Dynamic Business Environment Assignment Sample

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INTRODUCTION

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The dynamic environment is about the business environment, which is changing rapidly. In the dynamic market, the organization needs to adapt the changes quickly and develop the new services, products and ideas to keep up with the new trends & technology. The business dynamic is related to the factors which get in used to describe about the business nature. There are various factors about the external and internal which can affect the approaches of management. The Contingency theory focuses on the three variables which can be influenced by the organizational structure (Worthington and Britton, 2020). This includes the size of organization, style of leadership and technology employed. The stakeholder theory is work for the capitalism the interconnected relationship among the business and customers. The report will delve into the two management theories which are related to the today’s sector of accounting and finance. The report will shed light on the theories with the research-based examples from the industry of accounting and finance. The report will lay emphasis on the two internal and external factors which can put impact on the organization in accounting and financial sector. The report will demonstrate on the industry example of the internal and external factor and along with some real world situations.

Discussing Management Theories

The management theories are the surrounded with the recommendation strategies of the management. This can include guidelines and framework which can be implemented by the organization.

Contingency theory: The theory states that the leadership is dependent upon the situation in the hand. This relies on the leadership style of the individuals and befits the situation (Needle and Burns, 2019). In accordance to the theory, someone can be a leader in one circumstance and other is in ineffective leader. The author of the theory is Joan Woodward and after this author it has expanded to the Paul Lawrence. The theory put focuses on the structure, size, environment of the organization rather the situation-based approaches. Within the sector of accounting and financial, the organization works in the diverse environment and can face the issues with the fluctuation, regulatory changes and development in the technology.

The contingency theory is based on the situation. This is helpful in the decision making, important in the adaptability. The theory allows the organization to adapt the strategies to fulfil the needs and comes up with the opportunities. Within the field of the accounting and finance, it also uses the contingency theory to adopt the structure of the management (Hilton and Platt 2020). The practices should be aligned with the organization. For instance, the accounting firm which is multinational can make of the decision making to work with the situation of local market. Apart from it, the financial advisor can focus on the approach to offer and maintain the quality services.

Stakeholder theory: The theory can be capitalism that the stresses can be interconnected with the relationships among the customers, employees, investor and business. The theory has been proposed in the year 1980 by the Edward freeman. The theory has been argued that the firm should develop the value of stakeholders. This operates the organization and can be considers the knowledge of the stakeholders. In accordance with the stakeholder theory, this includes the customers, workers, society and suppliers. This has created and developed the interest in the performance and activities within the organization. The organization should focus on the creating the value of the stakeholders which ultimately leads success (Morrison, 2020). In the sector of financial and accounting, the trust of the stakeholders plays a crucial role.

The theory of the stakeholder, this can help in improving the positive relationships with the other stakeholders. This can help in mitigating the issues related to the stakeholders. By working on the interest of the community, workers, customers and regulators and improve the reputation and decrease the risks. Firms of accounting and financial make use of the stakeholder theory to adopt the ethical practices and increase the open communication (Chikweche and Bressan 2021). For instance, bank can make use of the financial practices which is sustainable to resolve the issues and can be done by the stakeholders. This can help improving the reputation and attract the customers. The theory can be based on the suppliers, customers, workers and local communities who can be directly affected but the stakeholder theory. The theory has suggested that the main part of the organization is the stakeholders.

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Supporting with Examples

Example of contingency theory: The main example in the field of accounting and finance focus on the multinational bank Deloitte. The bank is focused on the decentralized approach which includes the numerous regional offices, strategies and practices in accordance with the demand of customers and situation of the market. For example, the bank Deloitte is mainly focused on the emerging market. The main aim is to address the issues related to the decision making and gain the opportunities. The structure of the Deloitte is agile with the services, needs and pReferences of the customers (Morrison 2020). The bank adopts the services to meet the needs of customer with the high quality services. The management practices work in offering the quality standards with aligns with the management practices. The Bank is improving the customer’s services and competitiveness. This is the main aspect of the bank to satisfy the customers with their best services to improve the customer services.

Example of stakeholder theory:

The stakeholder theory is observed with the financial organization which is JP Morgan Chase. The JP Morgan Chase is aligning with the strategy of the engagement of the stakeholder and work with the shareholder approach. The bank mainly focused on the stakeholder, this can include the customers, regulators, customers and communities. For example, the bank is working in the robust and social responsibilities and focused on the development of the sustainable friendly practices (Daniels et.al, 2019). The JP Morgan Chase is investing in the initiatives such as support to the small business, energy projects and affordable offering of the housing. The bank is demonstrating on the commitment to the stakeholder to create and develop value. Holistic approach which is related to stakeholder management can help in improving the trust between the stakeholders and increase the reputation.

Analysing Internal and External Factors

Within the sector of the accounting and financial, the companies can be effected by the internal and external factors. The factors can help in decision making and operation for the organization.

