We will write a custom Coursework on Business Environment Awareness specifically for you
301 certified writers online
Forces that surround any given business environment affect the way it conducts its affairs and the kind of access that it has to scarce resources. An organisation’s environment consists of factors that are broadly categorised into external and internal factors.
Environmental issues have become immensely significant, especially in today’s modernisation age. These issues have proved problematic for organisations in all countries. They include the relationship that subsists between the environment and technology, economic growth effects, society, water and air pollution, global warming, competition from other industry players, legal requirements, staffing within the organisation, finance, and politics among others.
It is important for an organisation to acquire a good comprehension of its environment for it to institute effective management. This paper seeks to explore some of the reasons why organisations need to be aware of their environment.
Awareness of the environment
Firstly, an organisation’s good understanding of its environment helps it to take advantage of opportunities that come due to certain changes in one or more of the factors in its immediate environment (Aktaş, Çiçek, & Kıyak 2011). For instance, the failure of a firm’s major competitor because of financial issues mean that such a firm should alter its plans upon taking into account the drop out of the competitor.
The huge advantage can have the effect of helping the organisation to achieve enormous unprecedented levels of growth. Failure to gain a good understanding of the environment may see firms fail to take advantage of such situations to increase their cash flows (Jones & Page 2002).
Secondly, awareness of the environment is essential in helping organisations to reduce or eliminate the effects of certain negative events that may take place within their surroundings. One of the biggest challenges that businesses face is competition from their close rivals in the same industry or product lines (Gadenne, Kennedy & Mckeiver 2009).
It significantly affects the way a business operates and/or approaches its target market. Knowledge of the environment may influence a firm that operates in a very competitive market to the extent of moving out of the market into another where the competition is low (Jang 2011). The same firm may also choose to remain in the market and face the competition head-on.
Further, awareness may improve the efficiency of an organisation’s management. It enables it to monitor various socioeconomic and political factors and the degree of impact they have on the organisation’s operations, thus enabling the management to make informed choices with regard to budgeting, expansionary plans, and marketing strategies for the organisation’s products among others (Cho 2006). This awareness helps to avoid unnecessary losses while at the same protecting the firm’s image.
As highlighted, there are a number of reasons of great significance as to why organisations need to be aware of their environments. Responsiveness on their environment enables them to maximise some opportunities that may come up because of changes in some of the environmental factors either internal, external or both.
It also prepares them for certain negative events in their environment as a way of helping them to make wise decisions to minimise risks that are posed by such happenings. In addition, it helps managers of such organisations improve their efficiency, thus serving to protect the institution’s image as a well-managed entity. Hence, it is paramount for organisations to make efforts to understand their environment for them to achieve greater success in fulfilling their objectives.
Motivation theory and leader effectiveness
Leaders have the role of guiding people who are under their leadership. The headed people include employees or citizens of given area. In the case of employees, a manager needs to guide and motivate his or her employees to ensure that a given task is done well and in good time.
While seeking to understand how leaders operate and/or the ways of improving their effectiveness, researchers have developed a number of motivational theories whose comprehension by leaders is paramount to their success in their leadership roles.
These theories seek to find an explanation for the driving force behind the conversion of people’s thoughts into behaviours. Even though these theories tend to elaborate similar motivational concepts in different ways, other researchers offer a new theory altogether. This paper seeks to explore how a good comprehension of motivation theory contributes to the effectiveness of a leader.
Maslow’s motivational hypothesis has assisted many organisational bosses in visualising worker inspiration. The theory has enabled them to lead their employees together with their companies to huge success in fulfilling the set tasks and objectives (Burke 2001).
Get your first paper with 15% OFF
The premise entails Maslow’s ladder of wants that classifies the essential requirements of people into five groups, including security, self-respect, self-actualisation, collective, and physiological demands. A leader who assists his or her subordinates in fulfilling these needs inspires them to become better workers (Bennis & Nanus 2007).
An individual who has already obtained self-esteem, social, physiological, and safety needs is able to develop self-actualisation that in turn drives one towards accomplishing his or her life’s agenda. The implication of this theory is that through developing genuine interest in the people that one leads, acknowledging their fundamental needs and taking the right steps to realise them, one inspires and motivates his or her employees (Knudsen 2005).
