Chapter 1 – Business Environments (Grade 10)

Risk Management

• Continuous process of identifying, monitoring and minimising potential threats.
• Not a stand-alone function; EVERY business function must apply risk strategies.

Management Information Systems (MIS)

• Ensure required technology & information are available WHEN & WHERE needed across all 8 business functions.
• Integrated into day-to-day activities (e.g., Public Relations uses websites, email, Skype).

Internal Resources (Factors of Production)

• 4 key resources: Human, Entrepreneurship, Raw materials (Natural), Capital.
• Each department secures & utilises resources to meet its objectives.

Business Policy

• Formulated with vision, mission, goals & objectives in mind.
• Provides direction & framework for all functions; originates from top management.
• Must be consistent across departments; reviewed as internal/external conditions change.
• Worthless without effective implementation & monitoring.

Business Culture

• Shared values & beliefs guiding behaviour of employees & managers.
• Positive culture → teamwork, synergy, broad buy-in of management decisions.

Organisational Structure

• Arranges people, authority, responsibility & information flow to achieve goals.
• Clarifies roles, reporting lines and communication channels.
• Common structures: Functional, Line, Line-and-Staff, Matrix, Project, Divisional by Product, Divisional by Region.

Market Environment (External)

• Business has NO direct control; must assess impact & plan responses.
• Seven key elements:

Suppliers

• Provide inputs; power through pricing & delivery reliability.
• Need right quantity, quality, price, time & place; build strong relationships to avoid disruptions.

Consumers

• Buyers/users of products/services; buyer ≠ always end-user.
• Monitor trends; adapt or redevelop products when demands change.
• Buyer power: high prices → stop purchasing → business forced to reduce price or lose customers.

Competitors

• Firms selling same/similar/substitute products to same market.
• Threat from existing rivals AND potential new entrants.
• Maintain competitive advantage via: Quality, Price, Technology, Service, Superior use of resources, Location.

Strategic Alliances

• Two or more firms cooperate to exploit market opportunities (e.g., discount partnerships).

Intermediaries (Middlemen)

• Link between business & consumers within distribution channel.
• Offer easier market access & insight into customer trends.

NGOs (Non-Government Organisations)

• Non-profit entities focusing on social/environmental issues.
• Demand ethical conduct & corporate social responsibility; often seek sponsorships.

Industry Regulators

• Provide guidelines & act as watchdogs (e.g., SABS, SACOB, Ombudsmen, Trade Unions).
• Ensure ethical operations & protect stakeholder rights.