essay of business environment grade 11

Grade 11 Business Studies Past Papers and Memos

This page contains Grade 11 Business Studies past exam papers and memos. You can browse and download question papers and memos for your revisions (2019, 2018 May/June, October, November).

Critical Topics for Term 1 Revision

• Influences on and control factors influencing business environments.
• Challenges in business environments
• Adapting to challenges in business environments
• Impact and challenges of contemporary socioeconomic issues on business operations
• Business sectors
• Benefits of a company versus other forms of ownership
• Avenues of acquiring a business

Critical Topics for Term 2 Revision

• Creative thinking and problem solving Stress, crisis and change management
• Transform a business plan into an action plan Starting a business venture based on an action plan Professionalism and ethics
• Presentation of Business Information

Critical Topics for Term 3 Revision

• Assessment of entrepreneurial qualities in business Citizenship roles and responsibilities
• Marketing activities, marketing in the formal and informal sectors Use of technology for marketing
• Imports and exports
• Foreign marketing
• The alignment of foreign marketing and the production function Production function
• Team Stages, dynamics theories and conflict management
• Introduction to the Human Resources function

Download Grade 11 Business Studies Past Papers and Memos

Business studies grade 11 2017 exams (english and afrikaans) question papers:.

• BUS STUDIES GR11 QP NOV2017_Afrikaans
• BUS STUDIES GR11 QP NOV2017_English
• BUS STUDIES GR11 MEMO NOV2017_Afrikaans
• BUS STUDIES GR11 MEMO NOV2017_English

Business Studies grade 11 2016  Exams (English and Afrikaans) question papers:

• Gr11-BSTD-N16-QP-Afr
• Gr11-BSTD-N16-QP-Eng
• Gr11-BSTD-N16-MEMO-Afr
• Gr11-BSTD-N16-MEMO-Eng

More Grade 11 Study Resources

• Grade 11 Computer Applications Technology Study Guides Available for Free Download
• Life Orientation Grade 11 Past Exam Papers and Study Guides
• Grade 11 Physical Sciences Study Guide Free Download
• Grade 11 Mathematics Study Guide Free Download
• Grade 11 Religious Education Study Guides Available for Free Download
• Grade 11 Computer Literacy Study Guides Available for Free Download
• Grade 11 Tourism Study Guides Available for Free Download
• Saturday school for grade 11 by Sci-Bono
• Grade 11 English Home Language Study Guide Free Download
• Grade 11 Business Studies Study Guides Available for Free Download. 

Download all Grade 11 Previous Question Papers

Related posts:

1 thought on “grade 11 business studies past papers and memos”.

Can you please send business grade 11 in afrikaans.

Leave a Comment Cancel reply

Save my name, email, and website in this browser for the next time I comment.

1.2 Understanding the Business Environment

• What are the sectors of the business environment, and how do changes in them influence business decisions?

Businesses do not operate in a vacuum but rather in a dynamic environment that has a direct influence on how they operate and whether they will achieve their objectives. This external business environment is composed of numerous outside organizations and forces that we can group into seven key subenvironments, as Exhibit 1.4 illustrates: economic, political and legal, demographic, social, competitive, global, and technological. Each of these sectors creates a unique set of challenges and opportunities for businesses.

Business owners and managers have a great deal of control over the internal environment of business, which covers day-to-day decisions. They choose the supplies they purchase, which employees they hire, the products they sell, and where they sell those products. They use their skills and resources to create goods and services that will satisfy existing and prospective customers. However, the external environmental conditions that affect a business are generally beyond the control of management and change constantly. To compete successfully, business owners and managers must continuously study the environment and adapt their businesses accordingly.

Other forces, such as natural disasters, can also have a major impact on businesses. While still in the rebuilding stage after Hurricane Katrina hit in 2005, the U.S. Gulf Coast suffered another disaster in April 2010 as a result of an explosion on the Deepwater Horizon oil-rig, which killed 11 workers and sent more than 3 million barrels of oil into the Gulf of Mexico. This event, which played out for more than 87 days, severely affected the environment, businesses, tourism, and people’s livelihoods. Global oil conglomerate BP, which was responsible for the oil spill, has spent more than $60 billion in response to the disaster and cleanup. Seven years after the explosion, tourism and other businesses are slowly recovering, although scientists are not certain about the long-term environmental consequences of the oil spill. 7

No one business is large or powerful enough to create major changes in the external environment. Thus, managers are primarily adapters to, rather than agents of, change. Global competition is basically an uncontrollable element in the external environment. In some situations, however, a firm can influence external events through its strategies. For example, major U.S. pharmaceutical companies have been successful in getting the Food and Drug Administration (FDA) to speed up the approval process for new drugs. 8 In recent years, the five largest companies in the S&P Index— Google , Facebook , Amazon , Microsoft , and Apple —have spent close to $50 million on lobbying activities in the nation’s capital in an effort to help policy makers understand the tech industry and the importance of innovation and an “open” internet. 9 Let’s now take a brief look at these varied environmental influences.

