Impact of Environmental Factors on Managers and Leaders of Organizations

Critical Management Issue

Impact of Environmental Factors on Managers and Leaders of Organizations

Ruth Williams

What is organizational environment? Organizational environment is all the factors that exist outside the organization, and have the potential to make an impact on decisions made by the organization’s managers (Module 3, p.2). Presently, the business environment is rapidly changing and managers and leaders of organizations will be influenced by environmental factors today and in the future. Three major environmental factors that will have an impact on mangers and leaders of organizations are technology, the economic climate, and human resources. These environmental factors will affect the way managers do business in the future. They will have to create cost effective operations, be more innovative, and become more efficient and effective in order to withstand these changes and remain successful.

Technology is continuously being improved and managers are expected to be involved, innovative, and knowledgeable. As Daft (2009) pointed out, the area of technology has seen “massive changes” lately (p.143). With current technology, managers are able to conduct meetings and conferences with their staff and colleagues all over the world; information, knowledge, and ideas are exchanged and expanded without gathering in a board room. Organizations are collaborating and forming partnerships around the world, therefore, there are more virtual offices. Moving forward, managers will need to ensure that they encourage continual training on new systems so that employees can stay abreast, current, motivated, and willing to collaborate to achieve the organizational goals.

Economic climate has a significant impact on leaders and managers of organizations today. For example, 2008 was a very difficult financial year for the auto industry, wherein the sales of vehicles fell dramatically as a result of a “weakening economy” (Daft 2009, p.142). With the...