Topic 1 Micro Environment

Question 1

The 3 Business Environments

Answer 1

⟿Micro Environment (internal)
⟿Market Environment (external)
⟿Macro Environment (external)

These 3 business environments are interrelated and influence one another. They can also influence the success or failure of a business.

Question 2

The meaning of the micro environment

Answer 2

The micro environment of a business** includes everything inside the business. **

All the internal affairs of the business are managed by the directors or the owners of the business.

The business has full/complete control over its micro environment.

Question 3

List the…

6 Components of the Micro Environment

Answer 3

1. vision, mission statement, goals and objectives
**2. **organisational culture
**3. **organisational resources
**4. **management and leadership
**5. **organisational structure
**6. **eight business functions.

Question 4

Vision

Answer 4

The vision of a business describes its long-term goal, that is, where the business sees itself in the future.

⟴Example⟴ To create a world where everyone has access to clean and safe drinking water.

✶Future-Oriented✶ The vision statement is all about what the organization aspires to achieve in the long term. It paints a picture of the ideal future they are working towards.

✶Inspirational✶ It’s meant to be a source of inspiration and motivation, not just for employees, but also for stakeholders and customers.

Question 5

Mission Statement

Answer 5

The mission statement describes:
what the business provides or produces, and
why the business exists.
It explains clearly the aims and values of the business.

⟴Example⟴ To develop and distribute innovative water purification systems to underserved communities globally.

✤Present-Focused✤ The mission statement describes what the organization does now, its core purpose, and how it aims to achieve its vision.

**✤Action-Oriented✤ **It lays out the specific actions or strategies the organization is taking to reach its goals.

Question 6

Goals

Answer 6

Goals are the long-term plans that the business wants to accomplish.

They serve as guidelines to help businesses achieve what they set out to do.

⟴Example⟴ To open five more branches in the next five years.

Question 7

Objectives

Answer 7

Objectives describe HOW goals will be achieved.

They are the short-term, measurable steps that will guide the business owner on **how **their goals can be accomplished/achieved.

They serve as guidelines to help businesses achieve what they set out to do.

**⟴Example⟴ **In order to open up five more branches in the next five years:
* we will upskill our current employees by offering specific and targeted employee training
* we will increase our efforts to reduce carbon emissions
* we will set up specific marketing campaigns to gain greater market share and increase our profit margins.

Question 8

What is Organisational culture

Answer 8

Organisational culture refers to how things are done in the business.

⟴Example⟴ How the employees communicate among themselves, their dress code and their administration policy,

Organisational culture **also includes **
the values, beliefs, norms and standards that are shared among the employees and management.

Question 9

The Purpose of Organisational Culture

Answer 9

The purpose of the organisational culture is to **define the business’ internal and external identity as well as it’s core values. **

• A strong business culture has the power to turn employees into ambassadors of the business.
• It helps businesses to retain its employees and clients.
• It breaks down boundaries between teams, guides decision-making, and improves productivity.

Question 10

Organisational resources (OR)

Answer 10

Refer to the people, equipment and machinery
that a business uses to produce its goods and services.

Question 11

The FOUR main groups that Organisational Resources are classified into

Answer 11

1. human resources
2. physical resources
3 financial resources
4 technological resources.

Question 12

OR1 Human resources

Answer 12

Human resources is a set of people who make up the workforce of the business.

Question 13

OR2 Physical resources

Answer 13

Physical resources are tangible
items that are used in the operation
of the business

Examples: raw materials, building machinery
and vehicles.

Question 14

OR3 Financial resources

Answer 14

Financial resources refers to the
capital that the business owns or
has borrowed from a financial institute. It includes all the funds that are available to the business,

Examples: bank overdraft, credit cards, long-term and short-term loans.

Question 15

OR4 Technological resources

Answer 15

Technological resources are intangible resources such as software licences and patents, that can help improve performance of an organisation.

Examples include: computer software, laptops, computers, websites, internet facilities, cell phones, photocopy machines, and so on.

