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THE

ORGANIZATION IN
THE ENVIRONMENT
STRUCTURES
Renmar J. Cruz
Princess Elaine B. Galman
Dharbie Mae L. Hilaga
Mary Milet G. Mercado
Veronica L. Nabong
Topics:
A. Demographic Structure – Product and Labor Markets
B. Socio-economic Structure – Distribution of Income and
Wealth
C. Political-legal Structure – Political Parties and Pressure
Groups
D. The Environment’s Influence on Organizational Values,
Attitudes and Behavior
E. Case Study: Impact of the Environment on
Organization’s Behavior
F. The Role of the Government and its Impact on
Organizations
G. The Influence of Political Parties and Pressure Groups
on Government Policies
H. Case Study: A State Policy regulating the Behavior of
Businesses
Organizational Structure
Organizational structure is the pattern of relationships among
positions in the organization and among members of the organization.
DEMOGRAPHIC
STRUCTURE- PRODUCT
AND LABOR MARKETS
Product Market
• A product market is where goods and services produced by businesses
are sold to households.
• It includes a broad group of products that satisfy a general, yet similar,
need.
Labor Market
• A set of social mechanisms though
which labor is bought and sold
• The market in which workers compete
for jobs and employers compete for
workers
• It provides the structure through
which workers and employers interact
in relation to the jobs, working
conditions and pay.
LABOR MARKET TRENDS (2018)
• The Philippines is among Asia’s premier labor markets. The country
houses a large and growing young population with a median age of 23,
a vital demographic advantage that can be leveraged with proper
investments in education and infrastructures.
• Currently, about 44.1 million people out of the 70.9 million – aged 15
years and above – are in the labor force. This is approximately 62.2%
labor force participation rate.
• The Philippines Statistics Authority (PSA) data also shows three in
every five, or 61.2% of the total employed persons, were salaried.
Some 27.6% were self-employed, while 3.5% were employers in own
family-operated farms or business, and 7.7% were unpaid family
workers.
Primary Labor Market
VS.
Secondary Labor Market
Demographics Demographic Trends
Studies of a population Describe the historical changes in
based on factors such as demographics in a population over time
age, race, sex, economic
status, lifestyle, level of
education, income level
and employment, among
others
Value of Demographic Trends
Staying up to date on the latest demographic trends enables
organizations to identify existing and emerging markets for their
products and services. By evaluating customers’ and prospects’
demographic trends, business decision-makers can identify changing
needs in the marketplace and adjust to them. Demographic trends can
also help organizations spot future spending trends.
Socio-economic
Structure –
Distribution of Income
and Wealth
Socio-
economic
It refers to person’s position in Categories:
society’s structural and functional
systems. These are the divisions of • Executives
people by income and occupation. • High level managerial
• Mid level managerial
• Skilled Laborers
• Semi skilled laborers
• Irregular workers
Distribution of Income and Wealth
Income is a net total of the flow of payments received in a given time
period.

Distribution of Income
• Income distribution reveals what percentage of individuals are at
various wage levels, information that can reveal more about
overall wage patterns than average income can.
Corporate Profits
Three way Distribution:
• Corporate profits taxes
• Undistributed corporate profits
• Dividends
Income can be in the form of:
• Wages
• Rents
• Dividends
• Interest
• Pensions
• Benefit payments
• Income from self employment
• Inheritance
Socioeconomic Dimensions of Income Inequality
Income distribution can be shown according to socioeconomic
characteristics:
• Ethnicity
• Region
• Gender
• Type of Job
The Distribution of Wealth
Distribution of wealth is a comparison of the wealth of
various members of groups in a society.

Wealth is an accumulated store of possessions and


financial claims. It may be given a monetary value if
prices can be determined for each of the possessions.
Wealth consists of those items of economic value that
an individual owns, while income is an inflow of items of
economic value.
Political-legal
Structure – Political
Parties and Pressure
Groups
Political-Legal Environment
This is a non-market factor but it can still greatly impact a
business. The political-legal environment is a combination of a lot of
factors such as the current political party in power, the degree of
politicization of trade and industry, the efficiency of the current
government, government policies, current legal framework, public
attitude towards the economy etc.

