1. Business Studies
Grade 11

2. Business Environments and Business Operations
Term 1
Business Environments and Business Operations

3. INFLUENCES ON BUSINESS ENVIRONMENTS

4. Influences on business environments
The business environment is not isolated.
The business environment exists within other environments and is influenced by these environments.
The degree of control businesses have over control factors differ from one environment to the next.

5. 1.1 Control of the micro environment
The control factors in the micro environment are
under control of an enterprise’s management.
Elements and Descriptions:
Vision, Mission, strategy and objectives
Written statements of what a business enterprise
hopes to achieve.

6. 1.1 Control of the micro environment
Vision, Mission, strategy and objectives
Control:
Management determines a business enterprise’s vision, mission, strategy and objectives.
Therefore management has full control over a business enterprise’s vision, mission, strategy and objectives.

7. Organisational resources
The means or resources available to a business
enterprise, including;
Human resources
Capital resources
Natural resources
Entrepreneurial resources

8. Organisational resources
Control:
Management decides which resources are required to run a business.
Therefore, management has full control over organizational resources.

9. Management
The people responsible for running a business.
Control:
Managers and leaders are appointed by a business.
A business chooses the people it employs.
Business functions
8 Business functions can be identified.
These functions refer to the different departments in a
business enterprises

10. Business functions
Control:
Management determines how each department is managed, what the functions of each department are and what each department is responsible for.
The various business functions are therefore under management’s control.

11. Organisational structure
Refers to the way employees are organised in a
business enterprises
Control:
Management decides how the employees of an enterprise are organized.
Management can either choose a hierarchical management structure or a flatter structure.
Organisational culture
Refers to “the way things are done” in a business
enterprise.
Working environment
Refers to the atmosphere in which employees work.

12. Organisational culture and Working environment
Control:
The business enterprise’s culture and atmosphere are created by management.
Management has full control over a business’ organizational culture and structure.

13. 1.2 Control in the market environment
The control factors from the market environment give rise to opportunities and threats
The business enterprise has no control over these factors.
The business enterprise is however able to influence some of the control factors from the market environment.

14. Elements and Descriptions:
Market (Consumers / customers)
Buyers of the goods and services a business enterprise
offers.
Control:
A business enterprise cannot force consumers to buy its goods or services
Businesses can however influence consumers to buy goods and services through advertising, sales promotions and fair prices.
Competitors
Other businesses who offer consumers the same or similar
goods and services.
Business enterprises cannot control their competitors’ behavior
They can however influence its competitors’ behavior by offering excellent services and low prices.

15. Suppliers
Business enterprises and people who provide resources to
other enterprises to produce good s or services.
Control:
Business enterprises depend on prompt delivery of good quality goods by suppliers.
Sometimes, suppliers experience problems which result in goods being late.
It also happens that suppliers deliver sub-standard goods.
Business enterprises cannot control problems experienced by suppliers.
However, if a business is not satisfied with a supplier, it can change suppliers.

16. Intermediaries
Also known as agents who help promote, sell and
distribute products to consumers.
Control:
Business enterprises acquire the services of intermediaries to sell goods and services on their behalf.
They usually work for commission.
This means that the more products they sell, the more money they earn.
Businesses cannot control the actions of intermediaries.
Businesses can influence intermediaries to a great extent because intermediaries depend on selling a business’ goods and service to earn commission.
Other organisations (civil society)
Civil society consists of organisations at local,
provincial and national level. Most civil society
organisations focus on welfare.
Civil society includes: CBOs and NGOs, Regulators,
Strategic allies, Unions

17. Other organisations (civil society)
Control:
Business enterprises form part of civil society.
Business enterprises can play an active role in civil society by getting involved in the fight against corruption, poverty and unemployment.
Regulators make rules for enterprises in different industries.
Businesses can however influence regulators by getting involved in the law-making process.
Business enterprises cannot control the decisions or actions taken by its allies because strategic allies are separate business and are managed independently.
Strategic allies word together so they do influence one another in order to obtain the maximum benefit from their relationship.
Businesses cannot control the actions or decisions of trade unions, however, businesses can work together with trade unions to establish good working conditions and fair workplace policies.

