Tag: Internal

  • Mastering Your Internal Communication Strategy with Examples

    Mastering Your Internal Communication Strategy with Examples

    Discover the importance of well-defined examples of internal communication strategy for organizational success. Explore actionable insights, key elements, and practical examples to enhance employee engagement, transparency, and collaboration within your company.

    The Backbone of a Thriving Organization: Mastering Your Internal Communication Strategy

    In today’s fast-paced and digitally connected world, a strong internal communication strategy is no longer a ‘nice-to-have’ but a fundamental pillar supporting organizational success. It’s the intricate network that connects employees at all levels, fostering collaboration, driving engagement, and ultimately contributing to a company’s bottom line. Without a well-defined approach, organizations risk miscommunication, disengagement, and a lack of alignment, hindering productivity and innovation.

    This article delves into the importance of crafting a robust internal communication strategy, providing actionable insights and concrete internal communication strategy examples to inspire and guide businesses of all sizes.

    Why is a Well-Defined Internal Communication Strategy Crucial?

    Think of your employees as the internal stakeholders of your company. Just as you strategically communicate with external clients and partners, nurturing your internal audience is equally vital. A strong internal communication strategy offers a multitude of benefits:

    • Enhanced Employee Engagement: When employees feel informed, valued, and connected, their engagement levels skyrocket. They are more likely to be invested in the company’s mission and contribute their best work.
    • Improved Productivity and Efficiency: Clear communication reduces confusion, minimizes errors, and streamlines workflows. When everyone is on the same page, projects move forward more efficiently.
    • Stronger Company Culture: Effective internal communication fosters a sense of community and shared purpose. It helps to reinforce company values, build trust, and create a positive and inclusive work environment.
    • Increased Transparency and Trust: Open and honest communication builds trust between leadership and employees. Sharing company updates, challenges, and successes transparently fosters a culture of authenticity.
    • Facilitated Change Management: Introducing change within an organization can be challenging. A well-executed internal communication strategy helps to manage employee anxieties, explain the reasoning behind changes, and ensure a smoother transition.
    • Better Alignment with Business Goals: When employees understand the company’s strategic objectives and their role in achieving them, they are more likely to be motivated and focused on contributing to those goals.
    • Reduced Employee Turnover: Happy and engaged employees are less likely to leave. Effective internal communication plays a crucial role in employee satisfaction and retention.

    Key Elements of an Effective Internal Communication Strategy

    Developing a successful internal communication strategy involves careful planning and consideration of various factors. Here are the core components to focus on:

    • Defining Clear Goals and Objectives: What do you want to achieve with your internal communications? Are you aiming to improve employee morale, facilitate change management, or increase cross-departmental collaboration? Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals is crucial.
    • Identifying Your Target Audience: Your employee base is not a monolithic entity. Different departments, roles, and demographics may require tailored communication approaches. Segmenting your audience ensures your messages are relevant and resonate effectively.
    • Choosing the Right Channels: A multi-channel approach is often the most effective. Consider a mix of communication tools, both traditional and digital, to reach all employees effectively.
    • Crafting Compelling and Consistent Messaging: Your messages should be clear, concise, and consistent across all channels. Ensure your messaging aligns with your company values and reinforces your overall brand.
    • Establishing Feedback Mechanisms: Communication is a two-way street. Creating opportunities for employee feedback, questions, and concerns is essential for continuous improvement.
    • Measuring and Evaluating Results: Track the effectiveness of your internal communication efforts. Are you meeting your goals? What’s working well, and what needs improvement? Regularly review and adapt your strategy based on data and feedback.

    Internal Communication Strategy Examples: Bringing Concepts to Life

    To illustrate how these elements can be implemented in practice, let’s explore some internal communication strategy examples across different scenarios:

    Table: Internal Communication Strategy Examples Across Different Objectives

    ObjectiveCommunication Channels & TacticsKey Message ExamplesMeasurement Metrics
    Increase Employee Engagement– Regular all-hands meetings (virtual/in-person)
    – Employee newsletters showcasing achievements and milestones
    – Intranet portal with employee stories and recognition programs
    – Employee resource groups (ERGs)    		– “Celebrating our Q3 successes and the incredible contributions of our teams.”
    – “Meet Sarah from Marketing – her innovative thinking is driving our latest campaign.
    – “Join our new sustainability ERG and help us build a greener future.”    		– Employee engagement survey scores
    – Participation rates in events and initiatives
    – Employee feedback on communication channels
    – Employee retention rates
    Facilitate Change Management– Town hall meetings with leadership explaining the change
    – Dedicated FAQ section on the intranet
    – Manager toolkits with talking points
    – Training sessions and workshops    		– “Understanding the upcoming organizational restructuring and how it will impact your role.”
    – “Navigating the transition to the new software system – resources and support available.”
    – “Your feedback is crucial as we implement these changes.”    		– Employee understanding of the change (measured through surveys/quizzes)
    – Adoption rates of new processes/systems
    – Employee feedback on the change management process
    – Project completion timelines
    Improve Cross-Departmental Collaboration– Cross-functional project teams with regular communication updates
    – Internal social media platform for sharing updates and insights
    – Department newsletters highlighting team achievements
    – Lunch and learn sessions featuring different departments    		– “Project X update: collaboration between Sales and Product Development is driving strong results.”
    – “Learn about the innovative work being done by the R&D team.”
    – “Join us for a lunch and learn session to understand the complexities of supply chain management.”    		– Number of cross-departmental projects initiated
    – Employee feedback on inter-departmental communication
    – Increased knowledge sharing and collaboration observed
    – Improved project outcomes
    Enhance Transparency– Regular CEO updates shared via email or video
    – Financial performance summaries shared with employees
    – Open Q&A sessions with leadership
    – Intranet blog featuring company news and updates    		– “A message from our CEO about our strategic direction and future goals.”
    – “Q3 Financial Performance: Understanding our successes and navigating challenges.”
    – “Submit your questions for our upcoming leadership Q&A session.”    		– Employee satisfaction with transparency (measured through surveys)
    – Employee understanding of company performance
    – Participation rates in Q&A sessions
    – Positive feedback on communication content

    Beyond the Examples: Practical Tips for Building Your Strategy

    Here are some additional tips for crafting a successful internal communication strategy:

    • Start with a Communication Audit: Assess your current internal communication landscape. What’s working, what’s not, and what are the pain points?
    • Develop a Communication Calendar: Plan your key messages and communication activities to ensure consistency and avoid information overload.
    • Empower Managers as Communication Champions: Equip managers with the tools and training they need to effectively communicate with their teams. They are crucial in relaying information and gathering feedback.
    • Utilize Visual Communication: Infographics, videos, and other visual elements can be highly effective in conveying information quickly and engagingly.
    • Keep it Concise and Accessible: Respect your employees’ time. Avoid jargon and ensure information is easy to understand and readily accessible.
    • Be Authentic and Human: Internal communication should feel genuine and relatable. Use a conversational tone and encourage open dialogue.
    • Embrace Technology: Leverage internal communication platforms, collaborative tools, and other technologies to streamline communication and enhance engagement.
    • Continuously Seek Feedback and Adapt: Regularly solicit feedback from employees and be willing to adapt your strategy based on their input and evolving needs.

    In Conclusion

    A well-crafted internal communication strategy is the lifeblood of a thriving organization. It fosters a connected, informed, and engaged workforce, driving productivity, innovation, and overall success. By understanding the key elements and implementing effective internal communication strategy examples, businesses can build a strong foundation for growth and navigate the complexities of the modern workplace with confidence. Investing in your internal communication is an investment in your most valuable asset: your people.

  • Internal management of individual law firms

    Internal management of individual law firms

    Strengthen the rules and regulations for the internal management of individual law firms. The establishment and also management of individual law firms should adhere to the principle of standardization. Gradual improvement by the law, and actively and steadily promote systematic construction. It relates to Person Law Firm in Management Systems. First, read the Development status of the individual law firms in Taizhou. After, Management defects of Personal Law Firms in Taizhou. Then, the Construction of individual law firms.

    Here are the articles to explain, Internal management of individual law firms

    Take the established Zhejiang Yongmo Law Firm as an example. Furthermore, the author recommends that individual law firms should set up the following systematic and standardized management mechanisms：

    • Democratic management and regulation, implement a democratic management system under the responsibility system of the chief lawyer, establish and improve operating regulations, and protect the legal rights and interests of the law firm and all staff.
    • The rules of procedure of the lawyers’ conference, the lawyers’ conference is the management body of the law firm. Mainly for the decision-makers of the law firm to provide reference opinions on the management and development of the law firm.
    • Also, administrative management regulations, are under the premise of implementing the director’s responsibility system. The law firm’s administrative management implements a system of division of responsibilities and realizes the standardization of daily administrative management.
    • Personnel management regulations, standardize the labor and personnel issues of law firms and ensure the legitimate rights and interests of employees.

    A Part 01

    • Regulations on social security benefits, social security, and welfare. Under the conditions of complying with the “Labor Contract Law” and related regulations. Reflect the principle of distribution according to labor and safeguard the legitimate rights and interests of all employees.
    • The rules for party building work, strengthen the scientific management of lawyers in the business of lawyers and ensure the healthy and stable development of lawyers’ careers. Also, It is necessary to deal with the relationship between the Party organization. The law firm’s administrative management and self-management. The Party’s construction must regard as the political guarantee for the development of lawyers’ careers.
    • Subject to case process management regulations, ensure the standardization of the law firm’s case process management work and strengthen risk control and prevention capabilities.
    • Conflict of interest management regulations, strengthen the legal service quality of lawyers in the firm. Also, Improve the credibility of practice, and reduce practice risks.

    B Part 02

    • Regulations on reporting on major sensitive matters, and a report registration system for major sensitive matters shall implement. Which shall be uniformly registered by the legal assistants of law firms. Also, Implemented under the supervision of the chief lawyer of the law firm.
    • Risk notification regulations, by the “Criminal Procedure Law of the People’s Republic of China”. “Civil Procedure Law of the People’s Republic of China”, “Administrative Procedure Law of the People’s Republic of China”. “Lawyers Law of the People’s Republic of China” and relevant laws and judicial interpretations. Lawyers may be notified in advance of the risks and responsibilities that may exist at all stages of criminal, civil, and administrative litigation.
    • Fee regulations, standardize the case collection and financial activities of law firms, prevent accidents, and formulate them. By the relevant provisions of the law firm’s “Articles of Association” and financial standards.
    • The cost of handling cases regulate. According to the “Lawyers Law” and its related regulations, when lawyers undertake various types of cases. Furthermore, the actual economic costs of handling cases shall be borne by the client. However, due to the failure of industry leaders in the region to issue corresponding guiding opinions. It is easy to raise objections. To properly handle the relationship with the client. Likewise, the law firm should make provisions on the cost of handling the case of the relevant lawyer for implementation when handling the case.

    C Part 03

    • Cooperation is subject to case management regulations, standardizing the handling of cases by lawyers of law firms or inter-firm cooperation, accelerating the development of lawyers in the direction of specialization, and formulating these regulations according to the actual situation of the law firm.
    • The project meeting of the consulting unit implements regulations. In the process of providing legal services to the legal counsel unit. Special regulations formulate to regulate the participation of lawyers in the project meeting activities of the legal counsel unit.
    • The management and regulation of legal service documents for consulting projects. In the process of providing legal advisory services by lawyers of the law firm. Also, Corresponding legal documents will produce based on the content of the services. To facilitate the management of legal service documents, regulations have existed formulated.
    • File management regulations, to standardize the business file management of the firm. By the relevant regulations of the state and also the legal profession file management, a special degree of customization make.

