What are some examples of how social, political, and technological factors in the external environment play a role in shaping an organization's strategic direction?
Suppose that during a SWOT analysis it is discover that the company has a clear advantage in cost of production. How might this factor shape the organization's future strategy?
An organizations strategic decision is very important for the organization to be able to achieve a competitive advantage through configuration of its available resources in a challenging environment in order to fulfill the expectations of the organization's stakeholders and to meet the needs of customers and the market at large (Nadkarni & Barr, 2008).. Factor in the external environment often affects an organization's ability to compete, which in turn affects the organization's strategic direction. This paper looks at some examples of how social, political, and technological factors in the external environment play a role in shaping an organization's strategic direction and how an advantage in cost of production shapes a company's future strategy.
Examples of how factors in the external environment shape strategy
Many studies show that there needs to be a link between an organizations environment and its strategic decisions. Some of the social factors that affect an organizations strategy direction include consumer behavior, societal trends, traditions, values, and society expectations (Nadkarni & Barr, 2008). Currently major social issues affecting strategy are global warming, pollution, aging workforce in industrialized countries, safety, health care and many more. These factors have an effect on people's behavior and how they react to an organization. Therefore, analyzing these factors can help an organization form strategic positioning to capture niche markets based on societal needs and consumer preferences. In such a case scenario consumer behavior and trends would help an organization to formulate strategy.
An example of strategic ...
Social, political and technological factors shape direction are examined.