Impact of External and Internal Factors on the Four Functions of Management

Last Updated: 02 Jul 2020
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Impact of External and Internal Factors on the Four Functions of Management External and internal factors such as globalization, technology, innovation, diversity and ethics can greatly impact the four functions of management. Functions such as planning, organizing, leading, and controlling can be influenced by these different internal and external factors since organizations need to ensure that they are addressed properly for business success. In addition, knowing the external and internal factors help organizations in identifying the business risks that exist in the environment in which they operate.

This paper will focus on United Way, a non-profit community-based organization that was initially found in communities, large and small, across the United States. Globalization Globalization has invoked extensive debate over its impact and credibility, giving rise to a number of perspectives. Indeed increased globalization has prompted remarkable economic growth around the world. It has led to job opportunities in making the products that are exchanged with different countries. This has produced specialization and comparative advantage.

The power of foreign competition has encouraged domestic industries to innovate and it has allowed resources to flow to their highest use as well. Further, globalization is the process that increased the link and interdependence of the world markets and businesses. It is a route of interaction and integration of the people, companies, and governments of different nations, a process motivated by international trade and investment and aided by information technology. The volume of world trade has increased due to globalization.

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Consequently, more jobs are being available to people and consumers all over the world are enjoying a wider selection of products made from different countries. Today, United Way does not only serve in strengthening families, helping children and youth, and building stronger communities locally. Aside from its 1300 local organizations in America, it has also 3000 organizations in 47 countries. Due to globalization, United Way is able to tap not only the local communities but the international communities as well.

The organization is able to help other nations through United Way International. As of 2008, United Way International started new United Ways in some parts of India, Brazil, Peru, France, Argentina and Johannesburg, South East Asia, Latin America and South Africa. (United Way International, 2008). United Way raises sources through donations to be able to help people in need in different countries. Globalization has indeed impacted the four functions of United Way management since the organization now needs to consider developing the budget and business plans for a global organization.

United Way’s Founding Committee discusses challenges of what may come up during this process. The committee chooses members that will oversee the board and hires the director and the first management team who will spearhead during the changes due to globalization. Planning, organizing, leading, and controlling an organization that serves a bigger area need to implement changes in its conventional way of doing things to ensure that the same quality services are provided in all the countries that it serves. Technology Technology impacts management and business decisions on multiple levels.

During the December 1999 Conference of the Alliance for Nonprofit Management, Executive Director Roni Posner states: Technology is the backbone of management and organizational effectiveness. It equips people with data and information that can be then synthesized into learning and knowledge; and, this knowledge is what gives organizations more powerful voices in, and greater impact on, community change--the ultimate goal of nonprofit capacity building. (Osten, 2001, para. 1). The United Way implements technological plans to remain competitive with fundraising and accounting, volunteer management and community services.

To improve management of accounting and fundraising practices, nearly 200 United Way organizations are opting to use Sage Software’s MIP Fund Accounting application (Sage Software, 2005). MIP Fund Accounting is designed to ease reporting and transaction management for nonprofits. With this system, chart of accounts are easily created with transaction tracking capabilities. Reports are generated within the program and reporting cycles are significantly shortened by hours or even days. MIP Fund Accounting is user-friendly and easy-to-learn, with grouped tasks according to accounting functions (“Sage MIP fund accounting,” n. . ). In addition to incorporating technology to manage multiple account funds, United Way is developing new technologies to garner donor contributions. Donations are the economic capital United Way relies on to provide quality services in their respective communities. Thus, United Way must be creative in its pursuits to compete with other nonprofits for this income stream. One viable solution was the creation of the United eWay Consortium. The consortium, founded by Phoenix’s Valley of the Sun United Way, allows participating United Way agencies to create customized Web sites for online pledging.

This system eliminates the use of paper pledges and makes donation tracking effortless for both United Way organizations and gifting firms (Wallace, 2001). Cash donations are not the only gifts needed by United Way to meet its organizational goals. Human resource donations or volunteers are a significant portion of the United Way workforce. Technology was again utilized by the nonprofit to meet managerial needs. A local United Way agency in Indiana launched an online matchmaking site to connect volunteers with giving opportunities.