Another motivational theory of immense relevance in promoting a leader’s effectiveness is the theory of transformational leadership. The theory has been considered appropriate in many corporate situations. According to this theory, leaders need to guide other based on values, meaning, and their elevated purpose (Bolden & Gosling, 2006).
It specifically requires people to exude integrity, encourage, set a good example, adopt effective communication, inspire, support, provide stimulating assignments, give credit where necessary and when it is due, set realistic goals, and/or assist their subordinates in focusing on group interest as opposed to their individual needs (Steel & Konig 2006).
The roles of an effective leader include motivating followers, satisfying their needs, treating them fairly, rewarding performance, and applying effective discipline (Locke & Latham 2002).
Clearly, a good comprehension of the motivation theory contributes to the effectiveness of a leader. Maslow’s theory has assisted managers in motivating their employees to achieve huge success in their leadership roles. With the theory, managers get to understand employee needs and their priorities, which when fulfilled give the manager an easier time.
Leadership transformational theory calls upon heads to incorporate principles, significance, and a superior rationale when directing their teams. Regardless of people’s culture, age, or gender, they have some motivational factors, which a leader can maximise on to get them perform the duties diligently and help in the achievement of set goals and objectives.
Leaders need to get a good understanding of motivational theories to use them to better the effectiveness of their leadership.
Usefulness of separating leadership and management
Achieving business victory calls for diverse individuals to handle diverse functions for organisational operations to be handled as planned. While some roles are easy to define, others may at times have confusing boundaries due to their vague nature.
An example of a case where such confusion may arise is differentiating between a leader and a manager. Management and leadership have an imperative function in getting things done. However, both of them have varying aspects with respect to the role they play and their impact.
This claim does not imply that one cannot play both roles simultaneously. It is possible for one to be a leader and a manager at the same time performing both roles. However, it is worth noting that being a great leader does not necessarily imply that such a person makes a phenomenal leader and vice versa.
For this reason, it is paramount for people to get a clear understanding of the fundamental differences between the two if they are to get a clear picture of how they can fair in their roles as managers or leaders. This knowledge may enable them to acquire relevant skills in performing and achieving success in their functions. This section seeks to explore the practical and theoretical significance of separating leadership and management to improve organisational effectiveness.
One of the fundamental differences between a leader and a manager is that a manager administers while a leader innovates (Miner 2000). This distinction implies that a head is usually bestowed with the duty of raising new opinions, which are meant to take the organisation into a chapter of ensuring that the set goals and objectives are realised.
Hence, the head must always guarantee success in the organisation. This agenda keeps all workers motivated when they get the news that the organisation is accomplishing its key agenda, thanks to the employee efforts. There is a need for a leader to be someone who ensures that he or she has proper knowledge of the latest skills, research findings, and trends.
Much of the knowledge that leaders may have acquired in school to complement their functions often need modification on their part in order to achieve the effectiveness that is expected of a leader as he or she always has to be a step ahead of the rest at all times (Yukl 2010).
On the other hand, an administrator’s role is to execute all key deliverables that the head has set for the organisation. He or she has to maintain focus on the bottom line. The manager has to maintain control to avert any organisational disorder (Yukl 2008). In fact, an administrator must work closely with all workers to ensure that what each of them is doing translates into the achievement of the company’s vision.
To achieve this goal, a manager has to understand the people that he or she is working with and get to know their passions and interests (Bass 2010). He or she is then able to build a team out of such people through decisions that relate to placement, promotion, pay, and communication with them as a team.
The manager tends to use the authority that comes with his or her position to get things done. At times, a manager is required to make strict orders that have to be adhered to by those that he or she is managing, whether they feel encouraged to abide by them or not.
A leader is someone who inspires trust among people whom he or she leads. Leadership is not merely about what one does as a leader (Gronn 1999). Rather, it is about what other people do in response to one’s actions. It involves influencing one’s other people to be his or her followers and to act or conduct themselves in a way that reflects the leader’s expectations (Drucker, & Maciariello 2008).
A good leader is someone who will always tend to have people around him or her. Such people must be interested in whatever the leader is doing, his or her plans, and/or what he or she has to say. People tend to associate themselves with leaders. As a result, they will often make an effort to attend their events or functions in which they are scheduled to deliver a speech.
For this reason, if a person who considers him or herself a leader organises a function and people fail to attend, this outcome points to his or her shortcomings as a leader.
