January 14, 2020 78
January 14, 2020 78
The relationship existing among the suppliers, creditors, and companies is crucial for the company’s long-term survival and growth. The relationship must base on faith and commitment and should be long-lasting.
The suppliers and creditors should be dependable during times of difficulty because the company should have a continued supply of needed inputs. A company depends on its suppliers not only for the timely delivery of materials but also for financial support and services.
During emergency conditions, the company may have to demand quick delivery of soft credit terms. The deliveries of items and material deferred or a lot may be broken into sub-lots. Only if the company is competent enough and it’s able to address some of the following aspects will it be continued support from its suppliers.
Specifically addressing the above issues a company can make forecasts about its position in the market and implement the needed strategies to sustain itself.
It is only rarely that a company can process all the ideal factors quality, quantity, price, and human and material resources. However, an accurate evaluation of suppliers and creditors is crucial for a company to gauge its business environment.
It has come into the understanding that youngsters are highly ambitious; therefore, it has become necessary for companies to pay marginally higher salaries to attract employees of other companies.
The ability of a company to sustain its efficient employees is necessary for its success. In the business environment, the reputation of a company and the total pay package that it offers are the main considerations of personnel.
From an employee, a good company is one which has long-term ability to meet the personal needs of employees is stable and permanent, pays reasonable salaries to its employees, looks into the welfare of employees, is valued for its product quality and service rendered and has a good reputation for the social behavior of its employees.
The wage pattern in all countries is different and this fact has been well utilized by many companies around the globe. The data processing and back-office work are shifting to countries where facilities in computerization and trained people are available to handle the information.
Technology has been rapidly changing in recent years. Likewise, obsolescence is also fast-changing. The advent of computers has shortened distances and virtually there has been an explosion of information. This technology boom has even changed the nature of competition. By innovating technology and streamlining operations, companies have expanded their operations and have raised customer’s expectations. Thus, the customer’s satisfaction transforms into a customer’s delight and customer’ success.
The technological changes also result in shrinking the product life cycles from years to months. A product introduced today may become obsolete the next day. The time to develop new products and services and to introduce new concepts has greatly reduced.
Some of the key factors which influence operations in a technological environment are as follows:
Companies need to comprehend, identify and classify the environment and its factors to draw meaningful conclusions. Although these environmental factors discussed above encompass all the relevant dimensions, it should not be forgotten that the environment is highly dynamic and it is humanly impossible to be accurate about these factors and their interrelationships.
All the elements act together in a coordinated fashion and no single element can be exclusive of the others. A change in the environment triggers off a series of reactions. The effect of a rising in petroleum prices on the business environment of a company, the effect of education on product preference, the effect of adulteration of edible oil on its sales, etc can be cited as examples.
Since the changes in the environment affect various factors that are vital to a company, to varying degrees at various times, it is difficult to evaluate these influences. Probable cause and effect relationships can be drawn between various factors and their impact on the environment.
The environmental uncertainties cause strategy managers to go for short-term plans. They operate with flexibility, focusing on speeding up operations to be in tune with the fast changes in the environment. Therefore, companies tend to become reactive rather than being proactive and hence face the risk of losing leadership in business.
It may be true that some strategies are successful. But it may be very difficult to anticipate the impact of changes in the remote and operational environments of a company. The impact of changes on other alternative strategies also cannot be easily evaluated. Hence, a lot of data should be collected, classified and analyzed.
In spite of the inaccuracies in predictions, it is worthwhile to study the effect of various changes on the environment as it helps to narrow down the alternatives and avoid unwanted options.
Assessment of the environment does not lead to the best strategy but it leads to the elimination of all non-promising alternatives. The cost effort and time spent on environmental scanning helps in justifying the efforts that go into the entire exercise.
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