The entities, conditions, factors, and events that surround an organization and influence the choices along with the activities that determine the risks and opportunities in the organization are called the external environment of an organization
Components of External Environment:
Microenvironment: The microenvironment comprises the factors that have direct implications on the operation of a business.
Customers are supposed to avail of services or buy products.
Suppliers provide the required resources to a company.
Partners are those associations or organizations that associate with a specific company to accomplish certain goals that are mutually beneficial (Bhowmick, 2016).
Marketing Intermediaries are the middlemen who have direct influences on the operation of the business of an organization.
Public perceptions are associated with the reputation that the general public has about a particular business.
Macro environment: The factors that affect the macro environment are economic, political, sociocultural, legal, environmental, and technical considerations (Birasnav, 2014).
Economic: The economic factors include demand and supply, interest and exchange rates, etc.
Socio-cultural: This is associated with the behavior of the consumers.
Political: Political factors include the policies and spending of the government that have implications on the business.
Legal: The laws that may include laws regarding the wages, requirements of an employee, or maximum working hours.
Environmental factors are the natural nonrenewal resources that can have implications on the business operation.
Technical factors are the knowledge and skills that apply to the smooth operation of the business.
The components of the external environment of Span Pac Singapore are the factors that surround the company and affect the choices determining the risks and opportunities. The microenvironment of Span Pac Singapore includes the factors that directly affect business operations. The factors affecting the microenvironment of Span Pac Singapore are customers, suppliers, partners, marketing intermediaries, and perceptions of the public.
The customers are the backbone of Span Pac Singapore which avails and uses its products. The company offers products regarding consumer goods, food, and beverages. The customers are belonging to Singapore, Malaysia, and specific regions in the Asia Pacific region (Bresman & Zellmer-Bruhn, 2013). The company is committed to addressing any concerns and issues that are involved with the customers to provide satisfaction to the customers regarding their products. The suppliers of Span Pac Singapore supply a wide variety of materials such as plastic, paper, wood, board, and other materials.
The suppliers who supply flexible plastic packaging are in huge demand for the board and paper. Some materials that the suppliers provide to the company utilize the raw materials. It can be stated that the utilization of bio-degradable materials is low in use. Thus, the suppliers focus mainly on flexible raw materials (Carmen, 2014).
The macro environment of Span Pac Singapore comprises the factors that have implications regarding the economic, political, socio-cultural, legal, environmental, and technical aspects of Span Pac Singapore (Cameron, 2015). The economic factors of Span Pac Singapore are the factors that are associated with the supply and demand, exchange, and interest rates of the organization.
The company has been affected by the recent global economic slowdown that has been consistent in the Asia Pacific region because of the development of the food processing industry. There were considerable investments that were made in the food processing industries leading to the need for flexible plastic packaging (Chen, et al., 2014). The political influences that the company faces are regarding the operations in different regions of Asia Pacific countries. There has also been a considerable increase in the regulatory schemes which pose direct implications on the sustainable options for packaging. The legal factors that affect Span Pac Singapore include the laws of all the regions, specifically laws of the Asian Pacific region and Singapore where the operation of the business is executed mostly (Csikszentmihalyi & Sawyer, 2014).
The environmental aspects have the major impact as the driving force for the company as the degradation of the environment due to the usage of plastic products that are non-biodegradable for packaging. The production of biodegradable flexible packaging products has been posing considerably less damage to the environment (De Vries & Van der Poll, 2016).
The concept of uncertainty deals with the fact that is not being sure. In the context of organizations, uncertainty can be attributed to daily business and operations. The circumstances where the management of an organization has very little information regarding the external environment as it is in a state of alterations and thus is largely unpredictable. Uncertainty in an organizational environment also can include personal decisions (Foss, Woll & Moilanen, 2013).
Handling of uncertainties in a business it is very important to identify and recognize the uncertainties that are faced by the company. It is also crucial to identify the future uncertainties adding to the complexity of the organization as a company has to identify and recognize the present and future uncertainties (Jacobs, 2015).
