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UNIVERSITY OF CAPE COAST
COLLEGE OF HUMANITIES AND LEGAL STUDIESSCHOOL OF BUSINESS
DEPARTMENT OF MANAGEMENT STUDIES
COURSE TITLE: INTERNATIONAL BUSINESS. CODE: ADM 301
LECTURER: DR. NICK FOBIH
Discuss the External Environmental Forces in terms of the Task Environment that Pressure and Influence Managers on an ongoing, daily basis.
Date: 30th October, 2016
1
UNIVERSITY OF CAPE COAST
COLLEGE OF HUMANITIES AND LEGAL STUDIESSCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
NAMES INDEX NUMBERS
PRINCE BRIGHT ATTATSI SB/ADM/14/0087
OPOKU OBED SB/ADM/14/0058
NKRUMAH LAWRENCE SB/ADM/14/0098
NANA ADU ANIMAH CYNTHIA SB/ADM/14/0099
AKPA FRANCIS WORLASI SB/ADM/14/0084
i
THE IMPACT OF THE TASK ENVIRONMENTAL FORCES OF THE EXTERNAL
ENVIRONMENT ON THE MANAGERS ON AN ONGOING DAILY BASIS.
BY
GROUP 17
A Thesis submitted to the Department of Management Studies, University of Cape Coast in
partial fulfillment of the first semester`s course requirement for International Business,
ADM 301.
OCTOBER 2016
ii
ABSTRACT
This study examined the impact, the pressure and the influence that the forces of the task
environment in the external environment of business organizations have on the performance and
the daily decision making of managers of the various business organizations with focus on
selected business firms from Cape Coast.
The data were collected using both qualitative and quantitative methodologies. The former was
collected through interviews while the latter were collected via structured questionnaire and
documents. In all, 58 respondents were used for the study. The respondents were selected using
multiple sampling techniques – comprising of (i) stratified random sampling (ii) quota sampling,
and (iii) systematic sampling techniques. The data were analyzed using parametric and non-
parametric statistics.
The main finding of the study is that, the task environmental forces of the external environment
are the closest to the business organizations and directly influence its basic operations and
performance. And that these forces affect the main internal functions of management, and
seriously influence the objectives of the firm and her strategies.
The study concluded on the note that management needs to have a second thought on the task
environmental forces and, identify the forces, analyze them and anticipate their pressure and
influence on their (management) decision making on an ongoing daily basis. The fact that many
of these forces are uncontrollable, it does not mean that managers can ignore them or use them as
excuses for poor performance.
iii
TABLE OF CONTENT
NAME PAGE………….…………………………………………….....................…………... i
TITLE PAGE………………………………….……………………………...…..................... ii
ABSTRACT……….…………………………………………………......................………… iii
TABLE OF CONTENT…………………………………………….....................……………. iv
CHAPTER ONE............................................................................................................................1
INTRODUCTION......................................................................................................................1.0
1.1 BACKGROUND TO THE STUDY
1.2 STATEMENT OF PROBLEM
1.3 OBJECTIVES OF STUDY
1.4 RESEARCH QUESTIONS
1.5 SIGNIFICANCE OF THE STUDY
1.6 SCOPE OF STUDY
1.7 OVERVIEW OF RESEARCH METHODOLOGY
1.8 RESEARCH LIMITATION
1.9 ORGANIZATION OF THE STUDY
CHAPTER TWO.........................................................................................................................5
LITERATURE REVIEW........................................................................................................2.0
2.1 INTRODUCTION
2.2 THEORETICAL FRAMEWORK
CHAPTER THREE.....................................................................................................................7
DATA COLLECTION AND ANALYSIS
CHAPTER FOUR........................................................................................................................8
RESULTS AND DISCUSSIONS
CHAPTER FIVE.........................................................................................................................11
5.1 SUMMARY,
5.2 CONCLUSION,
5.3 RECOMMENDATIONS
REFERENCE…………………………………………………………………………………..13
iv
CHAPTER ONE
GENERAL INTRODUCTION
1.1 Background to the study
Over the recent decades, the business environmental forces have experienced not only a
quantitative leap in the volume and value in respect of effective management decision making
and basic operations and performance of the business organizations, but a qualitative
transformation in the way managers of business organizations and the external environmental
forces interact with each other. The success and failures of Managers and organizations are
increasingly linked through the interactions of the opportunities and threats that the
environmental forces present to the managers and their organizations. The business environment
is becoming increasingly integrated and dynamic with speed growing rate of uncertainties being
the order for the day.
