Understanding the Company as an Open System in a Globalized Business Environment
The Company as an Open System
A company, as an open system, is a living entity that interacts with other businesses to create products and services. Every organization develops activities that culminate in the delivery of goods or services that satisfy market needs.
The Company’s Purpose
A company serves two primary functions:
- At the individual level: Produce goods and/or services.
- At the societal level: Create wealth.
The Systems Approach
The Systems Approach to management views an organization as a single, unified system with a specific purpose, composed of interconnected parts. This approach encourages managers to consider the organization holistically and within the context of its broader external environment. The systems approach recognizes that the actions of one segment of the organization can significantly impact all other segments.
Company’s External Environment
Organizations exist within complex external environments that influence their operations. Key factors in this external environment include economic, sociological, political, and technological elements. Factors that directly impact the organization include stockholders, banks, suppliers, unions, and customers.
Demographic Shifts
Demographic studies highlight changes in population, predicting an aging workforce with less practical experience, a higher proportion of women, and a shift in population density. Management plans for the future must consider these demographic shifts, along with the challenges and work ethic of employees.
Political and Legal Landscape
All companies operate within different external environments, with the political and legal landscape being particularly crucial. To ensure success, all company members must be prepared to navigate the current political climate and anticipate potential changes. Ignoring shifts in political or legal codes can lead to significant problems.
Technological Environment
Every company exists within a technological environment, requiring management to make critical decisions regarding:
- The appropriate level of enterprise technology.
- The introduction of new technologies.
When introducing new technology, managers must consider both financial and human factors. Some employees may struggle to adapt, potentially hindering the successful implementation of new technologies.
Internal Environment of the Company
The internal environment of a company encompasses its human resources, finances, technology, and physical assets. Financial resources include fixed investments, sales estimates, and miscellaneous income, all contributing to the final cash flow that measures the company’s economic health. This includes:
- Budget revenue (gross total undiscounted costs).
- Budgetary expenditures (to determine the liquid or net).
- Net cash (difference between entry and exit).
- Final box.
- Initial cash.
- Minimum cash.
Corporate Culture
Factor for the success of investment projects of the company.
Often the lack of organizational structure and limited budgets make to establish a point of contact between the community and the private company public relations department, human resources, advertising or marketing. Then creating a bit of skepticism among stakeholders of the company. It is for this reason that many industries have emerged in the very department called community relations, corporate affairs, public affairs or government affairs.
In the case of banks is the department of community reinvestment which is responsible for creating the link between the company and the community, which was created as a result of federal regulation. The area from where the coordination of community relations a company can tell us much about the approach, budget and commitment of this company in the community. Every day more companies are recognizing the importance of their participation in construction in the settlement of the country’s problems. Therefore, we must be very clear that the profile of a professional working in the area of community relations is vital to the success of investment projects of the company. However, a distinction in the professional profile that works to safeguard the public image of a corporation should not necessarily be equal to the actual projects that create educational partnerships, or runs a volunteer program.
The term Globalization Globalization UN translates English as Globalization, trying to interpret it as a great coverage of the practices or open market.
At the global level, globalization refers to the growing interdependence among countries, as reflected in the growing international flows of goods, services, capital and knowledge.
Within this context of the global village, there are great companies to conquer the market, among them are: multinational corporations, which maintain significant operations in more than one country simultaneously, but that given to all from its headquarters in the country of origin, transnational corporations, which maintain significant operations in more than one country simultaneously, and decentralized decision making in each transaction at the local country.
Currently, there are great opportunities for organizations to enter new markets, reach more and more potential buyers of their products, and expand their business horizons.
Social variavles vancarias institiciones Conpet economic variables political variebles technological variables