    D Part 04

    • Electronic document archiving and management regulations, to strengthen the management of lawyers’ archives and ensure the safety, effectiveness, standardization, and also order of digital archive information, by the “Archives Law of the People’s Republic of China”, “Electronic Document Archiving and Management Norms” and other relevant laws and regulations, combined with the actual situation, the “Digital Archives Electronic Document Archiving and Management System” system has been specially formulated.
    • Financial management regulations, to establish and improve the internal financial management system of law firms. Do a good job in the basic work of financial management, truthfully reflect the financial situation, calculate and also pay national taxes by the law. And ensure that the legitimate rights and interests of all lawyers and staff are not harmed. , Special customization.
    • Seal management regulations, to strengthen the seal management of law firms, prevent practice risks, and also improve work efficiency, special regulations have existed formulated.
    • Confidentiality regulations, to protect lawyers’ practice by the law, standardize lawyers’ behavior and protect the legitimate rights and interests of the parties, special regulations have existed formulated by the “Law of the People’s Republic of China on the Preservation of State Secrets” and also the “Lawyers Law of the People’s Republic of China”.

    E Part 05

    • Practice complaint work regulations, to standardize the management of law firms, by the relevant provisions of the “Lawyers Law of the People’s Republic of China” and also the “Zhejiang Lawyers Industry Complaint Investigation and Handling Work Rules”, special regulations have existed formulated for the actual situation of the firm.
    • The management and regulation of practice risks and accountability, by the “Lawyers Law of the People’s Republic of China” and the relevant regulations of the Zhejiang Provincial Bar Association, to strengthen standardized management, enhance the sense of responsibility of all lawyers and staff, learn from the lessons of the industry, live in peace of mind, and also held accountable for violations of laws and regulations, special regulations have existed formulated.
    • As a useful attempt to establish and improve the practice management of individual law firms. Also, the aforementioned regulations should adjust moderately to their own actual needs.
    Internal management of individual law firms Image
    Internal management of individual law firms; Photo by Giammarco on Unsplash.
  • What is Consumer Decision Making Process?

    What is Consumer Decision Making Process?

    Consumer Decision Making Process Meaning, Definition, Types, and Stages. The purchaser selection-making method includes the shoppers figuring out their needs, gathering information, evaluating alternatives, and then making their shopping decision. Consumer behavior may additionally decide with the aid of monetary and psychological elements and influenced using environmental elements like social and cultural values.

    Here are the articles to explain, the Meaning, Definition, Types, and Stages of the Consumer Decision Making Process.

    Consumer decision making behavior is a complicated technique and includes a whole lot beginning from hassle attention to post-purchase activities. Every patron has extraordinary wishes in their everyday lives and these are these wants that make to make one-of-a-kind decisions.

    Decisions can be complex, comparing, evaluating, and choosing as properly as buying from a range of merchandise relying upon the opinion of a customer over a precise product. This renders perception and realization of the fundamental hassle of the client selection-making technique for entrepreneurs to make their merchandise and offerings specific to others in the marketplace.

    Meaning and Definition of Consumer Decision Making Process:

    The buying process begins when customers recognize an unsatisfied need. Then they seek information about how to satisfy their need- what, products might be useful and how they can buy them. Customers evaluate the various alternative sources of merchandise such as stores, catalogs, and the Internet and choose a store or an Internet site to visit or a catalog to review. This encounter with a retailer provides more information and may alert customers to additional needs.

    After evaluating the retailer’s merchandise offering, customers may make a purchase or go to another retailer to collect more information. Eventually, customers make a purchase, use the product, and then decide whether the product satisfies their needs. In some situations, customers like Sania spend considerable time and effort selecting a retailer and evaluating the merchandise. In other situations, buying decisions stand made automatically with little thought.

    The types of Consumer Decision Making Process:

    The three types of customer decision-making processes are:

    1. Extended problem solving,
    2. Limited problem solving, and
    3. Habitual decision making.

    Extended Problem Solving:

    Extended problem solving is a purchase decision process in which customers devote considerable time and effort to analyzing alternatives. Customers typically engage in extended problem solving when the purchase decision involves a lot of risk and uncertainty. There are many types of risks. Financial risks arise when customers purchase an expensive product. Physical risks are important when customers feel a product may affect their health or safety.

    Social risks arise when customers believe a product will affect how others view them. Consumers engage in extended problem solving when they are making a buying decision to satisfy an important need or when they have little knowledge about the product or service. Due to high risk and uncertainty in these situations, customers go beyond their knowledge to consult with friends, family members, or experts.

    They may visit several retailers before making a purchase decision. Retailers influence customers engaged in extended problem solving by providing the necessary information in a readily available and easily understood manner and by offering money-back guarantees. For example, retailers that sell merchandise involving extended problem solving provide brochures describing the merchandise and its specifications; have informational displays in the store (such as a sofa cut in half to show its construction); and use salespeople to make presentations and answer questions.

    Limited Problem Solving:

    Limited problem solving is a purchase decision process involving a moderate amount of effort and time. Customers engage in this type of buying process when they have had some prior experience with the product or service and their risk is moderate.

    In these situations, customers tend to rely more on personal knowledge than on external information. They usually choose a retailer they have shopped at before and select merchandise they have bought in the past. The majority of customer decision-making involves limited problem-solving.

    Retailers attempt to reinforce this buying pattern when customers are buying merchandise from them. If customers are shopping elsewhere, however, retailers need to break this buying pattern by introducing new information or offering different merchandise or services.

    For example;

    Sania Mirza’s buying process illustrates both limited and extended problem-solving. Her store choice decision was based on her prior knowledge of the merchandise in various stores she had shopped in and an ad in the San Francisco Chronicle. Considering this information, she felt the store choice decision was not very risky, thus she engaged in limited problem solving when deciding to visit Macy’s. But her buying process for the suit stood extended. This decision was important to her, thus she spent time acquiring information from a friend and the salesperson to evaluate and select a suit.

    One common type of limited problem solving is impulse buying. Impulse buying is a buying decision made by customers on the spot after seeing the merchandise. Sania’s decision to buy the scarf was an impulse purchase.

    Retailers encourage impulse buying behavior by using prominent displays to attract customer attention and stimulate a purchase decision based on little analysis. For example, sales of a grocery item are greatly increased when the item stands featured in an end-aisle display when a “BEST BUY” sign stands placed on the shelf with the item, and when the item stands placed at eye level (typically on the third shelf from the bottom), or when items stand placed at the checkout counter so customers can see them as they wait in line.

    Supermarkets use these displays and prime locations for the profitable items that customers tend to buy on impulse, such as gourmet food, rather than commodities such as flour and sugar, which are usually planned purchases. Impulse purchases by electronic shoppers are stimulated by putting special merchandise on the retailer’s home page and by suggesting complimentary merchandise.

    Habitual Decision-Making:

    Habitual decision-making is a purchase decision process involving little or no conscious effort. Today’s customers have many demands on their time. One way they cope with these time pressures is by simplifying their decision-making process.

    When a need arises, customers may automatically respond with, “I’ll buy the same thing bought last time from the same store.’ Typically, this habitual decision-making process is used when decisions aren’t very important to customers and involve familiar merchandise they have bought in the past.

    Brand loyalty and store loyalty are examples of habitual decision-making. Brand loyalty means that customers like and consistently buy a specific brand in a product category. They are reluctant to switch to other brands if their favorite brand isn’t available. Thus, retailers can only satisfy these customers’ needs if they offer the specific brands desired. Brand loyalty creates both opportunities and problems for retailers.

    Customers stand attracted to stores carrying popular brands. But since retailers must carry high-loyalty brands, they may not be able to negotiate favorable terms with the supplier of the popular national brands. Store loyalty means that customers like and habitually visit the same store to purchase a type of merchandise.

    All retailers would like to increase their customers’ store loyalty. Some approaches for increasing store loyalty are selecting a convenient location, offering complete assortments and reducing the number of stockouts, rewarding customers for frequent purchases, and providing good customer service.

    Stages of Consumer Decision Making Process:

    The buying behavior model stands as one method used by marketers for identifying and tracking the decision-making process of a customer from the start to the end. The process stands categorized into 5 different stages which stand explained as follows:

    Need Recognition:

    Need recognition occurs when a consumer exactly determines their needs. Consumers may feel like they are missing out on something and needs to address this issue to fill in the gap. When businesses can determine when their target market starts developing these needs or wants, they can avail the ideal opportunity to advertise their brands.

    An example who buys water or cold drink identifies their need as thirst. Here; however, searching for information and evaluating alternatives are missing. These consumer decision-making steps stand considered to be important when an expensive brand is under buying consideration such as cars, laptops, mobile phones, etc.

    Problem Recognition:

    The buying process begins when consumers recognize they need to satisfy. This stands called the problem recogni­tion stage. Imagine leaving class to find that high winds had blown one of the oldest trees on campus directly onto your car. You need your car to get to school, work, and social events with your friends and family.

    Because your current car stands destroyed, you would immediately recognize that you need a new type of transportation. In this case, due to a lack of pub­lic transportation and the distance you must travel to meet your day-to-day obligations, you need to purchase a new car.

    Information Search:

    The information search stage in the buyer decision process tends to change continually as consumers require obtaining more and more information about products that can satisfy their needs. Information can also obtain through recommendations from people having previous experiences with products.

    At this level, consumers tend to consider risk management and prepare a list of the features of a particular brand. This is done so because most people do not want to regret their buying decision. Information for products and services can be obtained through several sources like:

    • Commercial sources: advertisements, promotional campaigns, salespeople, or packaging of a particular product.
    • Personal sources: The needs are discussed with family and friends who provided product recommendations.
    • Public sources: Radio, newspapers,s, and magazines.
    • Experiential sources: The own experience of a customer of using a particular brand.

    Information searches fall into two main categories- external and internal.

    External Information Search:

    When consum­ers seek information beyond their knowledge and experience to support them in their buying deci­sion. They are engaging in an external information search. Marketers can help consumers fill in their knowledge gaps through advertisements and prod­uct websites. The Internet has become an increasingly powerful tool. Because it provides consumers with on-demand product information in a format. That offers them as much or as little detail as they prefer.

    Many firms use social media to empower consum­ers’ external information search. For example, Ford uses Facebook, Twitter, YouTube, Flickr, and Scribd to communicate information and deepen relationships with customers. Ford combined paid advertising and content on Facebook by placing a sponsored video about the Ford Mustang on the Facebook logout page. Over 1 million people viewed the video in just one day. Allowing Ford to provide external information about the Mustang to a large audience of consumers.

    The consumer’s friends and family serve as perhaps the most important sources of external information. Think about the example of buying a new car and what those in your life might say about different brands or types of vehicles. You might be impressed by the salespeople and commercials for a certain type of car. But if your parents or friends tell you about a bad experience they had with it. Their opinions probably carry more weight.

    The power of these personal external infor­mation sources highlights why marketers must establish good relationships with all customers. It’s impossible to predict how one consumer’s experience might influence the buying decision and information of another potential customer.

    Internal Information Search:

    Not all purchases require consumers to search for information externally. For frequently purchased items such as – sham­poo or toothpaste, internal information often provides a sufficient basis for making a decision. In an internal information search, consumers use their past experi­ences with items from the same brand or product class as sources of information. You can easily remember your favorite soft drink or vacation destination. Which will likely influence what you drink with lunch today or where you go for spring break next year.

