BusinessBusiness EnvironmentEnvironment

Lecture Notes for Business and Lecture Notes for Business and Management Management

Dr. Fahmy Radhi, MBADr. Fahmy Radhi, MBA

Business EnvironmentBusiness Environment

Business Environment is Business Environment is individual and organization individual and organization that exist outside the that exist outside the business and have business and have influence direct and influence direct and indirect to the business. indirect to the business.

Business Environment ElementsBusiness Environment Elements

SupplierSupplier – supply materials, machine, – supply materials, machine, service and information used to service and information used to produce its products and servicesproduce its products and services

Financial institutionFinancial institution – the capital – the capital resources that available for the firmresources that available for the firm

CustomersCustomers – targets for the firm to – targets for the firm to market its products and servicesmarket its products and services

CompetitorCompetitor - all of the entities that - all of the entities that compete with the firm in marketplacecompete with the firm in marketplace

Business Environment ElementsBusiness Environment Elements

Stockholders/owners Stockholders/owners – persons who are – persons who are invest money in the firm and represent the invest money in the firm and represent the high level of managementhigh level of management

labor unionlabor union – organization of skilled and – organization of skilled and unskilled workersunskilled workers

The communityThe community – people in the area – people in the area where the firm perform its operationwhere the firm perform its operation

Government Government – federal, state and local – federal, state and local level government that provides not only level government that provides not only constraints in the form of law, regulation, constraints in the form of law, regulation, and taxes taking but also provides and taxes taking but also provides assistance in form of purchases, assistance in form of purchases, information and funds.information and funds.

Environmental managementEnvironmental management

Environmental managementEnvironmental management – how to manage the – how to manage the environmental elements by executing strategies environmental elements by executing strategies that alter uncertainly environment to a certain that alter uncertainly environment to a certain extentextent

Environmental Management Strategy:Environmental Management Strategy: Independent StrategyIndependent Strategy – carry out its own – carry out its own

resources to make better its environmentresources to make better its environment Cooperative StrategyCooperative Strategy – involve working with – involve working with

other environmental element for the same purposeother environmental element for the same purpose Strategic Maneuvering Strategic Maneuvering – try to alter its – try to alter its

environmentenvironment

Environmental managementEnvironmental management

Basic Strategy

Specific Strategy Example

Independent Strategy

Competitive aggression

Legal ActionPolitical Action

Product differentiationAggressive Pricing and

AdvertisingSuits brought against

competitorsLobbying

Cooperative Strategy

Co-optationCoalition

Consumer representativesIndustry Association

Strategic Maneuvering

Domain SelectionDiversificationMerger and

Acquisition

Entry in specific marketWide product mixMerger with competitors

Social ResponsibilitySocial Responsibility

Social Responsibility – Social Responsibility – the the awareness that business awareness that business activities have an impact on activities have an impact on its environment so it should its environment so it should try to balance its try to balance its commitment in its commitment in its environmentenvironment

Social ResponsibilitySocial Responsibility

Responsibility to consumers, such as: Responsibility to consumers, such as: the right to safety, the right to safety, the right to be informedthe right to be informed the right to choose, the right to choose, the right to be heardthe right to be heard

Responsibility to employees, such as: Responsibility to employees, such as: The right to safety The right to safety The right to equality in the workplace,The right to equality in the workplace, The right to improve its capabilityThe right to improve its capability

Social ResponsibilitySocial Responsibility

Responsibility to investors, such as: Responsibility to investors, such as: The right to be proper management of funds The right to be proper management of funds The right to access informationThe right to access information

Responsibility to the environment, such asResponsibility to the environment, such as Preventing to water and air pollution, Preventing to water and air pollution, Safe to the land and ForestSafe to the land and Forest natural resourcesnatural resources

Social responsibility, such as Social responsibility, such as Community support Community support Social auditSocial audit

Business ChallengesBusiness Challenges

Challenges in the Economic Challenges in the Economic Environment Environment

Challenges in the Competitive Challenges in the Competitive EnvironmentEnvironment

Challenges in the Social and Culture Challenges in the Social and Culture EnvironmentEnvironment

Challenges in the Political-Legal Challenges in the Political-Legal EnvironmentEnvironment

Challenges in the Technological Challenges in the Technological EnvironmentEnvironment

Challenges in the Economic Environment Challenges in the Economic Environment

MacroeconomicsMacroeconomics MicroeconomicsMicroeconomics The Forces of Supply and DemandThe Forces of Supply and Demand The Business CycleThe Business Cycle State BudgetState Budget International Trade International Trade

Challenges in the Competitive EnvironmentChallenges in the Competitive Environment

Types of Market StructureTypes of Market Structure Global CompetitionGlobal Competition Dealing with CompetitorsDealing with Competitors

Challenges in the Social and Challenges in the Social and Culture EnvironmentCulture Environment

Changing PopulationChanging Population Cultural ValuesCultural Values Social ResponsibilitySocial Responsibility Consumerism and EcologyConsumerism and Ecology Business EthicsBusiness Ethics

Challenges in the Political-Legal Challenges in the Political-Legal EnvironmentEnvironment

Government RoleGovernment Role Business and PoliticsBusiness and Politics Law enforcementLaw enforcement

Challenges in the Technological Challenges in the Technological EnvironmentEnvironment

Technology DevelopmentTechnology Development Applying TechnologyApplying Technology Technology TransferTechnology Transfer

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