Business Environments

• Redressing: to fix an undesirable of unfair situation
• Nepotism: the practice among those with power of influence of favoring relatives, friends, especially giving them jobs
• Retrenchment: When a business cuts down the number of its employees to reduce costs
• Go-Slow: a situation when workers go to work but deliberately work at a slower pace
• Trade Union: An association that represents and protects the interest of its workers
• Strike: a situation whereby workers refuse to work until their complaints/ demands are addressed by their employers.
• Collective bargaining: The process of negotiation between trade unions and management on behalf of all employees
• Lockout: Whereby an employer prevents his workers from entering the workplace due to industrial disputes
• Stakeholders: party that has an interest in a company and can either affect or be affected by the business
• Shareholder: A person who owns shares in a company
• Customer: Anyone who buys goods or services from a business
• Regulators: a person or body that supervises a particular industry or business activity
• Strategic Alliances: An arrangement between two companies to undertake a mutually beneficial project
• Joint Venture: Two businesses join together to form one new business, with both contributing capital and resources.
• Merger: When two separate organisations combine into one larger organisation
• Franchise: The right granted by a franchisor to another (franchisee) to market their products/services under certain conditions
• Open market: A market where there is no control over who may provide goods and services or over the prices that can be charged
• Demographics: Statistical data relating to the population and particular groups within it. Often incudes age, gender, income groups and occupation.
• Psychographics: The classification of people according to their attitudes, aspirations and other psychological criteria.
• Globalisation: Greater trade and collaboration between businesses or people in different countries which is enabled by technological advances and communication.
• Physical environment: This is an environment that is comprising of the ecological elements such as natural disasters, air pollution, water pollution, deforestation, waste products or natural resources
• Institutional environment: These are private-public partnerships which are formed between government and private enterprise
• Insurance: an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.
• Adapt to the Challenges of the Business Environments

  • Information Management
  • Strategic Responses
  • Mergers, Takeovers, Acquisitions, Alliances
  • Organisational Design and Flexibility
  • Influence of environment and social responsibilty
• Information Management

  • Implement effective information management system
  • Information found/ recorded/ easily retrieved, effectively used
  • IT solutions satisfy customer needs
  • benefit from increase in market share and profitability
• Strategic Responses

  • How businesses respond to challenges by putting in proper plans
  • Analyse information, identity stakeholders
  • Aware of new competitors
  • Remain sustainable
  • Identity, minimize, eliminate challenges
• Mergers

  • Two companies join together -agreement- form new business
  • share resources> more growth and sustainability
  • If it was a Public Company> shareholders swap shares
• Takeovers

  • One business takes control of another> majority ownership of the shares
  • Sometimes against the others will
• Acquisitions

  • Business buys another at an agreed price
  • Acquired business continues as an subsidiary
  • in companies not listed on the JSE
• JSE: Johannesburg Stock Exchange
• Alliances

  • Agreement between business with common vision> work together for benefit
  • Interest, nature, goals
  • more competitive, respond better to challenges
  • Remain separate businesses, co-operate
• Organisational Design an Flexibility

  • how business is structured and communicates its culture> align with objectives
  • Integrate people/ information/ technology> improve efficiency
  • Flexible> easily adapt
  • reflects environments business experiences
• Influence on Environment and Social Responsibility

  • environmental friendly production> awareness
  • joint ventures with government
  • conservation> use sparingly
  • sustainable CSI programmes> improve their communities
• Direct Influence of Environment

  • Influence Suppliers, customers
  • Projects
  • Benefits
• Influence suppliers> long term contracts for raw materials, fixed prices
• Influences customers> new uses of a product, take customers away from competition, new customers
• Influence Regulators> lobbying, bargaining
• Projects as part of Social Responsibility

  • more socially responsible> give back to communities
  • business code of conduct
  • Triple Bottom Line= People, planet, profit
  • Engage in economic development> education, awareness programmes
• Benefits of social responsibility projects

  • Increase employees morale and job satisfaction
  • use CSR/CSI programmes as marketing strategy
  • Attracts investors
  • Promote customer loyalty
  • Attract experienced employees
  • Positive business image
  • Competitive advantage
  • goodwill/ support of communities
• Lobbying?

  • Use influence to change government policy
  • meet specific needs and allow activities