Economic Influences

This category is one of the most important external influences on businesses. Fluctuations in the level of economic activity create business cycles that affect businesses and individuals in many ways. When the economy is growing, for example, unemployment rates are low, and income levels rise. Inflation and interest rates are other areas that change according to economic activity. Through the policies it sets, such as taxes and interest rate levels, a government attempts to stimulate or curtail the level of economic activity. In addition, the forces of supply and demand determine how prices and quantities of goods and services behave in a free market.

Political and Legal Influences

The political climate of a country is another critical factor for managers to consider in day-to-day business operations. The amount of government activity, the types of laws it passes, and the general political stability of a government are three components of political climate. For example, a multinational company such as General Electric will evaluate the political climate of a country before deciding to locate a plant there. Is the government stable, or might a coup disrupt the country? How restrictive are the regulations for foreign businesses, including foreign ownership of business property and taxation? Import tariffs, quotas, and export restrictions also must be taken into account.

In the United States, laws passed by Congress and the many regulatory agencies cover such areas as competition, minimum wages, environmental protection, worker safety, and copyrights and patents. For example, Congress passed the Telecommunications Act of 1996 to deregulate the telecommunications industry. As a result, competition increased and new opportunities arose as traditional boundaries between service providers blurred. Today the dramatic growth in mobile technology has changed the focus of telecommunications, which now faces challenges related to broadband access and speed, content streaming, and much-needed improvements in network infrastructure to address ever-increasing data transmissions. 10

Federal agencies play a significant role in business operations. When Pfizer wants to bring a new medication for heart disease to market, it must follow the procedures set by the Food and Drug Administration for testing and clinical trials and secure FDA approval. Before issuing stock, Pfizer must register the securities with the Securities and Exchange Commission . The Federal Trade Commission will penalize Pfizer if its advertisements promoting the drug’s benefits are misleading. These are just a few ways the political and legal environment affect business decisions.

States and local governments also exert control over businesses—imposing taxes, issuing corporate charters and business licenses, setting zoning ordinances, and similar regulations. We discuss the legal environment in greater detail in a separate appendix.

Demographic Factors

Demographic factors are an uncontrollable factor in the business environment and extremely important to managers. Demography is the study of people’s vital statistics, such as their age, gender, race and ethnicity, and location. Demographics help companies define the markets for their products and also determine the size and composition of the workforce. You’ll encounter demographics as you continue your study of business.

Demographics are at the heart of many business decisions. Businesses today must deal with the unique shopping preferences of different generations, which each require marketing approaches and goods and services targeted to their needs. For example, the more than 75 million members of the millennial generation were born between 1981 and 1997. In 2017 they surpassed baby boomers as America’s largest generation. 11 The marketing impact of millennials continues to be immense. These are technologically savvy and prosperous young people, with hundreds of billions of dollars to spend. And spend they do—freely, even though they haven’t yet reached their peak income and spending years. 12 Other age groups, such as Generation X—people born between 1965 and 1980—and the baby boomers—born between 1946 and 1964—have their own spending patterns. Many boomers nearing retirement have money and are willing to spend it on their health, their comforts, leisure pursuits, and cars. As the population ages, businesses are offering more products that appeal to middle-aged and senior markets. 13

In addition, minorities represent more than 38 percent of the total population, with immigration bringing millions of new residents to the country over the past several decades. By 2060 the U.S. Census Bureau projects the minority population to increase to 56 percent of the total U.S. population. 14 Companies recognize the value of hiring a diverse workforce that reflects our society. Minorities’ buying power has increased significantly as well, and companies are developing products and marketing campaigns that target different ethnic groups.

Social Factors

Social factors—our attitudes, values, ethics, and lifestyles—influence what, how, where, and when people purchase products or services. They are difficult to predict, define, and measure because they can be very subjective. They also change as people move through different life stages. People of all ages have a broader range of interests, defying traditional consumer profiles. They also experience a “poverty of time” and seek ways to gain more control over their time. Changing roles have brought more women into the workforce. This development is increasing family incomes, heightening demand for time-saving goods and services, changing family shopping patterns, and impacting individuals’ ability to achieve a work-life balance. In addition, a renewed emphasis on ethical behavior within organizations at all levels of the company has managers and employees alike searching for the right approach when it comes to gender inequality, sexual harassment, and other social behaviors that impact the potential for a business’s continued success.

Managing Change

Balancing comes easy at h&r block.

In an industry driven by deadlines and details, it’s hard to imagine striking a balance between work and everyday life for full-time employees and seasonal staff. Fortunately, the management team at H&R Block not only believes in maintaining a strong culture, it also tries to offer flexibility to its more than 70,000 employees and seasonal workers in 12,000 retail offices worldwide.

