Contemporary development in business and management Essay
The following document gives an analysis and descriptions to mobile phone organization Nokia based in America. It will analyze the internal and external factors that influence the industry, how decision making can be influenced by these factors, evaluation of the organization effectiveness. This document will also look at the area of that industry that requires improvements. All businesses, whatever sector they are in, will have plans, aims and objectives. In some cases these can be very sophisticated but in some small businesses very modest. Whatever they are a business will need to monitor its performance in relation to these goals.
The success of the any mobile phone organization relies heavily on a number of internal and external factors. This greatly influences the growth of the organization. Most mobile phone companies develop the phone with the aim of satisfying consumers and they keep on improving the product until people are satisfied. This has led to technological changes in the world. A mobile operator like Nokia introduces new products almost weekly to improve on the product. An industry is an organized activity that functions to produce and manufacture a certain product. Industries normally start to function with the purpose of profit
Need essay sample ? We will write a custom essay sample specifically for you for only $ 13.90/page
Internal and External Factors that Influence Mobile Phone Industry.
There are some factors that influence the Nokia mobile phone industry. The factors are further categorized into internal and external factors. External factors are those factors that a business cannot control and usually happens outside the organization. They also affect internal factors in the industry as well as objectives of the organization and the strategy it implements. Internal factors are factors that the organization can control and use to solve problems. (Centre for Electronic Commerce: 1996)
One of the major factors is competition from outside. The company needs to know the degree from outside. In order to know the degree the industry needs to know how it is fairing with the other relevant businesses. Competitors flood the market everyday, and the level of competition depends on how many small rival businesses exist, how many few rival businesses exist and how rapid changing of the market caused by consumer changing needs. An industry also needs to know its competitor behavior. It has to work out a strategy to remain immune to its competitors. It is mandatory for an industry to know the happenings of their competitors and be ready to respond effectively as it occurs. Most industries beat competition by cutting down prices of products, providing warranty and after sale services to its consumers, ensuring that the products are of quality and spending a lot of money on promotions.
Another factor is macroeconomic or economic factor. This factor affects the industry in the way that the government imposes taxes, demand of the product, exchange rates of currency in different countries if it operates globally, economic growth, rate of inflation and unemployment rate. Industries should consistently monitor the economic trends and evaluate them to ensure efficiency of organizations productivity.
Another factor is the global events that are happening worldwide. These events are usually hard to predict and they include: fires, earthquakes, wars, political changes that are going to occur especially in November and what the world is currently experiencing the increase of oil products. Since many businesses operate globally, a way of monitoring the happenings in the world is important to determine their response to these circumstances.
Legal is also a factor that influences the industries because it concerns the way the government passes the laws. It could be about labor, working hours and when they are passed they determine the way a business might survive. They are set by the government. Political factors influence the industry when there are changes in the government policies. For example, the government could ban the use of a product if it possesses health or any danger to its consumers.
Social factors are the behaviors of consumers and various communities of a particular country and have some influences on the industries. This are brought about by belief of people about a particular product. Businesses try to change their product in order to fit with consumers beliefs. Businesses should also be aware of their responsibilities socially. This can be the way they react to different communities. They also provide some social amenities to the society as a way of making people aware that the industry is not only interested in profit making but also in passing its benefits to the society. Most industries provide scholarship to students, create employment to societies and run positive campaigns against drug abuse. (Chau, S.B. and Turner, P.:2001, December 5-7)
Their benefits can be classified into social benefits and social costs. A social benefit happens when the company passes its benefits to the society, for example, building a new factory in another different place. This not only brings profit to the industry but also create job opportunity to the local community. Social costs are when the industries benefits have reverse effects on the society. The external factors are changing everyday. This is because the consumers cannot be satisfied hence competitors flood the market, technology emerges everyday hence forcing new products to be made and finally government policies change day by day.
