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Business Seminar - Tute 01
Business Seminar - Tute 01
PEST analysis
PEST analysis is a strategic management tool used to analyze the external macro-
environmental factors that can impact an organization or industry.
Political: Factors related to government regulations, policies, and political stability that can
impact the organization or industry.
Economic: Factors related to the economy, such as inflation, interest rates, exchange rates,
and economic growth, that can impact the organization or industry.
Social: Factors related to the demographics, lifestyle, and cultural norms of the population
that can impact the organization or industry.
PEST analysis can help organizations identify opportunities and threats in their external
environment and guide their strategic decision-making.
Advantages of Privatization
• Increased Efficiency
• Reduced Government Spending
• Access to Capital
• Improved Quality of Service
• Innovation
Disadvantages of Privatization
• Reduced Accountability
• Reduced Access for Low-Income Individuals
• Job Losses
• Monopoly Power
• Social Inequity
Advantages of Nationalization:
Arsan Nazar 1
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
• Strategic Prioritization
• Public Benefit
Disadvantages of Nationalization:
• Reduced Efficiency
• Reduced Innovation
• Bureaucracy
• Increased Government Spending
• Political Interference
Arsan Nazar 2
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
• Providing Funding
• Offering Business Support Services – Training or support programs
• Offering Tax Incentives
• Investing in Infrastructure
• Providing Export Assistance
1. Imposing Regulations
2. Enforcing Legal Penalties
3. Imposing Taxes or Levies
4. Restricting Trade - Through quotas and Tariffs
5. Nationalisation - Mainly done if the failing private firm is essential
Arsan Nazar 3
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
2. Price Stability - Governments aim to maintain price stability by keeping inflation low
and stable. Inflation erodes the purchasing power of money and can lead to
uncertainty and instability in the economy.
3. Full Employment - Governments aim to achieve full employment, which means that
everyone who wants a job can find one. This objective is important for reducing
poverty, promoting social cohesion, and improving the overall health of the
economy.
4. Balance of payment equilibrium - Governments aim to achieve a sustainable
balance in their external accounts, which means maintaining a healthy balance of
trade and avoiding excessive levels of debt. This objective is important for promoting
long-term economic stability and avoiding external imbalances that can lead to
financial crises.
5. Income Distribution - Governments aim to ensure that economic growth is shared
fairly across society and that the benefits of growth are not concentrated in the
hands of a few. This objective is important for promoting social justice and reducing
inequality.
6. Environmental Sustainability - Governments aim to promote sustainable
development by ensuring that economic growth is achieved in a way that does not
harm the environment or deplete natural resources.
1. Monetary Policy - Monetary policy involves controlling the money supply and
interest rates to achieve macroeconomic objectives. Central banks, such as the
Federal Reserve in the US, use monetary policy to influence economic activity. They
may increase interest rates to curb inflation or decrease interest rates to stimulate
economic growth.
2. Fiscal Policy - Fiscal policy involves the use of government spending and taxation to
achieve macroeconomic objectives. Governments may increase spending during a
recession to stimulate economic growth or decrease spending during times of
inflation. They may also adjust tax rates to encourage or discourage consumer
spending.
3. Supply-Side Policy - Supply-side policies aim to increase the production capacity of
an economy by improving productivity and efficiency. Governments may invest in
education and training to improve the skills of the workforce or reduce regulations
to make it easier for businesses to operate.
4. Exchange Rate Policy - Exchange rate policy involves managing the value of a
country's currency relative to other currencies. Governments may use exchange rate
Arsan Nazar 4
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
Businesses need to consider the needs of the community and pressure groups
for a number of reasons:
Arsan Nazar 5
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
sustainability. This can lead to long-term benefits for both the business and the
community.
Demographic changes refer to shifts in the size, structure, and distribution of populations
over time. These changes occur at the local, national, and global level and can have
significant social, economic, and political implications. Here are some examples of
demographic changes at each level:
1. Local Level
• Aging population: In many local communities, the population is aging as a result of
declining birth rates and improved life expectancy. This can have implications for
healthcare, social services, and the labor market.
