Societal Forces on Management
Discuss how societal forces influence the practice and theory of management. Do you think management techniques are a response to these forces? (Samson and Daft, 2009:78).
Management, as defined by Davidson et al. (2006), is “a set of activities including planning, decision making, organizing, leading and controlling directed at an organization’s resources (human, financial, physical and information) to achieve organizational goals in an efficient and effective manner” (p. 5).
According to Bartol et al. (2007), societal forces in general environment are factors that impacts on the organizations out of its control. Societal forces are often listed as economical, technological, socio-cultural, political-legal and international forces (Bartol et al., 2007). Evaluating each of these forces in a business management is crucial for a manager to carry out management theory and practices.
Economical:
Bartol et al. (2007) define economic element as activities involves profit gaining, buying abilities, spending patterns and distribution of wealth in a system. Many organizations faces economic influences that beyond their control and predictions. Inflation, recession, interest rates, currency exchange rates and unemployment are few of the important economic forces in business management (Bartol et al., 2007).
Wessels (2006) explain that during inflation, general prices of goods and services will increase. As a result, a company must adjust the prices of its products or services in order to compensate the difference in cost due to higher prices of raw materials (Wessels, 2006). Company may also need to adjust wages or salaries of its workers to reflect the real cost of living on that period of time unless there is a long term contract that fixed an agreed amount (Wessels, 2006).
Davidson et al. (2006) state that when unemployment rate increases, buying power of consumer decreases because less people are working. During economic downturns, it will be a lot harder to find a
Management, as defined by Davidson et al. (2006), is “a set of activities including planning, decision making, organizing, leading and controlling directed at an organization’s resources (human, financial, physical and information) to achieve organizational goals in an efficient and effective manner” (p. 5).
According to Bartol et al. (2007), societal forces in general environment are factors that impacts on the organizations out of its control. Societal forces are often listed as economical, technological, socio-cultural, political-legal and international forces (Bartol et al., 2007). Evaluating each of these forces in a business management is crucial for a manager to carry out management theory and practices.
Economical:
Bartol et al. (2007) define economic element as activities involves profit gaining, buying abilities, spending patterns and distribution of wealth in a system. Many organizations faces economic influences that beyond their control and predictions. Inflation, recession, interest rates, currency exchange rates and unemployment are few of the important economic forces in business management (Bartol et al., 2007).
Wessels (2006) explain that during inflation, general prices of goods and services will increase. As a result, a company must adjust the prices of its products or services in order to compensate the difference in cost due to higher prices of raw materials (Wessels, 2006). Company may also need to adjust wages or salaries of its workers to reflect the real cost of living on that period of time unless there is a long term contract that fixed an agreed amount (Wessels, 2006).
Davidson et al. (2006) state that when unemployment rate increases, buying power of consumer decreases because less people are working. During economic downturns, it will be a lot harder to find a