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Business Environment

Components of Business
Business does not operated in vacuum Business is a societal subsystem that interacts with society in its every sphere of operation. Business also contributes an influence society. Therefore it has reciprocal impact on each other

Business Environment
External Environment: i. General Environment is everything outside an organizations boundaries. ii. Task Environment is composed of specific groups and institutions the firm and its operation. Internal Environment is composed of specific and institutions/ organizations that affect the firm and its affairs.

General Environment:
Economic Dimension Technological dimension refers to the methods Socio-cultural dimension Political-legal dimension International dimension

Task Environment Components of task environment


Competitors: seeking the same resources as the organization Customer: Who acquire an organizations product on resource Suppliers: That provide resource for the organization Regulators : Agencies and interested group Strategic Partners (allies): Joint venture partnerships

McDonalds an example of internal environment..


Components of internal environment:Interaction of Environment and organization........
Environments Change & Complexity Competitive Forces

Turbulence

Organization

Environment

Interface

Information Management

Strategic Response

Mergers, Takeover, Acquisitions, Alliance

Organization, Design and flexibility

Direct Influence

Society is the direct partner of business

Business Ethics and CSR Ethics in Business Most confusing matter cannot define Study of learning what is right or what is wrong Guide the human behavior Concepts of Business ethics Business ethics involves applying general ethical principles and standards to business behavior or activities Ethical principles in business are not different from ethical principles in general Business actions are judged by general ethical standards of society Effects of Business decisions Individual level Organizational level Socio level Factors Influencing Managerial Ethics

Individual
Values Work background Family Status Personality

Organizational
Top level Management and philosophy The firms Reward system Job dimension

Environmental
Competition Economic condition Social/ cultural Institution

Common Unethical Decisions


Discrimination in payment Computer salesperson sells more expensive computer than customer needs Manager hires friend who is not the most qualified Manager tries to avoid govt. revenues Price discrimination