business environment Flashcards
Chapter 1 of Needle and Burns (2019) explains the broad concept of the Business in Context. This concept involves the environmental, and the organizational and strategic contexts. Explain each of these concepts in more detail and consider how these different elements shape business activities and operations.
environmental context - all aspects of the environment of the organisation within the context of globalisationthe economy - includes the level of activity in the overall economy, economic structure changes, international finance and currency, level of competition, nature of labour markets, existence of multinational firmsthe state - political ideology and scope for political change, govs economic policy, level of gov intervention and legislationtechnology - product and process technology, scale and nature of tech change, use of info technology, use of social media, e-commerce, impact on organisational structure and labour marketorganisational context - internal context of the organisationorganisation goals - includes type of goals set, differ depending on the organisation what it is intending to achieveownership and control - includes separation and control of organisation, public vs privateorganisation structures - influences and link between strategy and organisationbusiness activities context - firms activities in terms of level of innovation undertaken and organisation efficiencylevel of innovation, efficiency of operations, marketing, human resource management and finance and accounting
What is the function of management in an organisation? What attributes or characteristics wouldyou associate with a successful leader?
management - refers to people who manage an organisation, may be differing levels of management in the organisation hierarchygeneral manager - head a complete unit and are responsible for unit performancefunctional managers - responsible for a particular area of workstaff managers - responsible for activities eg financingproject managers - responsible for temporary team for projectmanagement is responsible for a particular activity and try to achieve an outcomedemocratic - takes views of others into account when making decisionsgood at allocating resources - able to identify where additional resources are requiredgoods at identifying problems - identify a problem and find a solution before problem arisesgood interpersonal skills - able to resolve conflict between colleagues, able to relate with employees lower down hierarchy
Explain the importance of team working in an organisation. What characteristics would be associatedwith a successful team in an organisation?
a team is a group of people who are working together to achieve set objectives, may have a constant or rotating leaderaims to achieve a set goal, can be more motivationalformal team - vertical or horizontalinformal team - develop as people work togetherdevelopment stages - forming, storming, norming, performing and adjourningbring together individuals for a common purpose, useful for organisationsproblems eg free-riding and additional time to coordinate activitiesdifferent team members have different rolesdiversity in team members backgroundgood leader/co-ordinatoreveryones individual needs are satisifiednot too large in sizesocialise and work well together
Many writers comment that good product branding is the key to business success. Discuss whetherthis assertion is true, and also what factors are essential to successful branding.
brand - name, sign or symbol, represent product or organisationallows for product differentiation, prominence in market place, repeat business/customer loyalty, used to extend product rangecompanies develop branding over prolonged periods of time, to get repeat business it is important that customers recognise the product through adssuccessful marketing to support development of brand image, 4 P’s - product, place, price and promotion
What is meant by the term ‘product life-cycle’? Why is the concept important to those planningmarketing strategy of a company?
stages in product life-cycle: development, introduction, growth, maturity, declinelength of cycle will vary between products and its useful to have a portfolio of products, some have lifecycles of months or yearsmarketing strategy - long term, forward looking approach to planning, goal to achieve competitive advantageinvolves the 4 P’sintroduction level - low sales, high or low price strategy for good, large expenditure on adsgrowth phase - rapid increase in sales volumes, price is maintained if demand is high or reduced to increase demand, increased ads for repeat businessmaturity phase - steady sales, most profitable phase of cycle, may try to change product to differentiate from competitors, prices may be reduced to increase sales, ads reinforce brandingdecline - sales decline, reduced ads, transfer branding to other products
Explain Porter’s Five Forces and identify the relative influence of Porter’s Five Forces on an organisationof your choice.
- threat of potential entrants - new business may enter industry and steal market share from existing firms2. threat of substitution - alternative product offers price/performance advantage3. bargaining power of buyers - buyers can choose a substitute product when there is little cost involved for the buyer in switching4. bargaining power of suppliers - greater when there are fewer suppliers available5. competitive rivalry - competitive force that relates to rivalry between existing firms in the industryCadbury1. firm benefits from economies of scale, difficult for new entrant, distribution relationships in large scale supermarkets and garage chains, patented designs and trademarks2.highly competitive market, many substitute products available, buyers willingness to switch3. price sensitivity of buyers, some price conscious customers may only buy when on offer, large chains have greater buying power than individuals so may only buy for certain prices etc4. few substitutes for raw materials, suppliers may have little power over market price against large companies like cadbury5. lots of large firms in the industry, growth is static in existing brands so creating new products is key, differentiation of products through packaging and marketing, new entrants would find it difficult to break in
Who are the main competitors for Lancaster University? On what basis does Lancaster Universityhave a competitive advantage over its competitors? Explain whether you think the competitiveadvantage of Lancaster University is sustainable and why
main competitors - other unis eg exeter, leeds, york etc, info in league tables to compare performancecompetitive advantage - campus uni, college system, reputation, exchange programmes, accommodation etcsustainable advantage - whether other rival unis could take the competitive position, currently strong in league tables, investment in facilities is on-going, development of faculties, development of brand
How can technology help a firm gain a competitive advantage? Provide examples to illustrate youranswer.
competitive advantage - attribute that allows an organisation to outperform competitors, eg access to natural resources, high skilled labour etctechnology - the application of available knowledge and skills used to create and use materials, processes and products, often accorded a dominant role in business and determines products and processestech helps competitive advantage - widening scope of business, reducing costs, creating new products and processes, increasing speed of operations, improving customer service, creating new markets
Identify the various type of change that are likely to occur from the introduction of business systemsaround Information and Communications Technology (ICT). What opportunities and threats exist forthe management and the workforce? What problems will be created and how may they beovercome?