Further, the management of a project varies significantly from empowering other people into doing something that comes with leadership. Whereas a leader may ask about what can be done and why it needs to be done, a manager may tend to ask how something happened and when it took place (Lunenburg 2011).
A leader needs to be in a position to question the occurrence of certain actions, something that may involve challenging his or her superiors. For this reason, leaders need to have the ability to face the top management whenever they feel that there is something else that needs to be performed for the organisation. Leaders do not expect to be always right since all people make mistakes at certain points in time.
When a organisation they are leading experiences failure, leaders are expected to come in and explain why the failure took place, ask others for their opinions on why they think the failure may have taken place, and the lessons gained from the experience (Scott 2011). Leaders will ask their teams to give their suggestions on how the organisation can use the information gained to approach their goals better.
Managers rarely deliberate on the meaning of failure. They tend to operate like soldiers while ensuring that they implement the plan accordingly. They understand the significance of plans and orders. Their work is to maintain their vision on the current organisational goals (Toor & Ofori 2010).
Understanding the difference between manager and a leader is important, especially for a person who is in charge of a team in an organisation or the whole organisation (Smythe, & Norton 2011). In the technological industry where creativity and innovation are a necessity, it is crucial for people who hold top positions to comprehend the nature of their roles and how such roles influence the progress of their organisations in achieving their objectives.
Specialist employees in the technological industry tend to work better with leadership since it gives them the room and time to exercise their creativity and innovativeness, which directly influence the organisation’s success (Lunenburg, Thompson & Pagani 2010). The inspirational aspect of business makes it appropriate in setting technology developers in the right mood that improves their innovativeness.
However, some form of management aspects can be helpful in meeting certain targets that may require some degree of control on the activities of the employees (Zaleznik 2001). If leaders and managers can borrow from each other some management and leadership aspects respectively, they can achieve unprecedented success in their roles. However, this achievement may take time since being good in both functions is not easy due to the conflict that arises between leadership and management roles.
The conflict makes it hard for one to balance between the two (Leavy 2000). Nonetheless, the best managers turn out to be good leaders to some extent in some cases. However, for greater efficiency within an organisation, it is preferable for different persons to be put in place to play management and leadership roles.
To understand the usefulness of separating leadership from management, one can take an example of the giant social site company, Facebook. The firm acknowledges the difference in strengths that leadership and management have. The company’s CEO, Mark Zuckerberg, is a proven leader. However, the firm needs someone who has strong supervisory skills that are found in managers to take care of other functions.
It recognises the fact that great leaders do not necessarily make phenomenal managers. For this reason, Facebook has settled on Sheryl Sandberg who happens to have a wide-range of skills in the area of management as its Chief Operating Officer. For the duration she has been with the company, she has been able to streamline the company’s functions, transforming from it from just being an admired site to a very profitable firm.
She oversees the company’s business operations that include, but not limited to, business development, public policy, human resources, communication, sales, and marketing. Her inputs and those of the firm’s CEO have helped Facebook to be among the world’s most profitable companies that have clients the world over (Fairholm 2004). Their combined skills continue to see the company record tremendous growth each year by outdoing its competitors.
Clearly, separating leadership and management is vital in improving organisational effectiveness. Whereas a manager’s function is to direct, a leader tends to innovate. Leaders are responsible for some of the fresh ideas that help organisations to stay ahead of their competition.
Leaders use the knowledge that they have acquired in class creatively by innovating to suit some of the circumstances that they encounter. Managers seem to be more concerned with maintaining order in the organisation. Managers use the authority that comes with their positions to run things in line with the organisation’s goals and objectives. Leaders are inspirational in nature.
They influence other people to act in a certain way as opposed to managers who tend to give orders on the activities that they expect their teams to carry out. Leaders are more willing to recognise failure, share their views with their teams, and/or seek their opinions on the way forward.
They are also courageous enough to stand up to a higher authority in an organisation and recommend certain changes that they feel are necessary. On their part, managers depict excellent supervisory skills that are important in getting things done in an organisation.
Facebook Company considered the variation in leadership and management roles in its structure by choosing to hire Sheryl Sandberg who has a strong management background while maintaining Mark Zuckerburg as the CEO. Hence, it is paramount to separate management and leadership for greater organisational effectiveness.