Volunteer Solutions is a medium used by area helping agencies to post their volunteer openings on the site. Potential volunteers register on the site and search for possible positions by their zip code, area of interest or agency name. When a match is found, volunteers are then notified. During the first week of its inception, Volunteer Solutions matched approximately 40 volunteers to local nonprofits (Davis, 2003). Not only does the United Way use technology to enhance business operations, the nonprofit also employs technology to better serve its constituents. United Way of Metropolitan Atlanta and its partners…piloted an electronic benefits calculator, a tool that streamlines the eligibility and enrollment process for federal, state and community benefits” (United Way of America, n. d. , pg. 11). Over a two-year period, awards for benefits increased by $453,000. Technology is an essential tool used by United Way to increase efficiency and allocation of resources, generate donor contributions and expand community services. Without the use of technology, United Way and its benefactors would not reap the benefits of its continued success as a dominant nonprofit organization.

Innovation Innovation is important for an organization to succeed in its endeavor. For a non-profit organization like United Way, innovation is significant in order to find more ways to help and serve communities in need better. Innovation can greatly impact the four functions of management since innovation needs to be considered in all functions of management to improve and advance the ways and means of United Way in serving people. Diversity Diversity is “variety of something, such as opinion, race, color, style and or gender” (“Diversity,” 2008, n. . ) In order for a company or organization to be diverse it needs to value diversity by respecting and appreciating all aspects of an individual, including race, gender, religion, skin color, nationality, sexual orientation, gender identity, physical abilities, age, parental status to name a few. That is what The United Way of America stands on and strives for. United Way is built up of all different walks of life and in order for the non-profit organization to be able to strive everyone must be able to get along and work well with each other.

To make sure the organization stays diverse, United Way of America has formed a Diversity Cabinet to eliminate discrimination. United Way is made up of all types of individuals from every walk of life to form their cabinets, their volunteers and their customers. United Way’s Core Value statement is “Diversity and Inclusion are core values for United Way. We aspire every segment of the community in every aspect of our work and to demonstrate our commitment to and accountability for an inclusive environment in which differences are recognized, respected, valued and celebrated” (United Way, 2008, n. . ). United Way also feels that its inclusive and diverse organization gives the organization the opportunity to actively live and achieve its mission and values to attract, develop and return more diverse talent. It also helps the organization to grow and broaden its base of support from volunteers, donors and other stakeholders. Diversity also helps the United Way to model, facilitate and lead the collaborative efforts needed to make changes in community conditions. It is also a way to become innovative and develop better solutions leading to better performance and results.

In addition, diversity enhances the organization’s reputation and brand in the philanthropic community and global market place (Live United, 2008, n. p. ). United Way does not care if an individual is someone who wants to be a volunteer or one of the organization boards/committees or someone who needs the help. United Way is here to help. Ethics Code of Ethics in any organization is extremely important. Code of ethics deals with organizational values and principles and behaviors on what is and is not acceptable.

It helps to ensure people are treated equally and justly in all matters. United Way does have Code of ethics and it may differ according to each location. However all communities in which the organization is located is governed by the overall America Code of ethics that United Way has set forth (“United Way of America Code of Ethics Guide, 2004). United Way code of ethics was created and discussed amongst the employees and volunteers and believe these codes will help the organization through the work that is encompassed each day.

United Way code of ethics is based on core values which are: integrity, impact, volunteerism, inclusiveness and catalytic leadership In addition, the organization believes that the staff will be able to make great decisions that are legal and binding when ethical codes are set forth. Code of Ethics from United Way Association (UWA) (United Way of America Code, 2004) also ensures personal and professional integrity. UWA is motivated in performance to meet the mission. In addition, UWA believes communication is a powerful source when used effectively. Equal Opportunity is another important factor governed under the Code of Ethics.

UWA believes conflict of interest could degrade the organization and should refrain from personal gain to include gifts that does not relate to the mission. To include, UWA no one should be family affiliated or dating within the organization because it is believed that it affects the appearance of impartiality. Confidentiality and privacy is believed to be handled at a professional level in the UWA organization by respecting the privacy rights of individuals and to make sure information is not disclosed. United Way is committed to the highest ethical standards. It has an obligation to everyone to act ethically at all times.