1.2 Statement of the problem
Our study will look into the influence that the task environmental forces have on managers on an
ongoing daily basis. Business environment is an interesting phenomenon and consists of a pool
of factors which have significant influence on the operations of the business organizations. The
environment is a powerful contextual dimension. The environments of business consist of all
elements existing outside the organizations` boundaries that have the potential to affect the
organization, Daft and Dorothy (2006). Gareth, Jennifer and Hill (2000) have defined
environment as the set of forces and conditions outside the organizations` boundaries that have
the potential to affect the way the organization operates.
In our study, we will define the environment as the set of factors, forces or variables that exist
within and outside the business organization which have the potential to influence the continued
and successful operations of the business organization. We believe that the organization has an
internal environment that can also influence the methods by which managers utilize resources in
order to effectively plan, organize, staff, direct and control organizational activities so as to
respond appropriately to changes in the external environment.
1.2.1 Internal and the External environment
Internal environment consists of a set of elements within the organization’s boundaries to which
managers must pay attention in order to help their organization survive and compete effectively
v
in the external environment. These forces include; corporate culture, managerial philosophies
and
vi
leadership style, skills and talents of employees, physical facilities and resources, and production
technology.
External environment consists of a set of relevant elements residing outside the boundaries of an
organization that have the potential of influencing the continued and successful operation of the
organization. The organization does not function in a vacuum; being an open system, it has to act
and react to what happens outside the factory walls. The external environmental forces often
affect the main internal functions of management and can seriously influence the objectives of
the firm and her strategies. The external environment in conceptualized into two types; the task
and general environment. The task environment embodied those elements of the external
environment that are closest to the organization and directly influence its basic operations and
performance. The later refers to those elements of the external environment that are widely
dispersed and affect the organization only indirectly. Our study is based on the former.
1.4 The Task Environment Forces
The task environment includes forces such as competitors, suppliers, customers, employee
organizations, government regulators, mass media, interest group, distributors and local
communities. Decision makers or managers must understand the nature of this environment.
They must be aware of the critical features and characteristics of these forces and recognize the
shift and pattern that occur. A firm cannot intelligently plan for the future if her managers lack
environmental sensitivity. Indeed, the ultimate survival of the organization depends upon its
ability to adapt to the demands of the environment that represent either an opportunity or a threat
to management.
1.5 The Task Environment and managers’ daily decisions.
Since the effects that the task environment`s opportunities and threats have on managers` daily
decisions and the firm`s performance is almost unexplored, this study seeks to examine the
relationships between the opportunities and threats on one hand and their effects on the
managers` daily decision making on the other hand. We suggest that the managers take critical
look at these forces and act proactively.
1
1.3 Research Objectives
The primary objective of this research is to gain a better understanding of the influence of the
task environmental forces on the managers` decision making on an ongoing daily basis. The
specific objectives include:
1. To examine the pressure and influence of the task environmental forces on manager`s on an
ongoing daily basis.
2. To find out the strength of relationship between opportunities and threats presented by the
forces of the task environment, and the managers and the performance of the firms.
3. To examine whether all the firms and managers are always affected by the forces of the task
environment.
4. To analyze the challenges, opportunities and risks of the forces of the task environment and
their implication for sustainable development of firms in an industry.
1.4 Research Questions
1.How does the forces of the task environment affect managers on an ongoing daily basis?
2.Do managers understanding and familiarity of the forces of the task environment make him
and his organization successful?
3. Do all managers get affected equally by the forces of the task environment?
1.5 Significance of the study
It is anticipated that the study will raise the awareness of the pressure and influence of the forces
of the task environment on the managers on an ongoing daily basis. It is again hoped that the
study will help managers identify the extent to which the forces of the task environment
influence them on an ongoing daily basis and how best managers can cooperate and manage
these forces and their opportunities and threats they present in order to achieve competitive
advantage. This would direct decision making as to the kind of objectives to set, strategies and
activities to undertake at a particular period.
2
Furthermore, the study would help management become aware of the sources of opportunities
and threats in the market and position themselves to take advantage of opportunities just as they
arise as well as devise means to always outweigh the threats of the task environment.
