UNIVERSITY OF CAPE COAST

COLLEGE OF HUMANITIES AND LEGAL STUDIESSCHOOL OF BUSINESS

DEPARTMENT OF MANAGEMENT STUDIES

COURSE TITLE: INTERNATIONAL BUSINESS. CODE: ADM 301

LECTURER: DR. NICK FOBIH

Discuss the External Environmental Forces in terms of the Task Environment that Pressure and Influence Managers on an ongoing, daily basis.

Date: 30th October, 2016

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UNIVERSITY OF CAPE COAST

COLLEGE OF HUMANITIES AND LEGAL STUDIESSCHOOL OF BUSINESS

DEPARTMENT OF ACCOUNTING AND FINANCE

NAMES INDEX NUMBERS

PRINCE BRIGHT ATTATSI SB/ADM/14/0087

OPOKU OBED SB/ADM/14/0058

NKRUMAH LAWRENCE SB/ADM/14/0098

NANA ADU ANIMAH CYNTHIA SB/ADM/14/0099

AKPA FRANCIS WORLASI SB/ADM/14/0084

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THE IMPACT OF THE TASK ENVIRONMENTAL FORCES OF THE EXTERNAL

ENVIRONMENT ON THE MANAGERS ON AN ONGOING DAILY BASIS.

BY

GROUP 17

A Thesis submitted to the Department of Management Studies, University of Cape Coast in

partial fulfillment of the first semester`s course requirement for International Business,

ADM 301.

OCTOBER 2016

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ABSTRACT

This study examined the impact, the pressure and the influence that the forces of the task

environment in the external environment of business organizations have on the performance and

the daily decision making of managers of the various business organizations with focus on

selected business firms from Cape Coast.

The data were collected using both qualitative and quantitative methodologies. The former was

collected through interviews while the latter were collected via structured questionnaire and

documents. In all, 58 respondents were used for the study. The respondents were selected using

multiple sampling techniques – comprising of (i) stratified random sampling (ii) quota sampling,

and (iii) systematic sampling techniques. The data were analyzed using parametric and non-

parametric statistics.

The main finding of the study is that, the task environmental forces of the external environment

are the closest to the business organizations and directly influence its basic operations and

performance. And that these forces affect the main internal functions of management, and

seriously influence the objectives of the firm and her strategies.

The study concluded on the note that management needs to have a second thought on the task

environmental forces and, identify the forces, analyze them and anticipate their pressure and

influence on their (management) decision making on an ongoing daily basis. The fact that many

of these forces are uncontrollable, it does not mean that managers can ignore them or use them as

excuses for poor performance.

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TABLE OF CONTENT

NAME PAGE………….…………………………………………….....................…………... i

TITLE PAGE………………………………….……………………………...…..................... ii

ABSTRACT……….…………………………………………………......................………… iii

TABLE OF CONTENT…………………………………………….....................……………. iv

CHAPTER ONE............................................................................................................................1

INTRODUCTION......................................................................................................................1.0

1.1 BACKGROUND TO THE STUDY

1.2 STATEMENT OF PROBLEM

1.3 OBJECTIVES OF STUDY

1.4 RESEARCH QUESTIONS

1.5 SIGNIFICANCE OF THE STUDY

1.6 SCOPE OF STUDY

1.7 OVERVIEW OF RESEARCH METHODOLOGY

1.8 RESEARCH LIMITATION

1.9 ORGANIZATION OF THE STUDY

CHAPTER TWO.........................................................................................................................5

LITERATURE REVIEW........................................................................................................2.0

2.1 INTRODUCTION

2.2 THEORETICAL FRAMEWORK

CHAPTER THREE.....................................................................................................................7

DATA COLLECTION AND ANALYSIS

CHAPTER FOUR........................................................................................................................8

RESULTS AND DISCUSSIONS

CHAPTER FIVE.........................................................................................................................11

5.1 SUMMARY,

5.2 CONCLUSION,

5.3 RECOMMENDATIONS

REFERENCE…………………………………………………………………………………..13

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CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the study

Over the recent decades, the business environmental forces have experienced not only a

quantitative leap in the volume and value in respect of effective management decision making

and basic operations and performance of the business organizations, but a qualitative

transformation in the way managers of business organizations and the external environmental

forces interact with each other. The success and failures of Managers and organizations are

increasingly linked through the interactions of the opportunities and threats that the

environmental forces present to the managers and their organizations. The business environment

is becoming increasingly integrated and dynamic with speed growing rate of uncertainties being

the order for the day.

