AC 1.3 External Factors and Trends and their Influence on Organisational Priorities
Organisations remain under the consistent influence of external factors which, almost certainly, lead to changes in operational policies. The Covid-19 pandemic did give general audiences a chance of viewing the external factors that determine organizational trajectories. Reduced travel led to decreased revenues for airlines and allied travel organisations. Restrictions and lockdowns collapsed tourism facilities around the world. Many hotels could not sustain normal operations in the advent of extremely reduced bookings. Loss of jobs in struggling companies facilitated a decreased purchasing power creating a cyclic effect facing commercial environments. Closure of schools, from kindergarten to universities, compelled a rethink of strategies by private academic institutions with some entities completely changing their business models. On the other end, both for-profit and not-for-profit institutions discovered the value of remote working arrangements, web-driven communication and reduced business travel for its executives. This factor has since guided a change in working policies paving way for massive savings in operational expenditure. The Covid-19 example brings up the presence of economic factors as external situation and trends that can influence organisational priorities.
Global geopolitics, as political factors, affect organisations in a significant manner to the point of facilities having to rethink global operational policies. At the height of the US-China diplomatic tiff, telecommunications’ giant Huawei and search giant Google were forced to reorganize their US and Chinese markets, respectively (Hass and Denmark, 2020). The US placed restrictions on Huawei in reference to the roll out of 5G services. China aggressively sought to limit Google’s penetration into Beijing through excessive protectionist policies. The Russian invasion of Ukraine currently distorts global oil and wheat trading dynamics making many business units to reconsider their supply and market operations. The fluidity of politics imagines a situation in which an organisation may have to rapidly make a response to hastily developed political decisions. Political factions in countries often exist from polar positions and extreme antagonism can create erratic operational environments. Change of guard as is the situation in the United Kingdom can facilitate and promote uncertainty paving way for a wait and see attitude within organisations.
Legal factors can independently rise to influence organisational properties. Intellectual property laws have the wight to organize how facilities develop their products and the entry into new markets (Terziev and Klimuk, 2021). China has a very open intellectual property framework designed to help domestic entrepreneurs grow. However, this landscape injures many corporations as their products carry the risk of reckless replication. If Land Rover-Jaguar releases a new Range Rover product design and China rapidly replicates it, the company risks failing to access value for money, efforts and time used to develop the design. Taxes, tariffs and labour laws often present legal dilemmas to organisations as the facility remain with no option but respond to them. A UK retail store may attempt to sustain its renumeration packages across the entire chain only for laws in offshore branches to demand domestic fidelity. This development calls for organizational reorganization failure to which the UK facility may close shop within the affected country.
Inclusion and consideration of diversity at the workplace has taken its position as a strong social factor capable of influencing a complete rethink of recruitment strategies. Inclusion along the lines of nationalities and race continues to face many facilities as the single issue of absorbing domestic employees proceeds to raise controversy. With nations increasingly carrying a multi-racial image, employers have had no choice but display the same layout in their workstations. Beneficially, inclusion and diversity has been pointed out as one of the forces behind organisational innovation cultures with companies successful at the two components proudly wearing their badges.
