GCU Impact of External Business Environment on Organizational Performance Responses

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PXJ11

Business Finance

Grand Canyon University

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Please provide a 300-400 word response for each of the below 3 discussion posts. 1. In the text, David, David, & David, state that “there are 10 external forces that can be divided into 5 broad categories: (1) economic forces; (2) social, cultural, demographic, and environment (SCDE) forces; (4) technological forces; and (5) competitive forces” (2020). External factors can greatly affect the success or failure of a firm. Therefore, “identifying and evaluating external opportunities and threats enables organizations to revise their vision and mission if needed, to design strategies to achieve long-term objectives, and to develop policies to achieve annual objectives” (David, David, & David, 2020). A couple weeks ago, I was having a discussion with my cousin about the farming industry, so it was the first one to come to mind when reading this discussion question topic. Quite a few members of my family and friends are involved in the agricultural (ag) industry, and over the past couple of decades it has been greatly faced/influenced by external factors and will continue to do so for decades to come. Each of those five broad categories mentioned above can be found throughout the ag industry. Social, cultural, demographic, and environment (SCDE) is one that stands in both positive and negative factors. Some SCDE variables David, David, & David mention are regional changes in tastes and preferences, social responsibility, social-media pervasiveness, population changes by race, age, and geographic area, and energy conservations (2020). Across the board there is increasing threatening factors to the ag industry such as increasing temperatures, limited supplies of water, increasing urbanization with disintegration of rural communities and family farms, topsoil depletion, air pollution, and new threats to human health and safety. A large portion of these factors have pushed towards the direction of sustainable farming. “Agricultural sustainability rests on the principle that we must meet the needs of the present without compromising the ability of future generations to meet their own needs. Therefore, long-term stewardship of both natural and human resources is of equal importance to short-term economic gain” (Brodt, Feenstra, Ingels, & Campell, 2011). Social media, interestingly, has been a huge factor in the SCDE overhaul of agriculture. It provides a platform to bring people closer to the food they consume and promote social/environmental responsibility. This leads into another category that stood out to me: technology. Overall, agriculture industry has (or had to) embraced the growing advances in technology, which has led to where the industry currently functions. As the National Institute of Food and Agriculture share, “today’s agriculture routinely uses sophisticated technologies such as robots, temperature and moisture sensors, aerial images, and GPS technology. These advanced devices and precision agriculture and robotic systems allow businesses to be more profitable, efficient, safer, and more environmentally friendly” (2021). This technology allows for safe management of natural resources, safer growing conditions, less pollution run off, and keeping produce prices at a more affordable rate. “Technology is improving volume of food per sq. ft, while decreasing costs per sq. ft, and giving farms the tools to more responsible in the long run with inputs” (S. Rolfe, personal communication, August 19, 2021). “One-third of America’s 3.4 million farmers are over the age of 65, long regarded as retirement age, and nearly a million more of them are within a decade of that milestone…[however] Some 27 percent of farmers are categorized as new and beginning producers, with 10 years or less of experience in agriculture… Young producers — age 35 or younger — account for 9 percent of farmers, but their operations and production are larger than the U.S. average” (Abbott, 2019). Younger people are starting to come back to farms and/or start new farms, as well as starting to have more control/influence over larger farms. Along with public interest and wants, I think this beginning shift in age will be a significant factor in the continual overhaul of the agriculture industry. It will be interesting to watch how the newer generations will respond to the five external factors categories and shape the agriculture future. References: Abbott, C. (2019, April 11). On average, U.S. farmers are aging, but a quarter of them are newcomers. Food & environment reporting network: AG insider. https://thefern.org/ag_insider/onaverage-u-s-farmers-are-aging-but-a-quarter-of-them-are-newcomers/ Brodt, S., Six, J., Feenstra, G., Ingels, C. & Campbell, D. (2011). Sustainable agriculture. Nature Education Knowledge 3(10):1. https://www.nature.com/scitable/knowledge/library/sustainableagriculture-23562787/ David, F. R., David, F. R., & David, M. E. (2020). Strategic management concepts and cases: A competitive advantage approach (17th ed.). New York, NY: Pearson Education. ISBN-13: 9780135203699 National Institute of Food and Agriculture. (2021). Agriculture technology. https://nifa.usda.gov/topic/agriculture-technology 2. Businesses are anticipating robust economic growth by the end of the year. However, roadblocks such as the new Delta variant may interfere with progress. As