How Organisational Strategies are Shaped by the Business and External Contexts

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Organisational strategies play a crucial role in determining the success of a business, and they are shaped by a combination of internal and external factors. The internal context of business refers to its own internal operations and decision-making processes, while the external context refers to the external context refers to the external environment in which it operates. Both of these contexts have a significant impact on the development and implementation of organisational strategies (Malik, 2022). One of the primary ways in which the business context shapes organisational strategy is through its own internal resources and capabilities. The available resources, including human capital, financial resources, and technological capabilities, will often dictate the types of strategies that a business can pursue. For example, a business with strong financial resources may choose to pursue a growth strategy, while one with limited resources may choose to focus on cost-cutting and efficiency.

The external context, including the competitive environment, economic conditions, and regulations, also plays a significant role in shaping organisational strategies. A highly competitive market will likely drive organisations to focus on differentiation and innovation in order to stay ahead of the competition. Conversely, a stable and predictable market may lead to focus on efficiency and cost-cutting. Economic conditions, such as a recession, may also force businesses to focus on cost-saving measures, while periods of growth may allow for a focus on growth strategies (Handayani et al., n.d.). Regulations and government policies also play a role in shaping organisational strategies. For example, businesses operating in heavily regulated industries may need to focus on compliance ad meeting regulations, while those operating in less regulated industries may have more flexibility in their strategy development. It is important to note that organisational strategies are not static and may need to be adapted over time in response to changes in the internal and external contexts. For example, a market conditions change, a business may need to pivot its strategy from a focus on growth to one of cost-cutting in order to remain competitive. In order to successfully navigate these changes, need to have a strong understanding of both their internal and external contexts.

References

Handayani, A.H., Purnamasari, W. and Patriya, E., n.d. A Study on the Role of Internal and External Factors in Consumer Buying Behaviour Through E-Marketplace.

Malik, A. ed., 2022. Strategic human resource management and employment relations: An international perspective. Springer Nature.

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How Organisational Strategies are Shaped by the Business and External Contexts
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