1.2 Statement of the problem

Our study will look into the influence that the task environmental forces have on managers on an

ongoing daily basis. Business environment is an interesting phenomenon and consists of a pool

of factors which have significant influence on the operations of the business organizations. The

environment is a powerful contextual dimension. The environments of business consist of all

elements existing outside the organizations` boundaries that have the potential to affect the

organization, Daft and Dorothy (2006). Gareth, Jennifer and Hill (2000) have defined

environment as the set of forces and conditions outside the organizations` boundaries that have

the potential to affect the way the organization operates.

In our study, we will define the environment as the set of factors, forces or variables that exist

within and outside the business organization which have the potential to influence the continued

and successful operations of the business organization. We believe that the organization has an

internal environment that can also influence the methods by which managers utilize resources in

order to effectively plan, organize, staff, direct and control organizational activities so as to

respond appropriately to changes in the external environment.

1.2.1 Internal and the External environment

Internal environment consists of a set of elements within the organization’s boundaries to which

managers must pay attention in order to help their organization survive and compete effectively

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in the external environment. These forces include; corporate culture, managerial philosophies

and

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leadership style, skills and talents of employees, physical facilities and resources, and production

technology.

External environment consists of a set of relevant elements residing outside the boundaries of an

organization that have the potential of influencing the continued and successful operation of the

organization. The organization does not function in a vacuum; being an open system, it has to act

and react to what happens outside the factory walls. The external environmental forces often

affect the main internal functions of management and can seriously influence the objectives of

the firm and her strategies. The external environment in conceptualized into two types; the task

and general environment. The task environment embodied those elements of the external

environment that are closest to the organization and directly influence its basic operations and

performance. The later refers to those elements of the external environment that are widely

dispersed and affect the organization only indirectly. Our study is based on the former.

1.4 The Task Environment Forces

The task environment includes forces such as competitors, suppliers, customers, employee

organizations, government regulators, mass media, interest group, distributors and local

communities. Decision makers or managers must understand the nature of this environment.

They must be aware of the critical features and characteristics of these forces and recognize the

shift and pattern that occur. A firm cannot intelligently plan for the future if her managers lack

environmental sensitivity. Indeed, the ultimate survival of the organization depends upon its

ability to adapt to the demands of the environment that represent either an opportunity or a threat

to management.

1.5 The Task Environment and managers’ daily decisions.

Since the effects that the task environment`s opportunities and threats have on managers` daily

decisions and the firm`s performance is almost unexplored, this study seeks to examine the

relationships between the opportunities and threats on one hand and their effects on the

managers` daily decision making on the other hand. We suggest that the managers take critical

look at these forces and act proactively.

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1.3 Research Objectives

The primary objective of this research is to gain a better understanding of the influence of the

task environmental forces on the managers` decision making on an ongoing daily basis. The

specific objectives include:

1. To examine the pressure and influence of the task environmental forces on manager`s on an

ongoing daily basis.

2. To find out the strength of relationship between opportunities and threats presented by the

forces of the task environment, and the managers and the performance of the firms.

3. To examine whether all the firms and managers are always affected by the forces of the task

environment.

4. To analyze the challenges, opportunities and risks of the forces of the task environment and

their implication for sustainable development of firms in an industry.

1.4 Research Questions

1.How does the forces of the task environment affect managers on an ongoing daily basis?

2.Do managers understanding and familiarity of the forces of the task environment make him

and his organization successful?

3. Do all managers get affected equally by the forces of the task environment?

1.5 Significance of the study

It is anticipated that the study will raise the awareness of the pressure and influence of the forces

of the task environment on the managers on an ongoing daily basis. It is again hoped that the

study will help managers identify the extent to which the forces of the task environment

influence them on an ongoing daily basis and how best managers can cooperate and manage

these forces and their opportunities and threats they present in order to achieve competitive

advantage. This would direct decision making as to the kind of objectives to set, strategies and

activities to undertake at a particular period.

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Furthermore, the study would help management become aware of the sources of opportunities

and threats in the market and position themselves to take advantage of opportunities just as they

arise as well as devise means to always outweigh the threats of the task environment.

