externalities

Examples of externalities in the following topics:

• Combining Internal and External Analyses

  • Using combined external and internal analyses, companies are able to generate strategies in pursuit of competitive advantage.
  • These inputs generally outline each of the specific analyses a company should conduct to understand its internal and external environments.
  • Context analysis considers the entire environment of a business, both internal and external.
  • This implementation of strategies that take into account both the internal and external environments eventually achieves dynamic capabilities for the companies involved.
  • Apply a comprehensive understanding of internal and external analyses to the effective formation of new strategic initiatives

• Considering the Environment

  • Considerations of the external environment—including uncertainty, competition, and resources—are key in determining organizational design.
  • Considerations of the external environment are a key aspect of organizational design.
  • Another perspective on organizational design is resource dependence theory—the study of how external resources affect the behavior of the organization.
  • Procuring external resources is important in both the strategic and tactical management of any company.
  • Identify the inherent complexities in the external environment that influence the design of an organization's structure

• The Impact of External and Internal Factors on Strategy

  • Analysis of both internal factors and external conditions is central to creating effective strategy.
  • Strategic management is the managerial responsibility to achieve competitive advantage through optimizing internal resources while capturing external opportunities and avoiding external threats.
  • The external environment is even more diverse and complex than the internal environment.
  • This chart diagrams the external factors that should be considered when analyzing a firm's strategy.
  • Examine the discrepancies between internal proficiency and external factors to capture strategic value

• SWOT Analysis

  • A SWOT analysis allows businesses to assess internal strengths and weaknesses in relation to external opportunities and threats.
  • Opportunities: external chances to improve performance in the overall business environment
  • Threats: external elements in the environment that could cause trouble for the business
  • Strengths and opportunities (the S and O of SWOT) are both helpful toward achieving company objectives, but strengths originate internally while opportunities originate externally.
  • Similarly, weaknesses and threats (the W and T of SWOT) are harmful toward achieving objectives, but weaknesses originate internally and threats originate externally.

• External Stakeholders

  • Integrating businesses into society results in a wide variety of interactions with a number of different external stakeholder groups.
  • As a leader or manager at an organization, understanding both internal and external stakeholder needs is the central responsibility.
  • There are quite few external stakeholders for business to keep in mind when making decisions and carrying out operations.
  • As a result, suppliers are closely related to organizations as key external stakeholders.
  • Identify the various external stakeholders which may be impacted by business operations

• Internal and External

  • The control process can be hindered by internal and external constraints that require contingency thinking.
  • This means that any time organizations encounter substantial internal or external constraints, it is the role of management to create a strategy to circumvent them.
  • In their attempts to maximize existing profits, business managers must consider both the short- and long-term implications of decisions made within the firm and the various external constraints that could limit the firm's ability to achieve its organizational goals.
  • The first external constraint, resource scarcity, refers to the limited availability of essential inputs (including skilled labor), key raw materials, energy, specialized machinery and equipment, warehouse space, and other resources.
  • Examine the external and internal control constraints that may limit efficiency in the control process

• Managers Role in Ethical Conduct

  • Many managers have responsibility for interacting with external stakeholders such as customers, suppliers, government officials, or community representatives.
  • Alternatively, new regulations, altered public perceptions and concerns, or other external factors may require the organization to make adjustments.
  • Outline the role managers must play in implementing internal ethical standards and aligning the organization with external standards

• The Importance of Motivation

  • To increase employees' efficiency and work quality, managers must turn to understanding and responding to individuals' internal and external motivations.
  • The fourth source consists of external motives.

• Internal Stakeholders

  • Organizational management is largely influenced by the opinions and perspectives of internal and external stakeholders.
  • Owners often make substantial decisions regarding both internal and external stakeholders.

• Strategic Management

  • Strategic management analyzes the major initiatives, involving resources and performance in external environments, that a company's top management takes on behalf of owners.
  • Analysis – Strategic analysis is a time-consuming process, involving comprehensive market research on the external and competitive environments as well as extensive internal assessments.
  • Risk assessments and contingency plans are also developed based upon external forecasting.
  • The above model is a summary of what is involved in each of the five steps of management: 1. analysis (internal and external), 2. strategy formation (diagnosis and decision-making), 3. goal setting (objectives and measurement), 4. structure (leadership and initiatives), and 5. control and feedback (budgets and incentives).