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Organization and Its Operating Environment

The key purpose of 21st-century business management is to ensure that the capabilities, resources and
structures of the firm are effective in meeting and exceeding the demands placed upon it by the
contemporary operating environment. Simultaneously, management ensures that those capabilities,
resources and structures are optimally positioned to ensure the sustainable development and growth of
the firm in a future environment that is likely to be significantly different from that of today.
For this essay, you will reflect on the extent to which the management of your current employing firm, or
an alternative firm with which you are familiar, is effective in achieving that purpose. In short, how well
positioned is your organisation to accurately anticipate and manage its future whilst simultaneously
administering its present?
To prepare for this essay:
�Read the Required files which uploaded.
�Reflect on the ideas presented in the assigned journal articles, in light of your own practical
experiences in the workplace.
�Analyse the relationship that exists between the organisation and its operating environment.
�Provide an assessment of the extent to which your own employing firm, or another firm with which you
are familiar, has been able to develop and sustain the abilities mentioned below. The post should include
an identification of areas in which the firm is especially effective, areas in which an improvement would be
desirable, and a brief comment on specific actions that the firm could take that would assist in developing
its capability profile.
o The ability to identify, interpret and respond quickly to environmental indications that change is
o The willingness to take risks by trying new things on a frequent and regular basis, with an associated
understanding that a significant number of those experiments will prove to be unsuccessful.
o A strong level of competence in the adoption and application of new technologies.
o The ability to competently and ethically manage a complex, unpredictable and behaviourally
inconsistent network of stakeholders.
o The ability to enthuse and inspire all of the people who work at all levels of the firm.


Relationship between an Organization and Its Operating Environment
It is important to establish that an organizations environment consists of both external
conditions and forces that have the capacity to influence its functions (Salleh, 2011, pp.120). In
complete familiarization with the operating environment of Subway, it is essential to establish
that its environment contains its rivals that include Kentucky Fried Chicken and McDonalds, its
customers, the social trends within the market that include a shift in the societies preferences as a
result of healthy eating, and political entities.
In this case, it is important to establish that the strategy management approach of Subway
forms a basis for its relationship within its environment. Strategy plays an integral role in
establishing the manner in which an organization pursues its goals in consideration of the
organizations external environment (Cullen, & Parboteeah, 2012, pp.20). In this case, it is
important to note that the environment of Subway plays a significant role in shaping its various
strategic decisions as the company’s executives try to lead the company to success. The
environment places a considerable constraint on the goals of an organization, for instance
Sustaining Strategy in Subways Operating Environment

Over the past years, Subway arrived at a decision to increase its client’s base by 50%, as
a result of the competition it’s experienced in the market. The company’s competitors such as
McDonalds and Kentucky had devised new strategies in the market that incorporated different
pricing for their products and product development that saw their products improve in quality

(Cullen, & Parboteeah, 2012, pp.23). Subway consequently lost some of its potential customers
to its rivals, an aspect that prompted the entity to develop a strategy aimed at increasing its client
base by 50%. However, it is essential to note that the organization may find it a challenge in
achieving this goal during the period of economic recession or in a case where there are several
competitors, an aspect that would require the organizations management to consider
environmental factors in the execution of these goals.
The first step that Subway needs to consider in the initial stage of this process is
establishing its operational environment through an assessment in order to effectively determine
the conditions of the environment its must develop its strategy (Kirovska, Josifovska, &
Kiselicki, 2016, pp.12). This therefore required the management of Subway to determine its
competitors increased their customers, culture, consumer preferences and trends. On the other
hand, this would require Subway to determine the strengths and weaknesses of its rivals in the
market, the economic capabilities and the buying habits of its customers.

At this point, the company is in a position to establish the relationship between its
strategy and organizational structure. With a clear focus on what the company wants to achieve,
the company proceeds into aligning its business structure and strategy in a manner that helps it in
achieving its goal (Mukerjee, 2016, pp.30). The company remains in a position to allocate
responsibilities in order to achieve optimal results, improve the quality of its products, create
change within the organization, and develop advertising campaigns with the aim of wining
The structure of the organization and its strategy will be helpful to the company in
establishing it’s tone would be formal, informal or semi-formal, with all these decisions arrived
at after the strategy of the organization is developed. It is imperative to establish that Subway

had the capacity to interpret and respond to some of the environmental indicators that
necessitated for change (Chien-Ming, Delmas, & Lieberman, 2015, pp.34). This can be
established in the company’s approach to cut salt in most of its sandwiches, an aspect that led to
other fast-foods to review the amounts of salt that was contained in most of their food products.
This clearly establishes that the environment plays a significant role in determining the functions
of an organization.



Chien-Ming, C., Delmas, M. A., & Lieberman, M. B. (2015). Production Frontier Methodologies
and Efficiency As A Performance Measure In Strategic Management Research. Strategic
Management Journal, 36(1), 19-36.

Cullen, J. B., & Parboteeah, P. (2012). International Business: Strategy and the Multinational
Company. New York: Routledge.

Salleh, A. (2011). Climate Strategy: Making the Choice between Ecological Modernization or
Living Well. Journal of Australian Political Economy, (66), 118-143.

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