How Exterior Environments Affect The Home Depot Corporation - Term Paper Example

How Exterior Environments Affect the Home Depot Corporation The issue of organisations’ success relies on both internal and external environments. The current paper articulates on the external factors that affect business operations of organisations especially on The Home Deport Corporation. Social, cultural, religious, law and political environments have been argued to play a dispensable role in determining the positioning of organisations. Additionally, the reflection of how these environments impact organisations in both negative and positive way will be highlighted. There are no absolute effects of these environments, since the challenges brought in by these environments are sometimes considered instrumental in making organisations devise mechanisms of overcoming the challenges. Introduction The facet of any business operations is to make profit. However, for any organisation to maintain competitive advantage, several factors dictate the success of developing and maintaining competitive advantage. According to Aquinas (2008), one of these factors is the external environments such as social, cultural, religious, legal and political environments. This paper will articulate on these factors and outline their influences on businesses and particularly on The Home Depot Corporation. Apart from internal operations of an organisation, each of the above mentioned external factors have been identified as potential influences of the business. Each of these factors affects businesses in different ways. Nevertheless, the line of business and market determines the level of control that these environments have on the business. For instance, a fast food business would be influenced differently by culture as opposed to how a clothing business would be influenced by the same. In some situations, the external environment has been argued to have configured the internal operations of an organisation, something that leads to slow development or boosts organisations returns (Markham, 2011). For instance, cultural factors may force an organisation to design or come up with new products that suits the culture of the target market. Political factors may force organisations to operate under the current political environment, something that may end up affecting the business operations that can lead to losses or slow development. Social environment Hatch & Cunliffe (2013) argued that organisations that want to maintain competitive advantage must show their willingness to participating in corporate social responsibility (Parboteeah, & Cullen, 2013). Social responsibility entails handing back to the society by supporting individuals, groups and the community at large. With the increased business competition in the contemporary world, many customers are looking for organisations that support the community in different ways. This is a good facet that denotes the fact that an organisation is not there only to make profit, but also to help the community come up with initiatives that are considered helpful and which can help in supporting sustainability. For instance, The Home Deport Corporation has been on the lead in the social support of different groups. The company has military appreciation group that provide support for the veterans and their families. Some of the support services include sending care packages, letters to troops among many others. Pan Asian Waves is a programme that supports multicultural awareness and community outreach. According to Dufey (2008), the ability of an organisation to understand and communicate its intentions to people is vital instrument in creating good social relations with customers. Studies have documented that organisations that manage to identify themselves with the people have higher chances of winning their loyalty and trust. Some of the important issues involved in understanding the social context of the customers include the ability to listen, act and identify with the customer. Therefore, having a workforce that has proficient customer relations is critical in ensuring that there is good relationship between an organisation and the customers. It is more likely to have loyal customer in an organisation that they feel well attended to than in organisations where customer relations is poor. The Home Deport Corporation has been argued to have a competent workforce that has excellent customer relations. This has helped the organisation in climbing the competitive ladder to the top. In light of this, the more social an organisation is to its customer, the more advantageous this is to the organisation (Harrison, 2013). Social is one of the external forces that every organisation has to face to have top results. Cultural environment Culture plays an eminent role in determining the success of any business. This is because of the beliefs that different people from different cultures have on consumption of particular products and services. For a multinational company like The Home Deport Corporation, for example, the business operations in the US are different from the business operations in Canada owing to the difference in culture of the two nations. Having been the global leader in the home improvement industry, The Home Deport Corporation has been cited arguing that understanding and embracing diversity has played a part in lifting the organisation to number one in this industry. In fact, to remain competitive, the workforce of The Home Deport Corporation mirrors the diversity of the world that the company operates. Additionally, The Home Deport Corporation has partnered with community organisations that help in supporting diversity initiatives or even represent the company’s diverse communities and associates. Homann, et al (2007), argued that for any business to succeed, it is imperative to comprehend the culture of the market. This is arguably true because there is high possibility that cultures may vary from