These factors will shape the political-legal environment in which


the firm has to operate and compete. There are three main elements of
a political-legal environment.
Government
You must have often heard that an election year is an extremely
important factor for the economy. This is why the type of government
governing at the center and the state has a huge impact on the
businesses. The government decides all the fiscal policies, monetary
policies, and taxation modules as well.
Legal
A sound legal system is essential to the success of any business. So a
country must have a sound and functioning legal system with laws that
equally protect both consumers and manufacturers. There are various
other matters like company law, royalties’ law, patent law, intellectual
property rights. International laws etc that also have a great influence
on the business of firms.
Political
Political stability in a country is essential for a stable economy and stock
market. Also, various political groups also hold a lot of influence on
businesses and unions. So the political environment of a country is a
major factor in the success of a firm.
The Influence of
Environment on
Organizational Values,
Attitudes and Behavior
Business Environment
It is a marketing term and refers to factors and forces that affect a firm's
ability to build and maintain successful customer relationships. The
business environment has been defined as "the totality of physical and
social factors that are taken directly into consideration in the decision-
making behaviour of individuals in the organization.
Three levels of the environment
• Internal environment – the internal elements of the organization used
to create, communicate and deliver market offerings.
• External Micro environment – small forces external the company that
affect its ability to serve its customers.
• External Macro environment – larger societal forces that affect the
survival of the organization.
INTERNAL ENVIRONMENT
Internal environmental factors are no doubt a great influence on any business. How
businesses use the right employee mix utilizing the most of the right resources says
alot about the internal environmental factors. However, we can take the following
factors as internal environmental factors:

Stakeholder Organization
Employee Mix
goals Culture
Mission, Vision and
Resources Strategy
Objectives
EXTERNAL MICRO-ENVIRONMENT
Microeconomics involves factors of resources availability and usage that impact
individuals and businesses. As a company operator, understanding the core
microeconomic factors affecting your business helps in planning and preparation, as
well as long-term business strategy development.

Suppliers Employees Competition

General
Customers Investors Public
Supplier
Suppliers can control the success of the business when they hold the
power. The supplier holds the power when they are the only or the
largest supplier of their goods; the buyer is not vital to the supplier’s
business; the supplier’s product is a core part of the buyer’s finished
product and/or business.
Customers
Who the customers are and their reasons for buying the product will
play a large role in how you approach the marketing of your products
and services to them.
Employees
The availability of qualified, motivated employees for your business type is vital to
economic success. If you operate a highly technical business, for instance, you might
have to pay more in salary to attract a limited number of available, specialized
workers.
Investors
Shareholders and investors may help fund your company at start-up or as you look
to grow. Without funds to build and expand, you likely can't operate a business. You
could look to creditors, but you have to repay loans with interest. By taking on
investors, you share the risks of operating and often gain support and expertise. You
do give up some control, though.
Competition
Those who sell same or similar products and services as your organization are your
market competition, and the way they sell needs to be taken into account. How does
their price and product differentiation impact you? How can you leverage this to
reap better results and get ahead of them?
General Public
Your organization has a duty to satisfy the public. Any actions of your company must
be considered from the angle of the general public and how they are affected. The
public have the power to help you reach your goals; just as they can also prevent
you from achieving them.
EXTERNAL MACRO-ENVIRONMENT
Business is affected by different external macro-environment factors which
collectively form the business environment. These include:

Economic Social Legal Political

Technological
Economic Environment
The economic factors of the business environment are all the variables
that impact how the consumer spends their money and the power of
that purchase.

• Interest rate
• Inflation rate
• Growth in spending power
• Rate of people in a pensionable age
• Recession or Boom
• Customer liquidations
• Balances of Sharing
Social Environment
The socio-cultural environment looks at the demographic characteristics of the
current business environment. It looks at the values, customs and norms of the
environment of which a company or organization is placed.
• values, beliefs
• language
• religion
• education
• literacy
• time orientation
• lifestyle
Legal Environment
The legal environment includes the laws and regulations of a state. The
laws and regulations will influence the way in which an organization will
market or sell the product and services.

• Employment law
• Health and safety
• Product safety
• Advertising regulations
• Product labeling
• Labour laws etc.
Political Environment
The entire political environment includes looking at government policies
and the risk and instability of current political factors.

