chapter4

• Business environment


  The environment in which a business operates, including the community that it serves
• Business environment


  • It is a complex dynamic environment where change in the environmental variables continually determines the success or failure of a business
  • The variables are often beyond the control of management, so it is management's task to adapt the organisation to change in the environment
  • At times, management acts proactively by anticipating events, thereby also accelerating change
• Environmental changes in South Africa


  • Accelerating urbanisation
  • Increased poverty
  • Influx of skilled and unskilled immigrants
  • Xenophobia
  • High crime rates
• Worldwide business organisations are restructuring, outsourcing and trimming workforces
• Eroding business confidence in the country
• Micro-environment


  One of the sub-environments of the business environment model
• Market environment


  One of the sub-environments of the business environment model
• Macro-environment


  One of the sub-environments of the business environment model
• The social responsibility of business

  • Economic responsibility
  • Legal responsibility
  • Ethical responsibility
  • Philanthropic responsibility
• Opportunities


  Favourable conditions or trends in the market environment that can be exploited to the business's advantage by a deliberate management effort
• Threats


  Unfavourable conditions or trends in the market environment that can, in the absence of a deliberate effort by management, lead to the failure of the business, its products or its services
• Environmental scanning


  1. Measurement

  2. Projection

  3. Evaluation of change regarding the different environmental variables
• The environment is continually changing; therefore, purposeful monitoring is necessary to keep abreast of change
• Scanning is necessary to determine which factors and patterns in the environment pose threats to the present strategy of a business
• Scanning is also necessary to determine which factors in the environment present opportunities for a business to attain its goals and objectives more effectively
• Businesses that systematically scan the environment are more successful than those that do not
• define business environment


  environment in which a business operates and the community it serves