01. the busines environment and busines economics

  • View
    62

  • Download
    1

Embed Size (px)

Text of 01. the busines environment and busines economics

  • The Business Environmentand Business Economics

  • The Business EnvironmentWhat is business economics?decision making in businessexternal influences on the firmthe business environmentinternal decisions of the firmthe external effects of business decision makingWhat do business economists do?descriptionanalysisrecommendations

  • The Business EnvironmentPolitical / legal factorsEconomic factorsthe microeconomic environmentthe macroeconomic environmentSocial / cultural factorsTechnological factorsPEST analysisrelationship between the four sets of factorsimportance of the economic factors

  • The Structure of IndustryImportance of industrial structure to the performance of firmsClassifying productionprimary productionsecondary productiontertiary productionShares in GDP and employment of the three sectorstrends over timecurrent position

  • Output of industrial sectors(as % of GDP)197454.9%2.8%42.3%SecondaryPrimaryTertiary

  • Output of industrial sectors(as % of GDP)197454.9%2.8%42.3%70.9%5.8%23.3%2002SecondarySecondaryPrimaryPrimaryTertiaryTertiary

  • Employment by industrial sector(% of total employees)197454.7%3.4%41.9%SecondaryPrimaryTertiary

  • Employment by industrial sector(% of total employees)197454.7%3.4%41.9%79.8%1.8%18.4%2002SecondarySecondaryPrimaryPrimaryTertiaryTertiary

  • The Structure of IndustryClassifying firms into industriesnature of an industryindustrial sectorswhy classify firms into industrial sectors?helps in analysing trendsidentifying specific needshelps to understand relationships between firmsStandard industrial classificationnature of the system of classificationsections, subsectionsdivisions, groups and classes

  • Standard industrial classification: 1992

  • The Structure of IndustryChanges in the structure of UK economyexpanding and contracting sectionsby outputby employment

  • GDP by industry (1980 = 100)GDP by industry (1980 = 100)CA/B

    fig

  • GDP by industry (1980 = 100)GDP by industry (1980 = 100)CA/BD

    fig

  • GDP by industry (1980 = 100)GDP by industry (1980 = 100)ECA/BD

    fig

  • GDP by industry (1980 = 100)GDP by industry (1980 = 100)EFCA/BD

    fig

  • GDP by industry (1980 = 100)GDP by industry (1980 = 100)IG/HEJ-QFCA/BD

    fig

  • Employment by industry (1980 = 100)Employment by industry (1980 = 100)CA/B

    fig

  • Employment by industry (1980 = 100)Employment by industry (1980 = 100)CA/BD

    fig

  • Employment by industry (1980 = 100)Employment by industry (1980 = 100)ECA/BD

    fig

  • Employment by industry (1980 = 100)Employment by industry (1980 = 100)EFCA/BD

    fig

  • Employment by industry (1980 = 100)Employment by industry (1980 = 100)IG/HEJ-QFCA/BD

    fig

  • The Structure of IndustryChanges in the structure of UK economyexpanding and contracting sectionsby outputby employmentAnalysing industrial structure

  • The Structure of IndustryChanges in the structure of UK economyexpanding and contracting sectionsby outputby employmentAnalysing industrial structurechanges in industrial concentration

  • The Structure of IndustryChanges in the structure of UK economyexpanding and contracting sectionsby outputby employmentAnalysing industrial structurechanges in industrial concentrationthe distribution of SMEs in the economy

  • Number of businesses, employment and turnover by industrial sector (2001)

    Sector

    Size of enterprise

    Number of enterprises

    (and % of sector)

    Employment

    (% of sector)

    Turnover

    (% of sector)

    All

    SMEs

    Large firms

    3739 565 (99.8)

    6 775 (0.2)

    55.4

    44.6

    51.4

    48.6

    A, B

    SMEs

    Large firms

    181 115 (99.9)

    25 (0.1)

    97.5

    2.5

    97.5

    2.5

    C, E

    SMEs

    Large firms

    5 705 (98.4)

    95 (1.6)

    14.6

    85.4

    19.8

    80.2

    D

    SMEs

    Large firms

    290 425 (99.2)

    2 325 (0.8)

    50.8

    49.2

    36.4

    63.6

    F

    SMEs

    Large firms

    691 595 (99.9)

    205 (0.1)

    84.5

    15.5

    74.7

    25.3

    G

    SMEs

    Large firms

    540 655 (99.8)

    1 000 (0.2)

    50.1

    49.9

    52.8

    47.2

    H

    SMEs

    Large firms

    123 220 (99.8)

    205 (0.2)

    53.8

    46.2

    58.5

    41.5

    I

    SMEs

    Large firms

    235 110 (99.8)

    455 (0.2)

    39.1

    60.9

    38.1

    61.9

    J

    SMEs

    Large firms

    63 650 (99.5)

    350 (0.5)

    21.4

    78.6

    n/a

    n/a

    K

    SMEs

    Large firms

    866 470 (99.9)

    1 015 (0.1)

    70.2

    29.8

    71.9

    28.1

    M

    SMEs

    Large firms

    117 355 (99.9)

    75 (0.1)

    84.4

    15.6

    86.0

    14.0

    N

    SMEs

    Large firms

    232 470 (99.8)

    565 (0.2)

    42.0

    58.0

    36.8

    63.2

    O

    SMEs

    Large firms

    391 695 (99.9)

    260 (0.1)

    73.1

    26.9

    63.5

    36.5

  • The Determinants of Business PerformanceStructure conduct performancerelationship between business structure and business conduct (behaviour)competitive markets and competitive behaviourlimited competition and collusionrelationship between business conduct and business performancedifferent indicators for measuring performanceprofitability, market share, growth, etc.

  • The Determinants of Business PerformanceInternal aims and organisationprofit maximisation as the prime goalother goalsdistinction between owners and managersimportance of managers own objectivessatisficing

  • The Determinants of Business PerformanceOther factors affecting performanceinternal structureinformationcompetence of managementquality of the workforcesystemsinformation systemsmotivationtechnical systemsdistribution systemsfinancial systems