    In our car example, your experience with automobiles plays a significant role in your new car purchase. If you have had a great experience driving a Ford Escape or Toyota Camry. For example, you may decide to buy a newer model of that same car. Alterna­tively, if you have had a bad experience with a specific car, brand, or dealership. You may quickly eliminate those automobiles from contention.

    Evaluation of Alternatives:

    This step involves evaluating different alternatives that are available in the market along with the product lifecycle. Once it has been determined by the customer what can satisfy their need. They will start seeking out the best option available. This evaluation can be based upon different factors like quality, price, or any other factor which are important for customers.

    They may compare prices or read reviews and then select a product that satisfies their parameters the most. Once consumers have acquired information. They can use it to evaluate different alternatives, typically with a focus on identifying the benefits associated with each product. Consumers’ evaluative criteria consist of attributes that they consider important about a cer­tain product.

    For example, you would probably con­sider certain characteristics of a car. Such as price, warranty, safety features, or fuel economy, are more important than others when evaluating which one to buy. Car marketers work very hard to convince you that the benefits of their car, truck, or SUV reflect the criteria that matter to you. Marketing professionals must not only emphasize the benefits of their goods or service. But also use strategies to ensure potential buyers view those benefits as important.

    A company marketing an extremely fuel-efficient car might explain that you can use the several thousand dollars a year you will save on gas to pay off credit card debt or fund a family vacation. In contrast, a company marketing a giant SUV with poor fuel efficiency might tell you about the vehicle’s safety fea­tures and how it can protect your family or the flexibility it will give you to take more family members on trips.

    Purchase Decision:

    When all the above stages have been passed, the customer has now finally decided to make a purchasing decision. At this stage, the consumer has evaluated all facts and has arrived at a logical conclusion. Which is either based upon the influence of marketing campaigns or upon emotional connections or personal experiences, or a combination of both. After evaluating the alternatives, a customer will most likely buy a product. Usu­ally the marketer has little control over this part of the consumer decision-making process. Still, consumers have several decisions to make at this point.

    For example, once you have decided on the car you want, you have to decide where to buy it. Price, sales team, and experience with a specific dealership can directly impact. This decision can finance terms such as lower interest rates. If you decide to lease a car rather than buy one, you would make that decision during this step.

    An effective marketing strategy should seek to encourage ritual consump­tion. Ritual consumption refers to patterns of consumption that are repeated with regularity. These patterns can be as simple as buying the same soft drink or stopping at the same place for breakfast every morn­ing. These types of repeat purchases often provide firms with higher profits and a steady stream of cus­tomer sales.

    Post Purchase Behavior:

    The purchase of the product is followed by a post-purchase evaluation. Which refers to analyzing whether the product was useful for the consumer or not. If the product has matched the expectations of the customer, they will serve as a brand ambassador. Who can influence other potential consumers which will increase the customer base of that particular brand? The same is true for negative experiences; however, they can halt the journey of potential customers toward the product. Post-purchase evalua­tion is even more important to marketers today because of the power of customer reviews available on the Internet.

    Such reviews can become critical factors in the firm’s ability to win over new customers. Though the decision-making process provides marketers with a framework for understanding how consumers decide to purchase a product, consumers don’t always follow the orderly stages discussed. Marketers should not assume that because their strategy succeeds at one stage of the consumer decision-making process it will succeed at the next.

    For example, a car company might do an excel­lent job of providing external information to help interest you in its car but still not receive your business. Because of your inability to secure financing or the objections of your family members. Numerous situational influences like these can occur at various points in the decision-making process and change the customer’s path.

    Meaning Definition Types and Stages of the Consumer Decision Making Process Image
    Meaning, Definition, Types, and Stages of the Consumer Decision Making Process; Photo by Francois Le Nguyen on Unsplash.

    Reference;

    • It is retrieved from https://www.yourarticlelibrary.com/consumer-behaviour/consumer-decision-making/99878 and https://www.marketingtutor.net/consumer-decision-making-process-stages/
    • Image Source from https://unsplash.com/photos/X6rUQ4lH40I
  • Consumer Buying Decisions Internal External Influences

    Consumer Buying Decisions Internal External Influences

    Internal and External Influences on Consumer Buying Decisions. Consumer behavior is the finding out about how humans buy, use, gather, and dispose of agency items and services. What is the consumer buying decision? Consumers can buy items and services, however, they can additionally achieve them via bartering, lending, or leasing. Once items stand purchased, the client can then use them in a range of ways.

    Here are the articles to explain, What are the Internal and External Influences on Consumer Buying Decisions?

    Product bumped off one time like bloodless ingesting or it should use over time as a cell phone. The shopping for conduct of others can additionally affect by using how lots you use it. Positive opinions can be a way for relaxed clients to advocate the product to others. Conversely, sad shoppers can make complaints and inspire different shoppers now not to purchase that brand.

    Consumer behavior additionally consists of the movements that appear after a product has stood used. Some organizations make investments in a lot of cash to make merchandise that can recycle. These groups are extra famous with buyers who care about the surroundings and are greater in all likelihood for them to promote their merchandise and services. We can usually say that important elements impact customer behavior.

    These elements decide whether or not a goal purchaser buys a product or not. These are Psychological, Cultural, Economic, Social, and Personal factors. Individuals or groups, such as a family, can additionally make shopping choices for items and services. The buy selection is a procedure and several human beings work collectively to affect the buy choice in such an instance. Each man or woman may additionally play a section in the decision-making process.

    Throughout the discussion of internal and external influences. It can say that every condition and influence is different and it also varies from one consumer to another. Some influences can change by marketers whereas some can only handle when they occur. Understanding these influences is essential as with this marketers’ can assist consumers in their purchase decisions. US coffee marketers can also resolve their troubles related to selling coffee by identifying specific internal and external influences on consumer buying decisions that are as follows:

    Consumer Buying Decisions Internal Influences:

    What is the Internal Influence on Consumer Buying Decisions? Internal influences come from consumers’ lifestyles and ways of thinking. These are consumers’ thoughts, self-concepts, feelings, attitudes, lifestyles, motivation, and memory. These internal influences can also know as psychological influences. Internal influences depict the ways through which consumers interact with the universe around them, identify their feelings, collect and examine information, develop ideas and beliefs, and take some specific action. These internal influences can also use by US coffee marketers to better understand the specific buying behavior of their consumers.

    Several internal influences affect consumers at the time of buying coffee which subsequent are very important and need to understand by US coffee marketers:

    Personal Needs & Motives:

    The most substantial internal influence that affects consumer purchase decisions is his personal needs and motives. The need of a consumer can define as a lack of something or the difference between his desired and actual state. Motive is an individual’s inner state that encourages him to satisfy his specific need. This could also understand with an example like an individual may be hungry or thirsty. Which is his actual state and he also has a desire to be well fed which is his desired state. This need would motivate him to discover a restaurant or hotel to satisfy his need. All needs of consumers are not possible to define but throughout significant research, consumers’ needs are classified.

    By identifying these needs and motives of consumers, US coffee marketers can easily influence their consumer buying decisions. The most substantial need identification model that can use by US coffee marketers to motivate their consumers is Maslow’s Need Theory. This theory gives by Abraham Maslow an American psychologist. According to this theory, consumers’ needs are classified in this order that if understood and used to influence consumers can be very helpful:

    Purchase decisions;

    Understanding these needs is very essential to direct consumers’ unfulfilled needs toward purchase decisions. With this, US Coffee marketers can identify the consumers’ different needs related to buying a coffee. Like, a consumer may purchase coffee to satisfy his thirst, whereas others may purchase it for discussion with friends or business class people. As well, some others may have different reasons to purchase it like students or office going just want it to get relaxed. And some youngsters want to have fun and get together at a coffee shop with some snacks.

    So, every consumer has different needs that may be his basic or psychological needs so before selling coffee to a target market it is essential to identify the needs of different segments of the target market. Identification of consumers’ different needs related to buying coffee will significantly assist a coffee marketer in segmenting its target market and serving them most effectively.

    Attitudes:

    The next substantial internal influence that affects consumer buying behavior is their attitude. Attitude pertains to what an individual feels or thinks about something. It stands always reflected in individuals’ acts as well as in their buying patterns. Once a person’s attitude forms it is very hard to change. If a consumer has some kind of negative attitude towards a specific product or issue, it will not be easy to change that belief. It is a long-lasting general evaluation of consumers about a product, service, or company.

    Attitudes inform marketers about their consumers and how well they establish in the overall marketplace. Identification of these attitudes can also assist coffee marketers in knowing about their consumers and their perceptions of coffee sellers. US coffee marketers need to keep in mind that in the modern era, consumers expose to several advertisements and information and they don’t remember all of them. However, in this exposure, if they find something conflicting with their attitudes screen easily.

    Advertisement;

    So, coffee marketers need to design advertisements in an appropriate manner that does not conflict with US consumers’ attitudes. The attitudes of consumers learn as they stand shaped by their own experiences and as well as influenced by their ideas and personality. As well, individuals’ attitudes stand also influenced by their friends & family members and extensive media coverage. For operating successfully, it is essential to influence consumers’ attitudes which can stand done by creating and establishing an effective perception in their minds.

    Serving coffee with all essential facilities, a good environment, and high quality will assist coffee marketers in selling coffee to US consumers. Some of the coffee companies are doing well in the US like Starbucks and it is due to their positive image in the minds of their customers in every aspect of their business and as well towards society. The creation of a positive image is essential to influencing consumers’ attitudes and this can only stand done by serving them effectively in an all-inclusive manner.

    Consumer Buying Decisions External Influences:

    What is the External Influence on Consumer Buying Decisions? At the time of buying a product or service, all of us confront several external influences that involve our own culture, subculture, household structure, and groups. These associations of individuals know as external influences because the source of influence usually occurs from the exterior to an individual despite his or her inside influences. External influences also known as socio-cultural influences, as grow from the individual’s formal and informal relationships with his friends, family, and other individuals.

    Understanding these external influences is essential to affecting consumers buying decisions. Although almost all of the described external factors are essential to understanding the most fundamental external factor. What influences consumer purchase decision is his/her culture which is as follows:

    Culture:

    An individual’s values, attitudes, beliefs, and opinions shape by his culture. This in turn also forms people’s attitude toward buying specific products or services. The culture of an individual also gratifies his several emotional needs and due to this. They try to protect their cultural values and beliefs. This culture of protection reflects in individuals’ behavior as consumers. This could also understand with an example of McDonald’s that served Indian consumers in a way it used to serve American consumers. This act of the company made a negative effect on Indian consumers due to their specific vegetarian culture values.

    Culture can develop a consumer need and as well as can also affect the gratification of that need. In this way, culture depicts how an individual satisfies or fulfills his needs that if identified by coffee marketers can assist them in serving US consumers in a much more effective way. By serving coffee in a way that resonates with the priorities of US culture, US coffee marketers can increase their chances of consumer acceptance and success. They should try to serve coffee with high quality and different kinds of environment according to the needs of US consumers.

    Collect information;

    Business-class people should serve coffee at esteemed and premium prices in a peaceful environment. Whereas youngsters should serve coffee at reasonable prices in a fun-loving environment. Before serving consumers, US coffee marketers must collect information about their specific target markets’ cultural values. It can stand done by analyzing their family, religious establishments, and education associations.

