1.

What are the various environmental factors that a manager should consider in an
organization?
Managers must recognize and respond to all the factors that can influence their organization
The forces that drive this change in the business are known as internal and external
environmental factors.
The internal environment
The internal environment of an organization refers to events, factors, people, systems, structures
and conditions inside an organization that are generally under the direct control of the
company. Corporate mission, corporate culture, and leadership style are factors that are typically
associated with an organization’s internal environment. As such, it is the internal environment
that will influence the organizational activities, decisions, behaviors and attitudes of employees.
Changes in leadership style, in the corporate mission or in culture can have an important impact
on the organization.
These internal factors include:
a. the staff: Employees are an important part of the internal environment of an organization.
Managers must be able to manage lower-level employees and, at the same time, supervise the
other factors of the internal environment.

b. the budget: In business, even the lack of money can determine the survival – or not – of a
company.

When cash resources are too limited, that can affect the number of people you can hire, the
quality of equipment and the type and amount of advertising you can buy. If you have enough
money instead, you have much more flexibility to grow and expand the business, or to endure an
economic downturn.
c. corporate culture: the internal corporate culture consists of the values, attitudes and priorities
that employees live every day. A ruthless culture in which every employee competes with his
colleagues certainly creates a different, and more toxic, environment than that of a company that
emphasizes collaboration and teamwork.
 The external environment
The external environment is composed by factors that occur outside the organization but which
can cause internal changes and are, for the most part, beyond the company’s control.
Customers, competition, economy, technology, political and social conditions, and resources are
common external factors that influence the organization.
Even if the external environment occurs outside an organization, it can have a significant
influence on its current operations, growth and long-term sustainability.

2. what is the purpose of organization, job design and organization structure?

An organization main aim or the purpose is to understand and manage the business well. Main
purpose is to bring together all the employees and also understand the direction of the
organization. Job design and work organization deal with the specifications of the content,
methods, and relationships of jobs in an integrated manner to satisfy technological and
organizational requirements as well as the personal needs of employees.

3. Bring out the factors affecting centralization/decentralization. Also highlight the

merits and demerits of centralization and decentralization with examples.

Centralization refers to the process in which activities involving planning and decision-making
within an organization are concentrated to a specific leader or location. In a centralized
organization, the decision-making powers are retained in the head office, and all other offices
receive commands from the main office. The executives and specialists who make critical
decisions are based in the head office. A centralized organization is structured by a strict
hierarchy of authority where most decisions are made at the top by one or a few individuals. ...
Examples of organizations utilizing a centralized structure include the U.S. Army and large
corporations.

Factors Determining Centralization of Authority:

 Achieving Uniformity of Action: ADVERTISEMENTS: ...

 Facilitating Integration: ...
 Promoting Personal Leadership: ...
 Handling Emergencies: ...
 Standardization of Procedures and Systems: ...
 Facilitates Evaluation: ...
 Economies: ...
 Co-ordination of Activities:
Some important factors determining decentralization are:

 The size and complexity of the organization.

 Dispersal of operations.
 Degree of diversification.
 Availability of competent personnel.
 The outlook of the top management.
 Nature of functions of the organization.
 Communication system.
 Planning and control procedures.

An effective centralization offers the following advantages or merits:

 A clear chain of command

 Focused vision
 Reduced costs
 Quick implementation of decisions
 Improved quality of work

Disadvantages(demerits) of Centralization

 The following are the disadvantages of centralization:

 Bureaucratic leadership
 Remote control
 Delays in work
 Lack of employee loyalty
Decentralization refers to a specific form of organizational structure where the top management
delegates decision-making responsibilities and daily operations to middle and lower
subordinates. The top management can thus concentrate on taking major decisions with greater
time abundance. Business houses often feel the requirement of decentralization to continue
efficiency in their operation. An example of a decentralized organization is a fast-food franchise
chain. Each franchised restaurant in the chain is responsible for its own operation. Broadly
speaking, companies start out as centralized organizations and then progress towards
decentralization as they mature. The basic advantages and disadvantages of decentralization from
an organizational point of view.

Advantages of Decentralization

 Motivation of Subordinates
 Growth and Diversification
 Quick Decision Making
 Efficient Communication
 Ease of Expansion
 Better Supervision and Control
 Satisfaction of Human needs
 Relief to top executives

Disadvantages of Decentralization

 Difficult to Co-Ordinate
 External Factors
 Narrow Product Lines
 Expensive
4. what does the field of forecasting encompasses, and how does forecasting relate to
planning?

