Chapter 1 – Business Environments part 2

Business Environments

• Business environment split into Internal (Micro) and External (Market & Macro)
• Internal/Micro = factors inside the firm that management controls ➜ direct impact on performance
• External (Market & Macro) = factors outside the firm ➜ can only be influenced/anticipated

Micro Environment: Core Elements

• Business Functions (core & additional)
• Resources (human, financial, physical, information)
• Business Policy & Strategy alignment
• Organisational Culture
• Structure & workflow

Core Business Functions ( 8 )

General Management

• Sets strategic direction: Vision → Mission → Goals (long-term) → Objectives (short-term) → Strategy
• Core tasks: Planning, Organising, Leading, Controlling, Communicating, Coordinating, Decision-making, Delegating, Disciplining, Motivating

Purchasing (Procurement)

• Secures inputs so other departments achieve objectives
• Must obtain: right Quality, Price, Quantity, Place, Time, Supplier

Production

• Combines factors of production to create outputs; aims to minimise \text{INPUT cost} without harming \text{OUTPUT quality}
• Choose method: Mass, Batch, Jobbing
• Product must be Safe, Reliable, Durable, supported by good After-sales service
• Monitor Product Life Cycle with Marketing

Marketing

• Conducts market research to define Product, Price, Place, Promotion (4P’s)
• Analyses target market variables: age, income, interests, gender, occupation, marital status
• Tools: advertising, sales promotion, personal selling, feedback monitoring

Financial

• Secures & manages capital
  • Fixed (long-term) capital → assets
  • Working (short-term) capital → inventory & expenses
• Calculates start-up vs running costs; prepares budgets; evaluates affordability of loans (capital + interest)

Administration

• Collects, processes, stores, and supplies accurate information in usable format and time

Human Resources / Human Capital

• Plans workforce size & skills; recruits, selects, trains, retains
• Complies with legislation: \text{LRA}, \text{BCEA}, \text{BBBEE}, \text{Employment Equity}, \text{SDA}
• Designs fair remuneration; monitors performance

Public Relations

• Maintains positive brand image; ensures ethical & sustainable engagement with stakeholders (internal & external)

Additional Business Functions

• Risk Management ➜ identifies, evaluates, mitigates threats
• Information / Management Systems ➜ provides reliable data & tech support for decision-making