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Category: Business

Autor: anton 21 June 2011

Words: 2194 | Pages: 9

Impact of Internal and External Factors on the Functions of Management

There are four main functions of management that, when used properly, work together to contribute to the success of a company’s goals: planning, organizing, leading, and controlling. Many different factors impact these four functions of management and require careful consideration when planning committees are working out the details of their plans for the company. The following paragraphs will outline several of these factors, using the Disney Corporation as an example, and also explain how these factors and functions can be managed through delegation.

Internal Factors

Overwhelming amounts of phone calls, the need for extra staff to handle customer service, and underproduction are some of the internal factors that make it almost necessary for a company to create a website. Disney’s comprehensive website has made all of their services available at the fingertips of anyone who has the Internet; from movies to television, shops, restaurants, cruises, live events, and more. Creation of a website large and effective enough to include information for each of these different ventures requires extensive planning and organization by Disney’s management and especially their marketing and IT departments. After its creation, keeping the website updated with the latest information is important for the satisfaction of their customers. Monitoring feedback from customers lets the company understand what is needed to keep visitors coming back to see what else is new. Their website shows how Disney has succeeded in conglomerate diversification, conquering many different aspects of the entertainment and travel markets. Their differentiation strategy over all other competitors becomes more apparent with each addition to their company.

A huge internal factor that impacts the functions of management is the increasing desire and pressure to “Go Green.” People choose what they buy, where they work, and how they live based on preserving the precious resources of our planet. They are now looking at the companies they purchase from to see if they are taking this matter into account when making their business decisions. Disney’s recognition of the importance of this factor led them to plan and pledge to a recycling and waste prevention program in the United States that has had many beneficial effects for the environment. The Walt Disney Company, according to an EPA report based on 2005 records, “has reduced an equivalent of more than 71,000 metric tons of carbon dioxide” (Disney, 2008). Continual planning and organization is underway to enhance green building designs for all Disney hotels by next Earth Day. Disney’s officials say they are very committed and with great leadership and control it is definitely possible (Disney, 2008).

External Factors

External factors are those that affect business from outside the organization. There are several external factors that affect the outcome of day to day business, even for a huge corporation like Disney. Walt Disney has been known for its family entertainment for more than eight decades. It started small in the 1920s and has grown phenomenally today to a global corporation. Even a business this powerful and profitable is affected by external factors.

The four functions of management, planning, organizing, leading, and controlling, are all affected by external factors as well. For instance, two major factors that affect these management functions are general economic and industry conditions. This external factor causes customers to delay or reduce their investments. It causes problems for all areas of the Disney Corporation from DVD and T-shirt sales to the number of guests in their amusement parks. If there is a decrease in the demand for Disney products, it could have a negative affect on the company’s strength and profitability.

Another external factor is competition. Where there is success there is competition. Disney has some competition but for the most part, Disney is the main competition for other organizations. Although Disney is the general source for competition, new competition arises all the time. With intense competition the corporation could result in a loss of customers.

Technological changes and product transitions are another external factor that affects businesses everyday. A company must be effective in managing product transition and improving customer service through incorporating technology.

Disney has managed their corporation well and has few concerns about these external factors. Though all pose a threat to business success, having good management an [Delete an. Rather use and] applying the four functions of management have help Disney be a huge success. External factors affect all of the management functions and can cause problems, mostly in less stable businesses but all organizations big and small are affected by external factors. Disney’s success is related to its management. External factors or not, Disney is around for the long haul.

Globalization and Technology

According to, the definition of globalization is “to extend to other or all parts of the globe; make worldwide” (, 2008). Globalization can have a huge impact on the four functions of management. In order to achieve success, a company must have a plan or goal set in action. Once a company decides to go global, it has to decide its market. For example, Disney has over 25 international websites, which are located in Africa, European Countries, Asia Pacific Countries, and other regions. Disney’s marketing team has come up with a way to satisfy almost every different type of culture that exists. For every new movie or show that they come out with, it is dubbed in many different languages in order to sell the item in different countries. This is a great way for organizations to make a good name for themselves. It gives the impression that the company is willing to put more effort into reaching people all over the world.

Whether a company goes global or not, technology is another huge impact on businesses. Over the past several years, the Internet has become one the most used technologies that has ever been developed besides the cellular phone. It has given businesses more revenue each year. Some people find it difficult to go directly to a store due to reasons such as illness, lack of transportation, or not wanting to deal with people. A lot of businesses also give better sales on the Internet than in the store. One advantage to buying online is that consumers do not have to pay sales tax (as long as the company is not located in the same state as the consumer’s residence). A disadvantage to ordering online is the waiting time to receive the product. For Disney, having websites in as many countries as they do allows people to purchase its products without having to worry about going to a store. This company is a great example of how going global and using technology to reach more people is a sure way of developing a good business with a great name that follows.