18. Opportunities and threats
Opportunities are trends or events than can be utilised
to the advantage of a business enterprise.
Threats are trends or events or events that affect a
business enterprise negatively.
Control:
Businesses cannot control opportunities or threats which may appear suddenly in the business environment.
But, a business must position itself in a way that it can react to opportunities and threats

19. 1.3 Control in the macro-environment
Management cannot influence or control the control factors from the macro environment.
Elements and Description:
Social / Cultural / demographic
People and factors that influence consumer
behaviour.
Includes the personal values, perceptions, behavior
and preferences that influence consumers’ buying
decisions.

20. Social / Cultural / demographic
Control:
Challenges relating to this environment include the HIV/Aids pandemic, skills shortages and crime.
These problems influence both business operations and consumer spending.
Business enterprises cannot exercise control over these problems.

21. Institutional environment
Refers to institutions that provide a series of services to
business enterprises, for example the SABS, JSE and
the CSIR (Council for Scientific and Industrial
Research).
Control:
Business enterprises must meet the standards set by the institutions they deal with.
For example, the SABS will not approve a product if the product does not meet the standard set by the SABS.

22. Legal and political environment
The laws and legislation that businesses have to
comply with. Also refers to the political situation in a
country.
Control:
Business enterprises must comply with legislation.
New laws can influence the way business enterprises operate.
If business enterprises do not obey laws, they are fined or punished.
Business enterprises cannot control new legislation.
Politics influence business enterprises because investors do not invest their money in businesses operating in countries which are politically unstable.
Business enterprises cannot control the election of the government, or the decisions made by them.

23. Economic environment
Refers to global and local economic forces that
influence business enterprises, including exchange
rates, interest rates and labour action.
Control:
The economic environment has a big influence on both business operations and consumer spending because it includes control factors such as inflation, interest rates and exchange rates.
Business enterprises cannot control any of these factors.

24. Global / international environment
Global and international forces that influence business
operations, for example international competition.
Control:
Local business enterprises operate in the global environment.
In order for local business enterprises to compete internationally, the goods and services of local businesses must meet international standards.
Local business enterprises are influenced by the global environment and do not have any control over factors influencing the global market.

25. Physical / natural environment
Refers to forces that are present in the natural
environment, including natural resources, infrastructure,
pollution and finding alternative sources of generation
energy.
Control:
The world is facing major crises regarding the availability of natural resources such as oil, coal and food.
Business enterprises should get involved in finding solutions to these problems but cannot control the availability of natural resources.

26. Technological environment
New technology creates new business opportunities
and influences the way business in conducted. The
internet has, for example, enable businesses to market
their products globally.
Control:
New technology does not only influence business enterprises that sell technological products, technology also influences the way in which business operations are conducted.
Upgrading to new technology is usually very expensive and often employees need to be trained to use these new technology.
Access to new technology does however benefit enterprises in the long run.
Business enterprises do not have control over the development of new technology that have an impact on business operationd

27. 1.4 Getting involved in the macro-environment
Management cannot influence or control any of the challenges that occur in the macro-environment.
Management must still react to these challenges before they develop into dangerous threats.
One way in which business enterprises can deal with the challenging macro-environment, is by getting involved in the macro-environment.

28. Business enterprises can get involved in the macro- environment in the following ways:
Investing money to train employees to keep up to date with the latest technological inventions.
Investing money in research to develop new technologies.
Fighting inflation by offering products at reasonable prices.
Applying for government tenders. If a tender is granted to an enterprise, it creates the opportunity to interact and influence government.
Making use of lobbying to influence parliamentary decision making.
Getting involved in the fight against HIV / Aids.

29. Getting involved in the fight against HIV / Aids, by:
providing counselling to HIV/Aids positive employees and their families.
providing HIV/Aids education to all employees.
providing anti-retroviral medicine to HIV/Aids positive employees.

30. Advantages of getting involved in the macro environoment:
Potential employees will recognise the business enterprise as a good employer.
Consumers will recognise the enterprise as an entity that promotes the interests of consumers.
Involvement in the macro-environment gives an enterprise a platform form which to influence the business environment.

31. Involvement in the macro-environment will help the business keep informed about challenges and developments in the macro-environment.
A business’s involvement in the macro-environment can help a business anticipate challenges and deal with these challenges quickly.

32. Activities