    These specific values taught by US culture can stand identified easily that in turn can use to serve customers. The culture and value-related information can stand considerably used by coffee companies marketing managers to create messages and advertisements that are more likable and tempting to attract consumers.

    Segmentation:

    With the help of a discussion of internal and external influences on US consumer buying behavior. They can segment based on demographic, psychographic, and location & culture. Regarding demographic segmentation, US consumers can segment based on factors like age, income, gender, and education level. In psychographic segmentation target market can segment based on attitude towards drinking coffee, attitude towards going out for coffee, attitudes towards coffee price, opinion about coffee shops, etc. In concern to culture or location, the market can segment into different locations.

    Based on different types of segmentation approaches, the primary customer segments for coffee marketers in the United State are:

    The Students: 

    This segment mainly involves students from the university, college, and post-college from urban cities. It includes students within the 16-22 age range. This segment of consumers has lower income and is very price sensitive to consumer goods such as coffee.

    The Leisure: 

    This segment includes people from family and friends that love to have coffee for enjoying a good conversation. The age of this group people varies from 16-65. It involves people from different income and education levels. So it is a broad group to serve by US coffee marketers.

    Business People: 

    This segment represents busy business class professionals that stand normally aged between 22 and 55, with moderate to high income and education levels.

    Target Market:

    Among the above-discussed market segments, the most appropriate target market. That can stand selected by US coffee marketers in starting is the students. It is easy to understand the situations and factors that influence students. As well, the number of students in the country is increasing because of all kinds of institutions. Targeting, this market will be easy, and positioning an effective image in the minds of students will assist coffee marketers in extending their image in the minds of other target customers.

    The selected targeted market can affect positively by offering them coffee at low prices with additional services. Some of the students require a peaceful environment or some of them love to have fun or gossip. Designing coffee shops with both kinds of environments will effectively serve their needs. This target market’s interest in going out for coffee directs by the need for social interaction and concentrated study.

    The students who like coffee once will visit a coffee shop again. Sometimes they may visit a coffee shop for peace or sometimes for having fun with friends. Their needs can stand fulfilled easily so, it is better to serve this target market first and after attaining success in this, US coffee marketers can proceed to other market segments.

    Recommendations:

    With the above discussion, it becomes clear that internal/external influences affect consumer buying decisions. For attaining success in this kind of environment, marketers must design. Their product and marketing-related strategies by identifying specific internal and external influences. U.S. Coffee marketers can also attain success in the US by making use of the above-discussed internal and external influences that affect consumers’ coffee purchase decisions.

    Regarding the identified external-internal influences and selected target market, US coffee marketers can develop or alter. Their marketing strategy in the following manner that includes all aspects of a firm’s marketing mix:

    Product:

    Nowadays consumers do not remain loyal to a product. And when it is a disposable product like coffee, it becomes more difficult. Consumers want full value from products like coffee that can only deliver by serving them with a high-quality product. By identifying external/internal influences a product according to target market needs can design. 

    The selected target market is students and they belong to the school and college-going students. Who prefers coffee drinks with baked goods. As well, they also look for a good experience or coffee shop. At the time serving students, US coffee marketers need to keep this in mind. All these aspects as this will assist them in delivering a high-value and quality-oriented product.

    Price:

    Another significant aspect of Coffee companies’ marketing strategy is the price as it affects almost all types of consumers. The US coffee marketers should serve the selected target markets with low-to-mid price coffee products and services. Students do not have high incomes and they belong to different classes. Students buying decisions can direct significantly by considering their internal and external influences. According to their influences, they need to target low to medium-range prices.

    Place:

    Nowadays consumers are highly exposed to retail stores or fast-food chains. They like to go and have fast food in shops that operate in different locations of a city or nation. It is their general attitude and this should be considered by US coffee marketers at the time of undertaking decisions about the locations of their coffee stores. 

    They should at least start their operations with 2-3 coffee stores as it makes a positive impression on consumers’ attitudes and motivates them to experience one specific coffee store. They should try to start with an urban location or a location. That is the hub of students like an area where almost all reputed institutes of the US are running. In this way, students can motivate by specific coffee stores or shops.

    Promotion:

    The last substantial aspect of companies marketing strategy. That can alter substantially by identifying internal/external influences on consumer buying decisions is promotional strategy. For consumer products like coffee, it is not worth making extensive use of active marketing channels like media advertisements. Awareness and promotion of products like coffee can only stand done with extensive passive exposure through its stores and coffee packaging.

    For a drink, consumer-like students can only attract to the visual repetition of its logo and products everywhere and at every time of the day. With the help of logical visual repetition of coffee products packaging. Exceptional awareness can create by US Coffee marketers for its selected target market and as well as for other segments.

    Consumer Buying Decisions Internal External Influences Image
    Consumer Buying Decisions Internal External Influences; Photo by Brooke Cagle on Unsplash.

    Reference;

    • It is Retrieved from https://www.ukessays.com/essays/marketing/internal-external-influences-on-consumer-behaviour-marketing-essay.php?vref=1
    • Image Source from https://unsplash.com/photos/tLG2hcpITZE
  • Internal Control and Risk Management Difference Relationship

    Internal Control and Risk Management Difference Relationship

    The Relationship and Difference between Internal Control and Risk Management; With the increasingly severe economic situation, the pressure on the survival and also the development of enterprises is increasing, and business risks are becoming more and more serious. To achieve sustainable and good development of enterprises, it is essential to have reasonable and complete internal control & scientific and effective risk management. Guarantee the sound development of enterprises occupies a position that cannot ignore.

    Here are the articles to explain, What is the Relationship and Difference between Internal Control and Risk Management?

    This article briefly introduces the connotation of internal control and risk management, compares the internal connection and essential differences between the two, and also proposes improvement measures on how to improve the efficiency of enterprise both. You may also like to read Analysis of Enterprise Risk Management and Macroeconomics.

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    Introduction;

    Internal control refers to several control measures, plans, activities, and strategies that an enterprise adopts and implements within the enterprise to expand development results, improve operational efficiency, maximize the availability of resources, and achieve the vision of realizing the strategic goals of the enterprise. method etc. Risk refers to the impact of uncertainty on an objective.

    Risk management refers to the identification, analysis, and evaluation of potential risk events that can affect the development of the enterprise, determining the size of the risk according to the possibility of risk occurrence and the degree of consequences, and weighing the benefits and costs of reducing risks. to determine which control measures to take to provide reasonable assurance that business objectives will achieve.

    They are related and different. It is necessary to look at the relationship between the two dialectically, comprehensively, and accurately handle and utilize the interaction and influence of the two in operation and management, and escort the sustainable and healthy development of the enterprise.

    The relationship between internal control and risk management;

    From the point of view of the overlapping key elements, there is an inseparable and inseparable connection between the two. The two intersect each other, jointly affect the various business operations of the enterprise, and synergistically affect the development effect of the enterprise.

    Consistent final purpose;

    Reasonably ensure the realization of corporate goals. Both aim to provide reasonable assurance for the realization of corporate goals, ensure the rational operation of various activities of the company, and promote the healthy development of the company. The common purpose is to safeguard the interests of investors, protect the assets of the enterprise and also generate more meaningful value.

    The two complement each other and work together to ensure the realization of corporate goals. The objectives of internal control and risk management mainly fall into three categories: reporting objectives, operational objectives, and compliance objectives. In addition, risk management also adds strategic objectives, which means that risk management focuses on the realization of corporate strategic objectives based on internal control.

    Similar;

    Dynamic process management represents a series of activities and processes, rather than results. Internal control emphasizes internal activities, risk management emphasizes management means, and both emphasize process management; which is dynamic management of time periodicity and process continuity, rather than a static state.

    From the point of view of dynamic process management, the two are to provide a guarantee for the long-term development of the enterprise; which will stand continuously updated and improved with the development of the enterprise and will act on all stages of the enterprise’s development, not just limited to a certain period of.

    Internal control lays a solid foundation and support for risk management;

    From the perspective of historical evolution, internal control appeared earlier than risk management, and its development is relatively sound. From the perspective of the development process and management methods of risk management, risk prevention and avoidance are its ultimate goals, and this is the most basic function of internal control. Risk management must support by a powerful tool such as internal control. At present, the internal control of most enterprises is not perfect, and also enterprises face many risks in the process of development.

    Only by strengthening and improving internal control can they better identify and control the occurrence of risk events. Based on improving internal control measures and systems, and further optimizing the internal environment and process nodes, the convenience and coordination of risk work can increase, the effect of risk work can improve, and all aspects of synergy can make all activities of the enterprise in the perfect risk management. The system carries out in an orderly manner to effectively prevent the occurrence of various risks and protect the interests of the company.

    Risk management provides the basis and facilitates internal control;

    As one of the five elements of internal control, risk assessment plays a crucial role in the rationality and effectiveness of internal control. Rational and effective internal control is inseparable from the prevention and also avoidance of risks, and the risk management work just provides convenient conditions for it. A sound risk management system can accurately identify, analyze and evaluate various potential risks in enterprise operations, and implement effective monitoring and early warning to facilitate the smooth operation of internal control.

    With the continuous development of big data technology, the traditional internal control mode can no longer meet the development requirements of existing enterprises, and risk management has gradually become an indispensable part of enterprise development. Therefore, the “risk-oriented” internal control mode has gradually become a modern enterprise. inevitable choice.

    The difference between internal control and risk management;

    The scope of control is different;

    Internal control is more about the internal control of the enterprise; mainly controlling and supervising the process and post-event effect to achieve its own goals; while risk management emphasizes the management and control of the overall risk of the enterprise, not only the internal risks of the enterprise; but also the external risks of the enterprise; which run through all stages and aspects of the management process, and more importantly; fully consider the existence of risks in advance, comprehensively identify various possible risk events, and at any time Maintain monitoring and control; so that all activities can be within the expected safety range; and there will be no unexpected accidents that cannot be dealt with and cause huge losses.

    Different implementation methods;

    Internal control is to carry out various orderly control matters through various integrated system specifications, activity processes, organizational structures, and execution mechanisms to ensure that various business activities of the enterprise are carried out by the established and effective process, Evaluate and monitor the risks in the process, and ultimately ensure the realization of enterprise development goals.

    Risk management is mainly to use specific methods and technologies to test the possible risks (including internal risks and external risks) of various business activities of the enterprise, and to adopt different treatment methods for different risks tested to avoid their current and future possible risks. losses to the company’s interests. It is worth mentioning the identification and also control of opportunity risk. Opportunity risk is a special resource of enterprise management. If it stands properly controlled, it may bring unexpected benefits to the enterprise. A huge loss, possibly even fatal.

    Different risk countermeasures;

    Risk management emphasizes the active identification, evaluation, and judgment of risks, and pays more attention to the prevention of risks. Concepts and technical methods such as risk preference, risk tolerance, risk countermeasures, stress testing, and scenario analysis stand introduced into the comprehensive risk management framework, and various measures; such as control, avoidance, transfer, and assumption of risks stand adopted to reduce the risks of enterprises in operation. , thereby reducing losses. Internal control is responsible for important activities during and after risk management; such as risk assessment and control activities implemented therefrom, information and communication activities, supervision, and review and correction of defects.

    Problems existing in internal control and risk management in enterprise operation;

    Lack of innovation in the internal control model;

    At present, the internal control of most enterprises is still in the traditional model; which lacks effective support in implementation and often fails to play a substantial role. For example, the internal control of many enterprises is still in the establishment of rules and regulations; thinking that internal control is only the establishment of various rules and regulations and operating norms. However, internal control is dynamic process management, not static result management.