Finally, this work seeks to contribute to the existing store of knowledge on the forces of the task
environment and their influence on managers on an ongoing daily basis.
1.6 Scope of the Study
The present study seeks to examine the impact of the forces of the task environment on managers
on an ongoing daily basis. In view of this the scope of the study is limited to those in
management positions in the various business organizations. Some of them include; the
marketing manager, human resource manager, research and development leader, production
manager, managing director, procurement manager and the finance manager.
1.7 Overview of Research Methodology
The survey research design was mainly adopted in the conduct of the study. This primarily
involved the use of structured questionnaires and interviews to collect information from
managers of some organizations.
The study mainly made use of primary data and secondary data involving past financial
performance of firms.
The main sources of the primary data included managers and some workers our team spot in an
attempt to get someone answers our questionnaires.
1.8 Research Limitation
The major limitation of this research is time constraints and unavailability of data. In order to
achieve an in-depth understanding of the influence of the forces of the task environment, this
study makes a critical attempt to retrieve past data from the few selected firms, though the
information may be foreseen to be less sufficient for understanding impact of the forces of the
task environment.
3
1.9 Organization of the Study
This research is organized into five chapters. Chapter one which is the introduction covers the
background of the study, statement of the problem, objectives of the study, research questions,
significance of the study, Scope of the study, and research limitations.
Chapter two is devoted to the theoretical framework and the literature review. Under this the
literature on task environmental forces would be extensively discussed as well as an overview of
their influence on managers on an ongoing daily basis.
The next is chapter three gives account of how the study was conducted. The following sub-
headings are discussed in this chapter: Research design, population, sample and sampling
procedure, instruments, data collection and data analysis procedure.
Chapter four deals with analysis of data, and the interpretation and discussion of findings in
reference to the literature / previous findings.
The last chapter that is chapter five focuses on the summary, conclusion and recommendation in
the light of the findings of the study.
4
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
While the world of business management is moving towards a new era where the business
environment is becoming more critical to the success of managers and their firms, many
managers still don’t see the need to consider the forces of the environment when taking decisions
most at times (Lutfi 1999), business organizations, whether in developed or less developed
countries, find themselves in a severe compelling business environment where they have to
consider several things before reaching decision, (Felix Opoku 2011). Therefore, managers of
companies should pay attention to the forces of the environment and influence; otherwise they
waste executive resources and inputs to effective decision making, (Morrison & Beck 2000).
A business organization, whether in developed or less developed countries, that operates within
today`s dynamic and hostile environment is vulnerable. The different functional areas within a
business organization need to be mobilized to confront the opportunities and threats presented by
the environment within which they operate.
In the past two decades, the business environment has gone through the process of dynamism,
one that causes increasing instability, uncertainty, interdependence and interrelatedness, and the
complexity of the environment. Business, as well, is inevitably affected by this process of change
towards more interdependence. Many forms of organizational restructuring (such as downsizing,
reengineering, implementation of cooperative strategies) have been witnessed as responses to
these changes (Jones, 2002). Yet, limited empirical studies have been conducted to investigate
how the forces of the task environment actually affects managers and firms on an ongoing daily
basis.
International business scholars (e.g., Clark &Knowles, 2003; Clougherty, 2001; Eden &
Lenway, 2001; Young, 2001) point out the need to explore further the impact of the environment
and globalization on firms. Therefore, this study aimed to investigate the impact of the task
environmental forces on managers on an ongoing daily basis.
2.2 Theoretical Framework
5
Since this study attempts to establish the link between the influence of the task environmental
forces and managers` decision on an ongoing daily basis, there is the need to draw from
environmental organization literature. Due to the nature of the environmental construct, the level
and dimension of the environment to be studied must be clearly specified to minimize conceptual
ambiguity and over abstraction (Castro Giovanni, 1991). Among the five levels of environmental
conceptualization (i.e., resource pool, sub environment, task environment, aggregation
environment, and macro environment), this research focuses on investigating the task
environment. The environment in which firms operate provides resources that influence their
survival and growth and the ability of new entrants to join the environment (Randolph & Dess,
1984).