Question 16

Overdraft

Answer 16

When a bank allows a person with a cheque account to withdraw more than he/she has in the account and charges interest on the extra amount used

Question 17

Long-term loans

Answer 17

Money that is borrowed and repayable over a number of years.

For example, bonds, debentures,

Question 18

Short-term loans

Answer 18

Money that is borrowed and repayable within a period of less than a year.
For example, bank overdraft, credit cards, and so on

Question 19

Competitive advantage

Answer 19

Factors that allow businesses to produce goods or services better or cheaper than its rivals

Question 20

Subordinate

Answer 20

A person under the authority or control of another within an organisation

Eg: Janines area managers are her subordinates

Question 21

Organisational structure

Answer 21

Refers to the different levels of authority in an
organisation. That is who does which tasks in the organisation.

https://m.youtube.com/
watch?v=zWy65DdbadE

Organogram

Question 22

The purpose of the organisational structure :

Answer 22

The purpose of the organisational structure includes:

• Helping to ensure the smooth and efficient functioning of the business.
• Ensuring that work happens with precise co-ordination and minimum wastage of resources.
• Helping the business to work towards its goals.
• Show the connections between various positions and tasks in the business.
• It describes the coordination between various departments in the business.

Question 23

Organogram

Answer 23

An organogram shows the level of authority, responsibility and tasks of the various departments in the business.

An organogram shows the hierarchical structure of the business.

Question 24

The purpose of the Organisational Structure

Answer 24

The organisational structure shows the different departments in the organisation and how they are organised. The organisational structure is also known as an organogram.

Question 25

**Management**

Answer 25

**The way the business is managed.** The process whereby an individual or individuals guide and direct the organisation to achieve its goals and objectives. This entails **1. planning, 2. leading, 3. organising and 4. controlling ** the people and resources in the business.

Question 26

**Leadership**

Answer 26

Leadership is the ability of an individual to inspire, influence or motivate their subordinates to achieve the goals and objectives of the business.

Question 27

**What are business functions?**

Answer 27

**Business functions:** the **tasks requiring ****specific knowledge and skills** that are carried out by the various departments to achieve the goals of the business. The eight business functions depend on each other to achieve the business goals. These functions work together to ensure the survival and sustainability of the business.

Question 28

**List the 8 Business Functions (BF)**

Answer 28

1. General Management Function 2. Administration function 3. Financial function 4. Human resources function 5. Marketing function 6. Production function 7. Public relations function 8. Purchasing function

Question 29

BF1 **General management**

Answer 29

The general management in a business COORDINATES the other business functions to achieve the goals and objectives of the business. The general management function * plans, * organises, * leads and * controls resources in the business.

Question 30

BF2 **Administration function**

Answer 30

The administration function is responsible for collecting, processing and storing all the data and information required by the business. The administration function has to be up to date with the latest information technology.

Question 31

BF3 **Financial function**

Answer 31

The financial function is responsible for determining all the financial needs of the business. It ensures that the business’s funds are used efficiently. It manages all the funds and financial assets of the business.

Question 32

BF4 **Human resources function**

Answer 32

The human resources function is responsible for attracting new employees into the business. It also has to manage all the people in the business by providing education and training for their employees.

Question 33

BF5 **Marketing function**

Answer 33

The marketing function undertakes market research to determine the real needs of the target market. It is also responsible for the advertising/promotion of goods and services to customers.

Question 34

BF6 **Production function**

Answer 34

The production function is responsible for changing/processing raw materials into finished or semi-finished products. It ensures that the business creates quality products to meet the demands of the target market.

Question 35

BF7 **Public relations**

Answer 35

The public relations function is responsible for creating a good public image for the business. It ensures that there is proper communication between the business and all its stakeholders.

Question 36

BF8 **Purchasing function**

Answer 36

The purchasing function is responsible for buying all the resources that the business needs in order to produce its goods and services.