Finally, this work seeks to contribute to the existing store of knowledge on the forces of the task

environment and their influence on managers on an ongoing daily basis.

1.6 Scope of the Study

The present study seeks to examine the impact of the forces of the task environment on managers

on an ongoing daily basis. In view of this the scope of the study is limited to those in

management positions in the various business organizations. Some of them include; the

marketing manager, human resource manager, research and development leader, production

manager, managing director, procurement manager and the finance manager.

1.7 Overview of Research Methodology

The survey research design was mainly adopted in the conduct of the study. This primarily

involved the use of structured questionnaires and interviews to collect information from

managers of some organizations.

The study mainly made use of primary data and secondary data involving past financial

performance of firms.

The main sources of the primary data included managers and some workers our team spot in an

attempt to get someone answers our questionnaires.

1.8 Research Limitation

The major limitation of this research is time constraints and unavailability of data. In order to

achieve an in-depth understanding of the influence of the forces of the task environment, this

study makes a critical attempt to retrieve past data from the few selected firms, though the

information may be foreseen to be less sufficient for understanding impact of the forces of the

task environment.

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1.9 Organization of the Study

This research is organized into five chapters. Chapter one which is the introduction covers the

background of the study, statement of the problem, objectives of the study, research questions,

significance of the study, Scope of the study, and research limitations.

Chapter two is devoted to the theoretical framework and the literature review. Under this the

literature on task environmental forces would be extensively discussed as well as an overview of

their influence on managers on an ongoing daily basis.

The next is chapter three gives account of how the study was conducted. The following sub-

headings are discussed in this chapter: Research design, population, sample and sampling

procedure, instruments, data collection and data analysis procedure.

Chapter four deals with analysis of data, and the interpretation and discussion of findings in

reference to the literature / previous findings.

The last chapter that is chapter five focuses on the summary, conclusion and recommendation in

the light of the findings of the study.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

While the world of business management is moving towards a new era where the business

environment is becoming more critical to the success of managers and their firms, many

managers still don’t see the need to consider the forces of the environment when taking decisions

most at times (Lutfi 1999), business organizations, whether in developed or less developed

countries, find themselves in a severe compelling business environment where they have to

consider several things before reaching decision, (Felix Opoku 2011). Therefore, managers of

companies should pay attention to the forces of the environment and influence; otherwise they

waste executive resources and inputs to effective decision making, (Morrison & Beck 2000).

A business organization, whether in developed or less developed countries, that operates within

today`s dynamic and hostile environment is vulnerable. The different functional areas within a

business organization need to be mobilized to confront the opportunities and threats presented by

the environment within which they operate.

In the past two decades, the business environment has gone through the process of dynamism,

one that causes increasing instability, uncertainty, interdependence and interrelatedness, and the

complexity of the environment. Business, as well, is inevitably affected by this process of change

towards more interdependence. Many forms of organizational restructuring (such as downsizing,

reengineering, implementation of cooperative strategies) have been witnessed as responses to

these changes (Jones, 2002). Yet, limited empirical studies have been conducted to investigate

how the forces of the task environment actually affects managers and firms on an ongoing daily

basis.

International business scholars (e.g., Clark &Knowles, 2003; Clougherty, 2001; Eden &

Lenway, 2001; Young, 2001) point out the need to explore further the impact of the environment

and globalization on firms. Therefore, this study aimed to investigate the impact of the task

environmental forces on managers on an ongoing daily basis.

2.2 Theoretical Framework

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Since this study attempts to establish the link between the influence of the task environmental

forces and managers` decision on an ongoing daily basis, there is the need to draw from

environmental organization literature. Due to the nature of the environmental construct, the level

and dimension of the environment to be studied must be clearly specified to minimize conceptual

ambiguity and over abstraction (Castro Giovanni, 1991). Among the five levels of environmental

conceptualization (i.e., resource pool, sub environment, task environment, aggregation

environment, and macro environment), this research focuses on investigating the task

environment. The environment in which firms operate provides resources that influence their

survival and growth and the ability of new entrants to join the environment (Randolph & Dess,

1984).