6
CHAPTER 3
DATA COLLECTION AND ANALYSIS
The main research instrument in this study was a questionnaire, interviews, unpublished works
from business websites, documents, journals and publications, textbooks, and articles. The
targeted key informants included the presidents, owners, or middle level managers who are
typically top decision makers of firms and are most knowledgeable about the firm`s overall
activities and strategies.
Stratified Random Sampling Technique was adopted using the following variables.
(a) Age - in terms of being young or old. In this study, we were particularly after age because the
aged will have more work experiences to share. The cut off age was twenty-five years and above.
(b) Length of Service. This deal with the period a particular employee had been in the service of
the organization. It is assumed that employees who have spent a longer period of their working
lives with a firm will be in a better position to know the historical profile and details about the
selected firms. The cut-off point was five years and above.
(c) Sex- in terms of being a male or female.
(d) work status in terms of being a management staff, senior staff or a junior staff.
7
CHAPTER 4
RESULTS AND DISCUSSION
One important force of the task environment is competitors. Competitors are the individual,
groups, or organizations that provides goods or services which are the same or similar to the
goods and services of another organization. Competitors are usually found in the same industry.
Competition is the basic element of a free enterprise system. The interests of both the
organization and the customers are better served when choices in the market are available.
Competition encourages progress and product-developments. It forces organizations to be more
innovative and productive. For example, in 1955, Harley- Davidson held nearly 70% of the U.S.
motorcycle market, but by 1983, this share had been reduced to only 3.7%.
This steep decline can be attributed to aggressive competition by Japanese companies such as
Honda, Yamaha, Suzuki and Kawasaki who invaded the market with redesigned products and
highly effective marketing strategies. Harley-Davidson failed to envision the strong impact of
effective competition.
It is important to recognize that the area of competition is not limited to customers only but it
extends to competition for all scarce resources such as raw materials, capital and human
resources. Thus, management must congruously look for cheaper but quality substitutes for raw
materials and must acquire and retain an effective and dedicated work force by offering good
working environment and by providing motivation for self-actualization goals.
Competitive strategies are well guarded secrets. Research activities, new product developments
and future advertising campaigns of competitors are extremely highly protected secrets.
Accordingly, management of an organization must continuously monitor competitor activities
and analyze each competitor to gain an understanding of its probable actions and responses.
Another vital element of the task environment is the customer. The basic reason for the very
existence of any business organization is making profits and the profits are created by customers.
Hence, knowledge about the customer’s needs and fulfilling these needs is an organization’s
8
primary concern. Accordingly, an organization must continuously monitor the consumer
environment in terms of any changes in customer’s needs or preferences.
Managers must also recognize certain buying preferences as passing fads and plan accordingly.
An example of such fads may be the Nehru jacket or the designer jean. Customers can be the
direct consumers who buy and use the products or services for themselves or they can be
industrial organizations that use the products or services to produce their own products and
services. An organization must match the changing needs of customers with new or improved
products in today’s constantly changing business environment. According to Peters and
Waterman, such successful companies as IBM, make every effort to stay close to their
customers.
Many organizations now have well-defined organized systems in keeping up with their
customers. They establish formal contacts asking them for feedback about the quality of their
products and services and invite them to participate in helping make product design changes.
According to Eric Von Hippel, in some industries, as much as 80 per cent of all important
innovations have originated with users.
The customers expect a quality product at a reasonable price with guaranteed satisfaction.
Accordingly, it is management’s responsibility to see that the interest of consumers is protected.
“The customer is always right” has proved to be a good policy for initiating sales and keeping
the customer.
To add to the above, Government regulators is yet another element of the task environment.
While political and legal issues and developments have an indirect impact on organizations and
thus become an element of macro-environment, regulatory agencies are specific government
agencies that have direct influence on organizational activities and operations and hence these
are part of the task environment of the organizations.
Regulatory agencies are created by local, state and federal government for the purpose of
ensuring that organizations operate within the enacted laws. These agencies have the power to
enforce laws in their respective fields and also introduce some of their own requirements that can
be legally enforced. These agencies are basically set up to protect the public from certain
business practices or to protect organizations from unfair competition.
