External/Internal Factors Paper Essay
External/Internal Factors Paper
The Frito-Lay is a worldwide recognized organization that began from the union of two companies in 1961. Within this organization, management has had to deal with internal and external factors that affect the four fundamental functions of management: planning, organizing, leading and controlling. Globalization, technology, innovation, diversity and ethics have also had their impact on the four functions of management in the Frito-Lay organization. Managers for the Frito-Lay organization have found ways to use delegation to manage the different factors and functions and perform in an effective and efficient way. The planning function of an organization is important because it involves determining the goals for the success of the company. An internal factor that may affect the planning function of management at the Frito Lay organization is attention to competitors. When Frito-Lay plans to incorporate new ideas and demands, they look to the competitors for insight of how to approach these new ideas in a positive and well-thought out process.
According to Leyla Norman, “a hurried entrance into a new market can cost the company money in the long run and not make full use of managers’ planning abilities” (Norman, 2004). This means that if the Frito-Lay organization does not take the planning process into full advantage when rushing to compete with other companies, they could end up losing instead of gaining profits and customer preference. An external factor that could affect the planning function of management is the economy. While determining the goals of the organization, the economy plays large role. When the economy is not at a high point, planning within the Frito-Lay company may be “stopped, adjusted or taken in a new direction” (Norman, 2004). As the economy recovers planning may be resumed as needed. The organizing function of management involves “assembling and coordinating the human, financial, physical, informational and other resources needed to achieve goals” (Bateman & Snell, 2011). An internal factor that could affect the Frito-Lay company is a financial necessity.
If funds are not available to pursue and achieve the plans of the organization, then it could affect the realization of the goals for the company. An external factor that could affect the organizing function within the Frito-Lay company may be any new technological advance. If the Frito-Lay company is not up-to-date with their technological capabilities, this could affect the implementation of the goals mapped out in the planning function. The leading function is described by Bateman and Snell as “stimulating people to be high performers” (Bateman & Snell, 2011). A factor that could internally affect Frito-Lay management in the leading function could be lack of employee performance. If employees do not have the motivation to achieve the goals of the organization, the whole company could suffer. An external factor that could potentially affect the organization and management of Frito-Lay is ethical issues.
When there are ethical issues outside of an organization, it could affect the company in a negative way. This could be a major reason that Frito-Lay creates opportunities and depends on the “minority and women-owned entrepreneurs (M/WBEs)” (Frito-Lay, 2014). In the controlling function of management, performance is closely monitored and changes are implemented as necessary. When employees deviate from the established performance standards, an internal factor that could affect the management function is a conflict of interest. When there are conflicts of interests, such as family relationships, it could internally affect the performance monitoring. An external factor that could affect the controlling factor in the Frito-Lay company could be labor laws. Although Frito-Lay has standards of performance and expectations, they must still comply with labor laws as they are established for the safety and security of employees.
There are many internal and external factors that impact the leading function of management. One internal factor that impacts it is employee morale. “Morale is defined as the end result of many factors present in the workplace environment.” (Javitch, 2005). Morale can make or break any business. If your employees have poor morale, it will affect customer service and customer satisfaction which is the key component to businesses. Competition is an external factor that can impact the leading function of management. If there is an outside company that is doing better than yours, it can discourage employees and supervisors as well. This can lead to poor attitudes and morale in the workplace which then turns into internal issues for that company.
An internal factor that impacts the controlling function of management is technology. Having up to date technology can help improve things ranging from order accuracy to financial management which are both essential things for Frito-Lay as they are a very large corporation with consumers around the world. The economy is an external factor that impacts the controlling function of management. The economy affects their profitability and competition as well. The economy’s condition could potentially impact their sales and profitability. “Globalization is an elimination of barriers to trade, communication, and cultural exchange. The Theory behind globalization is that the worldwide openness will promote the inherent wealth of all nations.” (Jones, 2014). Globalization impacts all four functions of management. Globalization opens the doors for more business opportunities around the world and increases management globally.
It allows production to increase and allows employees to transfer to other positions within the company to other locations around the world. Globalization also increases competition due to the increase in an increase in customer base. Larger customer bases increase the profitability of businesses. Not having globalization previously would decrease the values of products due to their limit of customers. It increases a company’s ability to compete worldwide instead of limiting it to its country of origin which also increases profitability. The four functions of management that are impacted in the technological sense would be planning, leading and controlling Utilizing the function of management process within the Frito-Lay’s organization has made it one of the most popular and long standing companies in the snack food industry. How they plan, organize, lead and control is important to the continued success of the organization. Because of the large scale volumes they have to produce and distribute efficiently and continuously to all their customers they have to utilize the planning process in order to stay in the competitive market they are in.