United Way believes that its continued success comes from everyone affiliated with the organization who lives by the code of ethics. United Way came up with their code of ethics by collaborating with their employees, volunteers and anyone else with interest (United Way of America Code, 2004). Holding an organization to a high ethical standard will always set the organization apart from other organizations. The United Way is such a highly reputable organization due to the implementation of its code of ethics. Delegation in Managing the Impacts of External and Internal Factors

Managers can use delegation to manage the impact that the factors have on the four functions of management by ensuring that the process of delegation is done well. One person can not run the show all on his/her own. Delegation plays a huge role in getting the job done successfully. In order to make this happen there must be a clear plan of action. All parties have to be informed as to what duties they are responsible for and how those duties must be carried out. There must be clarity that supports how the responsibilities will be completed and if support from other team members is needed for that completion.

These things must be discussed in the planning and or organization stages. There has to be contingency plans and structure to any project in which a manager is delegating responsibilities. Delegation of responsibilities, projects, duties or tasks can be a double-edged sword. In order for a manager to manage effectively it has to be used with finesse. The parties that a manager delegates tasks should be responsible and trustworthy. While it is not always possible to do so, it is important to implement accountability to each team responsible for every task.

Delegation will only work if the manager who is delegating also does his/her job properly. Follow-up and constructive feedback is important for the delegation process to be effective. Conclusion The external and internal factors can indeed impact the four functions of management. As observed in the United Way organization, globalization, technology, innovation, diversity and ethics can affect planning, organizing, leading, and controlling of its organization. While globalization has helped United Way in serving other countries in need it has also impacted the four functions of management. Considerations now need to be done in a larger scale.

The four functions of management have to be done in a global scale with the same standards as the organization has locally. Technology impacts the four functions of management on multiple levels. Proper planning on what technology to use, organizing the people who needs to spearhead the use of new technologies, leading and controlling the people who will be involved in the use of different technologies need to be considered. If these are not done, the effectiveness of the technologies that the organization uses may not be fully maximized. Innovation impacts the four functions of management since innovation needs to be considered in ll functions of management to improve and advance the ways and means of United Way in serving people. Diversity can also impact the functions of management since most organizations like United Way has diverse employees that can affect the decisions that are involved in planning, organizing, leading, and controlling of its organization. Ethics can also impact the four functions of management since an organization cannot create good credibility without acceptable code of ethics. Thus, it is essential that internal and external factors are considered when using the four functions of management.

References Davis, A. M. (2003, August 18). Technology connects volunteers: local United Way launches online matchmaking service. Indianapolis Business Journal, 24(23), 3, 60. Retrieved September 14, 2008, from Gale PowerSearch database. Diversity. (2008). In Encarta World English Dictionary Online. Retrieved September 14, 2008 from Live United: United Way: Diversity and inclusion. (2008). Retrieved September 14, 2008 from Osten, M. (2001, May). Technology and nonprofit management: Themes from the conference of the alliance for nonprofit management. Nonprofit Online News.

Retrieved September 14, 2008, from http://news. gilbert. org/features/featureReader$3842? print-friendly=true Sage MIP fund accounting. (n. d. ) In Sage Software. Retrieved September, 14, 2008, from http://www. sagenonprofit. com/products/fundaccount/ Sage Software continues to attract United Way organizations. (2005, August-September). The National Public Accountant, 4(4), 19. Retrieved September 14, 2008, from Gale PowerSearch database. United Way International. 2008. Official website of United Way International. Retrieved September 14, 2008 from http://uwint. org/devfinal/ United Way of America. n. d. ). Goals for the common good: The United Way challenge to America. Retrieved September 14, 2008, from http://www. liveunited. org/goals/upload/UW_Common_Good. pdf United Way of America Code of Ethics Guide. (2004). In United Way. Retrieved September 14, 2008 from United Way: United Way of Greater Los Angeles: Creating Pathways Out of Poverty. (2008). In United Way Los Angeles. Retrieved September 14, 2008 from Wallace, N. (2001, April 5). Technology: New online option for United Ways. Chronicle of Philanthropy, 13(12), 36. Retrieved September 13, 2008, from EBSCOhost database.

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Impact of External and Internal Factors on the Four Functions of Management. (2018, Aug 22). Retrieved from

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