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CHAPTER 3

DATA COLLECTION AND ANALYSIS

The main research instrument in this study was a questionnaire, interviews, unpublished works

from business websites, documents, journals and publications, textbooks, and articles. The

targeted key informants included the presidents, owners, or middle level managers who are

typically top decision makers of firms and are most knowledgeable about the firm`s overall

activities and strategies.

Stratified Random Sampling Technique was adopted using the following variables.

(a) Age - in terms of being young or old. In this study, we were particularly after age because the

aged will have more work experiences to share. The cut off age was twenty-five years and above.

(b) Length of Service. This deal with the period a particular employee had been in the service of

the organization. It is assumed that employees who have spent a longer period of their working

lives with a firm will be in a better position to know the historical profile and details about the

selected firms. The cut-off point was five years and above.

(c) Sex- in terms of being a male or female.

(d) work status in terms of being a management staff, senior staff or a junior staff.

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CHAPTER 4

RESULTS AND DISCUSSION

One important force of the task environment is competitors. Competitors are the individual,

groups, or organizations that provides goods or services which are the same or similar to the

goods and services of another organization. Competitors are usually found in the same industry.

Competition is the basic element of a free enterprise system. The interests of both the

organization and the customers are better served when choices in the market are available.

Competition encourages progress and product-developments. It forces organizations to be more

innovative and productive. For example, in 1955, Harley- Davidson held nearly 70% of the U.S.

motorcycle market, but by 1983, this share had been reduced to only 3.7%.

This steep decline can be attributed to aggressive competition by Japanese companies such as

Honda, Yamaha, Suzuki and Kawasaki who invaded the market with redesigned products and

highly effective marketing strategies. Harley-Davidson failed to envision the strong impact of

effective competition.

It is important to recognize that the area of competition is not limited to customers only but it

extends to competition for all scarce resources such as raw materials, capital and human

resources. Thus, management must congruously look for cheaper but quality substitutes for raw

materials and must acquire and retain an effective and dedicated work force by offering good

working environment and by providing motivation for self-actualization goals.

Competitive strategies are well guarded secrets. Research activities, new product developments

and future advertising campaigns of competitors are extremely highly protected secrets.

Accordingly, management of an organization must continuously monitor competitor activities

and analyze each competitor to gain an understanding of its probable actions and responses.

Another vital element of the task environment is the customer. The basic reason for the very

existence of any business organization is making profits and the profits are created by customers.

Hence, knowledge about the customer’s needs and fulfilling these needs is an organization’s

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primary concern. Accordingly, an organization must continuously monitor the consumer

environment in terms of any changes in customer’s needs or preferences.

Managers must also recognize certain buying preferences as passing fads and plan accordingly.

An example of such fads may be the Nehru jacket or the designer jean. Customers can be the

direct consumers who buy and use the products or services for themselves or they can be

industrial organizations that use the products or services to produce their own products and

services. An organization must match the changing needs of customers with new or improved

products in today’s constantly changing business environment. According to Peters and

Waterman, such successful companies as IBM, make every effort to stay close to their

customers.

Many organizations now have well-defined organized systems in keeping up with their

customers. They establish formal contacts asking them for feedback about the quality of their

products and services and invite them to participate in helping make product design changes.

According to Eric Von Hippel, in some industries, as much as 80 per cent of all important

innovations have originated with users.

The customers expect a quality product at a reasonable price with guaranteed satisfaction.

Accordingly, it is management’s responsibility to see that the interest of consumers is protected.

“The customer is always right” has proved to be a good policy for initiating sales and keeping

the customer.

To add to the above, Government regulators is yet another element of the task environment.

While political and legal issues and developments have an indirect impact on organizations and

thus become an element of macro-environment, regulatory agencies are specific government

agencies that have direct influence on organizational activities and operations and hence these

are part of the task environment of the organizations.

Regulatory agencies are created by local, state and federal government for the purpose of

ensuring that organizations operate within the enacted laws. These agencies have the power to

enforce laws in their respective fields and also introduce some of their own requirements that can

be legally enforced. These agencies are basically set up to protect the public from certain

business practices or to protect organizations from unfair competition.

