a lot of information to keep up with. Establishing roles within a company to research and report on new information is a great way to delegate a very important task. For example, some organizations have a research and development team that is responsible for researching and creating new products. Human resource teams may be held responsible for keeping up-to-date with information around hiring laws or wage laws. These individuals would be required to share their findings and help to create a plan to accommodate for these changes. Without a system in place to ensure the latest information is shared and discussed, companies may face compliance issues or lose a competitive advantage.

Education is another way to manage external factors. For example, sustainability is a popular topic in today’s society. If a company chooses to become a more sustainable organization, it is important for them to establish a training and development program. A training and development program can help instill sustainability within the culture of an organization. An initiative like sustainability needs to be instilled and enforced throughout every level of an organization in order to be successful. The same goes for any new initiative a company would like to implement. Training should accompany any new law or policy change that changes how an organization operates. By educating all organization members, companies can better implement change.

Managing relationships is another important part of managing external factors. Developing healthy relationships with customers and suppliers is extremely beneficial. Customers are at the heart of most organizations. Without customers, most companies would not exist. Creating a good customer relationship allows organizations to understand how they can better meet customer needs. Customers are external factors that greatly influence the operations of an organization. Having a strong relationship with suppliers is also an important way to manage external factors. Providing clear expectations and needs to your supplier can alleviate future problems. Regulators are another group of individuals companies should foster a working relationship with. Examples of regulators include the health department, the FDIC, and the local fire marshal. Having a working relationship with these organizations and individuals can help organizations stay informed and aware of new policy changes or current issues within the organization that need to be addressed.


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Organizational Behavior by Icfai Business School is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.