How Environmental Factors Can Affect the Business Organization Essay

How Environmental Factors Can Affect the Business Organization - Essay Example By 2005, it had over 80 employees and several customers, which ranges from supermarkets, restaurants, cafes, and households. The company will be used as a case study to answer the questions in the subsequent paragraphs. Open system approach to organizations An open approach system to organization implies that an organization interacts with its outside environment, which in turn influences the structure and operations of the organization. The fact that an open system interacts with the outside environment implies that an organization is an open system should always adapt to changes in the environment. For a long time, Icy Foods Ltd. has been operating on informal basis judging, by the way, operations are loosely divided into five departments with no clear-cut framework. Moreover, the company used to accept orders with less or no regard to quality or quantity specifications of the product. This lack of organization explains why the company lacked customers from major supermarket chains . The other apparent misgiving that characterized Icy Foods Ltd. is the lack of clear division of labor and specialization. This fact is inherent in the way the company conducts job rotations (Weiner, 2002). Job rotation is not a good concept because it does not give the employees the chance to gain experience in a given line of duty. The fact that the company did not embrace quality and efficiency in its operations negatively affected its business performance. Before the takeover by Megastores Plc., the company had adopted an organic organization structure in managing the various operations. The management, prior to the takeover, operated an open-door policy. The management was keen on hearing employee’s ideas on new products and operational improvements. There was also a flexible approach to handling employees’ issues such as working hours and leave. After the successful takeover, the management came up with a raft of new changes that were more bureaucratic as oppose d to the organic system that the management had used to all along. The company adopted strict operational procedures that all the workers were compelled to follow to the latter. The new management placed much emphasis on operational efficiency, and work was based on performance. Decisions at the company were made unilaterally by the management without any consultations whatsoever, with the stakeholders. The human-resource department was formed to manage the human-resource issues. This bureaucratic approach to management led to high turnover at the organization. Moreover, it resulted in low motivation levels among the employees (Cassidy & Kreitner, 2009). It is worth noting that bureaucratic approach to management of the organization has one critical advantage, which is an improvement of efficiency in operation and management of the resources of the organization. Since the adoption of the bureaucratic leadership style at the organization, the efficiency at the organization has improv ed by a whopping 35%. How environmental factors can affect the business organization The year, 2005-2010 saw several changes in the business environment that adversely affected the business performance of Icy Foods Ltd. The fact that major supermarket chains dominated the ready foods market drove out of the market the smaller retail outlets from a business.