    It is necessary to change this understanding mode; apply it to the actual operation of the enterprise, and continuously innovate and improve in practice. For example, under the situation of rapid development of information technology; many enterprises have not applied information technology; especially big data technology to the construction of internal control; and have not been able to control the collection and analysis of data, scientific decision-making, and risk prevention, and cannot play a better role. ground control.

    Weak risk awareness and lack of risk management system;

    Enterprises will face various risks in the process of operation, which restrict the quality and speed of enterprise development; and require enterprises to have strong risk assessment and control capabilities. At this stage, some enterprises do not realize the importance of risk management to the long-term development of the enterprise, lack the awareness of risk management, and do not pay enough attention to the construction of the enterprise’s risk management system. Playing a substantive role, it is in name only, making enterprises unable to respond effectively when faced with risks, resulting in huge losses.

    Separation of internal control and risk management;

    There are many overlaps between the two in terms of connotation, elements, and goals. The two are complementary and can be linked together to provide guarantees for the realization of corporate goals. At this stage, internal control and risk management in enterprises are not linked together; but are independent of each other, and even each has no sound management system, which greatly reduces the effect. If the two are combined, it can achieve twice the result with half the effort; and it can also better adapt to the changing economic situation and technical conditions. For example, in the medical industry involving people’s health and safety, risk management is particularly urgent; and it may be more convenient for enterprises to lead internal control by risk management. to fit.

    Suggestions on strengthening internal control and risk management of enterprises;

    Suggestions 01;

    Innovate the internal control model and establish a “risk-oriented” internal control With the continuous deepening of risk management, in the process of carrying out internal control work; it is necessary to deeply understand the relationship between risk management and internal control. It is necessary to strengthen the understanding of the “risk-led” internal control concept; focus on preventing various uncertain events that are likely to occur in the future; further, deepen and improve the internal control system, and thoroughly reform the internal control work.

    A more targeted effect can make the internal control work more specific and effective. Comparatively speaking, risk management involves a more in-depth level and introduces many methods. At this stage, it is imperative to innovate the internal control model; and establish a new type of internal control to improve operational efficiency and promote corporate stability.

    Suggestions 02;

    Establish risk awareness and improve risk management system Facing the increasingly complex; and volatile market environment, enterprises must establish risk awareness; strengthen the risk thinking of leaders and employees, and strengthen the emphasis on risk management construction. Formulate risk management plans from the overall level of the enterprise; design the risk management process according to the existing organizational structure of the enterprise; and, define their respective functions at the same time to form the overall risk structure of the enterprise; implement a long-term mechanism for risk management, and establish a complete identification and analysis; and, monitoring and feedback systems to facilitate more efficient monitoring of the results and efficiency of risk management.

    Suggestions 03;

    Introducing and cultivating high-quality professional talents and improving employees’ business skills are the core of enterprise development. To effectively and effectively strengthen both, enterprises must introduce and cultivate relevant compound talents; increase the training of employees, improve their theoretical knowledge and business skills; and continuously improve their actual business capabilities, so that they can be combined with enterprises. According to its characteristics and actual situation, it proposes targeted solutions to contribute to internal control and risk management.

    Conclusion;

    Reasonable design and effective operation of internal control can ensure that; all activities of the enterprise are carried out in an orderly manner; so as not to cause emergencies that deviate from the normal operating procedures and bring unfavorable losses to the enterprise. Better and more comprehensive identification of risk events facilitates. A sound and complete risk management system can efficiently prevent, avoid and control the occurrence of various risks, reduce the possible threats promptly, discover the insufficiency of internal control, and strengthen the guarantee for more rationalization.

    Enterprises should actively explore the application of internal control and risk management in practice. With the continuous improvement and improvement of each; the two should be both intersecting and independent and ultimately integrate into the operation of the enterprise. Therefore, enterprises should look at the connection and difference between the two from the perspective of connection and development; and integrate the two to ensure the stable operation of the enterprise, and even become bigger and stronger.

    What is the Relationship and Difference between Internal Control and Risk Management Image
    What is the Relationship and Difference between Internal Control and Risk Management? Photo by Soundtrap on Unsplash.
  • Business Environment: Definition, Nature, Importance, and Components

    Business Environment: Definition, Nature, Importance, and Components

    Learn Business Environment: Business means human activity directed towards producing or acquiring wealth through buying and selling goods. It can define as “the forces, factors, and institutions with which the businessman has to deal with to achieve its objectives”. Here are articles explain Business Environment with their topics of Meaning, Definition, Nature, Importance, and Components. It is a complex field of commerce and industry in which goods and services are created and distributed in the hope of profit within a framework of laws and regulations.

    What does mean Business Environment? Explain Meaning, Definition, Nature, Importance, and Components.

    Environment scanning can define as a process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business. No company can survive in the market by ignoring the effects of Business Environment. As well as, efficient management analyses the environment and makes changes in organizational policies to integrate its activities with Business Environment.

    The most suitable example to prove the impact of Business Environment is the controversial case of Pepsi and Coke Company. Business Environments provide constraints as well as opportunities for the businessman. For example, the regulation such as the MRTP Act and wealth restriction put constraints on the businessman. On the other hand, the liberalization policies, import relaxation policies bring opportunities for the businessman.

    Definition of Business Environment:

    The word business environment has been defined by various authors as follows,

    According to Wheeler as;

    “The total of all things external to firms and industries that affect the function of the organization is called business environment.”

    According to Arthur M. Weimer as;

    “Business Environment encompasses the -climate’ or set of conditions, economic, social, political or institutional in which business operations are conducted.”

    According to Keith Davis as;

    ‘‘Business environment is the aggregate of all conditions, events, and influences that surround and affect it.”

    Thus the business is an economic activity performed by human connection with the production and exchange of goods and services with a profit motive under the laws and regulations of the country. Based on the above definitions, it is very clear that the business environment is a mixture of complex, dynamic and uncontrollable external factors within which a business is to operate.

    Nature of Business Environment:

    The nature of Business Environment is simply and better explaining by the following approaches;

    1] System Approach:

    In original, business is a system by which it produces goods and services for the satisfaction of wants, by using several inputs, such as, raw material, capital, labor, etc. from the environment.

    2] Social Responsibility Approach:

    In this approach, the business should fulfill its responsibility towards several categories of society such as consumers, stockholders, employees, government, etc.

    3] Creative Approach:

    As per this approach, the business gives shape to the environment by facing the challenges and availing the opportunities in time. Also, the business brings about changes in the society by giving attention to the needs of the people.

    Importance of Business Environment:

    The importance of business environment explains with the help of the following points:

    1] Help to understand internal Environment:

    It is very much important for business enterprises to understand their internal environment, such as business policy, organization structure, etc. In such a case an effective management information system will help to predict the business environment changes.

    2] Help to Understand Economic System:

    The different kinds of economic systems influence the business in different ways. A businessman and business firm need to know about the role of capitalists, socialist and mixed economy.

    3] Help to Understand Economic Policy:

    Economic policy has its importance in the business environment and it has an important place in business. Also, the business environment helps to understand government policies such as export-import policy, price policy; monetary policy, foreign exchange policy, industrial policy, etc. have much effect on business.

    The big plans or strategies and policies in the organization are formed keeping in mind the business environment because the strategies and policies have to execute in the presence of environmental factors. Scanning of environmental factors helps to find out the problems of business and makes a better strategy to resolve them.

    4] Help to Adapt and Adjust with the Rapid Changes:

    In today’s world, changes are taking place very fast and these fluctuations have a great impact on business. So it is important to understand these changes as fast as possible. The business environment helps to scan the problems of the companies and also helps to remove them for future benefits.

    The businessman did changes in their internal environment also to match the external environment. With the help of a scanning environment, the Ambani bros recognized that today’s environment demands quick decision so they shifted from centralization to decentralization.

    5] Help to Understand Market Conditions:

    An enterprise must know the market structure and changes taking place in it. The knowledge about the increase and decrease in demand, supply, monopolistic practices, government participation in business, etc., is necessary for an enterprise.

    Components of Business Environment (Download PDF file):

    Every business firm consists of a set of internal factors and it also confronts a set of external factors. The following components factor you a more clear and comprehensive explanation about the different factors of the internal and external business environment.

    Internal Business Environment:

    Several factors influence the various strategies and decisions within the organization’s boundaries. These factors are known as internal factors and are given below:

    1] Human Resources:

    It involves the planning, acquisition, and development of human resources necessary for organizational success. It points out that people are valuable resources requiring careful attention and nurturing. Progressive and successful organizations treat all employees as valuable human resources. The organization’s strengths and weaknesses also determined by the skill, quality, morale, commitment, and attitudes of the employees. Organizations face difficulties while carrying out modernizations or restructuring process by the resistance of employees. So, the issues related to morale and attitudes should seriously be considered by the management. Moreover, global competitive pressures have made the skillful management of human resources more important than ever. The support from the different levels of employees supports the management in the different decisions and their implementations.

    2] Company Image:

    One company issues shares and debentures to the public to raise money and its instruments oversubscribe while the other company seeks the help of different intermediaries like underwriters to generate finance from the public. This difference underlies the distinction between the images of the two companies. Also, the image of the company matters in certain other decisions as well as forming joint ventures, entering contracts with the other company or launching new products, etc. Therefore, building a company image should also be a major consideration for the managers.

    3] Management Structure:

    Gone are the days when business was carried out by the single entrepreneur or in the formation of partnerships. Now it has reshaped itself into the formation of the company where it is run and controlled by the board of directors who influence almost every decision. Therefore, the composition of the board of directors and nominees of different financial institutions could be very decisive in several critical decisions. The extent of professionalization is also a crucial factor while taking business decisions.

    4] Physical Assets:

    To enjoy economies of scale, a smooth supply of produced materials and efficient production capacity are some of the important factors of business that depend upon the physical assets of an organization. These factors should always keep in mind by the managers because these play a vital role in determining the competitive status of a firm or an organization.

    5] R & D and Technological Capabilities:

    Technology is the application of organized knowledge to help solve problems in our society. The organizations which are using appropriate technologies enjoy a better competitive advantage than that of their competitors. The organizations which do not possess strong Research and Development departments always lag in innovations which seems to be a prerequisite for success in today’s business. Therefore, the R & D and technological capabilities of an organization determine a firm’s ability to innovate and compete.

    6] Marketing Resources:

    The organizations which possess a strong base of marketing resources like talented marketing men, strong brand image, smart salespersons, identifiable products, wider and smooth distribution network and high quality of different services, make effortless inroads in the target market. As well as, the companies which are having so strong basis can enjoy the fruits of brand extension, form extension, and new product introduction, etc. in the market.

    7] Financial Factors:

    The performance of the organization is also affected by certain financial factors like capital structure, financial position, etc. Certain strategies and decisions are determined based on such factors. Also, the ultimate survival of organizations in both the public and private sectors is dictated largely by how proficiently available funds are managed. So, these were some of the factors related to the internal environment of an organization. These factors are generally regarded as controllable factors because the organization commands control over these factors and can modify or alter as per the requirement of the organization.

    Business Environment Definition Nature Importance and Components Image
    Business Environment: Definition, Nature, Importance, and Components. Image from Pixabay.

    External Business Environment:

    Companies operate in the external environment that forces and shape opportunities as well as threats.