As stated above the internal factors are those factors that can be controlled within the organization. They influence the function of the organization. Managerial influence is a factor as this contributes to the overall performance of the industry. The management functions; promote positive attitudes and increase motivation to employees, ensuring that employees have responsibilities to carry out, and increase skills of their employees by providing training and team building activities. The management of an industry is also responsible for the performance of the industry. It is their responsibility to make strategic decisions and control risks occurrence. There are some factors that the management uses to determine the performance of the company. These factors are business strategy that the industry is going to implement, implementation of new technologies as they emerge and carrying out research and developments.
The management should review objectives of the industry, the strategies that it implements and introduce innovations. They should be also monitoring the commitment of their employees and also their satisfaction once in a while. When the organization introduces changes then it should ensure that it satisfies the employees. The employees should be rewarded once in a while as a way of motivating them. When making decisions the management should put in mind the organizational culture and identity. Freel, M. (2000: 62).
Another internal factor is control. This is the assigning of tasks and the assigning of responsibilities as to the employees. The management should also be responsible in controlling risk occurrences and also the market. Control assists the management to foresee the future hence helps them to solve problems immediately as they occur. It is also a form of writing an account to what is happening in an organization. This in turn helps the management to make strategic decisions. It helps in the gathering of information. The aims of control include; decision making, proper planning and construction of business activities, construction and implementation of strategies and supports the generation of financial reports
Leadership is also another factor that influences the organization. Leadership affects the decision making structure of the organization. Leadership involves accomplishing missions and influencing people to do a particular thing in order to accomplish a goal. Wrong leadership values could lead to company dysfunctions. There are some leadership styles that the industry applies; one is bureaucratic leadership that involves following set procedures and standards.
This ensures quality, decreased corruption and increase in security. Second is charismatic; this is whereby team are assigned responsibilities and have the power to make decisions on their own without consulting the leader. They mostly work in teams and success is credited to the teams. The other one is autocrat ism where the leader is given the power to make decisions all by himself, and there is also democrat ism whereby the leader makes decisions when he has consulted the teams.
Resource influence is so another important factor that influences the industries. When resources are locally available then it makes it easy to manufacture the product. It also saves the cost of transport hence reduces the cost of production. (Lawrence, K. and Keen, C.D.:1997)
Motivation is also another factor. It is the work of the management to get things done in the organization and it is usually done by employees. In order to achieve this, the management should motivate the employees. When the management understands this it leads to effectiveness of management and good leadership. Workers who are motivated tend to work better than those who are not. It is therefore important to study the motivational principles for a business to be successful. Motivation is the key to improving performance. This is because performance is considered to be a function of ability and motivation according to (Chau, S. B.:2001). He also says that job performance=f (ability) (motivation). There are several ways that the management can provide motivations. They include; treatment of people should be fair, satisfaction of employee needs, rewarding employees according to their performance, setting reasonable goals and objectives, the forms of punishment should be effective and setting high expectations for the employees.
Measuring the performance of the company is very important in order to place the company with others. There are many ways of measuring the performance in mobile phone technology. First the organization needs to define its goals and objectives. This measure determines success of the organization. The goals and objectives should be made challenging and achievable at the same time. This helps to improve the market segment and retaining customers by reducing complaints. Secondly the organization needs to determine ways to measure performance. To do this they need to look at marketing strategies of the organization. This could include; growth of sales, the methods that are used to distribute the product, training on budget allocations, quality of the products and time of delivery of the product. Production is also another factor that the organization needs to look at. Factors to consider are the industries capacity to produce, expansion ability in future, availability of raw materials and suppliers. Company performance can be determined by company accounts, accounts of management and statistical database. Most companies use gantt charts to show the production of the product against time. ( MacGregor, R.C., Waugh, P., and Bunker, D.:1996). Another factor that influences the performance is the employee attitude .
