TOPIC 1:INFLUENCES OF BUSINESS ENVIRONMENTS

COMPONENTS OF THE MICRO ENVIRONMENT

• Vision, mission statement, goals and objectives.

• Organisational structure

• Organisational culture

• Organisational resources

• Management and leadership

• Eight business functions.

COMPONENTS OF THE MARKET ENVIRONMENT

• Customers/consumers

• Suppliers

• Intermediaries

• Competitors

• Civil society, NGOs, CBOs, regulators, strategic allies and unions.

COMPONENTS OF THE MACRO ENVIRONMENT

• Legal

• Political

• Social

• Economic

• Technological

• Physical

• Global

TOPIC 2: CHALLENGES OF THE BUSINESS ENVIRONMENTS

CHALLENGES IN THE MICRO ENVIRONMENT

• Difficult employees: employees that do not support the vision of the business can create conflict in the business.

• Strikes and go-slows: a strike means employees refuse to go to work or they do not work until their complaints have been addressed which can result to the business losing many hours of production time for a period of a strike. A go-slow means employees choose to not work productively which will result in the business to have a decrease in profit and not meet its targets.

• High employee turnover

• Employee absenteeism
  SHORTAGE OF SUPPLIES

• The business productivity and profitability will decrease.

• Without the availability of raw materials, a business cannot produce its products or services to meet the demands of the target market.
  DEMOGRAPHICS AND PSYCHOGRAPHICS (DEFINITIONS/EXAMPLES)

• Demographics refers to the statistics of the population such as gender, age, etc.

• There are always constant changes in the demographic characteristics of their target market. When a lot of people emigrate, it will result in a decreased number of consumers and skilled labour.

• An example of demographics, people are living longer which could lead to an increased demand of goods and services.

• Psychographics refers to customers’ lifestyles and behaviour. It includes their attitudes, interests, opinions, desires and lifestyles.

• It could be difficult to determine the psychographics of a target market because customers’ lifestyles and behaviours change frequently.
  GOVERNMENT TENDERS

• Government tenders are people or a company who has to provide the goods/services and the government must pay an agreed price at the agreed time.
  WAYS THE BUSINESS CAN OVERCOME COMPETITORS

• Businesses should have unique goods or services for the target market.

• Businesses must produce high-quality goods/services that the customers would be interested in.

• Businesses should ensure that they have been well trained and dedicated employees.

• Businesses should make the prices of their goods lower than their competitors.
  EXAMPLES OF CONTEMPORARY LABOUR LEGISLATION

• Employment Equity Act - compels businesses to give preference to previously disadvantaged individuals when appointing new employees into the business.

• National Credit Act- this act was established to protect both businesses and consumers from negligent lending practices that could result in over indebtedness by consumers.

• Consumer protection Act-this act promotes and advances the social and economic welfare of consumer in South Africa.

• Labour Relations Act- this legislation regulates the relationship between the employer and employes when resolving conflict in the workplace

• The Basic conditions of employment act- this legislation provides minimum acceptable standard for any employment policy. It describes the conditions of employment.

• The compensation for occupational injuries and diseases act

• Skills development act- this legislation ensures that employers contribute towards the education and training of their employees.

• Broad based black economic empowerment- this act ensures that previously disadvantaged individuals fully participate in the economy.

TOPIC 3: ADAPTING TO THE BUSINESS ENVIRONMENT

MERGERS

• Mergers occur when two companies collaborate/join together to form one new business.

• Emerged businesses share their resources which could lead to more growth and sustainability.

• If its a public company, then the shareholders will swap their shares
  NETWORKING

• Refers to a situation whereby businesses share information and develop professional contacts to benefit all the members in the network.

• Networking assists in acquiring new business leads.

• Networking benefits the business by helping to identify best practice.

• Networking can help the business identify new trends.
  STRATEGIC ALLIANCES

• STRATEGIC ALLIANCE: Businesses form partnership agreements to benefit from each other’s involvement. These alliances are designed to build on the expertise of each partner and on how they complement each other.
  DIRECT INFLUENCE OF THE ENVIRONMENTS

• Businesses need to investigate alternative environmental friendly production techniques and create environmental awareness.

• Businesses can form joint ventures with other businesses and the government to protect the environment through conservation and preservation.
  TRIPLE BOTTOM LINE

• Triple bottom line is an accounting framework that focuses on people, planet and profit.
  SOCIAL RESPONSIBILITY

• Increases employees’ morale and job satisfaction when they are involved in social responsibility programmes.

• CSI helps to attract investors because of increased profits/income.

• Promotes customer loyalty resulting in more sales.

• A business may have a competitive advantage, resulting in good publicity/an improved reputation.
  PROJECTS THAT CAN BE UNDERTAKEN BY BUSINESSES AS PART OF SOCIAL RESPONSIBILITY

  • Businesses must allow employees to get involved in social development programmes.

  • Engage in environmentally friendly campaigns such as recycling or re-using scarce resources.

