ASSIGNMENT COVER

HHAHA

HAMBRA EDU SERVICES

STUDENT’S NAME : JERRY LOZITIN

I/C NO / MATRIX NO. : HBPM21112

PROGRAMME : EXECUTIVE BACHELOR IN OPERATION & PROJECT

MANAGEMENT

CLASS DATE : 05 FEBRUARY 2022

INTAKE DATE : 06 FEBRUARY 2021

MODULE : GLOBAL BUSINESS ENVIRONMENT

TRAINER’S NAME : DATO MOHD FARIZ BIN HASAN

CENTRE : KOTA KINABALU - CLASS ONLINE

OVERALL MARK

(Fill up by Trainer)

INDICATOR MARK

EFFORT ( 10% )

PRESENTATION (10% )

CONTENT ( 40% )

TOTAL ( 60% )
 PROGRAMME:
EXECUTIVE BACHELOR IN OPERATION
& PROJECT MANAGEMENT

MODULE:

GLOBAL BUSINESS ENVIRONMENT

HAMBRA EDU SERVICES

F-16-2, Alam Avenue 2, Jalan Serai Wangi N16/N,
Seksyen 16, 40000 Shah Alam.
www.executivetraining.com.my

Global Business Environment 1

 TABLE OF CONTENTS

1. INTRODUCTION .............................................................................................................. 4

2. DISCUSSION ..................................................................................................................... 4

Key Functions ..................................................................................................................... 4

2.1 Concept of business environment ................................................................................. 4

2.2 What is business environment? ..................................................................................... 5

2.3 Micro and Macro Environment ..................................................................................... 6

2.4 Macro Environment ...................................................................................................... 7

2.5 Functions and characteristics ...................................................................................... 10

2.5.1 PESTLE analysis .............................................................................................. 10

2.6 Other factors of environment that impacts business ................................................... 12

2.6.1 Market Environment......................................................................................... 12

2.7 Business and cultural environments............................................................................ 12

2.8 Perception, attitude, belief and other cultural influences. ........................................... 13

2.9 International business environment ............................................................................ 13

2.10 Impact of global factors on business environment ................................................... 14

2.11 Impact of business policies that impact business environment ................................ 15

3. CONCLUSION………………………………………………...…………..……………16

Global Business Environment 2

Business Environment and Its Key Functions

Global Business Environment 3

1. INTRODUCTION

External and internal elements that affect a company's success are referred to as the "business
environment." The macro environment of a certain firm is further examined by conducting an
in-depth investigation (Bah, & Fang, 2015). There are both internal and external factors that
influence an organization's operational state. Users and dealers, its rivals and owners,
advancements in technology, decrees and administration operations, and market, community,
and financial drifts are only few of the elements of the company environment. Setting
objectives for a company is a first step in accomplishing those goals. This will assist the
corporation in determining the most effective operational plan (Akhmetshin¸2017). When it
comes to pricing, manufacturing, national and international commerce, and more, the business
climate has a significant impact. The business operations are explained in this assignment. The
good businessman must understand the firm's objective in order to fulfil its goals and
objectives. Therefore, in order to analyze the business environment and its key functions, the
discussion of different environments will be done.

2. DISCUSSION

Key Functions

2.1 Concept of business environment

Our market is always evolving. Everything changes in a couple of seconds because of the rapid
development of new technologies. It's possible to regulate some of them, while others lie
beyond the control and are known as "systematic factors." The place we live in and the
environment we surround ourselves with have systematic effects, and these effects may have a
significant impact on us (Prajogo, 2016). A business's environment and all the aspects that
affect its day-to-day conditions are also impacted by it. As a result, firms must continually
monitor and assess the environment in which they do business and the market as a whole.

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Every living thing, including humans, is a part of a larger ecosystem. Family, friends,
classmates, and neighbours make up the rest of a person's environment, besides the natural
world. Also included in this category are man-made structures like buildings as well as
furniture, roads as well as other physical infrastructure. There is no such thing as a single
person living in isolation. They are constantly interacting with their surroundings in order to
sustain themselves. In the same way that people don't exist in a vacuum, neither do businesses.
Businesses must adapt to their surroundings in order to be successful. Businesses succeed in
part because of how they interact with their surroundings (Georgescu & Pospecul, 2015).
Continuous inaction in the face of important environmental changes eventually leads to an
organization's demise from the market. As a successful company, one must not only be aware
of but also appreciate, adapt to, or manage or influence the many parts of the environment in
order to succeed. If a firm wants to survive and thrive, it must constantly monitor & adapt to its
surroundings.