The field of forecasting is concerned with approaches to determining what the future holds. It is
also concerned with the proper presentation and use of forecasts. The terms “forecast”,
“prediction”, “projection”, and “prognosis” are typically used interchangeably. Forecasts may be
conditional. That is, if policy A is adopted then X is likely, but if B is adopted then Y is most
likely to occur. Often forecasts are of future values of a time-series; for example, the number of
babies that will be born in a year, or the likely demand for compact cars. Alternatively, forecasts
can be of one-off events such as the outcome of a union-management dispute or the performance
of a new recruit. Forecasts can also be of distributions such as the locations of terrorist attacks or
the occurrence of heart attacks among different age cohorts. The field of forecasting includes the
study and application of judgment as well as of quantitative (statistical) methods.

Both Planning and forecasting are basic and most important managerial activity. They are closely
related to each other. Planning gives answer to how, when and what to be done. It is a goal
oriented activity which designs future course of action and provides future environment of
organization.

As future is uncertain, planners are forced to make some assumptions. This assumption related to
future is called forecasting which is based on facts, past trend, economic condition and
information. Planning is the process of thinking about the future course of action in advance,
whereas forecasting is predicting future performance of the organization on the basis of past and
present performance and data. ... But, Planning is done by top level managers to formulate plans
for the organization.

5. Do I need to know about what causes the thing I’m forecasting to change?

Not always. Much research has been done on how to forecast using only historical data on the
variable that is to be forecast. For example, airline call-center traffic could be forecast using
extrapolation methods. The Methodology Tree distinguishes between forecasting using
univariate data, for which various extrapolation methods might be useful, and forecasting using
multivariate data. Econometrics is commonly used in the latter case. Note that econometric
methods are not confined to economic problems, but can be applied to forecasting in situations
where you have theories about what causes changes in the thing that you are forecasting. In order
to forecast using econometrics, you will also need to have data on the causal variables. These
data need to vary, and to make the exercise worthwhile you will need to be able to forecast the
causal variables sufficiently accurately that the overall error attained is smaller than could be
achieved by extrapolation.

6. Is it possible to improve on forecasts by using expert knowledge about the situation?

Most people think so and they revise forecasts from quantitative methods, usually reducing
accuracy as a result. Nevertheless, people often have useful knowledge about the problem, which
is referred to as domain knowledge. One approach to making effective use of domain knowledge
consists of providing graphic decision support for judgmental forecasting. Another approach is to
integrate domain knowledge with statistical methods. The best way to integrate judgment with
statistical methods is as an input to the quantitative models for example, causal-force knowledge
can be used to incorporate knowledge about trends into forecasts.

7. which well accepted methods should be used to provide bench mark forecasts?

The simplest forecasting method for time series is the random walk. It assumes that the future
value of a time series will be equal to the current value. In other words, one does not have useful
information about the future changes in the series: it is equally likely to go up or down. The
random walk provides relatively accurate forecasts in many circumstances, and should serve as
one basis for comparing performance. Forecasts from simple exponential smoothing methods are
also frequently used as benchmarks. For cross-sectional data, one can use the group average (or
“base rate”) as a forecast. When available, markets offer good benchmarks. Market prices are
based on large numbers of people who put money on their forecasts. So, for example, studies
have shown that, without inside knowledge, it has been impossible to improve upon current
prices in forecasting the stock market. Prediction markets have been implemented for many
different forecasting problems, such as the tenure of political appointees and the popularity of
individual movies. Links to internet sites that provide play-money or real money markets, and
their implicit forecasts, are listed under Resources for Practitioners.
 8. How should the accuracy of forecasts be compared?

Forecast accuracy is compared by measuring errors. In general, the error measure used should be
the one that most closely relates to the decision being made. Ideally, it should allow you to
compare the benefits from improved accuracy with the costs for obtaining the improvement.
Unfortunately, this is seldom possible to assess, so you might simply use the method or methods
that provide the most accurate forecasts. Some commonly used error measures are Mean
Absolute Deviation (MAD), Mean Square Error (MSE), R2 (or R-squared), Mean Absolute
Percentage Error (MAPE), Median Absolute Percentage Error (MdAPE), and Median Relative
Absolute Error (MdRAE). The selection of a measure depends upon the purpose of the analysis.
For example, when making comparisons of accuracy across a set of time series, it is important to
control for scale, the relative difficulty of forecasting each series, and the number of forecasts
being examined. A word of caution: two popular measures should be avoided. The first of these,
R2 (which assesses the pattern of the forecasts relative to that of the actual data), is not
particularly useful to forecasters and its use probably does more harm than good when using time
series data. The second, Mean Square Error, should not be used because it is unreliable; in
addition, it is difficult to explain the results to decision makers.

9. How can I best respond to criticism of my forecasts?

Following good forecasting practice does not guarantee accurate forecasts on every occasion.
One approach we could take to answering critics is to compare the accuracy of our forecasts to a
suitable benchmark. Unfortunately, benchmarks are not readily available for all types of
forecasting. If there is no benchmark relevant to our forecasts, we will need to show that we
followed best forecasting practice. To do this, we can conduct an audit of the forecasting process
we used and, if we did adhere to the relevant principles, we will get a good report that we can
show critics.