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Task 1

Changing External Environments of Organisations

Environmental change or an organisation includes both the specific and general environment change. The rate in which the environment changes; can be considered as stable environment. A company’s general external environment can have different factors which include economy, socio-cultural trends, technological trends and political or legal trends. Specific environment includes the competitors for which companies are needed to specifically address some changes. According to Williams and Chuck (2019, p. 38)These changes can both be dynamic and stable. A company’s external environment that changes rapidly is considered as dynamic environment whereas, when the rate of change is slow it can be considered as the stable environment. As per the punctuated equilibrium theory, go through equilibrium that is long and simple periods of stability, after which a short period of revolution that includes complex, fundamental dynamic changes take place. This finishes returning to the stable period again. The changes are observed and appropriate actions are taken by the managers though it depends upon how much the managers are able to understand and predict the environmental change that has potential to take place and potentially will affect the business.

Changing External Environment of Kmart in 2019/2020 and their Management Responses to these Changes

As a close partner of the United States, Australia is facing certain issues in trade such as increased export barriers due to tension between United States and China trade landscape. Though, Australia is one of the most transparent trading countries, this tension may reduce the scalability of the organisation. From the economic environment, it has been observed that there is an observable increase in the consistency of global retail sales. This poses a highly opportunistic path to Kmart to expand its sales margin. Approximately 65% of the Australian population is of working age due to which the affordability of the product is higher (Eldridge 2013, p.16). As the current working generation is technology competent, this organisation management conducts both online and offline marketing campaign to increase its reach to the customers.

“The extent to which managers can understand or predict which environmental changes and trends will affect their businesses (Williams and Chuck 2019, p. 38)”. Extensive logistics network including distributors, suppliers and other supporting services of the company helps it to make the retail sales consistent with the economic trend. As awareness of Australian people regarding ecological safety is increasing, this organisation arranges several corporate social responsibility programs. Using the 11 free trade agreement into which Australia has recently involved, it offers it own products without relying on the Chinese suppliers (Securities Exchange Commission, 2020). Competitors of the organisation such as Walmart and Target offers lower price to the customers that is handled by the company through targeting lower and middle income group.

Reference List

Eldridge, J. E. T, 2013. A Sociology of organisations (RLE) Hoboken : Taylor and Francis

Securities Exchange Commission, 2020, License Agreement between Kmart Corporation and Kmart Australia Limited. Retrieved 27 July 2020, <https://www.sec.gov/Archives/edgar/data/825777/000119312504219668/dex151.htm.>

William & Chuck, 2019. MGMT4. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/deakin/detail.action?docID=6135911 Cengage

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