the country continues to implement provisions, increase the availability of the Covid-19 vaccine, and decrease the unemployment rate, other poorer nations are struggling to improve economic activity and performance. While other countries are trying to tame the first wave of Covid-19, the second wave emerges. Once again, businesses across the globe are uncertain as to whether the new strain will interfere with improving the global economy. If the Covid-19 cases continue to spike, companies will have to prepare for the possibility of supply chain disruption, government policies/restrictions, interest rate changes, and a recession (Global Economic Outlook, 2021). Once again, businesses across the globe are uncertain as to whether the new strain will interfere with improving the global economy. Our chosen company for our CLC project is Southwest Airlines. The airline industry was at a standstill when Covid-19 first emerged. The industry struggled to combat multiple environmental forces, which lead them to a complete halt. Each airline company resulted in a loss of traffic and revenue. Unfortunately, closed borders, government restrictions, flight suspension, and feared customers made it even more difficult for the industry to turn around. Southwest Airlines did not discontinue flights to domestic services points (Kim, 2021). The number of incoming flights scheduled was limited, but the company continued to provide air transport service. Additionally, the airline did not lay off or furlough its employees (Kim, 2021). As restrictions lifted and borders reopen, the airline industry strived to recover from losses, and respond to domestic and international traffic surges. References: Airport Council International (ACI). (2021). The impact of Covid-19 on the airport businesses and the path to recovery. Retrieved from https://aci.aero/news/2021/03/25/the-impact-of-covid-19-on-theairport-business-and-the-path-to-recovery/ Global Economic Outlook. (2021). Retrieved from https://conference-board.org/topics/globaleconomic-outlook Kim. B. (2021). Gary Kelly on how comms was key to Southwest Airlines emergence from the pandemic. Retrieved from https://www.prweek.com/article/1720745/gary-kelly-comms-keysouthwest-airlines-emergence-pandemic 3. I currently see two sides to businesses globally. Right now we are in a crisis and many businesses have been doing whatever they can to stay afloat. People have been losing their jobs, getting hours cut, and not knowing day to day if they will have a job the next day. People are losing their houses, they cannot afford their bills, and many people have filed for unemployment and other benefits to help them live every day. This would be the bad side of things globally because everyone is going through this together and all or most countries are experiencing hardship due to the pandemic. What has changed is how people are shopping and doing business and that is online. According to one article, “The COVID-19 pandemic has accelerated the shift towards a more digital world. The changes we make now will have lasting effects as the world economy begins to recover,” said UNCTAD Secretary-General Mukhisa Kituyi” (UNCTAD, 2020). Businesses are still making money and have figured out other ways on how to stay open, but online retailers are seeing that many people prefer to shop online because they do not have to get out of their house, and things will be delivered right to their home. We picked Amazon for our company, and many of the types of business like ours (online shopping) have remained open, or also have very strict access to keep things up and running in their in-person stores. While things are slowly beginning to open up again, but many people are not ready to be around others at grocery stores, convenience stores, etc. Most places now requiring mask mandates or vaccination proof are still driving orders to be pursued online. UNCTAD. (2020). COVID-19 has changed online shopping forever, survey shows. Retrieved from https://unctad.org/news/covid-19-has-changed-online-shopping-forever-survey-shows
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Responses 1
For a long time how external factors have been seen to greatly influence the success of
industries. Companies' profitability and stability highly depend on their ability to quickly
identify, respond and adapt to the changes in the external environment. Akpoviroro & Owotutu
(2018) states clearly that change is inevitable, and flexibility is needed to manage unexpected
market mutations, which will determine whether it will survive or face extinction. I am agreeing
with you that an organization needs to identify and assess the external opportunities as well as
drawbacks. They are vital in determining the direction a company is heading, decisions to make,
and revise on the already set targets to meet long-term goals. Indeed, agricultural industry is
greatly affected by external factors. Also, technology is one aspect that can improve the
agricultural industry and helping to manage the factors effectively. Use of advanced devices and
precisiin agricultural systems are making the industry thrive and farmers to make more profits
than before. I pointed out significant research by King (2017) reporting that farmer do not need
to spend a lot in applying fertilizers and pesticides in an entire field. Technology can assist them
identify specific areas with problems and treat the crops individually with the minimum
quantities. This can guarantee high crop yie...


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