What Is The Relationship Between Market Forces And Organizational Response?


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Iris Phillips answered
Market forces describe the interaction between supply and demand within a market.  Organisational response is the reaction given by a company or business to an economical or business circumstance.  An organisation’s response to market forces is key in any circumstance as it will have a direct impact on the company’s profits and reputation.  In terms of supply and demand the most successful companies will have appropriate market research and analysis in place to ensure that they are able to supply a product or service to meet the demands of its customers.  If a company has judged the market demand for their product correctly then they will keep their customers happy by ensuring they supply the product or service requested by their customers in the appropriate quantities.  It will also increase profits as the company will have judged their margins correctly to be able to supply and sell as much of their product as possible, without over stocking, bringing added finances to the business.  Poor judgement could lead to a misinterpretation of market forces, either leaving customers empty handed as not enough product has been supplied, or leave their business overstocked as customers do not want the quantities supplied.  In both scenarios a company’s profits would be greatly affected, and the organisation’s reputation may be tarnished.  The relationship between market forces and organisation response is therefore paramount in terms of business success and customer satisfaction.  For this reason, market research is key in order to determine market forces so that an organisation can respond correctly to the market they are operating in.  It is also important to continue in monitoring market forces to ensure that an organisation can respond to any changes in market conditions.  More or less product may be needed to match customer demand during different market seasons.

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