Name:

AKEEM ADIJAT ADETUTU

Department:

BUSINESS ADMINISTRATION

Course code:

BAM 218

Course title:

Nigeria Business Environment

Matric No:

P|ND|18|3620550

Lecturer-in-charge:

MR. THOMAS . G .S
 1. CONCEPT OF BUSINESS ORGANIZATION IN NIGERIA

Business means different things to different people .To an average man on the street, "business means
buying and selling”.

Business can be define as all forms of activities that people engage in to satisfy their needs of people
and sometimes also make profit.

Business organization is a commercial or industrial enterprise and the people who constitute the
business.

Types of business organization in Nigeria

Different types of business organization exist namely:

 Sole proprietorship
 Partnership

 Limited liability company

 Public limited company
 Unlimited liability company
 Cooperative societies and company limited by guarantee

2. NATURE AND SCOPE OF BUSINESS ENVIRONMENT

The business environment is a set of forces and conditions outside the organizations boundaries that
have the potential to affect the way the organization operates. These forces and conditions change from
time to time.

The business environment presents opportunities which organizations can take advantage and threats
that the organization should avoid. For example changes in the environment such as the introduction of
new technology or the opening of global markets, create opportunities for managers to obtain resources or
enter new markets and there by strengthen their organizations.

In contrast, the rise of new competitors, a global economic recession, or an oil shortage poses threat
that can devastate an organization if managers are unable to obtain resources or sell the organizations
goods and services.
 The quality of managers’ understanding of organizational environmental forces and their ability to
respond appropriately to those forces are critical factors affecting organizational performance.

The general environment consists of factors such as legal, economic, political, socio-

Cultural, technological and ethical which affect business organizations operations and

Which emanate from local, national and international sources.

2. THE INTERNAL BUSINESS ENVIRONMENT

The internal business environment consists of conditions and forces within the

Organization which consists of the owners, board of directors, employees, the

Organization’s culture.

OWNERS

The owners of business are those who have legal property rights to the business.

Owners can easily pay individual who establishes and runs a small business, partners

Who join to the business, Individual investors who buy stock in a corporation, or other organizations.
These sets of people have a stake in the business and are mindful of how the business is being managed.

BOARD OF DIRECTORS

A corporate board of directors is elected by the stock holders an discharged with overseeing the
general management of the firm to ensure that it is being run in away that best serves the stockholders
interest. Some boards are relatively passive. They perform a general oversight function but seldom get
actively involved in how the company is really being run .But this trend is changing ,however ,as more
and more boards are more carefully scrutinize the firms they oversee an exerting more influence on how
they are being managed.

EMPLOYEES/MANAGERS

An organization's employees are also a major element of its internal environment. The employees are
the workers who perform the day to day operations of the organization and ensure that work is being
accomplished to achieve the organizations desired goals. These sets of people are being supervised and
managed by the manager.

Managers are responsible for combining and coordinating the resources of a organization including the
workers to ensure that organizations achieved their goals.

4. THE EXTERNAL ENVIRONMENT

The external environments are those environmental dimensions that have a direct working
relationship with the organization. These dimensions influence the day to day operations of the business
enterprises. The external environment is closer to the organization and also has a direct influence on its
performance.

The external environment consists of the suppliers , customers ,distributors, and competitors. These
institutions affect the operations and everyday activities of the firm.

Suppliers are those organizations which supply the raw materials the organization uses to produce its
goods or services.

Customers are people around the organization who buy the goods or services provided by the
organization.

Competitors are organizations within the business environment that produce the same or similar
goods and services customers. They compete with other organizations in similar business for the same
customers.

5. A BUSINESS MODEL

A business model describes the rationale of how an organization creates, delivers, and captures value, in
economic, social, cultural or other contexts.

The process of business model construction and modification is also called business model innovation
and forms a part of business strategy. Business model innovation is an interactive and potentially circular
process.

In theory and practice, the term business model is used or abroad range of informal and formal
description store present core aspects of a business, including purpose, business process, target customers,
offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational
processes and policies including culture.
They are:

 Industry Forces–Other businesses who offer similar value propositions to similar customers.

These could be existing competitors, new entrants or substitutes.

 Key Trends–the evolving parameters of the law, culture and technology, which may change

whether an idea is possible or acceptable.

 Market Forces–our constantly changing customers segment and their expectations.

 Macro-Economic Forces–The financial health of society and each person in it. This affects our

customers’ willingness and ability to pay for different things.