Innovation and Diversity

Innovation has a big impact on the four functions of management because it is through innovation that companies are able to continue to grow. Managers must use innovation during the planning process to introduce new ideas for products and procedures. They must encourage their planning team to think up new ways to stamp out competitors by coming up with new and different ideas for conducting their business. By being innovative during the planning process, businesses can gain advantages over others in their market. Disney is constantly coming up with new innovations and expanding the different parts of their business to include many other ventures. Walt Disney began with his Mickey Mouse cartoons, then went into Mickey Mouse merchandise, and in the blink of an eye, his company has theme parks, cruises, and environmental programs. Disney understood that to be successful, they had to strive to be the best they could be, which meant expanding in to many different (but related) markets that their fans and customers would follow them into.

Diversity is very important for management to consider during the planning process. Businesses must keep in mind that not all of their customers are the same, so they have to make sure that their business caters to many different types of people. They must diversify their products and/or services to reflect many different tastes that will appeal to their customers. Disney easily shows how diverse their company is through all of the different products and services that they offer. From programming for both children and adults to theme parks in several different countries to their website being available in multiple different languages, Disney can safely count diversity as one of their best traits as a successful company.


According to the book Management: Leading and Collaborating in a Competitive World, “Ethics is the system of rules that governs the ordering of values” (Bateman & Snell, 2004, p 138). The intent of ethics is to classify the rules that should direct people’s actions and the products and services that are needed. In business ethics the moral principles and standards are guides to the conduct of the individuals in the organization and the organization itself.

Ethics should always be adhered to in all four functions of management. In planning, ethics is necessary in order to structure goals and objectives both internally and externally in corporations. Organizing, leading and controlling, ethics should be at the forefront of every manager. How to conduct oneself toward peers, subordinates, and the public is essential because how the manager acts reflects on the entire organization (comma) not just themselves. Without good moral ethics, trust can be lost and the business can fail.

Disney World and the Disney Corporation have set standards to which all employees of its organization must follow. Because they are a global leader in family entertainment, “the company’s business and ethical standards are fundamental to how the company operates” (Disney, 2008). In planning, organizing, leading and controlling, Disney has set high ethical standards for all who are employed within the organization to uphold. Not only do they set standards of ethics for their employees they also have high standards of ethics environmentally. “The Company is committed to balancing environmental stewardship with its corporate goals and operations worldwide” (Disney, 2008). On Disney’s corporate responsibility webpage it states that they are “responsible for maintaining the ethical standards [that were put into place in the planning stage.] These standards govern how we treat everyone with whom we have contact. These are standards of integrity, honesty, trust, respect, fair play, and teamwork” (Disney, 2008). The Disney Corporation can not just sit back and watch the plans that were set, happen; they have to review and make improvements when needed to insure the safety and satisfaction of their employees and the community. By doing this they are using good business ethics in every part of their organization.

Delegation and Managing Factors and Functions

Due to the many different aspects of business that Disney is promoting in 2008, it is very important that they delegate responsibilities. To keep up their financial success, as well as develop their new strategies, it is important that they utilize all the resources that they have. One way of doing that is by allowing the staff to help take over some jobs of the managers.

Having the managers work on projects such as the success of the new Disney park, it is important to designate others to be in charge of existing projects, such as the production of Disney merchandise and the upkeep of their other two parks. Managers could also delegate some responsibilities to the "Go Green" campaign. Having others think of ways to recycle and reuse would open up time for the managers to work on the details of the plans.

It is very important for any company to delegate responsibilities. With Disney's high success and constant expansion, it is important for them to keep their costs down. By delegating responsibilities to other employees, instead of hiring new managers, they are accomplishing this goal effectively. Not only does delegation keep costs down, but it also gives employees a chance to prove themselves to the company. With Disney's constant expansion of their services, if an employee does a great job with the delegated project, they put themselves in line for a promotion or raise.


The topics explained above show how Disney has used the selected factors to their advantage and have emerged a highly successful and diverse company as a result. The way that a company’s management handles these and other factors shows their strength and integrity. By delegating work to employees, the company’s managers can increase the work that is done and have the time to plan for new goals to help the company grow in its success. If the company is successful, they can look forward to revenue, productive and loyal employees, and customers that will keep coming back for more.


Batemen, Thomas S. & Snell, Scott A. (2004). Management: Leading and Collaborating in a Competitive World, 7e. New York, N.Y. McGraw-Hill/Irwin. Unabridged (v 1.1). (2008). Retrieved on March 14, 2008 from

Disney Corporation. (2008). Retrieved on March 11, 2008 from

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