Aktaş, E, Çiçek, I & Kıyak, M 2011, ‘The Effect Of Organisational Culture On Organisational Efficiency: The Moderating Role Of Organisational Environment and CEO Values’, Procedia – Social and Behavioural Sciences, vol. 43 no. 2, pp. 1560-1573.
Bass, B 2010, The Bass handbook of leadership: Theory, research, and managerial applications, Simon & Schuster, New York, NY.
Bennis, G & Nanus, B 2007, Leaders: The strategies for taking charge,
Bolden, R & Gosling, J 2006, ‘Leadership Competencies: Time to Change the Tune?’, Leadership, vol. 2 no. 2, pp. 147-163.
Burke, J 2001, ‘How Do Mentorships Differ From Typical Supervisory Relationships?’, Psychological Reports, vol. 68 no. 1, p. 459.
Cho, K 2006, ‘An Empirical Study on the Effects of the Internal Company Factors and External Environment Factors on the Usage Level and Performance of Electronic Commerce in the Shipping Companies – Primarily on the Liner Shipping Business’, Journal of Korean Navigation and Port Research, vol. 14 no. 3, pp. 483-489.
Drucker, P & Maciariello, J 2008, Management, Word Press, New York, NY.
Fairholm, M 2004, ‘Different Perspectives on the Practice of Leadership’, Public administration Review, vol. 64 no. 5, pp. 577-590.
Gadenne, L, Kennedy, J & Mckeiver, C 2009, ‘An Empirical Study of Awareness and Practices in SMEs’, Journal of Business Ethics, vol. 84 no. 1, pp. 45-63.
Gronn, P 1999, ‘Substituting for Leadership: The Neglected Role’, The Leadership Couple, vol. 10 no. 1, pp. 41-62.
Harper Collins, New York, NY.
Jang, S 2011, ‘The Effects of Internal, External Environment and Entrepreneurship on the Performance of Social Enterprise: Focused on the Network Activity’, Journal of the Korea Academia-Industrial Cooperation Society, vol. 54 no. 5, pp. 4801-4811.
Jones, L & Page, D 2002, ‘Theories of Motivation’, Education + Training, vol. 29 no. 3, pp. 2-16.
Knudsen, C 2005, Theories of The Firm, Management, and Leadership, Springer, US: Kluwer Academic Publishers.
Leavy, B 2000, ‘On Studying Leadership in the Strategy Field’, The Leadership Quarterly, vol. 7 no. 4, pp. 435-454.
Locke, E & Latham, G 2002, ‘Building a practically useful theory of goal setting and task motivation: A 35-year odyssey’, American Psychologist, vol. 57 no. 9, pp. 705-717.
Lunenburg, C, Thompson, B & Pagani, D 2010, The multifactor leadership
Lunenburg, F 2011, ‘Leadership versus Management: A Key Distinction—At Least in Theory’, International Journal of Management, Business, and Administration, vol. 14 no. 1, pp. 1-3.
Miner, B 2000, ‘Testing a Psychology Typology of Entrepreneurship Using Business Founders’, Journal of Behavioural Sciences, vol. 36 no. 1, pp. 43-69.
Questionnaire (MLQ): Factor structure of an operational measure, American Educational Research Association, Denver, CO.
Scott, L 2011, ‘Leadership 101 Column 2: Leadership versus Management — Either, Or, Both?’, Journal of the Canadian Health Libraries Association, vol. 1 no. 1, pp. 107-08.
Smythe, E & Norton, A 2011, ‘Thinking As Leadership/Leadership As Thinking’, Leadership, vol. 23 no. 4, pp. 65-90.
Steel, P & Konig, C 2006, ‘Integrating Theories of Motivation’, Academy of Management Review, vol. 31 no. 4, pp. 889-913.
Toor, S & Ofori 2010, ‘Leadership Versus Management: How They Are Different, And Why’, Leadership and Management in Engineering, vol. 1 no. 1, p. 61.
Yukl, G 2008, ‘How Leaders Influence Organisational Effectiveness’, The leadership Quarterly, vol. 19 no. 6, pp. 708-722.
Yukl, G 2010, Leadership in organisations, Prentice Hall, Upper Saddle River, NJ.
Zaleznik, A 2001, ‘Managers and leaders: Are they different?’, Harvard Business Review, vol. 55 no. 1, pp. 67-78.