Use a range of examples to illustrate the relationship between market forces and organizational responses.

A

There is a new market perspective that shows that organizations seek to legitimize their responses to market forces by conforming to the prevailing practices within their fields of operations. Within these organizational fields are their suppliers, consumers controlling authorities as well as other firms that deal with similar commodities. This new perspective focuses on organizational approaches and practices that determine its responses to the changes in the market forces. Different approaches and practices in the organization legitimating process do exist in both the pre-convergence stage or in the subsequent stages as they may be dictated by the level of pressure of the market forces on the organization.

The organizations are building capacities internally to constitute and enact a focused approach that would direct response actions especially in market forces that can be predicted as failure to have appropriate response can be a risk factor to the organization. The organizational responses, therefore, is centrally determined by the level of influence, power and change that could be expected in response to a given market force. The market forces that could be expected to bring in positive changes to the organization are normally received with a fast and more permanent response mechanism. Forces that would be a potential drawback to the general operations of the firm is normally approached as a disruption and the response is that which may paralyze the source of the market forces or align them in a manner that may not cause excessive adverse effect to the organization.

Organizations respond differently to various market forces. The price controls and price ceilings are tools employed to control prices. The government have ensured that certain products are not sold beyond a certain maximum, especially prices of staple foods and goods, much more, the government has imposed the minimum wage that an employee can be paid, which have a direct impact on the profit made by the organisations. Shell Company has put a price ceiling on the retail operators to maintain its price and competitiveness in the market. It has six different types of products.

Today’s market is governed by a variety of choices. The company has increased the product range with the introduction of new Petrol-chemicals. The quantity of goods produced has immensely been increased to ensure consistency in supply and production, the market is now concerned about the reserve they require to overcome price fluctuations and shortages. Equally, when demand is higher, the supply is increased and when it is low supply is reduced.

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