Global Business Environment

Shareholder-

Stakeholder- someone of interest in ur organisation and have interest in it.

Could be external (Customers, suppliers, community, government) or
internal (los que influyen en las decisiones tomadas en la propia
compañía) (owners, shareholders managers and staff or employees).
University has 2 big stakeholders: students and teachers
 1. Owners and Shareholders (objective is to make a profit)
 The number of owners and the roles they carry out differ according
to the size of the business
 In small businesses there may be only one owner (sole trader) or
perhaps a small number of partners (partnership)
 The owner (s) of a business is referred to as Entrepreneur because
they initially set up and run the business. Entrepreneurs are good at
taking risks. In small businesses, sometimes the entrepreneur
owner may be the only shareholder of the business
 In large organisations there are often thousands
of shareholders, who each own a small part
of the business
 2. Managers (to make a profit for owners and protect their own
interest such as higher pay):
 organise
 make decisions
 plan
 control
 are accountable to the owner(s)
 Sometimes the owner entrepreneur is also the Manager.
3. Employees or Staff: (KAIZEN: You value everyone´s opinion. It engages
stakeholders opinion and use to improve the business)
 A business needs staff or employees
to carry out its activities
 Employees agree to work a certain number
of hours in return for a wage or salary
 Pay levels vary with skills, qualifications, age, location, types of work
and industry and other factors
 In the UK, 74% of small businesses in the private sector have no
employees. They are often run by their owners (source: Department
for Business, Enterprise and Regulatory Reform)
Consumers: they consume
Customers: they like a concrete Brand, their preferences are subjective.
Stakeholder: The key is the LOYALTY for a Brand. If u get rewards, you will
be loyal to that Brand. You cannot ignore the stakeholders and make
decisions having concerned of them. They have different interest in
comparioson with the others, and theirs are the most important for a
companie. They have to be interested in the companie.
4. Customers (best price and quality, service):
 Customers buy the goods or services produced by businesses.
 They may be individuals or other businesses
 A business must understand and meet the needs
of their customers, otherwise they will fail
to make a profit or, indeed, survive
5. Suppliers (charge high prices for supplies to the business):
 Businesses get the resources they need to produce goods and
services from suppliers
 Businesses should have effective relationships with their suppliers in
order to get quality resources at reasonable prices
 This is a two-way process, as suppliers depend on the businesses
they supply
6. Community (regulate, improve health and safety, protect the
community, tax):
 Businesses and the communities they exist in
are also in a two-way relationship
 The local community may often provide many of the staff and
customers
 The business often supplies goods
and services vital to the local area
 But at times the community can feel aggrieved by some aspects of
what a business does
 7. Government (regulate, improve health and safety, protect the
community, tax):
 Economic policies affect business costs (through taxation and
interest rates)
 Legislation regulates what business can do
in areas such as the environment
and safety and health
 Successful businesses are good for governments
as they create wealth and employment

STAKE HOLDER APPROACH

 In the UK, “Stakeholder approach” means giving less importance to
the interest of the owners and more to other stakeholders
 With this approach, the focus is on good employment and customer
care policies, Working well with suppliers, giving back to the
community, being environmentally friendly and for large companies
showing corporate social responsibility
 This approach is measured in terms of impact on profits and
revenues. The main challenge of the stakeholder approach is that it
an add costs and lower profits.
You have to be aware of who your stakeholders are, their interests in the
companie, their power and their influence.

Session 3

Political
Economical
Socio-cultural
Technological

PEST is about opportunities and threats in the external environment:

1 PEST considers factors outside the organisation’s immediate
environment which cannot be ignored.
2 PEST factors can be interlinked and overlap which may cause
confusion when doing the analysis (e.g. Government policy has an
economic impact).
3 PEST factors crucially allow for consideration of opportunities and
threats.
4 PEST factors are often used in building scenarios where there are
conflicting factors (e.g. The same factor might be a positive for the
organisation if viewed one way, but a negative if seen in another
way).

Session 4
Markets are the area of economic activity in which buyers and sellers
come together and the forces of supply and demand affect prices:
• Perfect competition (closest is a stock market)
• Monopolistic (retail markets e.g. Gap)
• Oligopoly (industrial e.g. Honda)
• Monopolies (utilities e.g. water companies)
• Concentration ratio – market share of the top 1, 5, and 10
companies.
Anything that changes costs which are the ‘conditions of supply’ will cause
a shift in the supply curve:
• Input prices going up
• Technology improving
• Reorganising the company
• Change in taxation
• Etc, etc

Porter’s five forces framework helps identify the attractiveness of an

industry in terms of five competitive forces:
• the threat of entry,
• the threat of substitutes,
• the bargaining power of buyers,
• the bargaining power of suppliers and
• the extent of rivalry between competitors