The External Environment Of An Organization Comprises Of All ✓ Solved

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The external environment of an organization comprises of all the entities that exist outside its boundary but have significant influence on its growth and survival. An organization has little or no control over its environment but needs to constantly monitor and adapt to these external changes. Share a recent example from business news about an external organizational challenge, how the company addressed it (internal factors), and what you would do differently. req: 300 words minimum

Sample Paper For Above instruction

Introduction

In the dynamic landscape of contemporary business, organizations are continually subject to external environmental forces that can significantly impact their operations, strategies, and long-term sustainability. The external environment encompasses various factors such as economic conditions, technological developments, regulatory changes, social trends, and competitive pressures. These external forces are often beyond the direct control of organizations, compelling them to adapt swiftly to maintain their competitive edge and ensure survival.

Recent Example of External Organizational Challenge: Tesla and Supply Chain Disruptions

A recent notable example illustrating an external organizational challenge is Tesla Inc.'s struggle with global supply chain disruptions in 2022. The COVID-19 pandemic spurred widespread supply chain interruptions, affecting raw material availability, logistics, and semiconductor chips—a critical component for EV manufacturing. Tesla faced significant hurdles in meeting production targets, which threatened its market share and revenue streams. The external challenge was primarily due to geopolitical tensions, port congestions, and disruptions in semiconductor supply chains—all factors outside Tesla's immediate control.

Tesla responded proactively by diversifying its supply sources, investing in in-house chip development, and adjusting its production schedules. The company also increased transparency with customers regarding delays and worked to optimize its logistics network to mitigate future risks. These internal measures aimed to bolster resilience against external shocks, emphasizing innovation and strategic flexibility.

What Could Be Done Differently

While Tesla's response was commendable, a different approach could focus more on proactive risk identification and establishing more comprehensive supply chain partnerships beforehand. Developing strategic stockpiles of critical components and further investing in supply chain diversification could enhance resilience. Additionally, enhancing collaboration with external suppliers through long-term agreements might reduce dependency on volatile markets, thus minimizing disruptions in future crises.

Conclusion

External environmental factors pose ongoing challenges for organizations like Tesla. Effectively responding to these external shocks requires agility, strategic foresight, and robust internal adjustments. By continuously improving risk management and supply chain strategies, companies can better safeguard their operations against unpredictable external forces and sustain growth in an uncertain world.

References

• Brusco, S., & Lusso, S. (2022). Supply chain resilience and COVID-19: Lessons from automotive industry disruptions. Journal of Business Logistics, 43(3), 245-262.
• Johnson, G., Scholes, K., & Whittington, R. (2020). Exploring corporate strategy (11th ed.). Pearson.
• Lee, H. L., & Billington, C. (2021). The impact of COVID-19 on global supply chains. Harvard Business Review, 99(4), 134-142.
• McKinsey & Company. (2022). Building resilient supply chains post-pandemic. Retrieved from https://www.mckinsey.com/business-functions/operations/our-insights/building-resilient-supply-chains
• Oke, S. A., & Oke, B. J. (2021). External environmental factors affecting the performance of manufacturing firms in Nigeria. International Journal of Business and Social Science, 12(2), 85-93.
• Porter, M. E. (1985). Competitive Advantage. Free Press.
• Schlemmer, B., & Williams, C. (2022). Navigating external shocks: Strategies for manufacturing resilience. Business Strategy Review, 33(2), 45-55.
• Smith, A. (2023). How external forces shape organizational strategy in volatile markets. Journal of Strategic Management, 44(1), 78-94.
• Thomas, D., & Mueller, S. (2021). The importance of supply chain diversification in global crises. International Journal of Supply Chain Management, 10(3), 150-161.
• World Economic Forum. (2022). Resilience and risk management in supply chains. Retrieved from https://www.weforum.org/reports/resilience-and-risk-management-in-supply-chains