Extreme dangers to the company may arise from changes in the external environment, but there
may also be new possibilities for the business. Each opportunity and danger in a company's
environment must be recognised and evaluated by a business in order for it to be successful. As
previously said, a business's success relies on its ability to adapt to its surroundings. For
example, if government laws change, the company will have to make the required adjustments
to keep up. It's also possible that a new technology may render an older product obsolete or
inconsequential, as happened when computers replaced typewriters and colour televisions
rendered monochrome televisions uncool (Khajeheian et al, 2018). Demand for other
conventional clothing was diminished as demand for jeans increased due to changes in trend or
client preferences. The firm has no influence over any of these external circumstances. In order
to stay successful in business, business units must be able to adapt to these changes. A
thorough awareness of the many components of the business environment is critical to a
successful strategy in today's competitive marketplace.

External influences, causes, and organizations that are out of the control of a corporation and
influence its performance are known as the "business environment." Customers, rivals,
suppliers, the government, and other social, political, legal, and technical issues are all
included in this. Even if some of the variables or forces may directly affect the company,

Global Business Environment 5

others may have an indirect impact (Čepel et al, 2018). As a result, the term "business
environment" may be used to describe all of the factors that influence a company's day-to-day
operations. It can also be described as the collection of uncontrolled external elements,
including as economic, social, political, and legal issues, as well as demographic and
technological factors, that influence a company's business choices.

2.2 What is business environment?

Business refers to a company's collaborative attempt to make money by purchasing and selling
goods. Businesses function in an atmosphere known as the "Business Environment," and
everyone is aware of this fact (Halbert, 2020). Everything that affects how a company makes
choices, operates, and performs is included in the concept of the "business environment."
Changes and actions in the business environment have an impact on environmental elements,
but environmental factors may also have an impact on business operations. The environmental
elements are split into two categories, or "types," based on the degree of control they have over
them.

The term "internal environment" refers to the business environment's consideration of the
many aspects inside the company. Conditions, forces, members, and events all have a role in
the company's capacity to make and execute choices. All the immediate and informational
resources of the company, such as technological, financial and physical resources, are included
in this definition of operational management. There are many external elements that have a
substantial impact on a company's capacity to perform and succeed, and these factors are
frequently beyond of a company's control (Belás et al, 2015). These aspects must be taken into
account in order to ensure that the firm continues to operate at a high level of efficiency. The
company has no influence over these variables.

Global Business Environment 6

2.3 Micro and Macro Environment

These elements, which are also known as the "task environment," have a direct impact on the
operations of the organisation since they include the immediate surroundings. In nature, the
variables are partially within our control. It contains:

• Competitors: Competitors are company competitors who operate in the same sector,
provide similar products and services, and target the same demographic.
• Suppliers: The raw materials needed for the manufacturing process are supplied by the
suppliers. The supplier's actions have a direct influence on the business operations of a firm
(Bejtkovský et al, 2018).
• Customer: It's important to remember that customers are the ones who buy and
consume the goods. Customers is given the highest priority in any firm since they are the only
ones who will utilise and benefit from the items. Marketing intermediates are those that assist a
company in the promotion, sale, distribution, and delivery of a product to a final customer.
Agents, dealers, distributors, wholesalers, retailers, and delivery men are all included in this
category.
• Investors: Investors are the true proprietors of a firm since they put their money into it.
They also get a dividend, which is their part of the company's earnings. At the company's
annual meeting, they are entitled to a vote.
• Employees: The term "employees" refers to the firm's employees, who are employed to
assist the organisation in accomplishing its objective. As a result, it is critical for a company to
find the proper people to hire, keep them engaged, and keep them on board.
• Media: Journalism plays a critical part in the life of any business since it has the
capacity to overnight popularise or discredit a company's product. This is because the media
has such a wide audience that any material that appears in any media form has the potential to
have a favourable or negative impact on the organisation, depending on the information it
includes (Komljenovic et al, 2017).