Based in Kansas City, Missouri, and built on a culture of providing exceptional customer service, H&R Block was recently named the top U.S. business with the best work-life balance by online job search site Indeed. Analyzing more than 10 million company reviews by employees, Indeed researchers identified the top 20 firms with the best work-life balance. H&R Block headed the 2017 list, followed by mortgage lender Network Capital Funding Corporation , fast food chain In-N-Out Burger , Texas food retailer H-E-B , and health services company Kaiser Permanente , among others.

According to Paul Wolfe, Indeed’s senior vice president of human resources, empathy on the part of organizations is a key factor in helping employees achieve balance. Wolfe says companies that demonstrate empathy and work diligently to provide personal time for all employees tend to take the top spots on the work-life balance list. “Comments we have seen from employee reviews for these companies indicate ‘fair’ and ‘flexible work environments,’” he says. Surprisingly, none of the tech companies known for their generous work perks made the top 20 list in 2017.

In this 24/7 world, when no one is far from a text or tweet, finding time for both family and work can be difficult, especially in the tax services industry, which is so schedule driven for a good part of the year. Making a commitment to help workers achieve a healthy work-life balance not only helps its employees, but it also helps H&R Block retain workers in a tight labor market where individuals continue to have choices when it comes to where and for whom they want to work.

• How does management’s support of employee work-life balance help the company’s bottom line?
• What can other organizations learn from H&R Block when it comes to offering employee perks that encourage personal time for workers even during the busy tax season?

Sources: “Career Opportunities,” https://www.hrblock.com, accessed May 25, 2017; “About Us,” http://newsroom.hrblock.com, accessed May 25, 2017; Abigail Hess, “The 20 Best Companies for Work-Life Balance,” CNBC, http://www.cnbc.com, May 4, 2017; Kristen Bahler, “The 20 Best Companies for Work-Life Balance,” Money, http://time.com, April 20, 2017; Rachel Ritlop, “3 Benefits Companies Can Provide to Boost Work-Life Balance,” Forbes, http://www.forbes.com, January 30, 2017.

The application of technology can stimulate growth under capitalism or any other economic system. Technology is the application of science and engineering skills and knowledge to solve production and organizational problems. New equipment and software that improve productivity and reduce costs can be among a company’s most valuable assets. Productivity is the amount of goods and services one worker can produce. Our ability as a nation to maintain and build wealth depends in large part on the speed and effectiveness with which we use technology—to invent and adapt more efficient equipment to improve manufacturing productivity, to develop new products, and to process information and make it instantly available across the organization and to suppliers and customers.

Many U.S. businesses, large and small, use technology to create change, improve efficiencies, and streamline operations. For example, advances in cloud computing provide businesses with the ability to access and store data without running applications or programs housed on a physical computer or server in their offices. Such applications and programs can now be accessed through the internet. Mobile technology allows businesses to communicate with employees, customers, suppliers, and others at the swipe of a tablet or smartphone screen. Robots help businesses automate repetitive tasks that free up workers to focus on more knowledge-based tasks critical to business operations. 15

Concept Check

• Define the components of the internal and the external business environments.
• What factors within the economic environment affect businesses?
• Why do demographic shifts and technological developments create both challenges and new opportunities for business?

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/introduction-business/pages/1-introduction

• Authors: Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt
• Publisher/website: OpenStax
• Book title: Introduction to Business
• Publication date: Sep 19, 2018
• Location: Houston, Texas
• Book URL: https://openstax.org/books/introduction-business/pages/1-introduction
• Section URL: https://openstax.org/books/introduction-business/pages/1-2-understanding-the-business-environment

© Apr 5, 2023 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

• List of Commerce Articles
• Business Environment

What is Business Environment?

Meaning of business environment:.

The word ‘business environment’ indicates the aggregate total of all people, organisations and other forces that are outside the power of industry but that may affect its production. According to an anonymous writer- “Just like the universe, withhold from it the subset that describes the system and the rest is environment”. Therefore, the financial, cultural, governmental, technological and different forces which work outside an enterprise are part of its environment. The individual customers or facing enterprises as well as the management, customer groups, opponents, media, courts and other establishments working outside an enterprise comprise its environment.

Also Check:  Important Questions for Business Environment

Importance of Business Environment:

Just like us, business operations do not survive in confinement. Every enterprise is not an island to itself; it subsists, endures and develops within the circumstances of the part and forces of its situation. While an individual enterprise is able to do minute to change or manage these forces, it has no choice to reacting or modifying according to them. Good knowledge of the environment by business managers allows them not only to recognise and assess but also to respond to the forces outside to their enterprises. The significance of the business environment and its perception by managers can be understood if we contemplate the below-mentioned following points:

(A) It Helps in Identifying Opportunities and Making First Mover Advantage

• The environment provides numerous opportunities, and it is necessary to identify the opportunities to improve the performance of a business.
• Early identification gives an opportunity to an enterprise be the first to identify opportunity instead of losing them to competitors.  Example:  ‘Airtel’ identified the need for fast internet and took first-mover advantage by providing 4G speed to its users followed by Vodafone and Idea.
• Asian paints lost market share to Nerolac because it failed to match its technology.

