Tables showing both environmental and organization pressures
Every organization is a dynamic entity, which has at its core a variety of forces that impinge upon it both externally as well as internally. How an organization functions as well as the course of action that it takes up is essentially interplay between these varied forces and also the kinds of situations that come into play at different points in time.
Environmental pressures to an organization, as the name implies are those external factors that emanate from the environment that an organization functions and exists in. As a former employee of Hilton hotel and Resort I experienced these environmental and organizational pressures through out my stay there and I learned to solve many of them. I came to know that some of the key environmental pressures that influence an organization are the following:
Economic Environment-This is one of the most important factors that impinges on and influences any company and even determines the course that the company needs to take. There are so many economic factors like interest rates, government’s credit policy, employment rates and availability of manpower, inflation and the like that play an important role in how an organization functions. Organizations mostly function with a profit motive and, hence, economic factors play a very important role in how a company shapes up in the arena of revenue, costs and profitability (Right Management, 2014). As hotelier in Hilton I learnt that inflation in our country affected the charges of the hotel and reduction of employees as the business had to achieve its set goals.
Socio Cultural Environment- These are factors that play an important role in determining the nature of workforce and some of the unique characteristics of people that make up an organization. There were a number of societal factors like social norms and mores, cultural and historical context, expectations of people that had a direct bearing on business. Those norms were dependent on the efforts, creativity, and ingenuity of employees for sustenance, growth, and vitality. To business managers made sure that all employees were oriented on expected international standards as well as motivating them to adopt the required norms effectively.
Technological environment- We live in a technological age and the continuance of business without the aid of technology seems well nigh unimaginable. Automation, Internet, and online business models such as free WIFI are all the rage and a company that ignores the impact of technology does so to its own existential peril. At Hilton all the modern I discovered that the information technology depart was up to the called task as they made sure that any new invention was available in the premises to allure the clients. The business was always pressured to keep afloat with the current technology to maintain and safeguard its status.
These are the forces or factors that impact an organization from within. Every company has various elements and components that exist within the organization and exert forces, stresses and strains that impact the company and the way it adapts in order to cope with these forces. Three of the most important organizational pressures are as below:
People: I discovered that people are very important component of the company since they are the prime movers in any organizational context. Organizations cannot function without people and it is quite imperative for companies to look at how people behave, what they want and what would really motivate them to give their best and do well. At my work place the human resource manager was pressured to ensure that the business clients were treated with utmost care through creating a serene environment for therm.
Organizational Structure: I realized that this is an important component since it defines the role as well as power distance between individuals in addition to the different nuances that come to play in an organization. At my former work place there were many aspects of progression, relative importance and the like that impacted how people behaved and came together for the well being and growth of the company.
Processes: These are the linkages, rules, and regulations as well as procedures that defined as to how the business was organized and regulated and conducted itself. Processes also put in place norms of behaviour both internally as well as externally and were significant as these helped to define culture of the organization.
Organizational and environmental pressures are not static with time. These also evolve and keep changing with the passage of time both in nature as well as intensity. Take, for instance, economic pressures that impinge upon the company. Any change in the government’s taxation or credit policy would impact the revenue and profitability of the company. This is also quite true of regulations, export policy and regulation of trade between nations. Companies are often made or marred in terms of prospects and growth owing to decisions taken by the government that change over time. If you take the example of the Aditya Birla Group in India, the company has also over time seen the impact of people-related changes in a very remarkable way. From being a closely knit company comprising of employees and senior functionaries from only one of the communities in India, the company has changed significantly with time and metamorphosed into a professionally managed corporate with high levels of corporate governance and commitment to professionalism at the highest levels.
Similar changes have also been seen internally in processes and systems dealing with people practices. Board members who would not retire well past the 70s have had to retire and pave the way for induction of professionally qualified younger members (Sutevski, 2009).
Impact on Finance
Economic pressures have a lot of impact on the financial status of a company. If you consider taxation policy of government, it has a direct impact since higher taxes means having to raise prices of goods or services that, in turn, could have the effect of reducing sales. With the passage of time, technology also changes and the company has had to invest heavily in technological advancement, online business models and the like which do have an impact on the financial status and viability of the organization. Aspirations of employees have also changed with time and wage comparisons have widened since a lot of professionals now compare with other sectors as far as wage is concerned. Hence companies have to constantly benchmark and try and keep pace with developments in the job market to remain competitive and relevant. This does have impact on finances of the company.
Impact of Employees Internally
Employees are also impacted by organizational and environmental pressures. With passage of time, as technology and processes change, people have to take up new assignments, acquire new skills, enhance knowledge, and become competitive as well as competent from their end also. This is true for me and other employees in the company who have had to make changes in the way of functioning as well as outlook towards work and the role technology plays in the company.
Reaction of Company
The company has been remarkably flexible and agile to adapt to changes with time and the altered pressures of the environment as well as internally. Management has become nimble and agile, people processes have transformed, and technological investments have been made over the years to adapt and also be ahead of the curve on all these facets (Navis, 2013).
Adapting to meet challenges of economic pressure needs a financial and corporate strategy makeover as far as the company is concerned. A mix of marketing, product and service changes are required to ensure that revenues are maximized and costs are minimized so that profits are very high.
Meeting challenges related to people is possible through an integrated people practices and human resources policy framework. The company has to come up with innovative policies, practices and people engagement initiatives to ensure that employee retention is high and people give their best for the growth of the company.
Navis, C. (2013). Pressure to change: how do companies respond to environmental or social activists? Retrieved from https://bus.wisc.edu/mba/strategic-human-resource-management/blog/2013/01/22/pressure-to-change-how-do-companies-respond-to-environmental-or-social-activists.
Right Management. (2014). What is organisational pressure? Retrieved from http://wellness.rightmanagement.co.uk/news-details/10500.
Sutevski, D. (2009). Sources of organizational change. Retrieved from http://www.entrepreneurshipinabox.com/9/organizational-change-source/