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2.4 Macro Environment

Macro environment, which is also known as the general environment, has an impact on the
whole industry as a whole rather than just one company. In nature, there is no way to manage
these forces. To survive and flourish, a company must be able to adapt to changes in the
macro-environment. It contains:

• Economic Environment: The profitability of a firm is strongly influenced by the state

of the local and national economies. As a result, the need for the company's goods is regulated
by the country's economic circumstances, such as buying power, savings habits, per income per
capita, credit facilities, etc (Moroni et al, 2015).
• Legal and Political Environment: The company's legal and political environment
comprises of the laws, regulations, regulations, and policies to which it must obey. They might
alter the corporation's decision-making, provide new doors of opportunity for the organisation
or constitute a danger. In today's technological environment, something new and better is
released every day using the most up-to-date technologies. It's a benefit if the firm is the first in
the race, but only if the product succeeds. A failure would mean that all of that work and effort
would have been in vain. In addition, any business must stay abreast of new technological
developments (Bruijl, 2018).
• Socio-Cultural Environment: The socio-cultural environment includes aspects such
as societal conventions, traditions, beliefs, values, morality, tastes, and preferences that are
concerned with human connections. On a wide range of issues, such as employing personnel,
advertising, decision making, etc., these considerations must be taken into account.
• Demographic Environment: Even as name implies, the demographic environment
refers to the population's size, composition, structure, level of education, and dispersion within
a geographical region. The firm's understanding of this ecosystem will aid it in determining the
best marketing strategy for its target audience.
• Global Environment: As a result of liberalisation, local companies may now sell their
goods and services internationally. It's true that plenty of businesses are active in several
countries throughout the globe. As a result, these enterprises must conform to both local and
international rules and norms in order to operate in these nations. As a further requirement, the

Global Business Environment 8

reaction to the global environment and the company's rules must be in line with this
(Kozubíková et al, 2017).

When referring to a macro-environment study, the term "PESTLE analysis" refers to a bird's
eye perspective of the macro-environment. Using the PESTLE analysis, business leaders and
strategists can see where their market is now and where it is likely to go over the next several
years. In the acronym PESTLE, each letter represents a group of elements that have an impact
on every sector, both directly and indirectly. There are three things that each letter stands for:

An open system is a corporation. As a result of its interactions with the environment, it obtains
its resources from it. Environmental forces may be classified according to their intensity. While
some are confined to one's immediate surroundings, others are more widely dispersed. An
external factor may be national, regional and/or global in scope. The business community
might benefit from or be threatened by these environmental factors (Gavurova et al, 2017). As
a firm, you have to take advantage of the possibilities that present themselves and be ready to
meet the challenges that arise. The external environment cannot be changed by businesses;
they can only respond to it. When confronted with external opportunities and risks, they adapt
their company's internal components (the "internal environment") in response.

As a result, understanding the business climate is critical to a company's long-term survival

and growth. In order to implement an effective business plan, managers must assess the
company environment. People, money, technology, data, energy, plus raw materials are all
provided by society to commercial organisations. Following government laws, social
conventions, cultural values, regional agreements, and global alignment are all part of doing
business in a country that is governed by the rule of law. Consequently, business organisations
are dynamic entities because they operate within a dynamic business environment (Vasilev et
al, 2017).

Global Business Environment 9

2.5 Functions and characteristics

To sum up, the following functions and characteristics of a corporate environment are relevant.

• The term "business environment" refers to everything that surrounds and affects a
company's operations.
• It includes variables and pressures like as consumers, rivals, suppliers, government, and
social, cultural, political, technical, and legal situations.
• It is impossible to forecast future events and changes in the economic as well as social
environment.
• Every city, region, and nation has its own unique business climate.

2.5.1 PESTLE analysis

The Porter's 5 Forces may be influenced by macro-environmental issues, which can affect
strategy and the competitive landscape. They may have a significant influence on the
profitability of the Consumer Products business as a whole.

Using PESTEL research, the businesses may learn a lot about the operational issues it will
encounter in the macro environment, outside of competition. With the businesses, for example,
a highly lucrative industry with a strong development trajectory will do little good if it is
located in an insecure political climate (Groşanu et al, 2015).