one place to another. For instance, some cultures do not believe in consuming some products because they go against their beliefs. Additionally, when organisations venture into the following markets, it becomes difficult to operate without learning the culture and probably employing people from the foreign culture to be part of the workforce. It has been observed that organisations that ignore the cultural issue have in most cases failed to excel in a foreign market. For instance, an American organisation planning to operate in the Chinese market would face difficulties in its operations unless the organisation employs people from China. This helps organisations in understanding the culture, the market forces and how they are influenced by the culture and above all, the organisation is better placed to thrive if it identifies with the new culture. Culture is a strong factor that influences businesses to an extent that some foreign organisations venturing to new markets have been forced to merger with local organisations in order to capture the market. In fact, some have been forced to exit the market due to lack of cooperation with the local culture. In such situations, the foreign organisation brings in foreign cultures that are mostly rejected by the local culture (Gerlach & Brandt, 2007). Religious environment Religious believes have been cited to have highly contributed to failure or success of business in different parts of the world. Some religions have strong believes that even dictate on the kind of business to be conducted within the regions that endorse such a religion (Gerlach & Brandt, 2007). For instance, Islamic culture does not allow wearing of mini-skirts by women. Therefore, it would be difficult for fashion organisation to operate in such regions. There are other cultural believes that have strong attachment with what people in such regions believes is their religion. These beliefs come with issues such as tribalism and discrimination. For example, a certain culture may hold beliefs that people from certain regions or from other cultural beliefs are not fit to mingle with. In such a scenario, it is tricky for people from these two cultural backgrounds to conduct business together. In regard to The Home Deport Corporation, the organisation has gone a mile ahead to understand such beliefs and embraced every cultural belief. They incorporate employees from all walks of life. This makes the organisation unique, something that has made it become successful in all regions it operates. In another dimension, some religious practices such as prayers, religious practices such as holidays among others affect how the business is conducted in such regions. If, for example, an organisation operates in regions with a mixture of various religious beliefs and practices, the operations might be distorted. This calls for such organisations to look into the consideration of how to function in such regions especially when the organisation has most of its employees from different religions (Beer, 2010). This involves shifting employees depending on their religious beliefs in order to ensure that none is discriminated against. This ensures that there is fair treatment of every employee regardless of their religious affiliation. The organisation has to take into account everyone’s beliefs while all together ensuring that there is no preferential treatment. Religion also affects the organisational culture in different ways. For instance, The Home Deport Corporation has devised a culture of incorporating every religion in its internal operations. This helps in reducing discrimination, which might be used by its competitors to tarnish its name. There is also the culture of treating all customers equally without discriminating them according to their religion. This is referred to as recognition of human values especially the religious values. Legal environment Every country has got its own legal system that regulates business operations (Homann, et al., 2007). The same case applies to organisations that intend to operate in foreign countries. There are also international laws and treaties that regulate trade and tariffs. Both public and private organisations are subjected to these laws. Organisational law When an organisation is recognised as a legal entity, it is subjected to law that governs the operations and conduct of the entity. These laws entail defining corporations, partnerships and limited and unlimited companies. In this regard, organisations must understand what the law stipulates about its entity. Security law Organisations that intend to obtain financing from investors may be subjected to security law. Security law ensures that the organisation protects the right of financiers from exploitation and other misconducts emanating from finance issues. Employment law Organisations that employ people are subject to a myriad of laws which relate to employment especially on discrimination and safety laws that are meant to protect the employee from exploitation and discrimination by the employer (Homann, et al., 2007). Compensation is also catered for so that employees are compensated adequately and within the current job market ratings. Organisations that fail to observe on employment laws always have problems with development and maintaining competitive advantage. Many instances of cases brought forward by employees as a result of discrimination and other related employment errands have been reported in the past and disciplinary measures taken on the organisation or its management. Contract law Many organisations engage in contracts at some point in their operations. These contracts must be subject to the laid down laws that stipulates on how the contracts must be executed. In addition, these laws can also be applied to individuals that enter into contracts as part time or permanent employees. The law also covers government contracts and procurement procedures. Immigration law Every organisation must