July 6, 2018

Awareness of Business Environment - Top Management Challenge

Article of the Theme - Top Management Challenges

Importance of  Awareness of Business Environment

Transformation of an organization depends on an insight. Insights come when a manager is trying to make sense of a situation which offers a business opportunity or a business threat.  Such a situation is always preceded by awareness of the relevant environment. Organizations depend crucially on the awareness of the top management regarding the change in the environment.

Self-awareness and Organizational Awareness

A high degree of personal and organizational awareness improves leadership effectiveness.Successful leaders have a strong self-awareness and organizational awareness. The self-awareness requires deep understanding personal emotions, strengths, limitations, values and motives by top managers. It is about themselves. Organizational awareness is the deep understanding of the organizational structure, leadership styles that succeed in the organization and culture of their companies. Effective CEOs and top managements use surveys to increase awareness of intra-organizational environment.

Top managers have to be aware of the environment of their business concern. They need to see developments that are likely to occur in the business environment and create scenarios. For each scenario they have to create a plan and take some actions that will facilitate the deployment of the full plan as a particular scenario actually happens. Consumer environment is one focus area for top management in the business environment.

Consumer Environment 

The consumer environment refers to everything external to consumers that influences what they think, feel, and do. It includes social stimuli, such as the actions of others in cultures, subcultures, social classes, reference groups, and families, that influence consumers. It also includes other physical stimuli, such as stores, products, advertisements, and signs, that can change consumers’ thoughts, feelings, and actions.

The consumer environment is important to marketing because it is the medium in which stimuli are placed to influence consumers. For example, marketers run commercials during TV shows that their target markets watch to inform, persuade, and remind them to buy certain products and brands. Marketers can send free samples, coupons, catalogs, and advertisements by mail to get them into consumers’ environments. Stores are located close to populated areas to get them in the proximity of consumers. Web sites become part of a consumer’s environment if they are contacted.

Clearly, marketing strategies should be designed not only to influence consumers but also to be influenced by them. For example, if research shows that consumers are disgusted (affect and cognition) with  advertisements for a product, the company may want to change its ads to better appeal to the market. If research shows that consumers in the target market do not shop (behavior) in stores where a company’s product is featured, the distribution strategy may have to be changed. If research shows that consumers want to be able to get information from a company’s Web site (environment) and none exists, the company may want to create one. Thus, marketing strategies should be developed, implemented, and changed based on consumer research and analysis.

Read in more detail: Analysis of Consumer Markets - Kotler's Book Chapter Summary

Seeking different perspectives: 

This trait is conspicuous in managers who monitor trends affecting organizations, grasp changes in the environment, encourage employees to contribute ideas that could improve performance, accurately differentiate between important and unimportant issues, and give the appropriate weight to stakeholder concerns. Leaders who do well on this dimension typically base their decisions on sound analysis and avoid the many biases to which decisions are prone.

Article by Claudio Feser, Fernanda Mayol, Ramesh Srinivasan - McKinsey and Co.

Benefit of participating in A to Z April Blogging Challenge

Reading and Understanding to Write

I am writing blog posts. But I am reading material and collecting materials regarding the topics. It is helping to understand the top management theory and practice better. I shall try and revise each of these articles once again later to make them more comprehensive and up-to-date. I request readers to give their suggestions for expanding and improving the article.

The index to all articles in A to Z April Blogging - Theme - Top Management Challenges

A to Z Challenge articles visited and read

Unique Alpha and Unseen Omega in Blogging

Vibrant India
Adventurous Outing in Rishikesh

About Anger and how to manage it to save relationships

Should Education Adapt or Adopt?

Updated 7 July 2018
1 April 2017


  1. Good luck with the challenge!

  2. Today is Saturday. I walked a quarter marathon in the morning. Then started the blogging marathon. I could visit six blog posts today. Would like to satisfy the objective of the A to Z Blogging challenge. Write and Read blogs and establish a network with other bloggers.

  3. This is a very good article. I appreciate the time you took to create it. I'll come back to see what else you have to teach me tomorrow!

    April Fools' Day

  4. Successful companies I have been a part of have management who research the market, surround themselves with others who think differently than they do and ask employees for ideas. The failing companies tended to have management who thought their ideas were correct, surrounded with like minded people and told their employees how to work.

    Good post. I look forward to reading more.

    Emily | My Life In Ecuador