1. The Business Environment

2. Business organisations do not operate in isolation
Business organisations do not operate in isolation. The modern view is that they operate as open systems interacting with a range of forces.
The term environments is used to describe the context in which business is undertaken.

3. The Business Environment
Internal Environment
External Environment

4. Internal Environment Culture, Values and Ethics of the business
Group Activity:
Read the case studies on p. 37 & discuss
Q. Does ethics play a role in the internal business environment?

5. Corporate Culture and Values
All organisations have a culture (whether they are aware of it or not)
Corporate culture is a term used to describe the shared values and beliefs of the people in the organisation
It is their idea of what is important and how things work in their particular
organisation

6. Continued…
Corporate culture is especially significant in large and complex organisations with many separate divisions
The corporate culture connects the organisation’s objectives to the values of each member and each section of the organisation

7. Indicators of ‘real’ corporate culture
Management style in the organisation
Attitudes of management to staff and staff attitude to management
Relations among staff
Customer relations
Dress code and behaviour
code within the organisation
CORPORATE CULTURE WILL VARY BETWEEN DIFFERENT TYPES OF BUSINESSES

8. Continued…
Corporate culture can be difficult to change because it is largely based on peoples’ values and beliefs
Corporate culture can also be moulded to emphasis objectives and strategies
Customer service
Environmental awareness

9. Activities to test your knowledge
Questions 1 to 9 p. 39
Complete question 12 on p. 41 & 42
You will need to read the extract ‘Winning over your shareholders’

10. Business Ethics http://www.youtube.com/watch?v=sDPsSyaZNIw
Business ethics and socially responsible management are significant business issues
Examples of ethical and socially responsible management:
Small businesses providing support to local sporting clubs
Large companies that develop policies to guide employee behaviour
Businesses that give increased protection to the environment

11. Business Ethics – page 42-43
What is social responsibility?
Why would a business need to be socially responsible?
Why is there conflict between a shareholder and a stakeholder?
What is a code of ethics?
Why should a business have a code of ethics?

12. External Environment
Four main external factors that affect businesses:
Customers: Customer satisfaction is central to business success – expect high quality for competitive price (excellent customer service, after sales service)
Suppliers: Organisations need reliable suppliers and financial sources to fund activities and growth
Competitors: Always potential for new competitors to emerge – increase in globalization is increasing competition in many markets
Special interest groups: These groups impact on the activities of an organisation (trade unions, church groups - anyone lobbying to bring social issues to the attention of the public and corporate sector

13. EXTERNAL environment

14. Peer teaching activity
In pairs, choose a factor from the pie chart.
Define what your groups role in the external business environment is
Brainstorm the impact your group has on a business
Create a power point to teach the class
Take notes from your peers power points

15. Writing Activity (PRACTISE FOR EXAM)
Individually write a 150 word response to the following:
Select any two of the factors from the external environment and explain their relationship to large organisations. Provide examples for your response