Internal factors:

Strengths:

• This is related to the internal factors and resources which offers the competitive advantages to the company.
• The organization which has the history of offering the services with the high quality can have the strong support from the customer’s base and relationship with them.
• With the skilled professional in the field of accountants and finance it can help it can help in offering the best services to the customers.
• The organization which focuses on investing in the cutting edge technologies such as digital platforms and software can improve the efficiency in resolving the issues related to the customers (Baron and Baron, 2003).
• Additionally, this can help improving the quality services and best deliveries the customers and fulfil the needs of customer base.

Weaknesses:

• This point refers to the limitation of the organization and some lacking points.
• Any firms which is not interested or slow to work with the new technologies can face several challenges to fulfil the needs of customer and can’t be work in the emerging market (Nickels et.al, 2019).
• The market segment can increase the risk of the downturns in the economy or disrupt the organizational operations.
• The lack of adopting the ethical standard can decrease the brand image and affected the overall performance of the company.

Pestle analysis

The external factor can increase the performance and goals of the organization in the field of accounting and financial.

Economic factors

• The economic downturns can come with the challenges within the organization within the sector of accounting and financial.
• On the global bases the financial market offers the opportunities to expand the services and increase the customers.
• Higher rate of fluctuations in exchange rate also impose threat in front of accounting and financial organizations (Clegg, Kornberger and Pitsis, 2015).

Technological factors

• The technology advancement such as data analytics and block chain can improve the decision-making process.
• With the extreme boost in the technology can increase the threat in the organization such as reputation, security of the data and instability in the financials (Costello, 2005).
• Excessive competition in the financial institution can put pressure on the market, prices and different offerings of the organization.

Use of SWOT and PESTEL analysis: The tools are valuable for the organization in the sector of accounting and finance. This offers the internal and external factors within the organization. This helps in identifying the areas for further improvement and development of it. The main aspect is to develop the strategies which can be developed through the strategic focus (Tiberius et.al, 2021). This can help in developing the strategies which can support in mitigating risk and work in gaining new opportunities. This also helps in decision making and allocation of the resources.

Supporting Factors with Examples

The illustration of the organization is an accounting firm Ernst and young (EY).

SWOT analysis

PESTEL analysis

CONCLUSION

By summing up the report, it delves into the two management theories such as stakeholder theory and contingency theory. The theories are useful in the industry of accounting and financial. This can directly affect the internal and external factors which can directly affect the organization. This can affect the revenue, customers, services, financials, market trends and some other factors as well. The report emphasis on the theories which provides specific evidences pertaining to the accounting & finance industry. The JP Morgan chase is aligned with the strategic with the strategy to stay connected and engaged with the stakeholder. The other example is the multinational bank Deloitte which is concentrated on the decentralized approach; this can include the strategies and practices. The report demonstrates on the analysing the internal and external factor which is offers the advantages to the organization. In the internal factor the organization has the history of providing the high-quality services. The External factor is about the increase in the goals and performance within the field.

REFERENCES

Books and journals

• Baron, D.P. and Baron, D.P., 2003. Business and its environment (p. 2). Upper Saddle River, NJ: Prentice Hall.
• Chikweche, T. and Bressan, A., 2021. An investigation on the need for business advisors who can respond to the changing needs of small business enterprises faced with a dynamic operating environment. Journal of Small Business & Entrepreneurship, 34(1), pp.94-118.
• Clegg, S.R., Kornberger, M. and Pitsis, T., 2015. Managing and organizations: An introduction to theory and practice.
• Corallo, A., Errico, F., Latino, M.E. and Menegoli, M., 2019. Dynamic business models: a proposed framework to overcome the death valley. Journal of the Knowledge Economy, 10, pp.1248-1271.
• Costello, T., 2005. Legal structures and responsibilities of voluntary organisations. In AIDS: A Guide to the Law. Routledge.
• Daniels, J.D., Radebaugh, L.H. and Sullivan, D.P., 2019. International business: Environments and operations. Pearson.
• Hilton, R.W. and Platt, D.E., 2020. Managerial accounting: creating value in a dynamic business environment. McGraw-Hill.
• Morrison, J. (2020) The Global Business Environment, Red Globe Press
• Morrison, J., 2020. The Global Business Environment. Red Globe Press
• Needle, D. and Burns, J., 2019. Business in Context: An Introduction to Business and Its Environment. Cengage Learning EMEA
• Nickels, W.G., McHugh, J.M. and McHugh, S.M., 2019. Understanding business. McGraw-Hill.
• Tiberius, V., Stiller, L. and Dabi?, M., 2021. Sustainability beyond economic prosperity: Social microfoundations of dynamic capabilities in family businesses. Technological Forecasting and Social Change, 173, p.121093.
• Worthington, I. and Britton, C., 2020. The Business Environment. Harlow: Prentice-Hall
• Online
• Elaborative SWOT Analysis of EY – A Multinational Professional Services Network, 2024. Online. Available through < https://iide.co/case-studies/swot-analysis-of-ey/>
• PESTEL Analysis of EY, 2023. Online. Available through < https://www.247caseanalysis.com/essay/EY-13683-Pestel-Analysis>