In context to the external environment of an organization, it could be analyzed that the macro environment of SPS has underlying organizational uncertainties. The economic factors deal with many of the uncertainties for SPS. The unpredictability of the economic situation of the world poses fluctuations for the business of SPS (Kuratko, Hornsby &Covin, 2014). The technological factors also are unpredictable for the SPS as there are always high chances of the development of new and improved technology to be launched by the competitors which would affect the sales of the products of SPS.
The organizational structure that is followed in SPS is the functional structure of an organization. The organizational structure of SPS is functional as there is a clear categorization of the individual department or portion that is set up according to the respective purpose of the SPS. It is relevant from the fact that the CEO of SPS and the heads of all the departments meet for a table conference for further planning regarding more outsourcing and less manufacturing (Larsson & Hamburger, 2016). The departments of SPS are divided into quality and control, purchasing, production, and customer service. The quality and control department of SPS deals with the foundation of quality assurance of the products of the organization. It deals with the assurance of the production of high-quality products and control of the manufacturing process of SPS (Li, et al., 2014).
The objective of the department is to put more emphasis on the quality assurance of the products. It supervises that the standards of quality are met for the efficient performance of the company as a whole as the company is known for its high quality of products. The objective of the purchasing department of SPS is to be accountable for the sourcing and negotiations with the supply contracts dealing with the packaged materials (Mio, Venturelli & Leopizzi, 2015). This department deals with the resolution of concerns regarding the preparation of reports and manuals of procedures to analyze the markets and pricing concerns.
The production department of SPS deals with the production of packaged materials. The department is concerned with the assurance of high output in the production of products of SPS. The customer service department is in charge of the building of the relationship with the customers. The department also deals with liaising with the customers and attending to the issues and concerns of the customers (Neuberger, 2015). The department makes sure that the customers are satisfied with the products and services of SPS. The customer service department of SPS also takes care of the initiatives that are required to be taken for the overall satisfaction of the customers.
The recent issue that SPS is facing is the inability to produce quality products while maintaining the costs of production according to its vision of being the top packaging solution provider. The inability to produce high-quality packaging products for the customers has resulted in a decline in the profits of the company.
This is due to the decrease in the number of customers availing the products because of the inability to upgradation of products. The coordination issues between the purchasing and quality control and the purchasing and production departments have led to the deterioration of the quality of the customer service (Qian, Cao & Takeuchi, 2013). Despite best efforts by the heads of the departments, the issues are not resolved which is hampering the business of the company.
According to the group discussion, bringing changes in the existing changes in the current organizational structure is required to bring the performance of the company back to its desired status. After thorough discussion among the group members, it is recommended that the organization break down the structure of the organization and start inculcating a divisional structure in the organization. If SPS followed the divisional structure, it would be able to cover different kinds of products in different market areas under the same umbrella group.
When the organizational structure of SPS is altered into the divisional structure, different departments will deal with different products and shall be responsible for their department in different areas of operation. Communication shall be inhibited as the employees in various divisions shall not be working together. However, SPS would be experiencing high costs due to the scope and size of the organization. Another change that can be done in SPS is that the business can be divided to be in different parts of the city so that the sales steam can be assigned the jobs to handle various geographic areas.
The purchasing department of SPS which is headed by Kelvin deals with the sourcing and negotiations of the supply contracts of the materials. The prime responsibility of Kelvin is to emphasize more on the assurance of quality and the concerns regarding non-conformance. He is supposed to be dealing with the compilation, organizing, and maintenance of the existing details and information associated with the suppliers. The decrease in the number of customers due to failure in the maintenance of quality without any changes in the production costs has started hampering the business of the company (Robbins & Coulter, 2014). In this circumstance, Kelvin, being the head of the purchasing department needs to take charge of contributing to bringing back the momentum of the company by sourcing different types of suppliers who can provide environment-friendly products to SPS.