(B) It Helps the Firm Identify Threats and Early Warning Signals

• The business environment helps in understanding the threats which are likely to happen in the future.
• Environmental awareness can help managers identify various threats on time and serve as an early warning signal.  Example:  Patanjali products have become a warning signal to the rest of the FMCG
• The sector to develop similar products. Similarly, if an Indian firm finds that a f oreign multinational is entering the Indian market with new substitutes; it needs to prepare accordingly.
• Chinese mobile phones have become a threat for Indian mobile phone manufacturers.

(C) It Helps in Tapping Useful Resources

• Business and industry avail the resources (inputs) from the environment  and convert them into usable products (outputs) and provide to society.
• The environment provides various inputs (resources) the like finance, machines, raw materials, power and water, labour, etc.
• The business enterprise provides outputs such as goods and services to the c ustomers, payment of taxes to the government, to investors and so on.

Example:  With the demand for the latest technology, manufacturers will tap the resources from the environment to manufacture LED TVs and Smart TVs rather than collecting resources for colour or Black & White TVs.

(D) It Helps in Coping With Rapid Changes

• The business environment is changing very rapidly, and the industry is getting affected by changing market conditions.
• Turbulent market environment, less brand loyalty, divisions of markets, changes in fashions, more demanding customers, and global competition are some examples of changing the business environment.

Example:  Jack Ma started Alibaba as he could see the potential of interest in E-Commerce.

(E) It Helps in Assisting in Planning and Policy Formulation

• The business environment brings both threats and opportunities to a business.
• Awareness of business environment helps in deciding future planning or decision making.

Example : Multiple entries of Chinese phones like VIVO, Gionee, OPPO, etc. have posed a threat to local players like Micromax, Karbonn, Lava etc. to think afresh how to deal with the situation.

(F) It Helps in Improving Performance

• Environmental studies reveal that the success of any enterprise is closely bound with the changes in the environment.
• The enterprises which monitor and adopt suitable business practices not only improve their performance but become leaders in the industry also.

Example:  Apple has been successful in maintaining its market share due to its proper understanding of the environment and making suitable innovations in its products.

Also Read:  Dimensions of Business Environment

Features of Business Environment:

(A) The totality of External Forces

• Business environment includes everything which is outside the organisation.
• If we add all these forces, they will form a business environment.

Example:  When Pepsi and Coca-Cola got permission to set up their business in India, it was an opportunity for them and threat for local manufacturers like gold spot, camp-cola etc.

(B) Specific and General Forces

• Specific forces  are those forces which directly affect the operational activities of the business enterprise.
• Example:   Suppliers, Customers, Investors, Competitors, Financers etc.
• General forces  are those forces which indirectly affect the functioning of business enterprises.

Example:  Economic, Social, Political, Legal and Technological conditions.

(C) Inter-relatedness

• Different forces of business environment are interrelated to each other.
• One component of the business environment affects the functioning of other components.

Example:  The increased life expectancy of people and awareness of health consciousness has increased the demand for many health products like diet coke, olive oil, and so many health products.

(D) Dynamic Nature

The business environment is dynamic in nature and keeps on changing in terms of :

(a) Technological improvement,

(b) Shifts in consumer preferences,

(c) The entry of new competition in the market.

Example:  Many established companies in FMCG (Fast Moving Consumer goods) sector are focusing on producing the goods with natural ingredients with the entry of ‘Patanjali Products’.

(E) Uncertainty

• The changes in the business environment cannot be predicted accurately because of future uncertainties.
• It is very difficult to predict the changes in the economic and social environment.

Example : There has been a sharp decline in the prices of Android smartphones due to the entry of many new companies.

(F) Complexity

• All forces of the Business environment are interrelated and dynamic, which makes it difficult to understand.
• Complex nature of Business environment can be understood if we study it in parts.
• Example :  Increase in goods and service tax to 15 % would increase the revenue of the government (economic), which would help the government to improve social being of people (social) and reduce the personal disposable income of rich people and thereby controlling inflation.

(G) Relativity

• Business Environment differs from place to place, region to region and country to country.

Example:  In China, the electricity to the industry is provided at cheaper rates as the consumption increases and hence, it leads to mass production whereas, in India, it is otherwise, higher consumption of electricity leads to costly electricity which results in lower production & higher cost of production.

Why It is Important for Business Enterprises to Understand Their Environment?

A) It Benefits in Tapping Useful Resources

• Business and industry avail the resources (inputs) from the environment and convert them into usable products (output) and provide to society.
• The environment provides various inputs (resources) like finance, machines, raw materials, power and water, labour etc.
• The business enterprise provides outputs such as goods and services to the customers, payment of taxes to the government, interest/dividend to investors and so on.

