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Environmental challenges in enterprise working


For the record
Parveen Kassim
Science & Technology
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Environmental challenges in enterprise working
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By Prof. Dr. Khawaja Amjad Saeed, FCA, FCMA
May 01 - 07, 2000

Our entrepreneurs and managements of private, public and multinationals should equip themselves to produce productive and profitable results

Challenges: There are several challenges of environmental changes which need to be serious considered for successful enterprise working.

Environmental Changes



1. Competition


2. Market Economy


3. Markets


4. Technology

Development of speed

Enterprise operations must result in high level of performance. Experience has shown that this can be achieved through several approaches. Main focus is needed in respect of three variables.

Expectation of Higher Level of Performance

S. NO.






* Process

* Product


Marketing and Distribution

* New approach

* E-Mail

Approaches: So far three approaches have been developed for studying environmental challenges in enterprises working. These include the following:

1. Traditional approach

Environmental challenges included study of external environment and internal environment. External environment included four challenges i.e. Political, Economic, Sociological and Technological. This approach is generally known as PEST formula (Annex "A"), Internal environment also included four components namely, revenue, expenditure, manpower and financial resources.

2. Incremental approach

Over and above external and internal environment, task environment orientation was added which focused attention to competitors, customers and suppliers.

3. Current thinking

The current thinking in respect of environmental challenges to enterprise working is illustrated through the figure number 1:

Organisation environment: Every enterprise must develop a Mission Statement if it did not exist. It must carefully review it, if it already exists. However major constituents of a Mission Statement include clear and concise manifestation of the following:

1.Who are we?

2.What do we produce?

3.What markets we serve?

4.Can include a statement of philosophical concerns

5.Statement of long-term objectives with measurable parameters.


a) result oriented

b) specific

c) attainable

Organisational structure: The basic objective is to determine appropriateness of organizational structures. Many structures are patterned on normal pyramid pattern. These need to be redesigned on inverted pyramid concept. For practical guidelines thoughts shared in table number 3 may be given a favourable consideration.

Criteria for Determining Appropriate Organizational Structures


Areas of Attention

1. Comparability

1. Corporate Profit
2. Corporate Strategy


2. Corporate Level

1. Output of the Firm's Business Unit
2. Hierarchical level


3. Structure

1. Coordination
2. Authority Balance between centralization and decentralization
3. Grouping of Activities

Leadership: Leadership is needed in more and more jobs. It is the most critical factor. Organisational changes are rapidly occurring due to the following four major factors:

1. Focus : Growth is rapidly taking place.

2. Products : Diversification is the direction.

3. Expansion : Horizons are growing internationally.

4. Technologies : Increasing use of sophisticated technologies is taking place.

Achieving competitive advantage: The Challenge before the management is to achieve sustained competitive advantage. Figure No. 2 identifies three significant resources.

1. Human resources

Significant areas for improved role include: role of board of directors, vision and selfless stewardness of top management, supervision by middle management, reduction of employees turnover and continuous training of human resources at all levels.

2. Organizational resources

Significant areas for improved role include: a continuous review of three levels of strategies i.e. corporate, business unit and functional, streamlining formal structures, decision making process, strategic control process and ensuring implementation.

3. Physical resources

Significant areas for improved role include: maintaining up-to-date technology, utilizing capacity in a productive manner, reengineering, distribution network to reach customers, establishing cost effective and reliable source supply and reviewing geographical locations from profitability angle.

Industry environment: Industry attractiveness Criteria for industry attractiveness include some factors of paramount importance such as annual industry growth rate, cyclicality of the industry, historical profitability, environmental opportunities at macro level, size, seasonality, unionization rate of innovation and competition in industry.

Factors governing industry environment: Three major factors have been identified governing industry environment. These are listed below:

1.Bargaining power of;

a) Suppliers

b) Buyers

2.Substitute products pressures

3.Threat unleashed by;

a) Entry into the industry

b) Rivalry among existing competitors

Macro environment

Four aspects governing macro environment are identified in figure number 3.

Political cum legal: Political cum legal forces affect an enterprise through national and international laws such as tax laws, environmental protection laws, anti-trust laws, consumer tending laws, wage-price controls, laws governing hiring, fixing, promotion and pay and international trade regulations. The impact of World Trade Organization (WTO) will also need to be carefully studied for the impact on enterprise operations.

Economic: Significant factors will include: stage of economic cycle, monetary, fiscal, commercial, industrial and related economic policies, energy cost, unemployment and disposable income.

Social: Demographic profile, population shifts, birth rates, life expectancies, quality of life, expectations from the workplace and attitudes governing product innovations, life styles, careers and consumer activism constitute social forces governing macro environment affecting working of an enterprise.

Technical: Four significant aspects include robotics, automation, rate and new approaches to product innovation and research and development (expenditures, Government role, industry trends).


The environment challenges for successful enterprise working have been identified. Now our entrepreneurs and managements of private, public and multinationals should equip themselves to develop a positive response and produce productive and profitable results for the wider prosperity of the teeming millions.

Former Pro Vice-Chancellor and Founder Director, IBA, University of the Punjab, Lahore. Member Governing Council, International Federation of Accountants (IFAC), New York. Chairman: Seminars and Conferences Committee, Institute of Cost and Management Accountants of Pakistan.

The author is Dean—Executive Programs — Punjab College of Business Administration