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Business and Performance: Stability and Profitability

Various external factors affect the stability and profitability of the firm and technological trends such as automation influence business operations. For instance, this tendency modifies recruiting processes, as skilled labor becomes a requirement (Invancevich & Konopaske, 2012). Simultaneously, the changes in technology contribute to the development of training programs to advance the skills of the workforce and maintain them. As for the economic changes, the fluctuations of oil prices might impact the business activities of the company. The firms that operate globally will experience changes in prices due to their dependency on currency exchange (Lee, 2013). Thus, these alterations will require them to redesign their strategies and redistribute the budget.

As for the legal and political factors, labor laws, and increasing the threat of cybercrimes will assist firms in making changes to their security systems, at the same time, the social trends such as age distribution might be a potential reason for modifying marketing campaigns. The firm will be required to adapt to demographical alterations to be competitive (Lamb, Hair, & McDaniel, 2011). Subsequently, the rising concerns of the public about the environment will drive the potential changes in the sustainability strategy and require modifying the production processes to minimize waste.

Simultaneously, HRM, financial activities, legal implications, and strategy have a direct impact on performance. In this case, HRM plays the role of the intermediary and ensures the compliance of the employees’ performance with the organizational goals (Invancevich & Konopaske, 2012). In other words, it provides training, recruitment, and favorable working conditions to enhance motivation. In turn, the financial department helps organizations distribute their resources effectively to avoid bankruptcy to assure the development of sectors such as HRM and optimize performance.

As for the compliance with the legal changes, following this approach helps avoid legal suits and ensures that the working conditions comply with the labor laws. It increases the commitment of the employees and enhances the overall performance. Thus, a strategy is a framework, which defines the goals and objectives of the business. In this case, the alignment with the strategy helps the components mentioned above enhance the company’s performance from different angles, respectively.

The strategy has to consider all elements equally, as, otherwise, it will lead to the excess in financing in some departments while others will function poorly due to lack of resources. The role of this interdependence is important. It affects the organizational structure and objectives of the business to pursue excellence and financial stability.

In turn, the company’s culture is a critical attribute of organizational performance and can be defined as a set of principles, which determine the values and objectives cherished within a firm (Tullman, 2014). In the first place, it has a direct impact on the performance of the employees. The workforce tends to value the mission of the firm, and a well-established culture defines their commitment and performance.

As a consequence, it has direct impact profitability, as employees’ actions outline the sales and the overall revenue of the organization. Lastly, the elements of corporate culture affect a level of innovation and decision-making practices.

For instance, giving the opportunity for the employees to contribute to the decision making might open new possibilities for development (Muindi, 2011). It could be said that corporate culture might be a potential driver for the shift in the revenues while enhancing the product’s life cycle, developing customers’ base, and occupying new market niches. Consequently, its pivotal role cannot be underestimated. A well-developed and concise company’s culture with the well-defined objectives, financial distribution, HRM, and legal compliance is a driver for the company’s success.


Invancevich, J., & Konopaske, R. (2012). Human resource management. New York, NY: McGraw Hill.

Lamb, C., Hair, J., & McDaniel, C. (2011). Essentials of marketing. Mason, OH: South-Western Cengage Learning.

Lee, E. (2013). Management of international trade. New York: Springer.

Muindi, F. (2011). The relationship between participation in decision-making and job satisfaction among academic staff in the school of business, University of Nairobi. Journal of Human Resource Management Research, 11, 1-34.

Tullman, H. (2014). Tullman on company’s culture: How to build and grow a successful business. Chicago, IL: Blog into Book.

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