Example:  With the demand for the latest technology, manufacturers will tap the resources from the environment to manufacture LED TVs and Smart TVs rather than collecting resources for colour or black & white TVs.

(B) It Helps in Coping With Rapid Changes

• The business environment is changing very rapidly and the industry is getting affected by changing market conditions.
• Turbulent market environment, less brand loyalty, divisions of markets, changes in fashion, more demanding customers, and global competition are some examples of changing the business environment.

Example:  Jack Ma started Alibaba as he could see huge potential in E-Commerce.

The above mentioned is the concept, that is elucidated in detail about the Business Environment for the Class 12 Commerce students. To know more, stay tuned to BYJU’S.

Leave a Comment Cancel reply

Your Mobile number and Email id will not be published. Required fields are marked *

Request OTP on Voice Call

Post My Comment

it is very useful thanks!

It is best for study

It is best for study.

Register with BYJU'S & Download Free PDFs

Register with byju's & watch live videos.

CAPS Business Studies 11

Caps bs 11 term 1 week 3 adapting to challenges of the business environments, topic – adapting to challenges of the business environments.

How a business constantly needs to adapt to the challenges of the micro (internal), market and macro business environments • Ways in which a business can adapt to challenges of the macro environment, and whether this is to the benefit of the business — Information management, strategic responses, mergers, takeovers, acquisitions and alliances, organisation design and flexibility, direct influence of the environment and social responsibility — Lobbying, networking and power relations o Lobbying e.g. hedging against inflation, bargaining sessions between management and unions, influencing supervisory body/regulators, etc. o Networking, e.g. finding new customers etc. o Power relationships e.g. strategic alliance agreements, persuasion of large investors, company representatives’ influence, etc.

ESSAY SAUCE

FOR STUDENTS : ALL THE INGREDIENTS OF A GOOD ESSAY

Essay: Business environment

Essay details and download:.

• Subject area(s): Business essays
• Reading time: 11 minutes
• Price: Free download
• Published: 22 August 2017*
• Last Modified: 2 August 2024
• File format: Text
• Words: 3,245 (approx)
• Number of pages: 13 (approx)

Text preview of this essay:

This page of the essay has 3,245 words.

POLITICAL ENVIRONMENT

Political factors, in the context of the external environment in which a business functions, are a type of external constraint acting upon a business. They’re related to actions of governments and political conditions in the location where the business conducts business or seeks to conduct business. Government actions and political realities influence the success of the business.

Political environment can also affect government policies at local to federal level. Companies should be ready to deal with the local and international outcomes of politics. Changes in the government policy make up the political factors. The change can be economic, legal or social. It could also be a mix of these factors.

Change in the political factors can affect business strategy. The stability of a political system can very well decide about the appeal of a particular local market because Government is a major consumer of goods and services. Government is liable for protecting the public interest and thus it views business organizations as a vehicle for social reform. Government pass legislation, which impacts the relationship between the firm and its customers, suppliers and other companies.

Below, is a list of political factors affecting business:

§ Bureaucracy

§ Corruption level

§ Freedom of the press

§ Trade control

§ Education Law

§ Anti-trust law

§ Employment law

§ Discrimination law

§ Data protection law

§ Environmental Law

§ Health and safety law

§ Competition regulation

§ Regulation and deregulation

§ Tax policy (tax rates and incentives)

§ Government stability and related changes

§ Government involvement in trade unions and agreements

§ Import restrictions on quality and quantity of product

§ Intellectual property law (Copyright, patents)

§ Consumer protection and e-commerce

§ Laws that regulate environment pollution

ECONOMIC ENVIRONMENT

A business has many decisions to make – what to produce, how to produce, for whom to produce. However, these decisions will be affected greatly by the economy in which the firm operates. Even if the economy is quite stable, the business always has to monitor its own operations, those of the opposition and any changes to customers’ habits or even lifestyles. Where there is instability in the economy the decisions of the business will be even harder and difficult and even more important.

Economic environment refers to the aggregate of the nature of economic system of the country, the structural anatomy of the economy to economic policies of the government the organisation of the capital market, the nature of factor endowment, business cycles, the socio-economic infrastructure etc.

When the economy becomes unstable, that’s when problems will occur, when services and goods start to become in short supply or the price of the goods and services go so high that people are not able to afford them anymore. A rise in unemployment could mean that the production and supply of goods decrease and the amount of money to purchase the available goods decreases as well – due to wages being reduced. As there are less people in employment, the taxes being paid to the government are less (they need the taxes to fund services such as housing, health e.g. and education, etc.).