The organization needs to develop data collection methods in order to generate reports that will be used in future to compare results. They are also used for reporting on trends that emerge regularly. The organization needs to compare itself with the competitors. This can be done by viewing the competitors’ reports to check their performance, publications that they make and the press releases. The other most important thing to do is to carry out research in order to find out the customers views about products, then they generate report on the findings. The other important thing that the mobile phone uses to measure performance is having an understanding of its strengths and weaknesses. This can be done by concentrating on strings of the company. Focusing to retain customers is also another important factor since it is a sure way to survive and in recent research it states that getting a new customer is more expensive in fact five times than keeping an old customer. The industries work to be loyal to their customers hence work hard to ensure that their products are of quality, fulfilling promises to their consumers and use old customers to attract others.
Changing to competitive environment is a factor that the industry considers. There are some factors that influence the changing to competitive environment. One is the positioning of the industry. Positioning is the creating awareness about products, the company itself and the brand to the new. This is important and is always the first step. It involves carrying out promotions and advertising the new product. Factors to consider when the mobile phone wants to position itself are: features of the product; the benefits of the products or what the product will do; types of products it can offer; comparison of the product with another similar but relevant and the class of the product. The customer can now distinguish the product by its function, the symbols used and experimenting the product. There are various steps that the mobile phone uses to position the product. They are identification of similar competitive products, identification of certain attribute that make the product unique, collecting views of the consumers about the product, determining the market target, and examining if it can fit between competitive products.( National Office for the Information Economy: 2000a)
The other factor that influences decision making of the mobile phone is the industry attractiveness. This is the way profit can be potential in a particular market. This then determinines the profitability of the market. Another factor that can be used is the crisis management. When changing to competitive market there the industry is prone to risks occurring every now and then. To help solve this risks, the industry prepares contingency plans in advance such that member can be called upon quickly to solve the crisis. Another way of preventing crisis is formation of a crisis team that helps to solve the problem internally and externally. The other method is acting quickly and solve the issue, using crisis management consultants is also advisable as they help to resolve issues quickly. The final way is to use accurate and information that is correct.
Another factor that influences the changing competitive environment is market segmentation. This is the process identifying the market, and breaking it into fragments where the industry sees the potential customers with similar characteristics and wants who will posses the homogenization characteristic. This is useful in order to sell the product selectively to different people. This will in turn help the organization to decide whether to go for full market fragment of half of it or different parts. These also position the company with its competitors in the market. It also develops a marketing mix. The industry bases its market segment according to geographic regions, demography, the behavior of the customer, differences in the product and psycho graphs. The steps that the industries follow are: identification of the total market; determination of the dimensions that exist; profiling the segments; selecting target market and determining the position of the industries in each fragment. The advantages of segmentation include: knowing the customer better; finding resource allocation easily and helps in focusing the organizations strategy. (National Office for the Information Economy: 2000b)
The other factor that influences the changing of environment is competitive intelligence. This is selecting, collecting interpreting and distributing information about the competition the industry is going to face or where the industry operates. It involves analysis of its competitors, the position in which the organization is in, intelligence of the competitors, the position of the organization, what it is capable of doing and the intentions it has in the areas it operates. Information can be collected from employees, customers of competitors as well as suppliers, the annual report from other companies and newspapers.
Finally another factor that could influence is the principals that the management uses to manage the organization. These principles are affecting the overall performance of the organization. This principle includes division of work. This is assigning employees with responsibilities to be carried out. It is usual done daily, weekly even monthly. Authority is also a principle that oversees the execution of commands and functions. The other principle is discipline in that the employees must obey orders from the management and also be responsible for facing punishment if they go against the rules. The unity of commands is a principle that states that an employee should be assigned one boss and it is from him that the commands should come from. The management should have one direction for it to become united. This means that people should be involved in the same activities of the organization. Paying of salary as expected is also a principle as it is a motivative factor. It should also be paid on time to avoid any inconveniences.