comply with immigration laws including employment of illegal immigrants. Consumer protection law This law ensures that consumers are protected from exploitation by the organisation. Sell of illegal goods can lead to lawsuits against the organisation. Substandard goods are also protected by the law. Consumers are entitled to the value of their money. Any organisation offering substandard goods are subjected to legal proceedings (Homann, et al., 2007). With regard to The Home Deport Corporation, it is apparent that organisation has complied with most laws, something that has enabled it to thrive in different regions. In situations where organisations fail to comply with the law, there end result is failure and low results and this may lead to exit from the market. Political environment For any business to excel, the consideration of political environment is critical and cannot be ignored. Bowhill (2008) pointed out that regions with stable political environment have higher chances of developing as a result of good businesses in such regions. This is unlike in situations where regions have political instability. In such regions, it becomes difficult in establishing or even growing business. Additionally, government policies have been cited to have a great share in determining business operations in a given region or market. Both local and international organisations must comply with the laid down policies that are implemented by governments to control unfair completion as well as regulate the market. Legislations by law makers configure markets in order to protect consumer and competitors in the market. For instance, countries enact laws that control importation and exportation of products. Any organisation is expected to comply with such regulations for fair transactions across the board (Homann, et al., 2007). This is implemented by imposing some taxes and penalties to organisations that fail to comply with such organisations. For instance, a government may decide to increase tax for importation of products that have competition with the local products or market. Conversely, exportation of scarce products is at times taxed heavily to avoid low supply in the local market. Another concern that is dictated by the political environments is the issue of protection of the environment, which is characterised by strict laws that dictates how organisations are supposed to treat the environment in the course of their operations (Hatch & Cunliffe, 2013). For instance, organisations are required to dispose their waste products in a defined way. Recycling has also been high on the public agenda and this has to be addressed by the governments. Additionally, there have been campaigns on the use of social responsibility by organisations in order to protect exploitation of consumers by organisations. In fact, some countries are very keen on licensing organisations that practice social responsibility in their operations. In a different perspective, political ambitions have led to many governments to create good business atmosphere for private organisations with the intent of creating more jobs to people that the government is unable to employ. In regard to situations where there is a political change, there might be changes on the stock market and this might end up affecting business operations in such countries. This is because different political parties and their leaders have different agendas of the economy and in case they assume power, they might change the existing policies in order to effect theirs. Conclusion Several external factors dictate the success of developing and maintaining competitive advantage of any given organisation. In regard to social environment, ability of an organisation to understand and communicate its intentions to people is vital instrument in creating good social relations with customers. Studies have documented that organisations that manage to identify themselves with the people have higher chances of winning their loyalty and trust. Cultural environment plays a dispensable role in determining the success of any business. Different cultures have different opinions in regard to consumption behavior or different products and services. For any business to succeed, it is critical to understand the culture of the market. Organisations that ignore the cultural issue have in most cases failed to excel in a foreign market. Religious environment is as important as other external influences. Some religions have strong believes that even dictate on the kind of business to be conducted within the regions that endorse such a religion. Religion also affects the organisational culture in different ways. Legal environment affect organisations in different ways. The law environment entails legal entity of the organisation, protection of the right of financiers from exploitation and other misconducts emanating from finance issues, employment laws that safeguard the employees, among other provisions. It has been argued that political environment have its own share in regards to affecting organisations’ operations. Regions with stable political environment have higher chances of developing as a result of good businesses in such regions. Government policies have been argued to have a great share in determining business operations in a given region or market. Countries enact laws that control importation and exportation of products. Any organisation is expected to comply with such regulations for fair transactions across the board. References: Aquinas, P. (2008). Organization structure and design: applications and challenges. New Delhi: Excel Books. Bowhill,B.(2008). Business planning and control : integrating accounting, strategy, and people. 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(2011).Environmental organizations in modern Germany: hardy survivors in the twentieth century and beyond. New York: Berghahn Books. Parboteeah, P. & Cullen, J. (2013). Business Ethics. New York: Routledge. Read More