Essay on Maximizing Profits in Challenging Economic Times: Understanding Internal Factors

Introduction

Some of the forces that impact the business are more challenging, which makes it challenging to handle them. The strategies that one can use to control these factors are different. A business person can change the way internal factors that affect the business but cannot influence the economy to grow. However, the businessman can encourage the mode of spending despite the situation of the economy. Learning and understanding the internal factors will make it possible for the business to benefit from these factors fully.

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Impact of legislation

Once a business acquires its legal status, it can determine the method it will use to run and govern its operation. Depending on what form of marketing it is registered, it will be easier to choose if it will be run by a board of directors or a single manager depending on the business. Once an organization acquires its legal status, there are specific effects that impact the industry. The impacts include:

Ability to regulate the rights and duties of the employees

Once the organization acquires its legal status, it will be easier for the managing team to come up with the responsibilities and rights of their employees. Fairness will be exercised as the employees will know what they are expected to do. Some rules will be invented to ensure that each person in the organization follows the rules as expected.

Protection to the investors, creditors, and consumers

After an organization is legally registered, the consumers, creditors, and investors will be protected. For example, an investor will be able to recover his or her investments in case the organization fall. The investors will follow the legal procedures and guidelines, and since the organization is registered, it will be easier to retrieve his investments. The legislation offers protection to not only the clients but also to the employees and clients.

Ensure a healthy society

The board or the members governing the organization will ensure all the products and services that they offer to their clients are of good quality (Bush et al, 2019). Offering the best goods and services provides that there is a healthy society. Since the organization is already registered, it will work to its level best to avoid its license being revoked.

An organization that has acquired its legal status is easy to govern. Before the government allows the business to start its operation, a lot of investigation is done to ensure that it is not an illegal business. Also, another requirement is that the company needs to define the method in which it is being governed. Therefore even after acquiring the legal status, there will be no governance conflicts since it was already stated in the proposal.

Purpose of vision and mission statements

Having a strategic plan is a critical function for every company management. Through strategic planning, they can set priorities, allocate resources, and also ensure the employees, investors, stakeholders. Everybody who is involved in the organization is working to meet the goals and objectives of the organization. For these strategic planning to be effective, the mission and vision statements are required (Fiaz, 2017). The vision statement is used to describe the future state of a firm. It is used to explain what the organization is working to achieve in the future. On the other hand, the mission statement is used to describe the current state of the organization, stating its primary goals and objectives. The detailed information about the operations of the business, the methods used to perform the services, and who it does the activities for are stated in the mission statement.

Defining the purpose

Both the vision and the mission statements help in defining the purpose of the business, sense of belonging, and identity. The comments motivate the employees to work harder to achieve success.

Aligning the resources

The two statements ensure that the resources are appropriately aligned in the organization to ensure that success is achieved. The mission statements also act as a 'north star' as it provides the direction in which the firm will follow. The vision, on the other hand, contains the 'destination' as it gives the goal that is to be achieved.

Act as a useful guide for making decisions

Since the organization has already made the vision and the mission statements, they guide the management in making decisions that are according to the organization's culture.

The mission and vision statements are essential tools in making strategic planning. They help shape the strategy that is used by the business to achieve the desired goals in the future. Every organization should ensure that they have the mission and vision statement since business is like a journey that one does not have a direction. Still, you know the destination, which is the motivating factor.

Impact of organizational structures on management roles

The method in which an organization is structured has excellent effects on the management. Any misfit between the organizational structures and the administration will lead to poor functioning of the firm. Despite all the other assets being present, the organization structures are essential. Organizations may have the best managers, but due to the wrong organizational structure, they are not able to offer the best services that will push the organization to the next level. The managers must understand the type of organization structure being used to determine the useful roles that they need to use.

There are two types of management styles.

Centralized management

In this type of management, the manager is expected to come up with a strategy, make the decisions, and delegate the tasks to the employees. The manager will do the three steps without having to consult his juniors. Employees are expected to follow orders without raising any opinions or concerns. The centralized management style is useful if only the organizational structure is simple, like those of small businesses.