ICT - stresses role of unified communications and integration of telecommunications and computerschanges due to ICT - accessibility to info on a global basis, increase in volume of speed and info flow between individuals, development of new products/services, removal of geographical constraintsopportunities - managers: improved quality of product, cost reduction, increased competitiveness, improved management over production and employees, employees: new job opportunities, greater job satisfaction, opportunity to learn new skillsthreats - managers: increased competition, job losses, problems with change, high costs, employees: job losses, increased managerial controlproblems and resolutions - reduce discretion individuals have, de-skills workforce and greater management control, training in use of new technology, re-training employees for their new roles, employee consultation about ICT and impact on jobs
What is meant by the term ‘corporate culture’? Provide examples of companies that have a strongcorporate culture.
corporate culture - shared values and beliefs in an organisation, shared goals and vision they should pursue, may be a mission statement, may be sub-cultures in organisation and may be difficult to changestrong corporate culture - PwC
Explain how the cultural aspects influence businesses. Provide examples to illustrate your answer.
culture - influences the way people interact, the context within which knowledge is created, resistance towards certain changescorporate culture - shared values and beliefs of people in the organisation, shared goals and vision which the organisation should pursuehow does it effect business - based on background, experience etc, company culture may effect methods of working and decision making, external/national culture may be brought into company, methods of management and evaluation may affect culture
Explain the different types of business entity (i.e. sole traders, partnerships and limited liabilitycompanies). Discuss the benefits and disadvantages of each type of business entity in terms of thedistribution of profits and control.
sole trader - individual in business on ownpros/cons - risks and rewards are on owners head, full control and decision making powerpartnership - two or more people run businesspros/cons - can have limited/unlimited liability, shared control and decision making powerlimited liability company - shareholders appoint directors to run businesspros/cons - only liable for money invested in company, benefit from dividends and capital gains, directors/managers run business and are separate from owners, ordinary shareholders have voting rights and receive share of profits
Describe the following different types of organisational structure: Functional, Divisional, ProjectTeams and Matrix structures. Can you give examples of why particular types of businesses mightprefer particular types of structure to others?
functional structure - teams of people with similar skills work together, layers of management and authority to organise what is happeningpros/cons - takes advantage of specialisation and has a clear chain of command, may result in conflicting objectives and lack of focus on consumermulti-divisional structure - separate divisions based on different products, can be like separate businesses as they may be responsible for their own decisionspros/cons - encourages entrepreneurship and reduces dependence on managers, problems of coordination across firm and management control may be affected by differing incentivesproject teams - teams created for particular tasks, useful in fast changing environmentpros/cons - diverse issues are dealt with effectively and you can deal with clients individual issue, may lead to duplication of effort and waste of resourcesmatrix structure - vertical and lateral lines of authority, staff usually have more than one manager, workers may work in teams but report to different managerspros/cons - expertise in places where it is needed, problems with coordination and control, individual employees have many bosses with conflicting loyaltiesorganisations have different numbers of management levels, appropriate for different business types eg schools may use matrix, structure may change overtime to adapt to economic needs
Argue the case for and against the premise that an organisation should be responsible to a widerange of stakeholders rather than solely the company shareholders. Provide some examples ofstakeholders who seek to influence organisations.
stakeholders - party affected by actions of an organisation, includes customers, lenders, govs, community, shareholders, employees etcpros/cons - companies should be accountable for various stakeholders, may be business benefits of being conscious of stakeholders, many large companies produce stakeholder reports, shareholders argue company aim is to provide returnsinfluenced by - trade unions who demand higher wages, local communities bringing pressure on companies, pressure groups like greenpeace for environment
What do you understand by the term “Business Ethics”? Why is business ethics important? Whatissues may arise in business ethics as a result of globalization? Provide examples to illustrate youranswer.
business ethics - a form of applied or professional ethics that examine ethical principles or moral problems that can arise in a business environmentimportance - attract higher profit, avoid bad publicity, avoid fines, attract other ethical firms as sellers and buyers, attract customers, investors and employees, act as a source of competitive advantageissues - different cultures/societies have different values, working conditions viewed differently in different places, absence of absolute values makes decision making more complex for global firms, organisations have developed global standards for trade and employment, growth of organisations like fair trade that ensures goods are produced ethically