• Migration: Local communities may experience an influx or outflow of people due to
changes in employment opportunities, housing costs, or cultural factors. This can
have implications for community cohesion and social services.
• Ethnic diversity: Local communities may become more ethnically diverse due to
migration or natural growth. This can have implications for social cohesion, cultural
practices, and political representation.
2. National Level
3. Global Level
• Aging population - Many countries are experiencing an aging population, which can
have implications for labor markets, social services, and international relations.
• Migration - Global migration is increasing due to factors such as economic
inequality, conflict, and climate change. This can have implications for social
cohesion, cultural practices, and political discourse.
The impact of social and demographic change on business and business decisions
1. Customer behavior and preferences – A growing aging population may lead to an
increased demand for healthcare and other services targeted towards older adults.
Businesses need to be aware of these changes and adapt their products and services
accordingly.
2. Workforce diversity and inclusivity - Businesses may need to implement policies and
practices that promote diversity and inclusivity to attract and retain a more diverse
workforce.
3. Technological adoption: Demographic changes such as an aging population may also
drive the adoption of new technologies that cater to the needs of older adults.
4. Legal and regulatory compliance - Changes in the composition of the workforce may
lead to new anti-discrimination laws or changes in immigration policies.
5. Sustainability and environmental concerns - Businesses may need to adopt
sustainable practices and reduce their carbon footprint to meet changing consumer
expectations and regulatory requirements.
ethical and sustainability standards and avoid working with suppliers who engage in
unethical or unsustainable practices.
The importance of international trading links and their impact on business and
business decisions
• Market expansion: International trading links can provide businesses with access to
new markets, which can help them grow their customer base and increase their
revenue streams.
• Competitive advantage: Businesses that have international trading links may have a
competitive advantage over those that do not, as they may be able to offer products
or services that are not available locally.
• Supply chain management: International trading links can impact a business's supply
chain, as they may need to source materials or components from overseas suppliers.
Businesses need to ensure that their supply chain is reliable and efficient to avoid
supply chain disruptions.
• Risk management: International trading links can also expose businesses to risks
such as currency fluctuations, political instability, and trade disputes. Businesses
need to have risk management strategies in place to mitigate these risks.
• Regulatory compliance: Businesses that engage in international trade need to
comply with regulations and laws in multiple jurisdictions. They need to ensure that
they understand the legal and regulatory environment of the countries they operate
in to avoid legal issues and reputational damage.
1. Market access: Trade agreements can provide businesses with increased access to
international markets, which can help them expand their customer base and
increase their revenue.
2. Tariffs and trade barriers: Trade agreements can eliminate or reduce tariffs and
other trade barriers between countries, making it easier and less costly for
businesses to export and import goods and services.
3. Regulatory convergence: Trade agreements can promote regulatory convergence
between countries, which can help businesses streamline their operations and
reduce compliance costs.
4. Intellectual property protection: Trade agreements can provide stronger protections
for intellectual property rights, which can benefit businesses that rely on intellectual
property to develop and market their products and services.
Arsan Nazar 8
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
Advantages:
Arsan Nazar 9
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
5. Corporate social responsibility: Many MNCs have programs in place to support local
communities and promote sustainable development, which can benefit the
environment, social welfare, and education.
Disadvantages:
1. Exploitation: MNCs can be accused of exploiting local labor and resources, by paying
low wages, engaging in environmental degradation, or extracting natural resources
without adequate compensation to the local community.
2. Competition: MNCs can put local businesses at a disadvantage, by using their scale
and resources to dominate markets and drive smaller competitors out of business.
3. Tax avoidance: MNCs can use complex structures and tax havens to avoid paying
their fair share of taxes in the countries where they operate
4. Loss of sovereignty: MNCs can exert significant influence on local governments and
policymakers, which can limit their ability to make decisions in the best interests of
their citizens.