Decentralized management

In this style of management, the managers only coordinate the output of tasks but do not interfere with the work itself. Managers are expected to discuss their opinions with the head of departments and, at times, the employees before making a decision. The type of organizational structure applies to the large organizations that have several departments and branches. The managers are expected to consult one another to avoid making huge mistakes that will incur costs to the organization.

It is advisable to understand the market in which the firm operates before determining the organizational structure. The benefit of having a suitable organization structure is that the firm will be able to maximize its productivity since the management can optimize the performance. Also, workers view managers with excellent management skills as a bonus and always value those managers that can bring the organization to higher levels.

Impact of organizational values and ethics on management decision making

Ethics and values guide individual behavior as well as making ethical decisions. Ethical decisions are those that are acceptable to a large percentage in our organizations. Ethical decision making involves evaluating and choosing alternatives that are consistent with ethical principles. An organization that makes ethical decisions has different impacts on both the employees and the organization at large. The following are the impacts of ethical decision making in an organization.

Employees feel appreciated

Once the decisions are made in a business, and the employees' values and ethics are observed, they feel appreciated. They will think that their presence in the organization is recognized, and they will work hard to meet the organization's mission and vision. The employees make a large group in an organization that can either push the business to success or drags it behind. Therefore, when making decisions, the management should ensure that they consider the values that will be morally fine with the employees.

Encourage teamwork

In every business, teamwork is the key to success. When people combine efforts and share ideas, better goods and services are provided, which improves the organization's standards and push it to high levels of success. An organization that practices ethical decision making encourages the employees to work together and achieve their goals despite the cost. The decisions made favor both the employees and the management hence the reason they are embraced in an organization.

Improves the relationship between the employees and the top management

Since ethical decision making involves the organization's culture and the values that favor both the employees and the management, the relationship between the two is improved. It is an advantage to the organization as they will both collaborate to ensure business success. The employee will feel free to communicate a concern to the management, and in return, the administration will listen to the workers. Both come up with a solution that will favor the business.

The Application of Management and Leadership Theories in An Organizational Context

Relationship between management and leadership

Leadership and management have proved to be closely related. Leadership is an essential part of ensuring the effective management of a business. Management is said to be the coordination of material and human resources in a business to enable the investors and stakeholders to achieve the desired goal. On the other hand, leadership is the process or organizing the material and human resources and directing the individuals in a company to influence them to work to meet the mission and vision of the firm.

In management, ethical leadership behavior stresses on building an organization environment which is comfortable and bearable for the employees to perform their roles effectively. A manager should have the qualities of a leader for him or her to run the organization effectively. A manager must plan, organize, direct, and control the activities taking place in the organization. Also, the manager is in charge of listening, building a relationship, inspiring and motivating the employees, which are the quality of the leader.

In an organization, the manager is elected to have leaders' qualities. A manager is expected to be close to the employees and can easily influence them into working towards their goals. In some organizations, managers are also elected by employees, and even employee representatives are elected to represent the employees in meetings. Proper management and leadership positively impact the strategic decisions made in a business. Proper management also plays a role in ensuring that a firm is efficient and enhances the use of appropriate management skills that includes leadership skills.

Management and leadership styles

Leadership styles influence both small businesses and large corporations. The styles affect every person in the organization from the senior management to the interns. Leadership styles create the organization's culture and influence business performance-the impact the firm through affecting the employees' morale, productivity, and the speed in making decisions. A successful leader in a firm is expected to analyze the problems, assess the skill level of subordinates, and consider changes that will ensure a favorable choice. Choosing the best effective leadership style will make an impact caused on the organization to be long-lasting.

One of the leadership styles is the commanding leadership style. Here the leaders establish a clear distinction between the employees and the superiors. Leaders who are arbitrary make decisions in a firm without involving their employees. In...