Professional Documents
Culture Documents
Business and Business Environment
Business and Business Environment
Business and Business Environment
Introduction: ‘business’
and its ‘environments’
Diversity
• Business does not refer only to private sector, profit
making companies. Public and voluntary (or third)
sector organizations may also be regarded as businesses.
• Within the dominant private sector, businesses vary in a
number of ways, such as legal structure, industry, size and
market power, and geographical reach.
• Each business operates in an environment that is, to some
extent, unique.
Topic 05 Key themes
Internal/external:
Điều kiện xung quanh
• The surrounding conditions and processes in the world
outside the organization.
• The ability of an organization to operate successfully within
its external environment depends, in large part, on the
effectiveness of internal systems and procedures.
• The internal environment has to be managed and
adapted to the demands and opportunities of the external
environment
Topic 05 Key themes
Spatial levels
• Spatial level or scale refers to the geographical or territorial
unit of analysis that we use to conceptualize and analyse the
business environment
• It is more appropriate to think of business and its environment at
a more local level (an urban area or region). Also, it has
become increasingly important to think of business environment
on a much larger spatial level, such as European or global.
Interdependent+integrated
• Globalization refers, roughly, to the tendency of business and
other economic, social, and political processes and relationships
to move across or beyond the borders of nation-states.
Topic 05 Key themes
Dynamic
• Businesses have to respond and adapt to changes in their
environment, and deal with uncertainty about the future
• Business organizations are themselves powerful agents of
change, as shown by the example of technological
innovation which is driven largely by business
capitalism
• Indeed the dynamism of western societies is deeply rooted
Command econoly >< markert
economy
in basic features of their market economies -
competition and the profit motive.
Topic 05 Key themes
Interaction
• There is two-way interaction between business
organizations and their environment: Businesses
influence and are influenced by their environments.
• Business organizations are not passive but seek to shape
environmental factors to their own advantage
• Firms do not simply respond to changes in lifestyles and
consumer behaviour that are happening automatically
‘out there’ in society but seek to influence and even create
such changes through persuasive advertising
Topic 05 Key themes
Stakeholders
• Business decisions have to be made in a context of
multiple stakeholder interests and demands.
• A stakeholder is any individual or group that is affected
by, and thus has a stake in, business decisions, and can
be defined very widely to include society as a whole
• Consumers may support boycotts of businesses judged to
be unethical; shareholders may campaign to influence the
remuneration of board members; and employees may
negotiate with employers through trade unions
Topic 05 Key themes
Values
• There are competing perspectives and values concerning
the nature and purpose of business in society - relating to its
power, responsibilities, performance and ethics.
• Business finds itself at the centre of many other value-based
debates in contemporary society concerned with issues such
as environmental protection and climate change, fair trade,
the responsibility of western companies for working
conditions in developing countries, discrimination, and the
social usefulness of some business activities and products
(e.g. unhealthy foods).
Topic 05 Key themes
Values
• There are competing perspectives and values
concerning the nature and purpose of business in society
- relating to its power, responsibilities, performance and
ethics.
• The western business model or capitalist system -
based on private enterprise, competition, and profit -
was challenged by socialism as an alternative model of
economic organization based on state control and
planning.
Topic 05 What is business? Broad and narrow definitions
Discussion
• In your opinion, Which one is a business? Amazon or
Police force organization?
• To support your argument, provide evidences with
justifications
The organization engaged in commercial, industrial, professional activities.\
Topic 05 What is business? Broad and narrow definitions
Discussion
• Amazon is a specific business organization
Discussion
• Business system such as ‘the market system’ or
‘capitalism’, not just in terms of economic organizations
such as businesses but the whole range of organizations
that interact to shape the pattern of economic activity,
including trade unions, professional bodies, consumer
groups, regulatory agencies, and other governmental bodies.
Scarcity
Dealing with the problem of scarcity
: shortage
• This broad definition of business in terms of production can
be related to the need of all societies to decide how to
allocate the available productive resources between all
the possible types of production of goods and services
for which they can be used.
Specific features:
• competition.
Topic 05 The private sector of business
Topic 05 The private sector of business
Specific features:
Động lực
• The methods of production: Profit provides a motive,
and competition a pressure, for continual improvements in
efficiency. This is because greater efficiency means
lower costs of production and cheaper products.
• Revenue
• Accountability
• Competition
• Revenue:
In the market the principle, you get what you pay for,
the system of taxation and public spending disconnects
what individuals pay in and what they get out.
Topic 05 Other sectors of business
• Accountability Resonsibility
• Competition
compare the price and quality of product between other companies
Consumers in the private sector can ‘shop around’
because firms operate in competitive markets. It is this
that keeps businesses customer-focused and is the
tối thượng
basis of consumer sovereignty
Mặc cả
replace
Topic 05 A transforming inputs into outputs model
• Current competitors
Environmental uniqueness
Topic 05 Conceptualizing the environment of business
• Global scale and MNCs: companies that have a global reach or span
of operations and undertake production in more than one country
Environmental uniqueness
ability to supply
Responsiveness
Influence
Choice of environment
Topic 05 Interaction between business and the environment
Responsiveness
Influence
Choice of environment
Choice of environment
PEST
SWOT
Stakeholder analysis
Topic 05 Environmental analysis
PEST
SWOT
• SWOT analysis combines internal and external analyses - the
strengths and weaknesses of the organization coupled with the
opportunities and threats in the external environment
• The organization’s strengths and weaknesses, opportunities and
threats (SWOT) are typically analyzed during the strategy
formulation process.
• The capacity of a business to take advantage of opportunities and
resist threats will depend on its internal strengths and weaknesses
• An opportunity only really exists if an organization has the
necessary skills or resources. Thus an opportunity is not simply
a feature of the external environment
Topic 05 Environmental analysis
Stakeholder analysis
• A stakeholder is any individual, group, or organization
that is affected by and therefore has an interest in the
decisions and behaviour of the business
Stakeholder analysis
• In terms of environmental analysis, businesses need to
have an understanding of:
Stakeholder analysis
Topic 05 Environmental analysis
Stakeholder analysis
• For each of the internal and external stakeholders shown:
a) identify the nature of their interests (e.g. the interests of
students might include high quality teaching)