5. Cultural imperialism: MNCs can promote a homogenized global culture, by
promoting their brands and products at the expense of local traditions and customs.
Arsan Nazar 10
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
Here are some ways in which a business and its stakeholders may use an environmental
audit:
1. Business decision-making
2. Risk management
3. Regulatory compliance: such as emissions standards or waste disposal rules. By
identifying potential compliance issues, the audit can help a business take corrective
action before problems arise.
4. Stakeholder engagement: By engaging with stakeholders and addressing their
concerns, a business can build a positive reputation and enhance its social license to
operate.
5. Reporting and disclosure: This can help enhance transparency and accountability,
and provide a basis for benchmarking and comparison with industry peers.
Arsan Nazar 11
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
Arsan Nazar 12
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
and pursue new ideas. This can be achieved by creating a culture of experimentation
and learning, and providing resources to support new ventures.
Organizational structure
Arsan Nazar 13
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
Advantages:
1. Expertise: Employees in a functional structure are organized by their specific area of
expertise, allowing them to develop deep knowledge and skills in their respective
fields
2. Clear career paths: This can help to attract and retain talent, as well as improve
employee satisfaction and motivation.
3. Cost-efficient: The functional structure is cost-efficient because it reduces
duplication of effort and resources.
4. Able to learn much quickly due to similar level of skills from the others
Disadvantages:
1. Silos: A functional structure can create silos, where employees focus solely on
their own functional area and may not be aware of how their work impacts other
areas of the organization.
2. Slow decision-making: Decision-making can be slow in a functional structure
because it requires input from multiple functions. This can result in delays,
missed opportunities, and an inability to respond quickly to changing market
conditions.
3. Limited perspective: Employees in a functional structure may have a limited
perspective of the company as a whole and may not be able to see the bigger
picture. This can result in a lack of innovation and creativity.
Hierarchical structures
Hierarchical structures can be flat or narrow, depending on the number of levels of
authority and the scope of control within the organization. Here are some advantages and
disadvantages of each type of hierarchical structure:
• More Autonomy: Employees have more autonomy in their work as there are fewer
levels of management to report to.
• Flexibility: Flat structures can adapt to change more quickly as they have less
bureaucracy.
Disadvantages:
• Limited Career Growth: With fewer levels of management, there are fewer
opportunities for promotion and career growth.
• Overworked managers: With fewer managers, they may be overworked and unable
to provide adequate supervision and support to employees.
• Lack of specialization: There may be a lack of specialization, and employees may
have to perform multiple roles, leading to a potential lack of expertise in specific
areas.
Narrow Hierarchical Structure:
Narrow hierarchical structure, also known as a tall organization, is a management approach
that has several levels of management between the staff and the executives. In a narrow
structure, there are many levels of management, with each level having a smaller number of
employees reporting to a manager at the level above
Advantages:
Disadvantages:
• Slow Decision-making: With more levels of management, decisions may take longer
to be made.
• Bureaucracy: A narrow hierarchical structure can lead to more bureaucracy, with
more layers of approval needed for decision-making.
• Limited Autonomy: Employees may have limited autonomy in their work as there
are more levels of management to report to, leading to potential micromanagement.
Arsan Nazar 15
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing
BS - SEMINAR A LEVEL
Matrix structure
A matrix structure is a type of organizational structure where employees are grouped by
both function and project or product. Here are some advantages and disadvantages of using
a matrix structure:
Project team 1
Project team 2
Project team 3
Project team 4
Advantages:
Disadvantages:
• Complexity
• Conflict - With dual reporting lines functional managers over resources, priorities,
and decision-making.
• Coordination is difficult
• Time-Consuming
• Costly
Arsan Nazar 16
BSc Business Management (University of London), Diploma Business Administration
(ICBT), PCM and DDM (reading) Sri Lanka Institute of Marketing