Chapter 3: Organisational environments and cultures Management decision Environm
ID: 236931 • Letter: C
Question
Chapter 3: Organisational environments and cultures Management decision Environmental roller coaster It couldn't be a better day to be at Wet and Wonderful amusement park in Kuala Lumpur, Malaysia. It's mid-January, sunny, 28 degrees and there's no one waiting in any of the lines. Passing by the Mega Rocker roller coaster, you stop to get a slushee and then sit down at a nearby picnic table to start thinking about the annual environmental scan. Since joining the management team of Wet and Wonderful you've done this exercise 10 times. Each time, i is more difficult because the environment keeps changing, but doing the environmental assessment has kept Wet and Wonderful viable You think to yourself 'We've just finished a tight season, but we managed to come out ahead. We are facing some big shifts, though both in the general business environment and in the amusement industry, so we need to build a plan to meet those environmental challenges Pausing for a moment, you stare at the roller coaster's 80- degree drop. Your mind dives just as steeply into a flurry of issues: shifts toward year-round schooling, trends in the insurance industry, new forms of entertainment, new competition, the effect of changing demographics on your attendance and your work force, higher petrol prices and the impact of the economy in general. You've been able to have small increases to the price of admission year after year, but how long can you continue to do that? Your straw makes a loud noise as you finish your slushee.I guess that means it's time to head back to the office and figure out what trends are going to affect the park and how. Questions 1. Consider the issues that you as the Wet and Wonderful manager are examining as part of this exercise. What other issues should you examine 2. Create a list of issues addressing each of the environmental factors discussed in the chapter (economy, technology, political/legal, socio-cultural, customer, competitor supplier, industry regulation). For each item on your list, explain how Wet and Wonderful will face the challenges posed by that factor in its environment. s. Based on the solutions you generated in question 2, how uncertain is the amusement park industry? Why do you think as you do? (Think about the environmental change, complexity and resources of the amusement park industry.)Explanation / Answer
1. Since environmental change, complexity and resource scarcity are the factors that affect the rate of business change. Conditions or events that affect a business change is known as environmental change. Number of external factors in an external environment is known as environmental complexities. Availablity or scarcity of resources in an external environment known as resource scarcity. The greater the rate of environmental complexities, environmental change or resource scarcity, the less managers will be confident in predicting, understanding the trends affecting their business
As Wet and Wonderful managers our duty is to do environmental assesment since enviroment keeps changing it has to be done repeatedly. There is a need to build a plan which can overcome those environmental challenges since there is marked shift in both amusement industry and the general business environment.
2. Economy: the current economic state of a nation affects the organisations operating on it. Growing economy implies that more people are working and they have more money to spend. A growing economy provides a favourable environment to the organisations. Since growing economies means more parents can afford to come to amusement park and hence the business will grow.
Technology: the use of knowlege, techniques and tools to convert the inputs i.e information, raw materials into output i.e. products and services.Changes in technology provides the better products and services. The use of better technologies like proper seats, safe rides etc must be considered so that more people will come in the park.
Sociocultural components: the general demographics, behaviour and attitude, beliefs of people towards a particular society. The changing demographic characteristics eg. the number of people having a particular skill, the growth and decline of a particular popualation segments affects the companies business. For eg. the amusement park will focus on the children population and their visits to the park is affected by the year round schooling of the children.
Political and legal components: it includes the court decisons, legislations, regulations that affect the business of the companies. The Wet and Wonderful companies should be aware of these legislations, regulations etc.
Customer: Since customers purchase the products and the services.For a business to be successful customers wants and needs must be monitored by the companies. For this the company Wet and Wonder should know the review of the people coming to the parks and should carefully note their complaints like parking lot space, staff coordination and quickly try to resolve this.
Competitors: they are the companies which provides similar products and services. A company success depends how much they can do better than their competitors. They can be better in terms of their competitors if they are giving additional benefits like cheap rides, refreshment facilities to their customers.
Suppliers: Suppliers are those companies which provide financial, human, informational resources to other companies. For this, the company should hire a reliable supplier which can provide them quality material so that the material used in making the roller coaster cannot be eroded easily and hence will be safe for the children
Industry regulations: are the laws and regulations affecting the practices and procedures of businesses and industries. Governments and regulatories affect businesses by imposing rule meant to protect customers, workers, societies etc. A company must be aware of all those regulations.
3. The amusement park industry is uncertain because it depends on children which depends on their school vacations. It also depends on various other factors like economy, new form of entertainment like video games, cycling etc, new competitors, high petrol prices etc.Moreover here the rate of environmental change, complexities, resource scarcity is high therefore the managers are less confident in predicting and trends of the business.
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