    These forces represent “noncontrollable”, which the company must monitor and respond to. SWOT (Strengths, weaknesses, opportunities, and threats) analysis is very much essential for the business policy formulation which one could do only after examination of the external environment. The external business environment consists of macro-environment and micro-environment.

    1] Micro Environment:

    The company’s immediate environment where routine activities affect by certain actors. Suppliers, marketing intermediaries, competitors, customers, and the public operate within this environment. Also, the micro factors don’t need to affect all the firms. Some of the factors may affect a particular firm and do not disturb the other ones. So, it depends on that to what type of industry a firm belongs to. Now let’s discuss in brief some of the micro-environmental factors.

    • Suppliers.
    • Customers.
    • Competitors.
    • Marketing Intermediaries, and.
    • Publics.
    2] Macro Environment:

    With the rapidly changing scenario, the firm must monitor the major forces like demographic, economic, technological, political/legal and social/cultural forces. The business must pay attention to their casual interactions since these factors set the stage for certain opportunities as well as threats. These macro factors are, generally, more uncontrollable than the micro factors. A brief discussion of the important macro-environmental factors give below:

    • Demographic Environment.
    • Economic Environment.
    • Technological Environment.
    • Political or Legal Environment, and.
    • Social-cultural Environment.
  • Who are the Users of Accounting Information inside the Organization?

    Who are the Users of Accounting Information inside the Organization?

    Users of accounting information – Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers (Elliot, Barry & Elliot, Jamie: Financial accounting and reporting). You are studying, Who are the Users of Accounting Information inside the Organization? In the Business have two types of person Internal and External. Users of accounting information – Internal users (Primary Users) – Owners, Management, and Employees. Also External users (Secondary Users) – Investors, Creditors, Members of Non-profit Organisations, Lenders, Suppliers, Government, General public, Customers, Regulatory Authorities, and Research Scholars. Accounting has been defined as – the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions, and events which are, in part at least, of financial character, and interpreting the results thereof. So, what is the question we discuss; Who are the Users of Accounting Information inside the Organization?

    In the Business have two types of person Internal and External. Who are the Users of Accounting Information inside the Organization?

    The Following are:

    Who are the Main Users of Accounting?

    Accounting information of a business enterprise is used by a number of parties. Different parties use accounting information for different purposes depending on their needs. Therefore, the accounting information system of a business enterprise must be designed in a way that should generate reports to satisfy the needs of everyone interested in accounting information. Accounting provides financial data so individuals can analyze the financial health and stability of a business. While there are many users of accounting information there are also many reasons why this information would be needed.

    Some reasons can include measuring the financial performance of assets, liabilities, equity, income, expenses and cash flow all in order to have the information to make better financial decisions. Other reasons include making financial decisions for investment, credit and operational decisions. There are several types of users who will use financial statements for managerial accounting, but they generally fit into either internal or external users. Each group will use this information for different purposes.

    Users of Accounting Information is Two types Internal & External:-

    Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization.

    Who are internal users of accounting?

    Internal users of accounting information (sometimes known as internal users), typically work within the company. Internal users (Primary Users) of accounting information include the following:

    #Owners

    Owners invest capital to start and run business with the primary objective to earn the profit. They need accurate financial information to know what they have earned or lost during a particular period of time. On the basis of this information, they decide their future course of actions such as expansion or contraction of business. The owners provide funds for the operations of a business and they want to know whether their funds are being properly used or not. They need accounting information to know the profitability and the financial position of the concern in which they have invested their funds. The financial statements prepared from time to time from accounting records depict them the profitability and the financial position.

    #Management

    Management uses accounting information for evaluating and analyzing an organization’s financial performance and position, to take important decisions and appropriate actions to improve the business performance in terms of profitability, financial position, and cash flows. One of the major roles of management is to set rules and procedures to achieve organizational goals. For this purpose, management uses the information generated by financial as well as managerial accounting system of the organization. Management is the art of getting work done through others, the management should ensure that the subordinates are doing work properly.

    Accounting information:

    Accounting information is an aid in this respect because it helps a manager in appraising the performance of the subordinates. Actual performance of the employees can be compared with the budgeted performance they were expected to achieve and remedial action can be taken if the actual performance is not up to the mark. Thus, accounting information provides “the eyes and ears to management”. The most important functions of management are planning and controlling. Preparation of various budgets, such as sales budget, production budget, cash budget, capital expenditure budget, etc., is an important part of planning function and the starting point for the preparation of the budgets is the accounting information for the previous year.

    How to Control?

    Controlling is the function of seeing that programs laid down in various budgets are being actually achieved i.e. actual performance ascertained from accounting is compared with the budgeted performance, enabling the manager to exercise controlling case of weak performance. Accounting information is also helpful to the management in fixing reasonable selling prices. In a competitive economy, a price should be based on cost plus a reasonable rate of return. If a firm quotes a price which exceeds cost plus a reasonable rate of return. It probably will not get the order. On the other hand, if the firm quotes a price which is less than its cost, it will be given the order but will incur a loss on account of the price is lower than the cost. So, selling prices should always be fixed on the basis of accounting data to get a reasonable margin of profit on sales.

    #Employees

    Employees are interested in the financial position of a concern they serve particularly when payment of bonus depends upon the size of the profits earned. They seek accounting information to know that the bonus is paid to them is correct. Occasionally, employees will use accounting information to see how stable a company is for their job security. More often though, employees will be interested in a business’s financial information when it relates to their income as sometimes bonuses, commissions, profit sharing or other financial metrics are used as a financial incentive.

    Employees who do not have a hand in the core management of the business are considered external users of accounting information. They are interested in financial information because their present and future are tied up with the success or failure of the business. The success and profitability of business ensure job security, better remuneration, job promotion, and retirement benefits.

    Who are the external users of accounting?

    External users of accounting information (sometimes called secondary users), External users (Secondary Users) of accounting information include the following:

    #Investors

    Incorporate the form of business, the owner is often separated from the management. Normally investors provide capital and management run the business. The accounting information is used by both actual and potential investors. Actual investors use this information to know how their funds are used by the management. And, what is the expected performance of the business in the future in terms of profitability and growth? On the basis of this information, they decide whether to increase or decrease investment in the corporation in the future.

    Investors use accounting information;

    Potential investors use accounting information to decide whether or not a particular corporation is suitable for their investment needs. Those who are interested in investing money in an organization are interested in knowing. The financial health of the organization to know how safe the investment already made is and how safe their proposed investment will be. To know the financial health, they need accounting information. Which will help them in evaluating the past performance and future prospects of the organization?

    Thus, investors for their investment decisions are dependent upon accounting information included in the financial statements. They can know the profitability and the financial position of the organization in which they are interested to make. That investment by making a study of the accounting information given in the financial statements of the organization.

    #Creditors

    Use the financial information to make decisions whether credit will be extended or restraints on spending will be put in place to pay down debts owed to the creditor. Before extending credit, banks typically require businesses to present financial statements to judge creditworthiness. Creditors (i.e. supplier of goods and services on credit, bankers and other lenders of money) want to know the financial position of concern before giving loans or granting credit.

    They want to be sure that the concern will not experience difficulty in making. Their payment in time i.e. the liquid position of the concern is satisfactory. To know the liquid position, they need accounting information relating to current assets, quick assets and current liabilities. Which is available in the financial statements.

    #Members of Non-profit Organisations

    Members of non-profit organizations such as schools, colleges, hospitals, clubs, charitable institutions, etc. Need accounting information to know how their contributed funds are being utilized and to ascertain. If the organization deserves continued support or support should be withdrawn from keeping in view the bad performance depicted by the accounting information and diverted to another organization. In knowing the performance of such organizations. The criterion will not be the profit made but the main criterion will be the service provided to society.

    #Lenders

    Lenders are individuals or financial institutions that normally lend money to businesses and earn interest income on it. They need accounting information to assess the financial performance and position and to have a reasonable assurance that the business to whom. They are going to lend money would be able to return the principal amount as well as pay interest thereon.

    #Suppliers

    Suppliers are business individuals or organizations that normally sell merchandise or raw materials to other businesses on credit. They use accounting information to have an idea about the future creditworthiness of the business and to decide whether or not to continue providing goods on credit.

    #Government

    Government agencies use the financial information of businesses for the purpose of imposing taxes and regulations. Central and State Governments are interested in the accounting information because they want to know earnings or sales for a particular period for purposes of taxation. Income tax returns are examples of financial reports which are prepared with information taken directly from accounting records. Governments also need accounting information for compiling statistics concerning business which, in turn, helps in compiling national accounts.

    #General public

    The general public also uses accounting information for business organizations. For example, accounting information is:

    • Education for students of accounting and finance.
    • Valuable data for those researching on organizational impacts on individuals and the economy as a whole.
    • Information for the people looking for job opportunities.
    • Information about the future of a particular enterprise.

    #Customers

    Accounting information provides important information to customers about the current position of a business organization and to make a judgment about its future. Customers can be divided into three groups – manufactures or producers at various stages of production, wholesalers and retailers and end users or final consumers. Consumers need accounting information for establishing good accounting control. So that cost of production may be reduced with the resultant reduction of the prices of the goods they buy. Sometimes, prices for some goods are fixed by the Government. So it needs accounting information to fix reasonable prices so that consumers and manufacturers are not exploited.

    Prices are fixed keeping in view fair return to manufacturers on their investments shown in the accounting records. Manufacturers or producers at every stage of processing need assurance that the organization in question will continue providing inputs such as raw materials, parts, components, and support, etc. The wholesalers and retailers must be assured of the consistent supply of products. The end users or final consumers are interested in the continuous availability of products and related accessories. Because of these reasons, accounting information is of significant importance for all three types of customers.

    #Regulatory Authorities

    For ensuring that the company’s disclosure of accounting information is in accordance with the rules and regulations set in order to protect the interests of the stakeholders. Who rely on such information in forming their decisions.

    #Research Scholars

    Accounting information, being a mirror of the financial performance of a business organization is of immense value to the research scholars. Who wants to make a study to the financial operations of a particular firm. To make a study into the financial operations of a particular firm, the research the scholar needs detailed accounting information relating to purchases, sales, expenses, cost of materials used, current assets, current liabilities, fixed assets, long-term liabilities, and shareholders’ funds. Which is available in the accounting records maintained by the firm.

    Who are the Users of Accounting Information inside the Organization
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  • Explain the Internal and External Sources of Employee Recruitment!

    Explain the Internal and External Sources of Employee Recruitment!

    Learn What? Explain the Internal and External Sources of Employee Recruitment!

    The searching of suitable candidates and informing them about the openings in the enterprise is the most important aspect of the recruitment process. The Concept of the study Explains – the Internal and External Sources of Employee Recruitment: Internal Sources and their advantages and disadvantages, External Sources and their advantages and disadvantages. Now, Explain the Internal and External Sources of Employee Recruitment!

    The candidates may be available inside or outside the organization. Basically, there are two sources of recruitment i.e., internal and external sources.

    (A) Internal Sources:

    Best employees can be found within the organization… When a vacancy arises in the organization, it may be given to an employee who is already on the payroll. Internal sources include promotion, transfer and in certain cases demotion. When a higher post is given to a deserving employee, it motivates all other employees of the organization to work hard. The employees can be informed of such a vacancy by internal advertisement.

