This report will indicate the change that are likely to be required in the process of planning and leading if the organization is to remain competitive in this changed environment. 1. 3 Scope The report will cover external environment with include mega and task environment. Moreover, it will discuss planning process and leading which appropriate for the new environment. 2. Assumption This is a medium-size business organization which is facing significant challenges.
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The medium size company is one that employs fewer than 500 people and that generates sales of less than 20$ million annually (Thomas et al, 1998, p283). For many years, the business operating in a stable environment had relatively mechanistic characteristics, highly centralised decision making, many rules and regulations, and hierarchical communication channels. Much emphasis was on vertical coordination, with limited delegation between management levels (Bartol, 2002, p317). Recently, there has been a change in government policies and the market is now more accessible by overseas business competitions.
The organization turns to operating in highly unstable and uncertain environments had more organic characteristics, decentralised decision making, few rule and regulations, as well as hierarchical and lateral communication channels. Horizontal co-ordination was emphasised, which considerable delegation between levels (Bartol, 2002, p317). 3. Nature of problem An organization’s effectiveness is influenced by its external environment, which are the major forces outside the organization that may potentially impact the success of the organization. 3.
1 Mega-environment, consists of five element The external environment, also called the mega-environment or general environment, consists of the external broad conditions and trends in the societies within which the organization functions The mega-environment consists of five major elements described by Bartol et al (2002). The major elements of the mega-environment are: Because the relationships at the strategic level are much more lateral and without clear subordination than at lower levels, the interpersonal skills involved in persuasion, negotiation, and collaboration are more crucial.
These processes operate on a base of effective reasoning and logic. Strategic leaders — especially when consequential decisions are being made — must be able to build the perception that their ideas are rational and deserve support. Conceptual skills which allow the strategic leader to make decisions and cope with the level of complexity associated with a particular position. Environmental Scanning. Scanning is purposeful search in the environment for relevant information.
The skill lies in knowing what may be important, where to look, who to ask, and what to ask, to obtain needed information. Not all environmental scanning is done by strategic leaders. In today’s environment, the task has such enormous scope that whole departments, branches, or organizations maintain environmental scans. Decision Making. Decision makers must isolate and identify key issues, visualize and predict potential problems, and formulate least-risk solutions. The complexity may be too great, and the consequences of possible courses of action too uncertain.
For these complex and ill-structured problems, most organizations make use of an executive team, composed of the leader and his/her advisors. The assembled wisdom of the team members enables a broader scope to be considered, and permits a more careful analysis of the information relevant to the issue. Reducing Complexity. The complexity and uncertainty of the strategic environment exceeds that which can be tolerated at the lower levels. Decision makers at these levels- nominally the mid-levels-develop concrete plans for allocating resources to operations.
The strategic role is to comprehend the complexity and uncertainty in the strategic environment, and then to set understandable azimuths for the mid-levels of the organization that can be used as a rational basis for resource allocation to operational units. Understanding Indirect Effects. A strategic leader’s frame of reference and vision must be broad enough to predict the indirect-second-, third-, and fourth-order effects of decisions. Without this capacity, changes in policy, regulation, or action may produce effects neither anticipated nor desired.