Certain internal and external factors can affect the four functions of management, which are planning, controlling, organizing, and leading. Management should analyze internal and external factors for any factors that have the potential to affect the company. To understand better management’s responsibility in this arena let us examine some of the internal and external factors that may affect Wells Fargo. External factors that most commonly affect the four functions of management are sociological, economic and political, and technology. Sociological directly affects the methods in which management does their job. The sociological factor covers the general culture, work ethics, personal values, and trends of a particular area. Obtaining a better understanding of sociological factors can help management plan and design products in the future. Wells Fargo can offer better financial products by understanding the society directly surrounding them. According to Wells Fargo (2010), “Our first job is to understand our customers’ financial objectives, then offer them products and solutions to help satisfy those needs so they can be financially successful. If we do that right, then all sorts of good things happen for all our stakeholders including our shareholders.“
The next external factors that affect the functions of management is economic and political. These factors are driven directly by the economy and political environment. The management of Wells Fargo must examine how to best operate within the ever-changing climate of politics and the waffling economy to maintain a successful business. Studying competitors, customers as well as suppliers is a necessity to make effective decisions. The last but not least external factor to affect management is technology. This area has perhaps the most effect on businesses. The constant changing market of technology is one area that an organization can feel the effects virtually overnight. It is imperative that companies approach technology with flexibility and the understanding that the organization must be able to adapt to frequent change.
External factors can have a large effect on any organization. However, internal factors can have just as large of an effect on a company. Internal factors can be considered the available resource that an organization possesses to accomplish a goal. These can be such things as human resources, physical resources, financial resources, and even technological resources. Management has the responsibility to use these resources efficiently and effectively. The overall success of a company can depend upon how these resources are acquired and utilized. Wells Fargo has concentrated on internal factors for much of its existence. The company as a whole has grown considerably over the last 20 years, starting with a few banks in the Midwest to a bank with national recognition. Wells Fargo has achieved greatness simply by capitalizing on internal factors of adequately managing their internal factors.
Wells Fargo (2010). Our vision: Where we’re going. Retrieved from https://www.wellsfargo.com/invest_relations/vision_values/3
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