9
These agencies regulate the activities of organizations in five principal areas. These are
consumer protection, investor protection, environmental laws, preservation of free market
competition and labour conditions. Food and Drugs Board (FDB) protect the interests of
consumers. Securities and Exchange Commission (SEC) establishes as to how public companies
must conduct financial and accounting practices and protects investors from illegal securities
activities. Various antitrust laws are established to foster free competition and to discourage
monopolization of markets. There are many laws that protect the interests of workers. These
include equal employment opportunity, affirmative action and the right to work in relatively safe
and healthy environment via Occupational Safety and Health Administration (OSHA)
regulations. Similarly, Environmental Protection Agency (EPA) protects the environment from
being polluted by business organizations in terms of air pollution, water pollution and dumping
of chemically hazardous wastes.
Furthermore, suppliers are also an element of the task environment. Since all organizations
transform inputs of materials, equipment, energy, capital and labour into outputs of products and
services, an organization must interact with a network of suppliers from whom these inputs are
obtained. This interaction is mutual and two- way. Just as an organization is interested that its
suppliers maintain the quality of the materials that it buys from them, the suppliers are equally
interested that the buyer organization brings out quality products.
Suppliers also influence a company’s strategic choices. Choosing the right supplier is an
important strategic decision, whether it be colleges and universities which supply human
resources or banks and federal lending agencies which provide capital or the suppliers of
materials. Since a firm depends on its suppliers to provide certain resources at every stage of its
operations, it is very important to keep good relations with the suppliers and it is always
advisable to have choices among suppliers.
10
CHAPTER 5
SUMMARY, CONCLUSION, AND RECOMMENDATIONS
5.1 Summary
This study was conducted to assess the pressure and influence of the forces of the task
environment on managers on an ongoing daily basis. In addition, the study sought to establish
the relationship between opportunities and threats of the task environment, and the managers`
daily decision making, and to examine whether all managers in an industry are equally affected
by the forces. Finally, the study intended to analyze the challenges, opportunities and risks of the
forces of the task environment and their implication for sustainable development of firms in an
industry. These objectives were pursued explicitly. The study came out with four major findings;
The study shows that the forces of the task environment often affects the main internal functions
of management, and seriously influence the objectives of the firm and her strategies.
Secondly, the study shows that, though many of the forces of the task environment are
uncontrollable, managers can still put measures in place to take advantages of the opportunities
they present, and also capitalize on the threats and turn them into opportunities that would give
them competitive advantage over their competitors in an industry.
In addition, the study shows that, many managers try to ignore most of the forces of the task
environment and use them as excuses for their failures due to the fact that they are
uncontrollable.
Finally, the study shows that managers who understand and are familiar with the impact of the
forces of the task environment and make provisions for them when taking decision for their firms
are always success in their fields.
5.2 Conclusion
This research was conducted to examine the pressure and influence of the forces of the task
environment on the managers on an ongoing daily basis. The study rigorously explores the
11
opportunities and threats the forces of the task environment posed to the managers in their daily
decision making. After a close look at the objectives and the research questions set out at the
onset of the study, findings indicate that forces of the task environment have presented lots of
opportunities and threats to managers on daily basis creating the prospect of production, trade
and investment in new and economically viable areas.
5.3 Recommendations
After exploring the various objectives and their respective research questions, it is realized that
industry players do not engage in co-marketing alliances. It is however recommended that
managements of firms should seriously consider and make use of the forces in the task
environment in their daily decision making processes. This is believed to help in arriving at an
effective and efficient decision which would result in higher growth and performance of the
firms. Knowing and making use of the forces in the task environment would also help managers
and firm to compete effectively and efficiently in their respective industries if the opportunities
and threats of the task environment are fully explored.
12
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Albanese, R. (1988) Management. Cincinnati: South-Western Publishing Inc.
Gareth, R.J.; Jennifer, M.G.; Charles, W.L.H. (2000) Contemporary Management. 2nd Edition. Boston: Irwin/McGraw-Hill.
Daft, R.L. (1988) Management. Toronto: The Dryden Press.
Daft, R.L. (2001) Organization Theory and Design. 7th edition. Australia: South-Western Thomson Learning.
Hannagan, T. (2004) Management: Concepts and Practices. 4th Edition. Upper Saddle River, N.J.: Prentice Hall
http;//bookboon.com/blog/2011/10/how-globalization-affects-business/
http;//kalyan-city.blogspot.com/2011/09/what-is-international-business-meaning.htm
http;//www.m-t-d.co.uk//blog/effects-of-globalization-on-business.htm
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