The Business Environment

O Business organisations do not operate in isolation. The modern view is that they operate as open systems interacting with a range of forces.

O The term environments is used to describe the context in which business is undertaken.

The Business Environm

ent

Internal Environm

ent

External Environm

ent

Internal Environment

O Culture, Values and Ethics of the business

Group Activity:Read the case studies on p. 37 &

discussQ. Does ethics play a role in the

internal business environment?

Corporate Culture and ValuesO All organisations have a culture (whether

they are aware of it or not)

O Corporate culture is a term used to describe the shared values and beliefs of the people in the organisationO It is their idea of what is important and how

things work in their particular organisation

Continued…O Corporate culture is especially significant in

large and complex organisations with many separate divisions

O The corporate culture connects the organisation’s objectives to the values of each member and each section of the organisation

Indicators of ‘real’ corporate culture

O Management style in the organisation

O Attitudes of management to staff and staff attitude to management

O Relations among staff

O Customer relations

O Dress code and behaviour code within the organisation

CORPORATE CULTURE WILL VARY BETWEEN DIFFERENT TYPES OF BUSINESSES

Continued…O Corporate culture can be difficult to change

because it is largely based on peoples’ values and beliefs

O Corporate culture can also be moulded to emphasis objectives and strategies O Customer serviceO Environmental awareness

Activities to test your knowledge

O Questions 1 to 9 p. 39

O Complete question 12 on p. 41 & 42 O You will need to read the extract ‘Winning over

your shareholders’

Business EthicsO Business ethics and socially responsible management are

significant business issues

O Examples of ethical and socially responsible management:

O Small businesses providing support to local sporting clubs

O Large companies that develop policies to guide employee behaviour

O Businesses that give increased protection to the environment

http://www.youtube.com/watch?v=sDPsSyaZNIw

Business Ethics – page 42-43

O What is social responsibility?

O Why would a business need to be socially responsible?

O Why is there conflict between a shareholder and a stakeholder?

O What is a code of ethics?

O Why should a business have a code of ethics?

External EnvironmentO Four main external factors that affect businesses:

O Customers: Customer satisfaction is central to business success – expect high quality for competitive price (excellent customer service, after sales service)

O Suppliers: Organisations need reliable suppliers and financial sources to fund activities and growth

O Competitors: Always potential for new competitors to emerge – increase in globalization is increasing competition in many markets

O Special interest groups: These groups impact on the activities of an organisation (trade unions, church groups - anyone lobbying to bring social issues to the attention of the public and corporate sector

EXTERNAL environmentExternal Factors that make up a

business environment

CulturalEconomicLegalTechnolog-icalPoliticalEcological

http://www.youtube.com/watch?v=Bmy-jtlLndc

Peer teaching activity

O In pairs, choose a factor from the pie chart.

O Define what your groups role in the external business environment is

O Brainstorm the impact your group has on a business

O Create a power point to teach the class

O Take notes from your peers power points

Writing Activity (PRACTISE FOR EXAM)

Individually write a 150 word response to the following:

Select any two of the factors from the external environment and explain their relationship to large organisations. Provide examples for your response..........