    Key Points on Internal sources of recruitment:

    Internal sources of recruitment are:

    • Publicity: Publicity means to give the employee a higher position, position, salary, and responsibility. Therefore, the vacancy can be filled up by promoting the right candidate of the same organization.
    • Transfer: The meaning of shifting means employment change, position, pay and change in the place of employment without the employee’s responsibility. Therefore, vacancies can be filled by transferring the suitable candidate of the same organization.
    • Internal advertising: Here, the vacancy is advertised within the organization. Existing employees are asked to apply for the vacancy. So, it is recruited from within the organization.
    • Retired Manager: Sometimes, retired managers can be remembered for a short period. This is done when the organization cannot find the suitable candidate.
    • Remember with a long leave: The organization can remember a manager who has gone on a long leave. This is done when the organization has to face a problem which can only be solved by that particular manager. After solving the problem, his leave has been increased.

    Methods of Internal Sources:

    The Internal Sources Are Given Below:

    1. Transfers:

    The transfer involves shifting of persons from present jobs to other similar jobs. These do not involve any change in rank, responsibility or prestige. The numbers of persons do not increase with transfers.

    1. Promotions:

    Promotions refer to shifting of persons to positions carrying better prestige, higher responsibilities, and more pay. The higher positions falling vacant may be filled up from within the organization. A promotion does not increase the number of persons in the organization.

    A person going to get a higher position will vacate his present position. The promotion will motivate employees to improve their performance so that they can also get the promotion.

    1. Present Employees:

    The present employees of a concern are informed about likely vacant positions. The employees recommend their relations or persons intimately known to them. Management is relieved of looking out prospective candidates.

    The persons recommended by the employees may be generally suitable for the jobs because they know the requirements of various positions. The existing employees take full responsibility for those recommended by them and also ensure their proper behavior and performance.

    Advantages of Internal Sources:

    The Following are The Advantages of Internal Sources:

    1. Improves morale:

    When an employee from inside the organization is given the higher post, it helps in increasing the morale of all employees. Generally, every employee expects promotion to a higher post carrying more status and pays (if he fulfills the other requirements).

    1. No Error in Selection:

    When an employee is selected from inside, there is the least possibility of errors in selection since every company maintains the complete record of its employees and can judge them in a better manner.

    1. Promotes Loyalty:

    It promotes loyalty among the employees as they feel secure on account of chances of advancement.

    1. No Hasty Decision:

    The chances of hasty decisions are completely eliminated as the existing employees are well tried and can be relied upon.

    1. The economy in Training Costs:

    The existing employees are fully aware of the operating procedures and policies of the organization. The existing employees require little training and it brings economy in training costs.

    1. Self-Development:

    It encourages self-development among the employees as they can look forward to occupying higher posts.

    Disadvantages of Internal Sources: 

    • It discourages capable persons from outside to join the concern.
    • It is possible that the requisite number of persons possessing qualifications for the vacant posts may not be available in the organization.
    • For posts requiring innovations and creative thinking, this method of recruitment cannot be followed.
    • If the only seniority is the criterion for promotion, then the person filling the vacant post may not be really capable.

    In spite of the disadvantages, it is frequently used as a source of recruitment for lower positions. It may lead to nepotism and favoritism. The employees may be employed on the basis of their recommendation and not suitability.

    (B) External Sources:

    All organizations have to use external sources for recruitment to higher positions when existing employees are not suitable. More persons are needed when expansions are undertaken.

    Key Points on External sources of recruitment:

    External sources of recruitment are:

    • Management Consultants: Management Consultants are used to selecting high-level employees. They act as the employer’s representative. They make all necessary arrangements for recruitment and selection. In return for their services, they take a service fee or commission.
    • Public Advertisement: The company’s personnel department advertises vacancies in newspapers, internet, etc. This advertisement gives information about the essential qualities of the company, the job, and the candidate. It invites applications from suitable candidates. This source is the most popular source of recruitment. That’s because it gives a very wide choice. However, it is very expensive and time-consuming.
    • Campus recruitment: The organization organizes interviews in the premises of the management institutes and engineering colleges. Interviews are given for final year students, who are soon to get graduation. Proper candidates are selected by the organization on the basis of their academic records, communication skills, intelligence etc. This source is used for the recruitment of qualified, trained but inexperienced candidates.
    • Recommendations: The organization can recruit candidates on the basis of recommendations from existing managers or sister companies.
    • Deputation Personnel: The organization can also recruit the candidates sent on deputation by the government or financial institutions or by holding or subsidiary companies.

    The external sources are discussed below:

    Methods of External Sources:

    1. Advertisement:

    It is a method of recruitment frequently used for skilled workers, clerical and higher staff. Advertisement can be given in newspapers and professional journals. These advertisements attract applicants in a large number of highly variable quality.

    Preparing good advertisement is a specialized task. If a company wants to conceal its name, a ‘blind advertisement’ may be given asking the applicants to apply to Post Bag or Box Number or to some advertising agency.

    1. Employment Exchanges:

    Employment exchanges in India are run by the Government. For unskilled, semi-skilled, skilled, clerical posts etc., it is often used as a source of recruitment. In certain cases, it has been made obligatory for the business concerns to notify their vacancies to the employment exchange. In the past, employers used to turn to these agencies only as a last resort. The job-seekers and job-givers are brought into contact by the employment exchanges.

    1. Schools, Colleges, and Universities:

    Direct recruitment from educational institutions for certain jobs (i.e. placement) which require technical or professional qualification has become a common practice. A close liaison between the company and educational institutions helps in getting suitable candidates. The students are spotted during the course of their studies. Junior level executives or managerial trainees may be recruited in this way.

    1. Recommendation of Existing Employees:

    The present employees know both the company and the candidate is recommended. Hence some companies encourage their existing employees to assist them in getting applications from persons who are known to them.

    In certain cases, rewards may also be given if candidates recommended by them are actually selected by the company. If recommendation leads to favoritism, it will impair the morale of employees.

    1. Factory Gates:

    Certain workers present themselves at the factory gate every day for employment. This method of recruitment is very popular in India for unskilled or semi-skilled labor. The desirable candidates are selected by the first line supervisors. The major disadvantage of this system is that the person selected may not be suitable for the vacancy.

    1. Casual Callers:

    That personnel who casually come to the company for employment may also be considered for the vacant post. It is the most economical method of recruitment. In the advanced countries, this method of recruitment is very popular.

    1. Central Application File:

    A file of past applicants who were not selected earlier may be maintained. In order to keep the file alive, applications in the files must be checked at periodical intervals.

    1. Labour Unions:

    In certain occupations like construction, hotels, maritime industry etc., (i.e., industries where there is instability of employment) all recruits usually come from unions. It is advantageous from the management point of view because it saves expenses of recruitment. However, in other industries, unions may be asked to recommend candidates either as a goodwill gesture or as a courtesy towards the union.

    1. Labour Contractors:

    This method of recruitment is still prevalent in India for hiring unskilled and semi-skilled workers in brick kiln industry. The contractors keep themselves in touch with the labor and bring the workers to the places where they are required. They get the commission for the number of persons supplied by them.

    1. Former Employees:

    In case employees have been laid off or have left the factory on their own, they may be taken back if they are interested in joining the concern (provided their record is good).

    1. Other Sources:

    Apart from these major sources of external recruitment, there are certainly other sources which are exploited by companies from time to time. These include special lectures delivered by the recruiter in different institutions, though apparently, these lectures do not pertain to recruitment directly.

    Then there are video files which are sent to various concerns and institutions so as to show the history and development of the company. These films present the story of the company to various audiences, thus creating interest in them.

    Various firms organize trade shows which attract many prospective employees. Many a time advertisements may be made for a special class of workforce (say married ladies) who worked prior to their marriage.

    These ladies can also prove to be the very good source of the workforce. Similarly, there is the labor market consisting of physically handicapped. Visits to other companies also help in finding new sources of recruitment.

    Advantages of External Sources:

    1. Availability of Suitable Persons:

    Internal sources, sometimes, may not be able to supply suitable persons from within. External sources do give a wide choice to the management. A large number of applicants may be willing to join the organization. They will also be suitable as per the requirements of skill, training, and education.

    1. Brings New Ideas:

    The selection of persons from outside sources will have the benefit of new ideas. The persons having experience in other concerns will be able to suggest new things and methods. This will keep the organization in a competitive position.

    1. Economical:

    This method of recruitment can prove to be economical because new employees are already trained and experienced and do not require much training for the jobs.

    Disadvantages of External Sources:

    1. Demoralisation:

    When new persons from outside join the organization then present employees feel demoralized because these positions should have gone to them. There can be a heart burning among old employees. Some employees may even leave the enterprise and go for better avenues for other concerns.

    1. Lack of Co-Operation:

    The old staff may not co-operate with the new employees because they feel that their right has been snatched away by them. This problem will be acute especially when persons for higher positions are recruited from outside.

    1. Expensive:

    The process of recruiting from outside is very expensive. It starts with inserting costly advertisements in the media and then arranging written tests and conducting interviews. In spite of all this if suitable persons are not available, then the whole process will have to be repeated.

    1. The problem of Maladjustment:

    There may be a possibility that the new entrants have not been able to adjust to the new environment. They may not temperamentally adjust with the new persons. In such cases either the persons may leave themselves or management may have to replace them. These things have the adverse effect on the working of the organization.

    Suitability of External Sources of Recruitment:

    External Sources of Recruitment are Suitable for The Following Reasons:

    • The required qualities such as will, skill, talent, knowledge etc., are available from external sources.
    • It can help in bringing new ideas, better techniques and improved methods to the organization.
    • The selection of candidates will be without preconceived notions or reservations.
    • The cost of employees will be minimal because candidates selected in this method will be placed on the minimum pay scale.
    • The entry of new persons with varied experience and talent will help in human resource mix.
    • The existing employees will also broaden their personality.
    • The entry of qualitative persons from outside will be in the long-run interest of the organization.

    Explain the Internal and External Sources of Employee Recruitment - ilearnlot
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  • What is the Source of Recruitment in the Organization?

    What is the Source of Recruitment in the Organization?

    Source of Recruitment in the Organization; The sources of employees can classify into two types, internal and external. The concept of the study Explains – the Source of Recruitment in the Organization: Internal Sources and their benefits and limitations, External Sources and their benefits and limitations. Also, Filling a job opening from within the firm has the advantages of stimulating preparation for possible transfer of promotion, increasing the general level of morale, and providing more information about job candidates through analysis of work histories within the organization.

    Understanding and Learn, What is the Source of Recruitment in the Organization?

    A job posting has several advantages. Also, From the viewpoint of the employee, it provides flexibility and greater control over career progress. For the employer, it should result in better matches of employee and job.

    Meaning and Sources of Recruitment:

    Whenever there is a vacancy in the organization, generally it is to fill. To make the candidate avail­able for filling those vacancies, their selection procedure and placement on a proper job comes under the purview of recruitment. As soon as the available vacancies know, they advertise through different media, and accordingly the applications collect for the vacant posts. Also, A group of candidates interested in doing the job and are eligible to do, it creates through recruitment.

    It is an operative function of human resource management coming under the managerial function called organizing. In the words of Edwin Flippo, ‘recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organisation’.

    In most instances, the jobs post on notice boards, though some carry listings in the company newspapers. Also, The posting period is commonly one week, with the final decision for hiring being completed within four weeks.

    Internal applications often restrict certain employees.