Economic factors that affect the business environments are as under:

· Government economic policies

· Rate of interest set by the central bank of any country

· Per capita Income which has a huge impact on business environment by changing their consumption behaviour

· Privatization policy by the government

· Instability in the economy due to bad political conditions in the county affects the business environment

· Customs duty structure

· Airline air freight charges

· Foreign investment in the country

SOCIAL ENVIRONMENT

Social environment of business means all factors around the business which affect it socially. It refers to the nature of social organisation and development of social institutions like caste, religion, customs, and socio-economic factors like class structure, social mobility, women employment etc.

Society is ever changing. The tastes and continuously changing trends are a part of it. It is highly affected by social media and social networking sites.

A business has some responsibilities towards society as it uses resources from society, so it has to return something to the society. Corporate social responsibility (CSR) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.

Below is a list of social factors which impact customer needs and size of markets:

§ Lifestyles

§ Buying habits

§ Education level

§ Emphasis on safety

§ Religion and beliefs

§ Health consciousness

§ Sex distribution

§ Average disposable income level

§ Social classes

§ Family size and structure

§ Minorities

§ Attitudes toward saving and investing

§ Attitudes toward green or ecological products

§ Attitudes toward for renewable energy

§ Population growth rate

§ Immigration and emigration rates

§ Age distribution and life expectancy rates

§ Attitudes toward imported products and services

§ Attitudes toward work, career, leisure and retirement

§ Attitudes toward customer service and product quality

TECHNOLOGICAL ENVIRONMENT

Technology has revolutionized the world. It is changing rapidly with newer innovations. It has influenced operations of the business over the world. Its influence is felt in practically all aspects on the day-to-day operations of businesses, both large and small.

Technology has also changed the face and the pace of how business functions. Business processes have been modified and organizations are now working much more efficiently than ever. At the same time, technology has opened a new way of communication, allowing businesses to communicate and collaborate beyond borders.

The growing use of IT and its tools, smartphones and various smart devices have taken the business to a next level. Today, it’s seen that those organizations are higher ranked are usually more advanced in technology. Technology has, in fact, made organizations to go digital.

The rapid development of technology requires quick reaction by businesses in order to survive in an emerging competitive environment and keep up with new trends and innovative services which other competitors might be offering.

These technological factors can include both products and processes and can present opportunities and threats but it is vital for competitive advantage and is a successful driver in globalisation. Products can be marketed in new ways and processes present immense Value to the business.

LEGAL ENVIRONMENT

The legal environment refers to the principles, rules and regulations established by the government and applicable to people. These regulations come through various legislations. The government has passed and enacted various Acts. Now due to globalization of economy, it became necessary to make changes in these Acts.

The legal environment plays a very crucial role in determining the success of a business. The government imposes taxes among other regulatory measures to promote economic growth and to cushion consumers from exploitation. Therefore, before establishing or when running a business, it is imperative to understand the role of regional tax measures and regulatory measures to determine how they affect business.

An understanding of the legal environment of business is relevant—indeed, essential—to functioning well within disciplines like accounting, finance, management and marketing. Additionally, a solid understanding of the legal environment can help avoid liability or at least minimize risk. In business, it is not enough to comport one and one’s business ethically. Business must also ensure that it understands the legal environment in which it is working. Therefore, it is important for the organization, for its employer, and for all the other people who may be relying on business expertise—such as employees and their family—to understand the legal environment. Such an understanding will help to avoid or lessen the likelihood of liability exposure, enabling organization to manage business affairs successfully, unhampered by unmanaged legal liability risks.

Most of the countries have consumer protection laws aimed at making sure that business act fairly towards their consumers. A few examples are

· Weight and Measures Act, 1976: This Act was enacted to establish standards of weights and measures, to regulate inter-State trade or commerce in weights, measures and other goods which are sold or distributed by weight, measure or number, to provide for matters connected therewith or incidental thereto. Goods sold should not be underweight. Standard weighting equipments should be used to measure goods.

· Trade Description Act, 1968: It means deliberately giving misleading impression about the product is illegal. The Act makes it a criminal offence to apply a false trade description to goods. The Act covers descriptions given both verbally and in writing. It covers any factual statement about the physical qualities of the product, e.g. size, capacity, performance, place of manufacture and previous history.

· Consumer Credit Act, 1974: According to this Act, consumers should be given a copy of the credit agreement and should be aware of the interest rates, length of loan while taking a loan. The Act also regulates what may be taken as security, limits the ways in which credit organisations can advertise and gives the county courts the ability to intercede in the case of unfair or unjust credit agreements. It also gives additional rights to the debtor, including certain limited rights to cancel concluded agreements.

· Sale of Goods Act, 1979: According to the Act, it is illegal to sell products with serious flaws or problems and goods sold should conform to the description provided. The Act applied to contracts where property in ‘goods’ were transferred or agreed to be transferred for a monetary consideration, in other words: where property (ownership) in personal chattels was sold.

NATURAL ENVIRONMENT

Business is interconnected with nature in two ways. Firstly, business gets its raw materials from the nature, whose quality and availability can affect the business to a large extent. Secondly, natural calamities which are uncontrollable and uncertain, can bring disaster for the business.

