Business_studies_Grade_10_Chapter_1_BUSINESS_ENVIRONMENTS_MICRO_ENVIRONMENT

THE BUSINESS ENVIRONMENT

The concept of the business environment encompasses various external conditions affecting the operations and success of businesses.
Businesses must analyze risks inherent in their environments to adapt and thrive.

Business risks can be categorized into three distinct environments:
- Macro-Environment: Larger economic, political, social, and environmental forces that affect all businesses.
- Market-Environment: Specific market-related factors including competition, market trends, and customer behavior.
- Micro-Environment: Internal factors that directly influence a business's operations and decision-making.

The micro environment consists of internal elements that affect the business outcomes.

Business Functions: Different roles and responsibilities within the organization.
Resources: The materials and personnel needed to conduct business.
Business Policy: Guidelines directing operational and strategic initiatives.
Business Culture: The shared values and beliefs within the organization.
Structure: The arrangement of roles, responsibilities, and communication flow within the organization.

There are traditionally EIGHT business functions, which managers must understand:
- General Management
- Purchasing
- Production
- Marketing
- Financial Management
- Administration
- Human Resources
- Public Relations
These functions are interrelated and fundamental for strategic planning and operational execution.

Goals and objectives are essential for shaping the direction of a business:
- Goals: Long-term vision of the business.
- Objectives: Short-term targets aiding in the attainment of goals.
Key processes within management include:
- Planning: Preparing future strategies and initiatives.
- Organising: Structuring teams to optimize resources.
- Leading: Guiding and motivating employees.
- Controlling: Monitoring outcomes to ensure standards are met.
- Disciplining: Maintaining a conduct system for upholding company standards.

Selecting reliable suppliers and ensuring quality resources at the right price and time.

Responsible for the actual creation of goods and services and optimizing production processes.

Involves acquiring sufficient capital for operations and effectively managing both fixed and working capital.

Conducting market research, setting pricing strategies, handling effective packaging, and ensuring efficient distribution.

Maintaining a positive business image and ensuring ethical conduct towards stakeholders.

Managing recruitment, training, labor laws compliance, and employee performance assessments.

Risk Management: Identify, assess, and strategize around business risks to mitigate their impact.
Management Information Systems (MIS): Essential technology infrastructure facilitating all business functions.

Resources are classified under the four factors of production: land, labor, capital, and entrepreneurship, and are crucial for operational success.

Policies guide business functions by providing a structured framework based on the overarching vision and goals.
Policies need to be coherent, clear, and regularly reviewed to ensure alignment with business objectives.

Defined by the values and beliefs that shape behavior and attitudes of employees, fostering teamwork and collaboration.