The management should also be centralized in that there is only one manager and he or she is in charge of all the activities that go on in an organization. This principle is determined by the organization condition. If the organization is big then centralization is important. Equity is also another principle that the management should practice. Injustices cause the organization time and money because they keep loosing their employees. The importance of the principles is to make changes and form a good organization, aids in decision making, helps in acquisition of skills and finally understand the tasks of management. Management has five elements: planning; organizing; coordinating, controlling and commanding. (Poon, S. and Swatman, P. :1998)
The industries are keen to evaluate the effectiveness of the organization response to the changes that are going to occur. They organize the strategies that are they are going to use in order to survive a particular market. On of the responses is to listen to the customer as the customer is always right. The cutting down of prices is also another response of the organization. This helps to attract and retain existing customers. This also helps build a positive company image. The introduction of the new products in the market will also be accepted positively by the consumers as a result of their responses. The industries also respond fast to crisis by solving problems as they occur. This is a way of maximizing on the profits that are generated by the company. They also try to make the best decisions out of a given sample in order to save the industry from collapsing.
Although the mobile phone organization Nokia is trying its best to satisfy the customer needs there is still a lot to be done. First it should respond to spread its products to other places especially to places in Africa and Asia. This will be determined by the factors that have been mentioned above. Secondly they need to have a way of checking imitations in the market. There are very many imitations and this confuses the customers who want to purchase the product.
The other recommendation is to introduce new products that other similar companies have in order to be in the same position as the rest. Thirdly is to keep in touch withits consumers in order to improve its product. They should also standardize their product such that when one travels to a different country he or she can purchase similar products that last. In some countries it has become hard to purchase the product since it does not last since it is fake.
The organization should also be fast in crisis management. This can be done by collecting views and also implementation of fast response from its users. The management should also consider spending more on promotions than it is now. This will give the public a positive image about the company. They should also try and take criticism positively in order to develop and grow. This is due to the fact that they respond negatively to the critism.
1.Barnatt, C. (1997). Virtual organization in the small business sector: The case of Cavendish Management resources. International Small Business Journal, 15(4), 36-47.
2. Centre for Electronic Commerce (CEC). (1996). Electronic Commerce for Small to Medium Sized Enterprises (SMEs). Report prepared for the Information Industries Board, Department of Tourism, Small Business and Industry. Monash University.
3. Chau, S. B. (2001). Four Phases of E-commerce a Small Business Perspective: An Exploratory Study of 23 Australian Small Businesses. Proceedings of the Information Resource and Management Association Conference. Toronto, Canada.
4. Chau, S.B. and Turner, P. (2001, December 5-7). A Four Phase Model of EC Business Transformation amongst Small to Medium Sized Enterprises: Preliminary Findings from 34 Australian Case Studies. Proceedings of the 12th Australasian Conference on Information Systems. Coffs Habour, Australia.
5. Freel, M. (2000, March). Barriers to Product Innovation in Small Manufacturing Firms. International Small Business Journal, 18 (2), 60-65.
6. Lawrence, K. and Keen, C.D. (1997). A survey of factors inhibiting the adoption of electronic commerce by small and medium sized enterprises in Tasmania. Working paper 97-01. Hobart, Tasmania: School of Information Systems, University of Tasmania.
7. MacGregor, R.C., Waugh, P., and Bunker, D. (1996). Attitudes of Small Business to the Implementation and Use of IT: Are we basing EDI Design Initiatives for Small Business on Myths? Ninth International Conference on EDI-IOS. Bled, Slovenia.
8. National Office for the Information Economy (NOIE). (2000a). Current State of Play-July 2000: Australia and the Information Economy. Retrieved from World Wide Web: http://www.noie.gov.au/publications/index.htm.
9. National Office for the Information Economy (NOIE). (2000b). Taking the Plunge – Sink or Swim: Attitudes and Experiences of SMEs to E-commerce. Retrieved from the World Wide Web: http://www.noie.gov.au/ publications/index.htm.
10. Poon, S. and Swatman, P. (1998). Small Business Internet Commerce Experiences: A Longitudinal Study. Electronic Commerce in the Information Society, 11th International Bled Electronic Commerce Conference. Bled, Slovenia.