• Taxation Policy
• Trade regulations
• Governmental stability
• Unemployment Policy, etc.
• Political stability
Technological Environment
The technological environment is becoming a lot more important in the
modern day business environment. New technology produces new
opportunities for companies and organizations to create, sell and
promote a product.

• Internet
• E-commerce
• Social Media
• Electronic Media
• Research and Development
• Rate of technological change
• Culture is the environment that
surrounds you at work all of the time.
• Culture is a powerful element that
shapes your work enjoyment, your work
relationships, and your work processes.
• But, culture is something that you
cannot actually see, except through its
physical manifestations in your
workplace.
Central Concepts of Culture
1. Culture=Behavior
2. Culture is learned.
3. People shape the culture
4. Culture is negotiated
5. Culture is difficult to change
More Characteristics of Culture
• Your work culture is often interpreted differently by diverse
employees.
• Your culture may be strong or weak.
• Ideally, organizational culture supports a positive, productive,
environment.
The Role of the
Government and its
Impact on Organizations
Role of Government
1. Permission to Form
2. Contract Enforcement
3. Consumer Protection
4. Employee Protection
5. Environmental Protection
6. Taxation
7. Investor Protection
The Effects of Government Policies on
Businesses
1. Market Catalyst
2. Political Stability
3. Government Spending
4. Interest Rates
5. Regulations
The Influence of
Political Parties and
Pressure Groups on
Government Policies
How do political parties influence
policy formulation?
• Try to be elected
• Work alongside pressure groups
• Create policy when in power
• Boycott political engagements
How do pressure groups influence
policy formulation?
Lobbying
• Direct Lobbying
• Indirect Lobbying
Case study: A STATE
POLICY REGULATING
THE BEHAVIOR OF
BUSINESSES
How Does the Law Affect Businesses?
Change in business laws means changes in the way businesses
operate. Taxation policy is one the government policies that affect
businesses directly because taxation is based on the amount of money
earned by all businesses. For example, increase in corporation taxes
which focus on the businesses profits has an effect similar to increase in
costs. VAT (value added tax) is also a tax policy that will affect the
bottom line, although in most governments VAT, is a cost on the
consumer and not the business owner.
• Business laws affect employer to employee relationships and vice-versa. For
instance, it is mandatory for employers to follow government regulations
regarding the way they treat their employees and their hiring mechanism.
• When it comes to international trade, business laws are imposed in regards
to international trade tariffs. Such rules and regulations are strict on the
kind of products going in and out internationally. The international trade
rules and regulations also enforce guidelines on the parties that should take
part in international trade.
• Lastly, governments impose business rules and regulations to ensure that all
businesses are run in line with codes of ethics, good health and safety of the
consumers.
Employment laws
• These laws pertain to minimum wages, benefits, safety and health
compliance
• SSS , OTHER PENSIONS
• CHANGES IN MINIMUM WAGE LAW
• OCCUPATIONAL SAFETY AND HEALTH STANDARDS amended by DOLE
• The objective of this issuance is to protect every workingman against the dangers of
injury, sickness or death through safe and healthful working conditions, thereby
assuring the conservation of valuable manpower resources and the prevention of loss
or damage to lives and properties, consistent with national development goals and
with the State’s commitment for the total development of every worker as a complete
human being.
Tax Reform for Acceleration and
Inclusion (TRAIN) Act
*Excise Tax of petroleum products
Cosmetics Excise Tax
All cosmetic surgeries, aesthetic procedures, and body enhancements
intended to improve, alter, or enhance a person's appearance are
now subject to a tax of 5%.
Tobacco Excise Tax
• The excise tax on cigarettes aims to reduce the amount of smokers and
respiratory and cardiovascular diseases one can catch from the act, as
well as generate additional revenue for health oriented programs and
services.
• From its original excise tax of ₱30 in 2017, the tax
on tobacco increased to ₱32.50 on January 1, 2018, ₱35 on July 1,
2018, will increase to ₱37.50 on January 1, 2019, and ₱40 on January
1, 2020. Afterwards, it will increase annually by 4% from January 1,
2024.
Import of Chinese Workers
A total of 3.12 million Chinese
citizens entered the Philippines from
January 2016 to May 2018,
according to the Bureau of
Immigration. Within these figures is
a number of Chinese workers, which
is still unknown.
Environmental Impact
• Boracay
• Manila Zoo