Internal Operating Macro

 For any business to succeed, it must be able to respond quickly to changes or pressures that come from it internal, operating and macro environments.

 Stakeholder – An individual or group that has a direct or vested interest in the activities of an organisation.  Best Practice – A method of comparing performance of one organisation against the leading firms and taking on board their practices.

 Internal Stakeholders: › Employees › Managers › Directors › Shareholders  Operating Stakeholders › Customers › Competitor › Suppliers › Trade Unions › Lobby/Pressure Groups › Financial Institutions › Regulatory Bodies

 Macro Forces: › Economic › Government › Legal › Technological Developmental › Globalisation › Political › Social and Cultural › Environmental

 Complete table outlining the following internal stakeholders: › Shareholders/Owners › Directors › Managers › Employees

 Organisational structure – The way in which an organisations activities are divided, organised and coordinated.  Corporate culture – The shared valued and beliefs of an organisation.

 Activity 2.2 › Page 31

 Customers › Pose potential uncertainty to the profitability and ongoing success to any business. › The philosophies, ‘the customer is always right’ and ‘the customer come first’ are important for organisations to adopt. › Customers are now more educated in their consumer choices.

› Customers may look at the following before making a decision to purchase a product or service:  Whether the product is Australian made.  Whether the product has received the Heart Foundation tick of approval.  Whether the organisation acts ethically and socially responsible.

 Competitors › A competitor is a business rival in the same market for products or services offered by an organisation. › It is crucial that all organisations keep up with their competitors or else they will fall behind, losing customers and market share. › One way organisations endeavour to gain a competitive edge is by offering inducements and incentive programs.

 Complete activity 2.3 › Pages 33 & 34 › Questions 1 – 5  Complete activity 2.4 › Pages 35 › Questions 1 & 2

 Suppliers › Supply the inputs (resources) required for the production process. › A good relationship needs to be developed with suppliers to ensure that resources are being delivered efficiently.  Trade Unions › An organisation formed to represent and protect the rights of workers in a particular industry.

 Activity 2.5 › Page 37 › Questions 1 – 4

 Lobby / Pressure Groups › Can attempt to influence the actions of organisations.  Environmental issues  Safe work conditions › Examples:  The Cancer Council has been instrumental in ensuring workplaces implement non-smoking and SunSmart policies.  International Fair Trade Association Page 37

› If the community does not like the way a business is operating, it can cause it to lose brand value. › Example:  Nike sales dropped dramatically when it was accused of using child labour in its factories.  Financial Institutions › To ensure they are not incurring excessive costs, businesses need to ensure they are keeping up with changing interest rates, loan arrangements and electronic banking.

 Regulatory Bodies › All three levels of government place pressure on businesses in the conduct of their operations. › Businesses need to ensure that they respond to bodies such as the Australian Taxation Office and the Australian Competition and Consumer Commission (ACCC). › Standards have also been established with which businesses must comply.

› Examples:  The Environmental Management Standard (ISO )  International Organisation for Standardisation (ISO) – International Organisation for Standardisation (ISO) certification

 Fair Trade – Contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalised producers and workers.  International Organisation for Standardisation (ISO) certificate – Quality assurance standard established internationally (9000 series).

 Economies of Scale - The ability to make cost savings through volume or by having significant bargaining power.

 Economic Forces › Various stages of the economic cycle can largely affect some businesses. › The effects vary depending on the type of business.  Activity 2.7  Pages 39 & 40  Questions 1 – 3

 Legal Forces › It is imperative that organisations comply with all legislation in the operation of their businesses. › Examples:  Workplace relations  Equal employment opportunity  Anti-discrimination

 Technological Development Forces › Advances in technology may force an organisation to change. › Technological developments have assisted organisations lower costs, improve quality and deliver goods and services to customers more quickly.

 Globalisation Forces › Rapid improvements to communication and other forms of technology have broken down trade barriers between countries. › The concept of global markets means that organisations must now compete internationally. › This would entail making changes to the way business is conducted, making better use of the internet, e-commerce and economies of scale.

 Political Forces › Political forces can affect the general stability of the country in which an organisation operates. › When deciding whether to operate or expand a business overseas, the political stability of that country must be considered.

 Social and Cultural Forces › Organisations must be aware or and respond to the changing conditions which affect society. › Examples:  Increase in female work participation rates  Aging workforce  Levels of unemployment  Expectations to be more socially responsible

 Environmental Forces › Organisations are under increasing pressure to take care of our environment.  Government Forces › Federal and state governments can have a large impact on the operations of organisations.

› The Victorian government affects businesses through:  Imposition of indirect taxes  Requirements to gain ISO 9000 series certification  Incentives and assistance to relocate › Outline the following:  Monetary policy  Fiscal policy  Microeconomic reform Page 40