BUSINESS ENVIRONMENTS

1. 2 market 1 micro BUSINESS ENVIRONMENTS 5 socio-economic issues 3 macro 4 relationships in business

2. Controlling : strategies and objectives = have strategy to deal with risks = need effective financial systems & operational methods 2. business functions and management tasks = management influences success of business = ensure operations are productive, profitable and responsible. 3. resources = need effective management. Controlling the Organisational Culture = Management must set standard and example 1 micro • Vision - dream • Mission Statement – aim to become • Long-term objectives – to achieve • strategy • Organisational Culture • Resources • Business Functions x8 TOTAL CONTROL Production Purchasing Public Relations Financial Administration Marketing Human Resources General Management Human –labour Physical – assets Financial Technological

3. Labour unions • = unions protect and promote the interests of the individual worker or groups of workers • = influence by: implementing labour legislation effectively • ensuring a safe and positive working environment • Using intermediaries • = middlemen: bridge gap between producer and consumer • = help businesses to sell, promote and distribute their goods. • = wholesalers & retailers (buy and resell products) • agents (distribution firms help with warehousing and transport) • representatives (market and sell their products or services- indirect marketing) • banks & insurance companies (financing and insurance) • = performed by business itself or outsource • = influence; e.g. influence banks to extend their opening hours Influencing consumers (the market) = Consumers have buying power –influence behaviour = do market research & strive to satisfy the needs of customer = cultural, social, psychological , personal factors & macro environment influences behaviour Influencing suppliers = Suppliers incl. manufacturers, farmers, processors, mines, wholesalers and retailers = business wants right quality, quantity of goods, at right price and right time = influence: price (payment agreements); policy (change product to suit customer); professional relationship (long-standing agreements, trustworthiness , keep supplier informed of needs) Competitors = sell the same, similar or substitute product or service = know competition and affects on business 2 market • Immediate environment • Suppliers, consumers, competitors, trade unions, intermediaries (wholesalers, agents), strategic alliances, industry regulators • Use PORTERS to analyse Little control, can influence Porters Five Forces: Level of rivalry in the market Availability of substitute products Threat of new entrants into the market Power of suppliers Power of buyers

4. 3 macro • External environment • External factors - PESTLE • Use SWOT or PESTLE to analyse • NO CONTROL PESTLE: P – political E – economic S – Social T – technological L – legal E – environmental *P- physical *E- ethical

5. 4 relationships in business A. Power relationships • forms of empowerment (eg black empowerment (BEE) and the empowerment of employees) • Also the empowerment of employees in an organisation. • Sharing power btwn management and workers help improve quality, motivation and commitment from employees -lead to higher productivity. B. Networking • relationships with individuals, groups or other businesses. • Define as interactions between individuals, groups of people or large organisations. • characteristics: • win-win situations for both parties • follow certain fixed patterns • provide human and physical resources • types of networks : social, personal, extended and electronic networks. • build relationships with government and role players in society

6. 4 relationships in business C. Lobbying • persuading individuals or groups who have decision-making power, to support a position that you believe is right. • used to influence anyone with power • Mostly used by organisations to persuade politicians or others with power and influence to support the organisation’s position. • basic principles for effective lobbying: • the lobbyist must be clear on his/her issue, facts and position • used for important issues that could improve life for all employees as well as the community • the right people must be targeted – those who have the power to make a decision? • build group and mobilise people • blackmail, bribery, gifts or favours to persuade someone should never be used – these are corruption, not lobbying.