AOS3- Business Management

External environment

External environment

is made up of the macro environment and the operating environment

Macro environment

consists of factors outside of the business, over which the business has no control. such as legal, political, social, economic, technological, global and corporate social responsibility factors.

Operating environment

consists of factors outside the business, over which the business has little control, including customers, competitors , suppliers and special interest groups

Key legal and government regulations

business owners need to ensure their business will comply with these regulations during the planning stage

Important laws and regulations

business name registration, company registration, local government regulations (zoning and health), employment regulations (anti-discrimination and work health and safety), trade practices and consumer protection laws, and environmental protection regulations

Changing societal attitudes and behaviours

such as values, beliefs and trends will need to be considered

social values and beliefs

are the shared principles and morals of a group of people or society, including the need to protect the environment and the expectation that businesses will contribute positively to society

trends

the general direction in which peoples attitudes or behaviour in society is developing or changing.

trends can be found

in changing demographics and workplace culture

economic considerations

such as interest rates, employment levels, tax rates, and levels of consumer confidence all have an effect on decisions made by business owners during the planning stage

technological considerations

including changing markets and technological developments, need to be taken into account when planning a business

globalisation

is the effect of hi-tech communications, lower transport costs and unrestricted trade and financial flows, which have transformed the world into a single market, producing a more integrated global economic system.

globalisation means

businesses operate in a worldwide market

global issues

including oversea competitors and overseas markets, offshoring of labour, exchange rates, patenting, copyrights and trademarks at a global level and online must be considered

corporate social responsibility

refers to managing a business in such a way that the broader social welfare of the community, including its employees, customers, suppliers ad the environment is taken into consideration when making a business decision

corporate social responsibility considerations

will need to be addresses. these considerations include environmental considerations and planning the production of goods and services.

CSR management

practices have benefits and costs

customers

are the people who purchase goods and services from the business, expecting high quality at competitive prices

needs and expectations of customers

including that businesses be socially responsible, must be considered during the planning stage

competitors

are businesses or individuals that offer rival, or competing, goods or services to the ones offered by the business.

existing competitors

business owners must be aware of existing competitors, and also monitor the environment for potential newcomers

suppliers

are businesses or individuals that provide the materials and other resources that the business needs to conduct its operations

supply chains

is the range of suppliers from which the business purchases materials and resources

special interest groups

attempt to directly influence or persuade a business to adopt particular policies or procedures

special interest groups include

environmental lobby groups, business associations and unions

unions

organisations formed by employees in an industry, trade or occupation to represent them in efforts to improve wages and working conditions

offshoring

the practice of moving some of the businesses processes or services to the same or another business located overseas