Business Environment (Byte Size)
All organisations, whatever their size and whether in the public or private sector, operate in a constantly changing environment. As it changes, this business environment offers organisations the opportunities they need to develop and grow. It may, for example, offer new markets to exploit, new technology to develop new products and new processes, ideas on how to manage operations better, new sources of raw materials or new ventures with new partners. The changes also, however, may present threats to organisations. These may be new competitors, changing fashions and tastes, new technology making existing products and processes obsolete, changing terms of trade making imported inputs expensive, and government policies changing the competitive or operating environment. The legal implications of what organisations do are extensive and varied; effectively, the legal infrastructure constrains their activities.
All successful organisations continually monitor the environment in which they operate, both formally and informally, in order at least to react to the changes taking place through reactive management. At best, organisations seek to anticipate and take advantage of changes through proactive management. Any actions need to match an organisation's basic philosophy and its resources and abilities. We look at how an organisation does this, but the first step is recognising what is happening in the environment and evaluating its importance.
After participating in this course, you should be able to:
- monitor changes to the business environment and appreciate their significance for an organisation
- identify potential environmental opportunities and threats for particular organisations
- describe the components of a PEST or STEEP analysis
- detail the structure of the social and demographic environment
- detail the structure of the economic environment
- identify relevant factors in the industrial environment
- assess the implications of government policies for an organisation
- identify relevant factors in the political environment, including the law, society and international trade
- identify significant technological developments driving organisational and competitive change.