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Impact Of Internal And External Factors On The Functions Of Management

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Autor:   •  June 21, 2011  •  2,194 Words (9 Pages)  •  3,863 Views

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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


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