Political factors: It is important to take into consideration the political state of a nation and the
globe as a whole. For instance, what kind of governance is influencing the choices of a nation?
These considerations include any and all government regulations, taxes, and tariffs imposed on
commerce. The businesses long-term profitability in a particular nation or market is heavily
influenced by political issues. Personal and Household Goods is a business area in which has
operations in more than a dozen countries, exposing the company to a variety of political and
political system risks.

Global Business Environment 10

Economic factors: An economy's status is influenced by a wide range of elements that may be
categorised as economic factors. It is important for companies to keep an eye on inflation,
interest rates, monetary policies, and the foreign currency rates that effect import and exports
in order to design plans that are in sync with all of the changes which are expected in the
economy. According to the businesses, the company's growth trajectory may be predicted by
analysing nation and industry-specific economic factors, including growth rates, inflation, and
consumer expenditure (Abdullahi¸& Zainol, 2016).

Social factors: Every nation is unique, and each country has a distinct way of thinking about
the world. PESTLE analysis incorporates these aspects since they have an influence on
organisations and their goods and services. Every aspect of a consumer's life is examined by
corporations in order to have a better understanding of their target market and their customers.
When marketers strive to figure out who their target audience is for Personal & Household
Goods, it helps to have a common understanding of what those customers think and feel.

Technological factors: PESTLE analysis is used to examine the impact of technology on a

company. Companies need to remain up to date with the latest technology and integrate
whenever necessary. Additionally, these aspects are examined to learn how customers respond
to technology changes and how they use them to their advantage.

Legal factors: Legislative changes happen all the time, and many of them have an impact on
business. For instance, if a regulatory body establishes an industry rule, that legislation will
have an influence on all of the industries and firms that compete in that sector, therefore
businesses must keep track of legal changes in their environment. While entering a new
market, the businesses executives should keep in mind a few legal considerations (Gavurova et
al, 2017).

Environmental factors: The trades that firms engage in are influenced by the geography of
nations. Another factor affecting business and consumer behaviour is climate change, which
has a significant impact on both the supply and demand for new products. Geographical
location, temperature, weather, and other non-climatic elements are examples of environmental
factors. These in particular have a negative impact on agriculture, farming, and related
industries.

Global Business Environment 11

2.6 Other factors of environment that impacts business

2.6.1 Market Environment

The structure of the market refers to the number of organisations that sell the same product to
draw in clients. A company's ability to do business is influenced by the market structure. The
pricing and production decisions are affected by the structure of the market.

Monopoly Market Structure- Whenever a market is dominated by one or two businesses, the
companies will seek to charge a premium for their goods. Customers are not a priority for the
organisation. They're simply concerned in making money. They make business judgments that
benefit the firm financially. Monopolists are continually looking for methods to boost their
earnings. However, in today's corporate environment, there is no true monopolist (Mazzeo,
2002).

Market Structure of Oligopoly- In this market structure, corporations would prefer to

establish prices depending on their top rivals and their own demand. Entry into the market is
simple for new participants. It's possible, though, that the admittance fee is prohibitive. Based
on this information, the business should make price decisions.

Market Structure with Perfect Competition- In the event of such market structures, the
corporation must contend with perfect competitiveness. There are many little businesses that
create the same kind of thing. To get market share, the corporation must price its products in
accordance with the prices of its competitors. As a result, a company's strategy and decision-
making should take into account the various market configurations (Komljenovic et al, 2017).

2.7 Business and cultural environments

A culture is a way of existence, in Lind's words (2012: 52). Organizational behaviour is shaped
by the combined influence of the trade and cultural contexts. PEST, or political, economic,
social, and technical (PEST) variables, are all part of the business environment. As a result of
these variables, the corporation may better plan how to do business. The company's legal
concerns, laws, and regulations are determined by political forces. In order for a firm to run

Global Business Environment 12

smoothly, economic and technical aspects are required. The company operation is also
influenced by the social context in which it operates. A company's operations should take into
account these macro-environment aspects (Aras and Crowther, 2011).

2.8 Perception, attitude, belief and other cultural influences

These elements must be handled by the company organisation in a correct manner. for
example, the businesses that deals in the sale of goods. Consumers' attitudes and beliefs
regarding these goods have the potential to alter corporate operations. Product Sales will
decline if more individuals realise how harmful smoking is to their health and hence abstain
from smoking. Employees' actions are also influenced by the company's culture. In making
judgments, they should take these aspects into account.

