Business Management 1/2 The external environment

Global issues

-Overseas competitors and markets: Local business that have the same service/product as an international business lose customer base because of the increase in competition. -Offshoring labour: Sending an element, service or a section of the business overseas because labour over there is cheaper. -Exchange rates: Changes in exchange rates affect the import/export price. If the Aus. $ goes up exports become more expensive and imports become cheaper. If it goes down, the exports are cheaper and imports are more expensive. -Protection of intellectual property at a global level: -Online sales:

Family Friendly workplace (Societal Attitudes)

Businesses should support flexible hours, pay and childcare options e.g. If someone needs parental leave, correct pay and time off

Sustainable workplace (Societal attitudes)

Consumers are pressuring businesses into using environmentally friendly and sustainable sources e.g. Seafood- Using farms, renewable sources, and not over fishing

Contraction

Decreasing consumer spending Business expectations increasingly pessimistic Decreasing business investment Sales and profits falling Unemployment falling

How a business can be socially responsible

Ensure that a fair price is paid for all materials Minimise waste and pollution Conserve the use of energy Protect the health and safety of customers Become involved in the community Ensure that the business is free of corruption Work with suppliers to ensure that they have socially responsible policies in place Develop the skills of employees Deal with employees honestly, fairly, and with respect

Special interest groups

Groups of people who attempt to directly influence or persuade a business to adopt particular policies or procedures including lobby groups, business associations and unions

Workplace diversity (Societal attitudes)

Hiring all ages, genders, religious, sexual orientation, culture with equal opportunity e.g. If a person has a disability the business would be expected to cater for them

Expansion

Increasing consumer spending Business expectations increasingly optimistic Increasing business investment Sales and profit rising Unemployment falling

Operating Environment

Is made up of stake holders external to the business which have a direct impact on the operation of the business.

External Operating environment

Is made up of stakeholders external to the business which have a direct impact on the operations of a busines

Coperate social responsibility

Managing a business in such a way that the broader social welfare of the community including its, employee, customers, suppliers and the environment, is taken into consideration with the business decisions

Competitors

Other businesses or individuals who produce and sell rival, or competing, goods and services to the ones offered by the business.

External environment

The Factors over which a business has some degree of control -employees, managers, management style, corperate culture, policies

Suppliers

The business or individuals that supply materials and other resources that the business needs to conduct its operations.

Demographic (Societal attitudes)

The change in parts of the demographic can create opportunities or problem for a business e.g. Age-It can create opportunities in the healthcare or problems for labour

Globalisation

The effect of high-tech communications, lower transport costs, unrestricted trade and financial flows turning the whole world into a single market, producing a more integrated global economic system.

External environments

The factors over which the business has little control

Internal environment

The factors over which the business has some degree of control.

Special interest groups

The groups of people who attempt to directly influence or persuade a business to adopt particular policies or procedures, including lobby groups, business associations and unions.

Customers

The people who purchase the goods and services from the business, expecting high quality at competitive pricing

Business environments

The surrounding conditions in which the business operates

Macro environment

This environment comprises the broad forces, conditions and trends in the economy and society within which the business operates. The business has no (or very little) control over these factors. Legal and Political, Societal, Economic, Technological, Global, Corporate Social Responsibility including Environmental

External Macro environment

This environment compromises the broad forces, conditions and trends in the economy and society within which the business operates. The business has no (or very little) control over these factors. legal and political, Societal, Economic, Technological, Global Compromise social responsibility including environmental

Peaks

Wages and salaries at high levels Business operating at full capacity sales and profits at highest levels Low level of unemployment

Contractions

Wages and salaries at low levels Business operating at below full capacity Sales and profits at lowest levels Consumer spending at lowest levels High levels of unemployment