 Contract Enforcement: The government also functions as a kind of police to businesses especially

in the area of contract enforcement. Businesses interact with eachother,these interactions usually

leads to the establishment of contracts and agreements with other business. These contracts may

be complex, such as mergers, or they may be as simple as a warranty on supplies purchased. So to

maintain law and order in the business environment and among businesses the government

enforces these contracts and agreements between companies. Companies bring one another to

court just as individuals do. An oral agreement can constitution a contract, but usually only a

written agreement is provable in court of law. If one party fails or refuses to meet its obligation

under a contract, a company can turn to the legal system for enforcement.

 Employee Protection: The government also regulates show employees are treated by businesses.
6. NIGERIA GOVERNMENT ECONOMIC AND STRATEGIC ROLES.

The capitalist system of economy allows and promotes individualistic ownership of means of
production and distribution of goods and services. In the long-run this usually leads to a distortion of the
market, this is because everything is driven by a motive to make profits.

This profit-driven mentality leads to an over-exploitation of resources in the society, both human and
material; and under utilization of certain areas of the economy. This phenomena can lead to a market
failure. This is the main reason for government intervention in the business environment to bring about an
equilibrating and balancing effect in the economy.

The government adopts different measures and approaches in the regulations of business
enterprises in Nigeria. This includes but not limited to the following measures:

 Permission: The government mandates new businesses to be registered. The different kinds of
businesses have different kinds of registration. This measures serves the purpose of letting the
government know the number and kind of businesses that are in existence, for different purposes
such as tax purposes, and to be able to call the manufacturer to orders if they should overstep
their boundaries. The function of this registration is usually to define the financial liability the
owners of the company have. It limits their risk to the amount they have invested in that
particular organization. Registration also allows the government to monitor companies to execute
its other functions in the business world.

 Consumer Protection: The government also tries to check the exploitative tendencies of
businesses by creating laws that protects the rights of consumers. This is usually done through
agencies that set minimum standards that businesses must abide by in the process of producing
their goods or rendering services. When businesses go against these,or tries to undermine the
rights of their consumers, the government, through these agencies place sanctions on such
offending companies. Some of such agencies in Nigeria includes: NAFDAC, that regulates food
and drug related products to protect the consumer from low quality food products and fake drugs;
we also have NCC that regulates the activities if telecommunication companies. Labeling is
another requirement the government imposes on marketers. Many foods, for example must
display nutritional content on the packaging.

7 FOREIGN PRESENCE AND INFLUENCE IN NIGERIA BUSINESS ENVIRONMENT.

Foreign presence in the Nigeria business environment helps to make trade easier. It leads to exchange of
ideals, innovation and many more.

There are three major are as which foreign presence influence, which are:

1. Economic system

2. Natural resources,

3. and infrastructure.

 ECONOMIC SYSTEM: Most countries all over the world today are moving toward market
economy, the key element here is freedom of choice. Consumers are free to decide on what
products and services they prefect to purchase. Firms are also free to decide on what products or
services to provide. It therefore follows that as long as consumers and the producers are free to
decide on what products or services to buy or produce in the market, then supply and demand
determine which and demand determine which firms and what products will be available.

 NATURAL RESOURCES is another aspect of the economic environment. Abroad range of

resources are available in different countries which help to promote economic activities. There
some countries which have a lot of natural resources while others didn’t. The United States has a
lot of natural resource such as crude oil, natural gas, coal ,iron ore, copper, uranium, and other
metals and materials that are important to the economic development of a modern economy.
Japan on the other hand very few resources on their own and have to depend on importation of
most of the resources needed for industrial activities.

One of the vital natural resources in the modern global economy is crude oil. Nigeria
produces crude oil along with other nations like Saudi Arabia, Iraq, Iran, and Kuwait. Some of
these countries have attracted many international businesses into their country because of this
important natural resource.
  INFRASTRUCTURE

Infrastructure is also a important aspect of the economic environment that is of relevance to international
business management. Infrastructure consists of physical things such as roads, railways, schools,
hospitals, communication systems, electricity, airports, and soon. While some countries have highly
developed infrastructures, others lacked them. Countries like united states, Japan, Britain, Canada,
France, Sweden, Denmark, and Germany to mention just a few have highly developed infrastructures that
have affected the development of international businesses in these areas. Others like Nigeria, Sudan,
Kenya, Peru, Chile, and Pakistan to mention just a few have poorly developed infrastructure that
discouraged international business. The poor electricity supply in Nigeria discouraged many international
organizations from Investing in the country. In some cases interested companies may have to build their
own infrastructure such as houses, schools, hospitals, and others in order to attract international
workforce.