    The guidelines for one company including (1) “good” or “better” on the most recent performance review; (2) dependable attendance record; (3) not under probationary sanction; and (4) having been in the present position for 1 year. Also, The present supervisor must at some time inform of his or her subordinate’s interest in another job. Some require immediate notification, while others inform only if the employee becomes a prime candidate for the listed opening. The personnel unit acts as a clearinghouse in unrealistic screening applications, preventing an excessive number of bids by a single employee, and counseling employees who are constantly unsuccessful in their attempt to change jobs.

    Inevitably, the firm must go to external sources for lower entry jobs, for expansion, and for positions whose specifications cannot be met by present personnel. Thus the firm has a number of outside sources available, among which are the following:

    Advertising:

    There is a trend toward more selective recruitment in advertising. Also, This can affect at least two ways. First, advertisements can place in media read-only by particular groups. Secondly, more information about the company, the job, and the job specification can include in the ad to permit some self-screening.

    Employment Agencies:

    Additional screening can affect the utilization of employment agencies, both public and private. Today, in contrast to their former unsavory reputation, the public employment agencies in several States well-regard, particularly in the fields of unskilled semi-skilled, and skilled operative jobs. In the technical and professional areas, however, the private agencies appear to be doing most of the work. Many private agencies tend to specialize in a particular type of worker and job, such as sales, office, executive, or engineer.

    Employee Referrals:

    Friends and relatives of present employees are also a good source from which employees may be drawn. When the labor market is very tight, large employers frequently offer their employees bonuses or prizes for any referrals that hire and stay with the company for a specific length of time. Some companies maintain a register of former employees whose record was good to contact them when there are new job openings for which they are qualified. Also, This method of recruitment, however, suffers from a serious defect that it encourages nepotism, i.e. persons of one’s community or caste employe, who may or may not be fit for the job.

    Schools, Colleges and Professional Institutions:

    Offer opportunities for recruiting their students. Also, They operate placement services where complete bio-data and other particulars of the students are available. The companies that need employees maintain contact with Guidance Counsellors of Employment Bureaus and teachers of business and vocational subjects. The prospective employers can review Credentials and interview candidates for management trainees or probationers. Whether the education sought involves a higher secondary certificate, specific vocational training, or a college background with a bachelor’s, master’s, or doctoral degree, educational institutions provide an excellent source of potential employees for entry-level positions in organizations. These general and technical/ professional institutions provide blue-collar applicants, white-collar and managerial personnel.

    Labor unions:

    Firms with closed or union shops must look to the union in their recruitment efforts. Disadvantages of a monopolistically control labor source are offset, at least particularly, by savings in recruitment costs. With one-fifth of the labor force organized into unions, organized labor constitutes an important source of personnel.

    Casual applicants:

    Unsolicited applications, both at the gate and through the mail, constitute a much-used source of personnel. These can develop through the provision of attractive employment office facilities and prompt and courteous replies to unsolicited letters.

    Professional organizations or recruiting firms or executive recruiters:

    Maintain complete information records about employed executives. These firms look upon as ‘head hunters’, ‘raiders’, and ‘pirates’ by organizations that lose personnel through their efforts. However, these same organizations may employ “executive search firms” to help them find talent. These consulting firms recommend persons of high caliber for managerial, marketing, and production engineers’ posts.

    Indoctrination seminars for colleges professors:

    Are arrange to discuss the problem of companies and employees. Professors invite to take part in these seminars. Visits to plants and banquets arrange so that the participant professors may favorably impress. Also, They may later speak well of a company and help it in getting the required personnel.

    Unconsolidated applications:

    For positions in which large numbers of candidates are not available from other sources, the companies may gain keeping files of applications received from candidates who make direct inquiries about possible vacancies on their own or may send unconsolidated applications. Also, The information may index and file for future use when there are openings in these jobs.

    Nepotism:

    The hiring of relatives will be an inevitable component of recruitment programs in family-owned firms, such a policy does not necessarily coincide with hiring based on merit, but interest and loyalty to the enterprise are offsetting advantages.

    Leasing:

    To adjust to short-term fluctuations in personnel needs, the possibility of leasing personnel by the hour or day should consider. This practice has been particularly well-developed in the office administration field. Also, The firm not only obtains well-trained and selected personnel but avoids any obligation in pensions, insurance, and other fringe benefits.

    Voluntary organizations:

    Such as private clubs, social organizations might also provide employees – handicaps, widowed or married women, old persons, retired hands, etc., in response to advertisements.

    Computer data banks:

    When a company desires a particular type of employee, job specifications and requirements are fed into a computer, where they match against the resume data stored therein. The output is a set of resumes for individuals who meet the requirements. Also, This method is very useful for identifying candidates for hard-to-fill positions which call for an unusual combination of skills.

    Sources of Recruitment:

    The eligible and suitable candidates required for a particular job are available through various sources.

    Internal Sources of Recruitment:

    1. Promotions:

    The promotion policy follows as a motivational technique for the employees who work hard and show good performance. Also, Promotion results in enhancements in pay, position, responsibility, and authority. The important requirement for the implementation of the promotion policy is that the terms, condi­tions, rules, and regulations should be well-defined.

    1. Retirements:

    The retired employees may give the extension in their service in case of the non­-availability of suitable candidates for the post.

    1. Former employees:

    Former employees who had performed well during their tenure may call back; and, higher wages and incentives can pay to them.

    1. Transfer:

    Employees may transfer from one department to another wherever the post becomes vacant.

    1. Internal advertisement:

    The existing employees may interest in taking up the vacant jobs. As they are working in the company for a long time, they know about the specification and description of the vacant job. For their benefit, the advertisement within the company circulates so that the employees will be intimated.

    Benefits of Internal Sources of Recruitment:
    • The existing employees get motivated.
    • Also, Cost saves as there is no need to give advertisements about the vacancy.
    • It builds loyalty among employees towards the organization.
    • The training cost is saved as the employees already know about the nature of the job to be performed.
    • It is a reliable and easy process.
    Limitations of Internal Sources of Recruitment:
    • Young people with the knowledge of modem technology and innovative ideas do not get the chance.
    • The performance of the existing employees may not be as efficient as before.
    • Also, The brings the morale down of employees who do not get the promotion or selected.
    • It may lead to encouragement to favoritism.
    • It may not be always in the good interest of the organization.

    External Sources of Recruitment:

    1. Press advertisement:

    A wide choice for selecting the appropriate candidate for the post is avail­able through this source. It gives publicity to the vacant posts and the details about the job in the form of the job description and job specification are made available to the public in general.

    1. Campus interviews:

    It is the best possible method for companies to select students from various educational institutions. Also, It is easy and economical. The company officials personally visit various institutes and select students eligible for a particular post through interviews. Also, Students get a good opportunity to prove themselves and get selected for a good job.

    1. Placement agencies:

    A databank of candidates is sent to organizations for their selection purpose and agencies get the commission in return.

    1. Employment exchange:

    People register themselves with government employment exchanges with their personal details. According to the needs and request of the organization, the candidates are sent for interviews.

    1. Walk in interviews:

    These interviews are declared by companies on the specific day and time and conducted for selection.

    1. E-recruitment:

    Various sites such as jobs.com, naukri.com, and monster.com are the available electronic sites on which candidates upload their resume and seek the jobs.

    1. Competitors:

    By offering better terms and conditions of service; Also, the human resource managers try to get the employees working in the competitor’s organization.

    Benefits of External Sources of Recruitment:
    • New talents get the opportunity.
    • Also, The best selection is possible as a large number of candidates apply for the job.
    • In case of unavailability of suitable candidates within the organization, it is better to select them from outside sources.
    Limitations of External Sources of Recruitment:
    • Skilled and ambitious employees may switch the job more frequently.
    • Also, It gives a sense of insecurity among the existing candidates.
    • It increases the cost as the advertisement is to be given through press and training facilities to be provided for new candidates.
    What is the Source of Recruitment in the Organization - ilearnlot
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  • Difference between Internal and External Sources of Recruitment

    Difference between Internal and External Sources of Recruitment

    Internal and External Sources of Recruitment Difference: Recruitment is the process of attracting the potential candidates and motivating them to apply for the jobs or selecting skilled and right candidates from the pool of applicants and appointing them for the right jobs. Her strategic thinking and decision-making can help in finding potential candidates. Also, human resources are one of the scarce resources and it is becoming a challenge to find the right candidate for the right job in the organizations. Also learn, Recruitment.

    Learn, What is the difference between Internal and External Sources of Recruitment?

    So organizations are approaching consultancies to find skilled and efficient employees to get a competitive advantage. Approaching recruitment agencies can give better results, but it is expensive and may not suitable for all organizations.

    Recruitment involves searching for the right candidates and motivating them to apply for the openings in the organization. Here sources of recruitment are two types i.e., Internal and External Sources of Recruitment of Employees!

    This article will help you to differentiate between internal and external sources of recruitment.

    The Difference Internal Sources:

    The following content is below, also learn, What is the Internal Sources of Recruitment?

    1. In the case of internal sources of recruitment, the management has a restricted choice vis-a-vis, the source out of which recruitment shall be done, as the only person available is either the existing or ex-employees of the organization.
    2. The cost of recruiting from internal sources is nil or negligible.
    3. Not much time is involved in recruiting personnel from internal sources; as employees are already available with the organization. Further, ex-employees of the organization could trace without taking much time.
    4. Selection formalities are minimum; as candidates from internal sources had already gone through detailed selection-procedure earlier. This saves, again time and cost, involving in undertaking the selection procedure.
    5. Candidates from internal sources, do not require any orientation (i.e. introduction); as this personnel is already familiar with various aspects of the organization, and it’s functioning.
    6. Only limited talent is available when personalized recruiting from internal sources. Their talents – existing and potential are already known to management.
    7. Candidates comprised of internal sources are said to have high morale; especially in cases of recruitment for promotion purposes
    8. The phenomenon of labor turnover is likely to minimize; when employees of the organization wait for their chances for promotion – especially in cases of time-bound promotions.
    9. Candidates picked up from internal sources quite advance in age; as they have already served the organization, for some time, in the past.
    10. Candidates from internal sources might or might not be suitable for newer types of jobs, arising in the organization.

    The Difference External Sources:

    The following content is below, also learn, What is the External Sources of Recruitment?

    1. In case of external recruitment, the management has quite a wide choice vis-a-vis, the sources out of which recruitment could do; as a large number of sources are available – which could compare based on their relative worth. And best sources of recruitment can finalize, based on such relative analysis.
    2. The cost of recruiting from external sources is from moderate to considerable – depending on particular sources.
    3. A detailed selection procedure has to undertake for carefully selecting candidates, from external sources. This also means time and cost, involving in undertaking the selection procedure.
    4. Much time is involving in recruiting personnel from external sources; as people take time to notice vacancies and yet take more time again to apply for jobs, to the organization.
    5. Needless to say that candidates from external sources require ori­entation; being absolutely new to the organization. This neces­sitates orientation training programs for them.
    6. Extra-ordinary talented personal might procure, from exter­nal sources – depending on the particular sources finalize for recruitment, and on chance fac­tor also.
    7. New candidates from external sources could not expect to have high morale for the organization, at least initially i.e. at the time of joining the organization.
    8. Labor turnover is quite likely; in case organizational jobs do not suit the recruits.
    9. Candidates from external sources are usually of a lower age i.e. belong to the young group of the population. In fact, minimum and maximum ages are an important requirement for candidates from external sources.
    10. For newer types of jobs, suitable candidates might recruit from a variety of external sources of recruitment.

    What is the Difference between Internal and External Sources of Recruitment - ilearnlot
    Difference between Internal Sources of Recruitment and External Sources of Recruitment