The analysis of the mega environment must also cover aspects like extent of endowment of natural resources in the country, ecology, climate, etc. These constitute the natural environment.

In today’s nature disturbances, upcoming of global warming and other hazardous issues to the environment, companies around the world are integrating environmental interest with business and are becoming proactive in finding ways to reduce environmental impact. Additionally, consumers are favouring businesses that contribute to protecting natural resources. These interconnections are explicit domains where business is heavily implicated.

There are no hard and fast rules with regard to location of plant. In practice, a large number of factors have to be considered while choosing a suitable location. Moreover, these factors differ from situation to situation and from time to time.

ENVIRONMENT SCANNING TECHNIQUES

It is essential for a company to understand the environment in which it is working, in order to stand and survive in the market. The understanding of environment can be meant as environmental scanning. This environmental scanning is used by the companies to judge its position among its competitors. It helps to identify positive points and negative points, that is, strengths and weaknesses of the company. It provides knowledge about the upcoming opportunities and threats to the company. Thus, environmental scanning gives a proper base to the company for looking its current position and improving for the better. It shows the scope of betterment in future.

There are various techniques of environmental scanning, each having its own usefulness but having some drawbacks at the same time.

SWOT ANALYSIS

SWOT analysis is an acronym of Strengths, Weaknesses, Opportunities, Threats. It is the simplest technique of all because it does not take much time and doing it forces the management to think about the company in a whole new way. SWOT analysis is calculated by a SWOT matrix.

SWOT analysis, as per the name suggests, helps company to identify its strengths and weaknesses, understand and grab the opportunities on the way and taking precautions against threats that may harm it.

Strengths and weaknesses are the internal factors of the company which can be changed from time to time but not without some work. Opportunities and threats are the external factors which cannot be changed nor there is any control over them.

Areas typically considered in the internal factors include financial resources, human resources, physical resources, access to natural resources, and current processes.

Some example of strengths, as an internal factor, that a company can consider are patents, strong brand names, good reputation among customers, cost advantages from proprietary know-how, exclusive access to high grade natural resources, favourable access to distribution networks. Some example of weaknesses, as an internal factor, that a company can consider are lack of patent, weak brand names, poor reputation among customers, high cost structure, lack of access to the best natural resources, lack of access to key distribution channels.

Areas typically considered in the external factors include market trends, economic trends, funding, demographics, relationships with suppliers and partners, and, political, environmental and economic regulations.

Some example of opportunities, as an external factor, includes an unfulfilled customer needs, arrival of new technology, loosening of regulations, removal of international trade barriers. Some example of threats, as an external factor, that a company can face include shifts in consumer tastes away from the firm’s products, emergence o f substitute products, new regulations, international trade barriers.

It is important to study SWOT analysis to determine the status of the company and providing for better future.

ENVIRONMENT THREAT AND OPPORTUNITY PROFILE(ETOP)

ETOP is the acronym of Environment Threat and Opportunity Profile. It is an environmental scanning technique in which environment is divided into different sectors and then impact of each sector is analysed separately. The impact is measured on three measures of scale: positive, negative, neutral, marked as +,-,0 respectively.

ETOP considers the environmental information and determines relative impact of threats and opportunities, for the systematic evaluation of environmental canning. It helps organization to identify opportunities and threats and to consolidate and strengthen organization’s position. It provides the strategists of which sectors have a favourable impact on the organization.

Some of the environmental factors that can be covered while undergoing ETOP analysis includes political factors, legal factors, economic factors, social factors and alike.

The strategic managers must keep focus on following dimensions:

· Issue selection

Focus on issues which have been selected, should not be missed as there is a probability of landing at incorrect practices. Some of the important issues may be related to market share, competitive pricing, customer preferences, technological change, economic policies, competitive trends, etc.

· Accuracy of data

Data should be collected from good sources otherwise the entire process of ETOP may fail. The relevance, importance, manageability, variability, and low cost of data are some of the important factors to be kept in focus.

· Flexibility in operations

Due to uncertainty in business situations, a company will be benefited by devising proactive and flexible strategies in their plans, structures, strategy, etc.

· Impact study

It should be conducted focusing on the various opportunities and threats and the critical issues selected. Efforts must be made to make the assessment more objective.

ORGANIZATIONAL CAPABILITY PROFILE(OCP)

OCP is the acronym of Organizational Capability Profile. It is summarized statement which provides overview of strengths and weaknesses in key result areas likely to affect future operation of the organization. Information in this profile may be presented in qualitative terms or quantitative terms.

The organizational capability profile is drawn in the form of a chart. The strategists are required to systematically assess the various functional areas and subjectively assign values to the different functional capability factors and sub factors along a scale ranging from values of -5 to +5.

