Chapter 2 Flashcards
Define business environment
The sum total of all the factors and variables which influence and establishment, growth and continued existence of the business positively or negatively
What are the components of the business environment?
Microenvironment
Market environment
Macro environment
What determines the effect that environmental variables have on the business?
The place and the role of the business in the total national economy
List the Principle characteristics of the business environment
-Interrelatedness of environmental factors
-Increasing instability
-Environmental uncertainty
-Complexity of the environment
-Unpredictability of the environment
Discuss the interrelatedness of environmental factors
Due to this, a change in an external factor may cause a change in the internal factors as well as external factors
Discuss increasing instability
The dependenceof things between environmental factors leads to fluctuations and changes in the environment
Discuss environmental uncertainty
It is a result of the amount of information available on environmental variables and the confidence management has in the information
-The more accurate information available then less the uncertainty
-Limited information = increase in uncertainty
Discuss the complexity of the environment
= This indicates the number of external variables that Organisations need to react to
various external variables
-Organisations in less complex environments have the advantage as they require less critical information for decision making
and not all aspects of the environment are equally important to all organisations
Discuss the unpredictability of the environment
-Revolutionary environments are unpredictable and constantly changing
:. It’s important for management to understand and have knowledge about the environment in which they operate
Define the Micro environment
Factors and variables that occur inside the business and are influenced in a direct/indirect way by the decisions of management
These factors have a fundamental influence on the establishment, growth and continuency of the business
List the variables of the microenvironment
-The mission statement and goals of the business
-The business functions
-The production functions
Define the mission statement
-What the business hopes
to achieve
-Must correspond with the
demands of the external
environment
List the business functions
-Finance
-Pr
-Admin
-Marketing
-HR
-Operations
-General management
-Purchasing
Define business functions
These are the roles and activities of each division to ensure the success of the business
Define the production functions
These are the resources available to a business
-The business must utilise opportunities to get rid of threats in the external environment using these resources