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These agencies regulate the activities of organizations in five principal areas. These are

consumer protection, investor protection, environmental laws, preservation of free market

competition and labour conditions. Food and Drugs Board (FDB) protect the interests of

consumers. Securities and Exchange Commission (SEC) establishes as to how public companies

must conduct financial and accounting practices and protects investors from illegal securities

activities. Various antitrust laws are established to foster free competition and to discourage

monopolization of markets. There are many laws that protect the interests of workers. These

include equal employment opportunity, affirmative action and the right to work in relatively safe

and healthy environment via Occupational Safety and Health Administration (OSHA)

regulations. Similarly, Environmental Protection Agency (EPA) protects the environment from

being polluted by business organizations in terms of air pollution, water pollution and dumping

of chemically hazardous wastes.

Furthermore, suppliers are also an element of the task environment. Since all organizations

transform inputs of materials, equipment, energy, capital and labour into outputs of products and

services, an organization must interact with a network of suppliers from whom these inputs are

obtained. This interaction is mutual and two- way. Just as an organization is interested that its

suppliers maintain the quality of the materials that it buys from them, the suppliers are equally

interested that the buyer organization brings out quality products.

Suppliers also influence a company’s strategic choices. Choosing the right supplier is an

important strategic decision, whether it be colleges and universities which supply human

resources or banks and federal lending agencies which provide capital or the suppliers of

materials. Since a firm depends on its suppliers to provide certain resources at every stage of its

operations, it is very important to keep good relations with the suppliers and it is always

advisable to have choices among suppliers.

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CHAPTER 5

SUMMARY, CONCLUSION, AND RECOMMENDATIONS

5.1 Summary

This study was conducted to assess the pressure and influence of the forces of the task

environment on managers on an ongoing daily basis. In addition, the study sought to establish

the relationship between opportunities and threats of the task environment, and the managers`

daily decision making, and to examine whether all managers in an industry are equally affected

by the forces. Finally, the study intended to analyze the challenges, opportunities and risks of the

forces of the task environment and their implication for sustainable development of firms in an

industry. These objectives were pursued explicitly. The study came out with four major findings;

The study shows that the forces of the task environment often affects the main internal functions

of management, and seriously influence the objectives of the firm and her strategies.

Secondly, the study shows that, though many of the forces of the task environment are

uncontrollable, managers can still put measures in place to take advantages of the opportunities

they present, and also capitalize on the threats and turn them into opportunities that would give

them competitive advantage over their competitors in an industry.

In addition, the study shows that, many managers try to ignore most of the forces of the task

environment and use them as excuses for their failures due to the fact that they are

uncontrollable.

Finally, the study shows that managers who understand and are familiar with the impact of the

forces of the task environment and make provisions for them when taking decision for their firms

are always success in their fields.

5.2 Conclusion

This research was conducted to examine the pressure and influence of the forces of the task

environment on the managers on an ongoing daily basis. The study rigorously explores the

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opportunities and threats the forces of the task environment posed to the managers in their daily

decision making. After a close look at the objectives and the research questions set out at the

onset of the study, findings indicate that forces of the task environment have presented lots of

opportunities and threats to managers on daily basis creating the prospect of production, trade

and investment in new and economically viable areas.

5.3 Recommendations

After exploring the various objectives and their respective research questions, it is realized that

industry players do not engage in co-marketing alliances. It is however recommended that

managements of firms should seriously consider and make use of the forces in the task

environment in their daily decision making processes. This is believed to help in arriving at an

effective and efficient decision which would result in higher growth and performance of the

firms. Knowing and making use of the forces in the task environment would also help managers

and firm to compete effectively and efficiently in their respective industries if the opportunities

and threats of the task environment are fully explored.

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Albanese, R. (1988) Management. Cincinnati: South-Western Publishing Inc.

Gareth, R.J.; Jennifer, M.G.; Charles, W.L.H. (2000) Contemporary Management. 2nd Edition. Boston: Irwin/McGraw-Hill.

Daft, R.L. (1988) Management. Toronto: The Dryden Press.

Daft, R.L. (2001) Organization Theory and Design. 7th edition. Australia: South-Western Thomson Learning.

Hannagan, T. (2004) Management: Concepts and Practices. 4th Edition. Upper Saddle River, N.J.: Prentice Hall

http;//bookboon.com/blog/2011/10/how-globalization-affects-business/

http;//kalyan-city.blogspot.com/2011/09/what-is-international-business-meaning.htm

http;//www.m-t-d.co.uk//blog/effects-of-globalization-on-business.htm

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