External Factors Affecting Simpsons

The external environment is constantly changing. It consists of events and forces outside of a company that has the potential to affect or influence it. Simpsons Plastic Products Corporation is operating in a competitive environment. Simpsons stands out amongst competitors with its strong research and development division, however, the company lost two of its key employees recently due to competition. Competitors are companies they operate in the same industry that offer similar products or services to customers. Managers must perform environmental scans to search the environment for threats and opportunities that may arise. A competitive analysis can also be performed to identify who the company’s competitors are and to determine their strengths …show more content…
This component in the external environment consists of regulations, laws, and court decisions that regulate business behaviour. The wage rate at Simpsons appears to be discriminatory as there is a gender wage gap. A gender wage gap is a difference in the average pay for female and male workers when both parties carry out equal work. Employees who are heads of households receive 18% more pay than workers who are not. However, the employees who receive the 18% extra pay tended to be men even though there were more female household heads in the company. Discrimination of any kind can cause the company lawsuits and in turn high court costs. Gender and sex is a prohibited ground in Canadian legislation. Discrimination based on a person’s sex extending to males, females (pregnant), or transgender persons is prohibited. Women working at Simpsons are treated unfairly on the basis of gender. The adverse effect is the lower wage rate. Equity theory research suggests that employees who feel they are treated unfairly react by departing the firm for better opportunities. Simpsons must correct their pay system and ensure there is pay equity amongst all