UNIT 2 ( PART 2)

Question 1

Components of a Business Environment:

1. Factors that exist within a company. ( ex. HR Value system,​ Vision and mission​, Labour union​, Corporate culture etc. )
2. These are outside factors that exercise an influence on a business’s operations. It is further classified into two segments.​

Macro - Socio-cultural, political, legal, and global factors fall into this category.​

Micro - This environment has a direct and immediate impact on a business. It consists of customers, investors, suppliers, etc.

Answer 1

1. Internal
2. External

Question 2

It represents the sum of all the individuals, institutions, competing organizations, government, courts, media, investors, and other factors outside the power of the business organizations but affects the business performance.

“The sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but the business still depends upon them as they affect the overall performance and sustainability of the business.”

• Hence, changes in government economic policies, rapid changes in technology, changes in consumer tastes and preferences, increasing market competition, etc. are outside the business organizations’ power but affect the business performance immensely.

Answer 2

Business Environment

Question 3

It refers to the economic operations that take place outside the borders of nations or states. It can also be referred to as businesses that operate beyond international borders, such as cross-border sales of goods and services.

Answer 3

International Business

Question 4

DEFINITION: A business that operates across national borders by exporting and importing

CHARACTERISTICS:
- primary focus on trade between home country and foreign markets
- the operation management on home country
- limited adaptation to markets

Answer 4

International business

Question 5

DEFINITION: a business with operations in multiple countries where foreign operation is managed independently.

CHARACTERISTICS:
- operates in several countries usually it adapts its products and services to the local needs

• each subsidiary functions as semi autonomous unit
• decision making is centralized, the office where global management is coordinated but it allows the local managers to make specific decisions

Answer 5

Multinational companies

Question 6

DEFINITION: a business that integrates operations across countries balancing global efficiency and local responsiveness.

CHARACTERISTICS:
- focuses on achieving cost efficiency globally while tailoring products to meet local demands.

• functions in matrix where, decision making is both centralized and decentralized
• aims for seamless integration of global and local strategies

Answer 6

Transnational companies

Question 7

DEFINITION: a business that views the world as a single market and offer standardized products or services elsewhere.

CHARACTERISTICS:
- emphasize unified global strategy prioritizing economic of scale

• products are mostly uniform across countries with minimal customization
• decision making is centralized

Answer 7

Global Companies