They also have to look for new and better ways to process their product. Frito-Lay is in a competitive industry and they always need to know what technology is available to them that when used it saves cost and increases productivity. When implementing new technology you have to ensure that those leading and controlling the employees have knowledge of the new technology. Frito-Lay also has to ensure that those operating or involved with the new equipment are trained well and capable of continuing to do the job they were previously doing, but better. When they implemented new packing equipment in their Kern County facility, they ensured that everyone was trained. Because the equipment was to eliminate jobs the managers communicated with the employees and assured them they would avoid lay-offs. (Mohsen & Grijalva, 2001).
With the management functions used and a good management team in place they were able to implement the new equipment and improve productivity by 30% on the line. (Mohsen & Grijalva, 2001). Innovation is defined by Merriam-Webster as, “The act or process of introducing new ideas, devices and methods.” (Innovative, 2014) With innovation comes change. Since innovation has an impact on the leading and controlling portion of the functions of management, management has to have an open line of communication in order to hear new ideas that their employees may have. The more involved Frito-Lay allows their employees to be, the more opportunity they have to receive and enact their innovative ideas. It is important that an organization utilizes the knowledge and experience of their resources by encouraging them to change methods that may work better than what has been done in the past. Frito-Lay is a diverse organization with their workforce as well as the products they offer their customers. Diversity also impacts the leading and controlling functions of management.
Communication and networking are important aspects of a diverse organization also, because they allow people to interact with others that they may not normally interact with. Diversity has allowed Frito-Lay to be successful in the global pursuit of introducing their products as well. When transitioning into another country they utilize someone that is familiar with the market and culture to ensure a smoother transition into that particular market. As far as the diversity of their products they are currently conducting a contest to find new flavors for their chips in an effort to diversify their product even further. With all the misconduct that occurs in the business world, ethics is an important factor that can impact all the functions of management. In all aspects an organization has to avoid unethical behavior within the business they conduct, how the deal and address their employees and customers.
Because of the products that are available through Frito-Lay management has to concern themselves with the employees behaving in an ethical manner as well. To ensure that the employees know and understand the ethical implications that can occur, they are required to attend an ethics course and sign a certification that they have done so on a yearly basis. Frito-Lay has to take all precautions in avoiding unethical behavior throughout their organization. The top managers over at Frito Lay© over see many parts of their overall organization. They continuously have to adapt to different factors that may arise, excel in efficiency, excel in effectiveness, and monitor daily operations. It would be almost impossible for one person to do all of these functions, while planning strategies for existing goals and new ones. In order for a manager to accomplish all of these objectives they must delegate their work to their subordinates. Using delegation has many advantages that help the manager and their subordinates. For top managers, they are able to take on more of the strategic planning of the company than the operational managing.
The sixteen executive managers of Frito Lay© that oversee different divisions of the company cannot possibly specialize in each part of the department (Frito Lay 2014) They must delegate the work out to middle managers and line managers in order to complete operational tasks and planning. These levels of management have a more intimate knowledge of their division or department (Bateman 2011). A manager in marketing may have a clearer understanding of globalization and how to reach an international market. Managers in human resources or compliance will have a more precise view of ethical dilemmas could arise. Although upper management might be delegating out their work, they still have a final say on what choice to make. This makes the final responsibility land on the upper management.
Managers must be adaptive to all the different factors that come up in business. The world market is a continuously changing and growing environment. In order for a business to survive in this environment the managers that are employed must recognize the issues that could arise and know how to adapt to them. External issues could range from global economic changes to environmental changes that limit resources. Some internal issues that should be considered could involve the growth of the company. Recognizing the company has out grown its current structure will allow managers to implement a new structure that will fit the growing company better.
Management will always need to know how to adapt to these changes as well consider them in their overall planning, organizing, leading, and controlling. Changing environments can shift how a manager views their own organization and how it is standing up against its competition. Sometimes, though, management needs to use their most crucial resource as efficiently as possible. This resource would be time, and a manager needs to use this resource as wisely as possible. In order to free up managers they have to delegate their work amongst their subordinates. Delegating their work frees them up to make all of the important planning that will guide the organization to their next achievement.