After the preparation of OCP, the organisation is in a position to assess its relative strength and weaknesses vis-a-vis its competitors. If there is any gap in area, suitable action may be taken to overcome that. OCP shows the company’s capacity. OCP tells about company’s potential and capability. OCP tells what company can do.

STRATEGIC ADVANTAGE PROFILE(SAP)

SAP is the acronym of Strategic Advantage Profile. It is a summary statement, which provides overview of the advantages and disadvantages in key areas likely to affect future operations of the firm. It is a tool for making a systematic evaluation of the strategic advantage factors, which are significant for the company in its environment. The preparation of such a profile presupposes detailed analysis and diagnosis of the factors in each functional area.

SAP describes the organisation’s competitive position in the market place. It indicates what the organisation has done or is doing in comparison to its competitors to generate competitive advantage for itself. It is external-oriented.

INTERACTION MATRIX – PORTER’S FIVE FORCES OF MODEL

Source: www.tutorialspoint.com

The mix, character and power of the competitive forces operating in a company’s industry varies from one industry to another. The most powerful tool used for systematically diagnosing the basic competitive pressures in a market and assessing strength, weakness, opportunities and threats, is the five-forces model of competition.

Five forces model of competition was developed by Harvard Business School’s Michael E. Porter in 1979. It emphasizes on the five important factors that help determine whether or not a business can be profitable on the basis of the present strategy it is following. The strategy the business follows is what ultimately drives competition and profitability and not on what product or services it is providing.

RIVALRY AMONG EXISTING COMPETITORS

In today’s cut-throat market, competitors are prone to use whatever weapons they have in their business to attain better market positions and earn good profits as well as brand loyalty. The challenge is to adopt a competitive strategy that produces competitive edge over rivals. This strategy consists of offensive and defensive moves, action and reaction patterns, adjust and readjust process. Thus, the current leaders of the market cannot be very sure of their continued leadership in future.

Rivalry gets stronger when competitors are active in making strategies against strategies, moves after moves. Competition increases as the products of rival sellers become more standardized and diminishes as the products of industry rivals become more strongly differentiated. Competitors to stand in market, thus, should have diverse strategies and objectives.

THREAT OF NEW ENTRANTS

Val Renault, Section 14. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats, Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main

Tim Berry, What is a SWOT Analysis?, Retrieved from http://articles.bplans.com/how-to-perform-swot-analysis/

SWOT Analysis, Retrieved from http://shodhganga.inflibnet.ac.in/bitstream/10603/59535/7/07_chapter%201.pdf

Smriti Chand, Environmental Threat and Opportunity Profile, Retrieved from http://www.yourarticlelibrary.com/organization/environmental-threat-and-opportunity-profile-%D0%B5%D1%82%D0%BE%D1%80/23557/

ETOP Analysis, Retrieved from http://www.bbamantra.com/etop-environmental-threat-and-opportunity-profile/

BMS Team, Organizational Capability Profile, Retrieved from http://www.bms.co.in/organizational-capability-profile-ocp/

Strategic Management – Environmental Scanning Techniques – Notes – Business Management, Study notes for Business Administration. Banaras Hindu University,Business Administration, Retrieved from http://www.docsity.com/en/strategic-management-environmental-scanning-techniques-notes-business-management/52577/

Jim Makos, Political factors affecting business, Retrieved from http://pestleanalysis.com/political-factors-affecting-business/

Alex Pirouz, The Impact of Technology in Business, December/January 2012 issue of Business Review Australia magazine

Andrew J. Hoffman and Susse Georg, INTRODUCTION TO BUSINESS AND THE NATURAL ENVIRONMENT A history of research on business and the natural environment: conversations from the field, Retrieved from http://webuser.bus.umich.edu/ajhoff/pub_academic/2013%20Routledge%20Intro-2.pdf

About this essay:

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, Business environment . Available from:<https://www.essaysauce.com/business-essays/business-environment/> [Accessed 17-09-24].

These Business essays have been submitted to us by students in order to help you with your studies.

* This essay may have been previously published on EssaySauce.com and/or Essay.uk.com at an earlier date than indicated.

Essay Categories:

• Accounting essays
• Architecture essays
• Business essays
• Computer science essays
• Criminology essays
• Economics essays
• Education essays
• Engineering essays
• English language essays
• Environmental studies essays
• Essay examples
• Finance essays
• Geography essays
• Health essays
• History essays
• Hospitality and tourism essays
• Human rights essays
• Information technology essays
• International relations
• Leadership essays
• Linguistics essays
• Literature essays
• Management essays
• Marketing essays
• Mathematics essays
• Media essays
• Medicine essays
• Military essays
• Miscellaneous essays
• Music Essays
• Nursing essays
• Philosophy essays
• Photography and arts essays
• Politics essays
• Project management essays
• Psychology essays
• Religious studies and theology essays
• Sample essays
• Science essays
• Social work essays
• Sociology essays
• Sports essays
• Types of essay
• Uncategorised
• Zoology essays