BUSINESS MANAGEMENT

Business Enterprise and its

Environment

Business Environment
Lesson Outcome
- describe the micro-environment of the
enterprise
- explain the market environment and
the variables that influence the
enterprises growth and existence; and
- identify the macro-environment and
all the forces and influences that affect
the enterprise

Business Environment
For an enterprise to be successful, it is important
that:
- it is in continuous contact with the market
- it is aware of the consumer needs; and
- monitoring the activities of competitors
Business environment which is the environment in
which an enterprise functions can be defined as the
sum of all the factors and variables that influence the
establishment, its growth and its continued existence
positively and or negatively. The environment an
either assist or hinder the enterprise in achieving its
objectives.

Business Environment
Business environment is divided into:
- micro-environment
- market environment
- macro-environment

Business Environment
Characteristics of the business environment
- business environment changes continuously
- enterprise must be in step with the changing
environment
- there are both opportunities and threats in the
business environment
- the establishment, growth and continued
existence of the enterprise are directly influenced
by the business environment
- business environment influences the future of
the enterprise

Business Environment: Internal

Internal environment: the enterprise itself and its
generally described as the micro-business
environment.
Micro environment is the sum of all factors and
variables which occur internally in the enterprise.
It is influenced directly or indirectly by the
decisions of the enterprises management. The
factors and the variables have a fundamental
influence on the establishment growth and
continued existence of the enterprise.

Business Environment: Internal

Variables in the micro-environment
- mission statement and objectives of
the enterprise
- enterprise functions
- production factors of the enterprise
Management of the enterprise exerts
direct influence on the mission
statement and objectives

Business Environment: Market

Environment
Market environment is the sum of all
the factors and or variables which
exist externally and which can
positively or negatively influence the
growth and existence of the
enterprise
Market environment surrounds microenvironment but its surrounded by
the macro-environment.

Business Environment: Market

Environment
Chief variables
- consumer and his needs
- competitors
- suppliers of resources and services without which the
enterprise cannot manufacture its own products and or
services
Types of markets
- consumer market
- Resale market
- industrial market
- international market
- government market

Business Environment: MacroEnvironment

Macro-environment consists of all the variables
and factors outside the enterprise which have a
positive or negative influence on the growth and
continued existence of the enterprise and which
encourage or hinder the achievement of
objectives.
Individual enterprise has no control over macroenvironment or the variables that operate in it.
Sub environments of macro-environment cannot
be controlled by the enterprise but can exert a
significant influence over it.

Business Environment: MacroEnvironment

Sub macro-environment
- economic environment
- Social environment
- physical environment
- international environment
- technological environment
- political and statutory changes

References
EE Le Roux, et. Al, Business
Management: A Practical and
Interactive Approach, Heinemann