How business adjusts (fails to adjust) to the change in its external Essay

How business adjusts (fails to adjust) to the change in its external environment - Essay Example The main objective of this study is to understand how organizations adjust in change, more specifically a change coming from the external business environment (Kazmi, 2008). Introduction It has been seen that entrepreneurs operate with respect to the environment in which they are established. There is a significant relationship which businesses have with their respective external environment (Chidi et al., 2011). Though environment brings opportunities for the business like growth opportunity or expansion opportunity, but there are certain threats too like competition or rivalry. Environment has three major components including globalization, market and competitors which can change rapidly or be rigid for a longer aspect of time (Adekola & Sergi, 2007). It all depends on how the market evolves and how businesses compel in the present environment situation. Hence the progress of entrepreneurs depends on two things, first how much they accept the change from environment components, and second how quickly they adjust to that change (Chidi et al., 2011). Interaction is very important in this respect as it sets the ground for developing a positive relationship between the entrepreneur and its environment (Chidi et al., 2011). ... Theoretical background When entrepreneurs adjust to the change they have to analyze each components of the external environment. According to modern literature, components include the market, the competitor and company’s individual business domain. All areas are parts of company’s external environment and come out separately in devising company’s growth or expansion strategy (Weiss et al., 2008). Globalization is one of the major components of external business environment, holding a direct influence for companies at the time of change (Adekola & Sergi, 2007). When companies are highly internationalized, they have to review all the features (culture, politics, society, and economics) associated with globalization in order to appropriately adjust to the change (Adekola & Sergi, 2007). Multinationals often find it a challenge, as they have to analyze all the features which are important from their global business point of view. This is one core requirement which hy per-globalists have to fulfil; otherwise they are out from competition or even out from the state of heading forward (Singla, 1993). According to several classical business theories like The Uppsala Model, when entrepreneurs are in a position to internationalize, they should target the developing regions, where new markets are waiting and new trends can be set (Jain & Griffith, 2012, pp.136). Companies can become pioneers in those regions if they understand the diversity and cultures of the new place. With respect to the Uppsala model, business expansion is itself a change where adjustment can be brought if organizations make the right decision. A right decision for an expanding entrepreneur would be to target the developing nation, where there is less