2.9 International business environment

A trade is a transaction in which goods are bought and sold. In international commerce, a
transaction happens between two or more nations. When a country's manufacturing industry
has a competitive edge, it engages in this kind of commerce.

To better understand global commerce, consider the notion of comparative advantage (CA). A
country's ability to manufacture goods is said to be based on its comparative advantage over its
competitors, according to the principle of comparative advantage. When that isn't an option, it
should purchase items from other nations with better comparative advantages.

For example, there a business of tobacco manufacturer. Bangladesh can make one item of
clothes for seven cents, whereas England can produce one unit of apparel for ten euros. The
cost of a single piece of Bangladeshi clothes, including shipping and tariffs, is €8. Bangladesh
is a better option for apparel in this case than England. Because of this, England will be better
off. Clothing production labour costs may also be used for other purposes, allowing it to save

Global Business Environment 13

money. Again, England is a specialist in cigarette production, thus Bangladesh may get
cigarettes from England. As a result, there is global commerce (Grimwade, 2000).

Importance of International Trade: International commerce is essential for every country in

today's competitive globe. International commerce is necessary since no two countries have
exactly the same resources. The relevance of international trade is as follows: Profits and
revenues may be increased for the UK firm, which can ensure the effective use of both nations'
labour, provide people with high-quality goods, and expand the company's scope.

It aids in the development of positive political ties between nations, as well as the creation of
new employment opportunities. As can be seen from the discussion above, foreign commerce
has played a critical role in the evolution of corporate structure. It also has certain drawbacks.

2.10 Impact of global factors on business environment

The UK business sector is heavily influenced by global influences. There are a number of
global elements that have varying effects, as outlined below.

• The PESTLE study gives an overview of the company's worldwide business

environment. The political, economic, social, technical, legislative, and environmental aspects
of the business environment are all included in this category.
• In order to run a firm effectively, a stable political environment is required.
• The efficient functioning may be facilitated by technology. The laws and social
concerns of the United Kingdom also have an impact on business in the UK (Grimwade, 2000).
• Due to high tariffs and taxes, international commerce might be hindered. As an
example, the businesses is required to pay tariffs and taxes for its foreign operations.
• Currency exchange rates refer to the rate at which the currencies of two nations are
converted into one another for the purposes of doing business. As a result of an abrupt shift in
the currency rate, international company might be adversely affected.
• As a result, the operations of multinational corporations might be influenced by the
global trade organisation.

Global Business Environment 14

2.11 Impact of business policies that impact business environment

Many policies have been set by the EU regarding the company's operations in the UK.
Businesses in the United Kingdom are affected by these policies. Two business policies for
companies in the United Kingdom have been outlined.

Energy policy: Maintaining a low-energy consumption business is mandated under this

regulation. Internal energy markets should be implemented in accordance with sustainability
and pollution-free gas emission standards. The European Union (EU) announced in 2007 that it
will reduce greenhouse gas emissions by 20% by 2020. The businesses must require a certain
amount of energy in order to make its tobacco goods. The European Union's energy strategy
should be followed (Čepel et al, 2018).

Employment and social policy: The policy states that all persons in the United Kingdom
should have equal opportunities. When it comes to staffing, all employees should be treated
similarly. Discrimination of any type was prohibited under the policy. It also advocated for
fostering a sense of camaraderie in the workplace. The European Union's employment & social
policy is maintained by the businesses. Having this strategy in place, the UK Company will be
able to recruit the finest possible staff for its operations.

Because of this, the European Union will have the most significant influence on the UK
corporate sector. Organizations must adhere to EU policy in order to fulfil their goals.

Global Business Environment 15

3. CONCLUSION

The corporate world is undergoing significant change on a daily basis. In order to avoid being
left behind in the increasingly competitive market, entrepreneurs must take this seriously and
strive to stay up with the speed of change. Among the topics covered in this assignment are the
many goals of companies; laws and regulations; the culture and environment; the nature of
competition; the global elements and international commerce. This is both educational and
insightful. Analytical examples of several business scenarios are provided. A company's
operations are affected in a variety of ways depending on the sort of business environment it is
operating in. In order to meet its aims and objectives, the company must take the business
environment extremely seriously. The the businesses has also been impacted by the EU. There
are a number of environmental standards and regulations in the United Kingdom that
businesses must adhere to.

Global Business Environment 16

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