  • Businesses must protect the environment and participate in community upliftment programmes.

  • Businesses should support less fortunate people, by providing donations to charity organisations.

TOPIC 4: CONTEMPORARY SOCIO-ECONOMIC ISSUES

LACK OF SKILLS AND IMPACT ON THE BUSINESS

• Unskilled employees could spend considerable time seeking assistance to perform their work.

• They may perform tasks without the appropriate knowledge and expertise which could lead to poor performance.

• The time spent on assisting unskilled workers can reduce productivity levels in the workplace.

• Businesses may be required to increase the budget for skills development programmes.

INFLATION RATE AND IMPACT ON THE BUSINESS

• This leaves customers with less money to spend on goods and services.

• Reduced spending will lower profits for the business.

• Can create retrenchment.
  MEANING OF PIRACY

• Piracy is the illegal use or imitation of another person’s work. This may affect the artist’s and producer’s productivity levels.
  COPYRIGHT
  Refers to an exclusive legal right assigned to the authors,artist or producer of artistic work to print, publish, perform or record the work.

• Copyright holders of Intellectual Property are allowed to take legal action.
  PATENT

• This right is granted by government for a limited period of up to twenty years for the exclusive right to an invention.

• If anyone uses the invention without permission, the creator may take legal action against them.
  TRADEMARK

• A trademark refers to a sign, character or word that is protected by the law to represent the company or a product.

• These are used by businesses so that their products or the business itself is easily indentifiable.
  DUMPING

• Dumping occurs when a country or company exports a product at a price that is lower in the international importing market than the price in the exporter’s local market.
  THE IMPACT OF DUMPING

• Local businesses lose profit as the cannot compete with cheap prices.

• They can lose income and be forced to shut down their operations.

• This may lead to a decrease in local production and a loss of jobs.

• It is not possible for local businesses to manufacture the same products at an equal or lower price.
  EXAMPLES OF ETHICAL MISCONDUCT

• Sexual harassment

  • This unwelcome or unwanted conduct causes discomfort for the victim and causes them to be embarrassed.

  • The victim may also be unable to concentrate or focus on their work.

• Corruption

  • Corruption refers to any act of dishonesty such as bribery/theft/collusion/kickbacks and so on.

  • It occurs when two parties enter into an illegal agreement from which they both benefit.

• Mismanagement of funds

• Mismanagement of funds refers to the wrongful use of funds.

• It involves dishonest activities in which a person entrusted with authority in a business abuses their position of trust to achieve personal gain.

EXHAUSTION RESOURCES

• This refers to the over-usage of resources which could lead to the resources being depleted.

• This can be devastating for businesses whose operations solely rely on these natural resources.

• Businesses may be forced to substitute exhausted natural resources with chemicals which can lead to a strong contribution of climate change.

INDUSTRIAL RELATIONS

• Industrial relations refer to the relations between management and its employees in the industry. It explains the relationship between employees and the management that stems directly or indirectly from union versus employee relationship.

LRA

• The act provides the structure for governing the relations between an employer and their employees.

• It encourages collective bargaining in the workplace.

• The act further encourages fair labour practice between employer and employee.

• The transfer of employment contracts between existing and new employers are explained.

TRADE UNIONS (FUNCTIONS AND ROLES)

FUNCTIONS:

• Trade unions represent their members and protect their members against unfair labour practices.

• They empower employees about their rights in the workplace and how to apply these rights.

• Trade unions negotiate for better working conditions, salaries and wages, and other benefits to improve the standard of living for employees.

• They may take legal action on behalf of their members when necessary.

ROLES:

• The main role of Trade unions is to represent staff members in the workplace.

• They highlight the need for job creation in the economy.

• They ensure that poverty levels are kept low in the country through fights against reckless retrenchment processes by employers.

INDUSTRIAL ACTIONS (STRIKES, LOCKOUTS AND GO-SLOWS)

STRIKES:

• A strike is the result of unresolved disputes.

• It is the join action organised by employee or their union representatives to stop working and try to force employers to accept their demands.

GO-SLOWS:

• This is a form of industrial action where workers decide to deliberately work unproductively or slow as a form of protest.

• The goal of a Go-slow is to reduce business productivity.

• This is often used by essential serve industries where strikes are not allowed.

LOCKOUTS:

• Lockouts occur when an employer prevents striking employees from entering the business premises.

• Employees need to be notified 48 hours in advance and in writing of their intention to use the lockout clause.

• Employers may resort to the lockout clause to ensure that equipment and the workers who aren’t striking are kept safe.

TOPIC 5: BUSINESS SECTORS

BACKWARDS LINKING:

1. A manufacturing company (secondary sector) may provide a mining company(primary sector) with machinery and equipment it needs to operate its business.

2. The mining company (primary sector) may outsource the management of their information systems to a specialist IT company (tertiary sector).

3. The manufacturing company (secondary sector) may outsource the management of their information system to a specialist IT company (tertiary sector)