Kevin needs to identify, recognize, and organize information regarding the raw material suppliers who are providing environment-friendly raw, materials in the global market. He needs to make an effort to establish a business connection with them to make alliances and partnerships with those suppliers. He needs to analyze and maintain regular contact with them till and after the contract is made to have a regular supply of green raw materials for the manufacture of environment-friendly packaging products that would no longer be a threat to the environment.
He needs to draw out the deals of business in such a way that SPS can receive environment-friendly materials at a low cost. He also needs to ensure that the purchasing goals with the new suppliers providing environment-friendly materials align with the high standards of quality assurance (Salas-Fumás, Sáenz-Royo & Lozano-Rojo, 2016). Kevin also needs to ensure that SPS can build close relationships and associations with the new suppliers so that there is a continuous flow of supplies to the company without any issues.
The technique of personal management where the employees and the managers work together to specify, record, and control the organizational goals for a certain period is called management by objectives(MBO). The goals of an organization can be the future state that a company which in this case is SPS strives to obtain. Management by objective (MBO) can or cannot always be oriented with the goal-setting approach of the organizations. When the management of SPS has chosen the objectives and goals, several approaches would have arrived (Sorensen & Stanton, 2013).
The common approach could be to down approach. , management of objectives is one of eth most commonly used top top-down approaches that is used in organizations. Management by objectives (MBO) in SPS would concentrate on the coordination of setting goals, feedback, and incentives (Sorensen & Stanton, 2013). While formalizing the documents for the increase in organizational productivity, it was observed that the CEO of SPS established the renewed mission of the organization and the strategic goals for SPS. The tactical goals derived from the strategic goals were [passed down to the next management level, i.e. the head of the departments. The documented planning on approval is executed by the supervisor and employees at the lowest level of management.
The MBO Process aims to achieve greater performance and efficiency for the organization. Proposed by Peter Drucker, the MBO Process is a personal management system for an organization where the organization plans, monitors, and targets to achieve already set goals with the cooperation of employees. Every business should follow this process to increase the productivity and sales of the organization. It’s all about the plan, strategy, and how the organization going to implement it. This process also helps to motivate the employee. Execution evaluations are the last stride of the procedure of Management by Objectives. By definition, a step-by-step audit of the worker’s execution over the association can be called an execution examination. Execution examination is related to the term execution assessment, yet at times, both contrast with each other.
The 6 Steps of the MBO process are:
Organizational effectiveness depends upon the Goals that are set by the organization. Organizations are involved in setting different types of goals for the organization and they ensure that these are managed perfectly. Everybody is going to work as per the goal set.
The Next step should be setting goals for every employee. Goals help employees set their targets for the work so that they can accomplish them in the given period (Wooten & Hoffman, 2016).
The MBO process helps to monitor the performance and progress of each goal which are determined in the above steps. To monitor performance and progress the below-mentioned points are required:
Performance evaluation is done by the concerned managers. It is the most important step for any organization. Concerned managers evaluate the performance of every employee and assign rank as per that. This is done so that every employee will be able to know where they lack so that they can improve shortly.
This is the process of reviewing the performance of the employee and it’s the last stage of MBO. It helps to find out the most active and inactive employees of the organization. Performance Appraisal also helps to motivate employees. If a company gives some sort of gift or payment hike for their performance then employees will be happy. Even they will want to do more work to get the appraisal for every year. This also acts as a catalyst for fellow members to motivate themselves.
At a certain point, input helps people know their shortcomings. Then again, it likewise persuades potential people to improve and build up their execution moreover.
The vision of SpanPac Singapore is to become the top solution provider for packaging in Singapore and the Asia Pacific region along with the mission of the company to deliver packaging solutions of high quality and efficiency of cost to create value for its customers. The mission of SpanPac Singapore is to assure quality, excellence in performance, and technical know-how. The goals of the company are also on the beliefs in operating a business that is driven by high quality and efficiencies of cost.
To grow the business, the organization needs to set goals to be short-term or long-term goals. After setting the goal, the organization must ensure that everyone works as per the goals and achieves the given target (Yanagizawa& Furukawa, 2016).
Organisations need to look after the different goals and as per the situation or market demands they need to redesign the goals to achieve the respective target.
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