The modern-day organizations are striving to maintain a balance between the individual entities (Harper, 2015). The smooth operational functioning is often considered as a challenge for the big organizations (Harper, 2015). The performance of the organizations is being affected by the external as well as internal factors. The contextual factors have a major influence on the day to day operations of the company. This essay would discuss the various factors that are responsible for management process of the organizations. The objective of the essay is to improve the understanding of the several contextual factors that affect the decision-making capabilities of the organization.
The organization selected for the purpose of study is Uber Technologies Inc. It is one of the largest transportation network organization, which is headquartered in United States (San Francisco) (Uber.com, 2017). The organization operates in more than 570 cities on global location and it was founded in the year 2009 (Uber.com, 2017). The main products of the company include website, mobile app and the services include transportation, vehicle for hire and delivery process. The operating income of the company include US$2.8 billion in the year 2016 (Uber.com, 2017). The revenue of the company includes US$ 6.5 billion in 2016 (Uber.com, 2017).
The modern-day businesses are affected by a majority of factors (Harper, 2015). The influences of the business environment are embedded in the core business functions of the organization. Uber uses PESTEL analysis to determine the external environment forces such as political, social, economic, technological and environmental (Harper, 2015). It also uses these metrics when venturing into a foreign country (Harper, 2015). The company also uses Porter’s five forces analysis to gauge external major factors which affect the business prospects of the company (Harper, 2015). The five forces include threat of new entrants, competitive rivalry, threat of substitutes, bargaining power of suppliers and the bargaining power of the buyers (Anton, 2015). The internal organizational metrics of Uber is being monitored with the help of an innovative model known as McKinsey 7S model (Mitchell, Fredendall & Cantrell, 2015). This model focuses on the two different kinds of elements namely hard and soft elements that are evident in an organization. The hard elements comprise of the structure, systems and strategy (Mitchell, Fredendall & Cantrell, 2015). The soft elements of the company comprise of the shared values, skills, staff and style (Harper, 2015). The TOWS strategic alternatives matrix and SWOT analysis are two most common tools used by the organizations for measuring the dynamics of the internal environment.
Uber has several critical issues, which are evident in the organization for quite long time. The organization has poor assessment criteria for assessing the local market preferences and thus they are unable to give adequate services to the customers (Uber.com, 2017). The organization is not flexible in the implementation of policies. The organization has not implemented transparent channels of communication and hence there are often communication barriers between the key entities (Rogers, 2015). There are no agreed upon standards and they depend on the current decision of the management. The company is often penalized for poor safety mechanisms in their cars and often undergo through legal procedures (Rogers, 2015). In a highly global market, it is important to implement innovative features to be ahead of the competitors. The main rival of the company is Ola, which gives a tough competition to the company (Feeney & companies Uber, 2015). There is high degree of risk involved when the company ventures into a foreign land There are instances when the company is unable to adopt an appropriate market entry strategy. Uber has failed to address to the concerns of the customers and hence there has been a decrease in the customer satisfaction rates. The economic crisis is affecting the company operations in several parts of the world (Feeney & companies Uber, 2015). The less buying capacity of customers would imply less business prospects for the company.
There are several domestic contextual factors which affect the business operations. The business managers of Uber strive to make the correct tactical choices for the organization. The different business context factors such as size of firm, number of employees, number of years of operation, main authority, nature of leadership and others affect the business operations (Mei & Dula, 2016). The modern-day organizations focus on a great deal on the customer engagement activities. There has been considerable increase in the social media activities of the organization, which has given them more visibility among the target audience (Mei & Dula, 2016). These new kind of marketing tools help the organization to interact more openly with the audiences and answer any queries (Mei & Dula, 2016). The managers of the firm engage in the development of new products, new services and the incorporation of new technology, which would improve the operational efficiency of the firm (Storey, 2016). The technology also has great impact on the smooth operations of the firm. Uber has high implementation of the technological innovation and this has helped them to capture the market in a short time. They also try to maintain an optimum level of internal communication, which includes high degree of training materials (Mei & Dula, 2016). It is also the responsibility of the organization to maintain optimum organizational culture, which would act as a motivational factor for the employees. This drives them to give highest level of productivity, which helps the organization to fulfil its objectives (Mei & Dula, 2016).
There are several international contextual factors that influence the business operations of Uber. One of the most important influences in the modern businesses is the globalization (Davenport, 2013). It is true that globalization has many good influences on the organization including positive growth of the company, however it has many negative attributes as well. The rising instances of globalization has fostered income inequalities among the developed and the developing economies (Hirst, Thompson & Bromley, 2015). The transnational companies have increasingly started to focus on the profit generation motives rather than focusing on the individual needs of the country. The transnational companies should be able to make use of the right technology at the right time. The local customization of the business processes is essential for enhancing the revenue generation of the company (Hirst, Thompson & Bromley, 2015). The dynamic environment has great impact of the business environment of the firm and the companies are increasingly equipping themselves in order to handle turbulent situations.
The internal as well as external contextual factors affect the business structures in a major way. The increased globalization has led the companies to design appropriate strategies which would lower the impact of the transnational activities (Hirst, Thompson & Bromley, 2015). The domestic business factors affect the level of coordination and communication within the organization (Pye, 2015). The contextual factors are very unique and diverse. The companies often find it difficult to identify all the contextual factors that are associated with them. The organizations aim to analyze their business process management and they do so by analyzing the root causes of variation in performances (Hirst, Thompson & Bromley, 2015). An organization comprises of several processes, which in turn comprise of number of activities. There are number of factors that influence these processes. For example, the number of passengers or the customer demand would help Uber to decide the number of fleets or cars that should be made available to the audience (Pye, 2015). The contextual factors affect the key performance indicators of the company and this often drives the management to alter their business policies. The different contextual factors have major influence on the human resources relations in the firm (Pye, 2015). A high degree of employee engagement is known to be beneficial for the organizational success. The engaged employees would be motivated ones, who would give higher yields and their production levels would be high. This would help the organization to realize its goals. The responsible employees would imply higher customer satisfaction.
All the modern business is influenced by the domestic as well as international contextual factors. They are the determinant of a successful organization. These factors determine the operational policies of the firm along with the performance of the organizations in the long run. There are different tools for understanding the business environment such as Porter’s five forces, PESTEL analysis, SWOT analysis and others. This essay discussed some of the critical issues of the business such as lack of flexibility, lack of proper communication channels, poor safety mechanisms in their cars, failure to address customer complaints and others. The domestic and international contextual factors are discussed in detail. Globalization is major phenomenon which has impacted the functioning of the organizations. The effect of the business processes on the organizational functioning are also determined.
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