(solved) Contemporary Developments in Business & Management
Added on 2020-11-12
14 Pages4415 Words271 Views
Leadership ManagementEconomics
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Contemporary Developments inBusiness and Management
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.Primary external influences and importance of each to the organization.............................1TASK 2............................................................................................................................................41.Analyse its relevance and how it influences policies and decision-making withinVolkswagen.................................................................................................................................42.Critically evaluate the effectiveness of the organization’sresponse....................................63.Demonstratesomeareasforimprovement...........................................................................7CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
INTRODUCTIONIn recent times there has been frequent change in global market conditions. Businessesare highly impacted by the external factors in which they operate which includes social,economic, etc. due to its impact many medium size companies are not able to survive in industryfor long term (Renwick and et.al., 2016). Also, any change in this effect on growth anddevelopment and decision making process. They have to change their policies and way ofworking. Thus, effective strategies are developed by organization to reduce impact. This reportwill briefly describe influence of external factor on organization and its importance. Moreover, itwill show how it influences policies and decision making. At last areas will be discussed whereimprovements are required. For present report organization taken is Volkswagen. It belongs toauto mobile sector and operate globally.TASK 11.Primary external influences and importance of each to the organizationAutomobile industry plays a significant role in economic growth and development of acountry. it contributes a major part in GDP of a nation. Besides this, many other industries aredependent on auto mobile sector growth (Chang, 2016). They include glass, steel, rubber, etc.thus, any impact on it will affect overall country economical condition. But in recent time, thissector is been influence by change in many factors. Also, globalization has led to increase incompetition among different countries and companies as well. Business is surrounded by bothmicro and macro factors. It sets boundary within which business has to operate. Moreover, everyfirm is closely related to external factors. Thus, any change in it influence operations anddecision making. Volkswagen is a German auto mobile company founded in 1937 and headquartered inWolfsburg, Germany. It is the largest auto mobile maker in the world. The company subsidiaryare Audi, Bugatti, etc. it operates worldwide. Company is giving tough competition in thissector. The competitors are Hyundai, Toyota, etc. Volkswagen operations are spread in different countries. they have to analyze the factorsso that impact can be minimized. Furthermore, the importance is without this business can notgrow and sustain. Here, PESTEL analysis is conducted to identify influence on Volkswagen(Pestel analysis of Volkswagen. 2018). It is as follows :-1
Political – the political situation of any nation should remain stable. Government develops tariffpolicy to create trade relations and supply chain network. It is because entire nation is run bygovernment by developing laws and regulations (Hammer, 2015). Thus, any change in this willresult in political disturbance. Also, it reflects the relation with neighboring countries.Volkswagen is successfully operating in many countries. so, if there is any change in politicalsituation, then company growth will be hindered. But on the other hand its importance is friendlyregimes and international trade relations helps business growth. also, government supports insales by providing funds to and allowing FDI investment. along with this, political condition in21St century is playing a vital role in expansion of business. Auto mobile industry has been ableto improve their product quality by following policies and guidelines. For example – in Indiagovernment has banned the production of BS3 vehicles. This step is taken to reduce pollutionand provide better environment to society. Moreover, laws and standards set by differentcountries enabled Volkswagen to manufacture vehicles accordingly. Economic- this is most important factors that consists of currency rate, tariff and trade policies,etc. the government and central bank of nation is responsible for regulating and controllingeconomic situation (Vom Brocke and et.al., 2014). Auto mobile sector is directly related to thisas they are strong pillar of country economic condition. Fluctuations in economic condition canlead to increase or decrease in supply or demand of products. Due to rise in prices of oil demandof vehicles has decreased. This has led to fall in sales and profits of Volkswagen. Furthermore,company has suffered a huge loss due to diesel scandal. This has impacted on their brand imageas well. But when economic forces are in stable and in favor of company it ensures survival forlong time. Volkswagen is successfully expanded their business in countries like Germany, UK,etc. for example – The developing nation like India has provided opportunity to Volkswagen toproduce vehicles. It has provided hand to contribute in GDP and improving economic growth. Social – it is related to society and culture of country. In includes living standard, income level,class, needs, etc. the change in taste and preference of customer forces business to modifyproduct features or develop new ones. Socio cultural forces has changed habits of people. Nowthey are demanding cheap vehicles. Now demand of electrical and high average vehicles hasraised. Volkswagen growth is affected by this as they have to manufacture electric vehicles. Theimportance of social forces to Volkswagen is it helps in determining needs of people. Then,products are developed to fulfil their needs. In addition, it is useful to categories needs on basis2
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