Skills and objectives are a part of the micro environmental forces affecting the company.

• • Business environments

Business environments

Learning Outcomes

• Define the term business environment; 
• Identify and explain the elements of the business environment, 
• Discuss the extent to which the business has control over and can influence the micro, market and macro business environment;
• Discuss the challenges of the business environment;
• Explain how an organisation can adopt to the challenges of the business environment.  

Definition of the term business environment.

Is all the force and elements external to the business which influence internal in terms of its vision, mission, goals and objectives, strategies and structures either positively or negatively. 

The elements of the business environment.

Micro business environment.

Is the organisation as a business entity. The micro environment includes force and elements such as the organisational vision, mission statement, goal and objectives, strategy and structures, management and employees.

Market business environment.

The market environment includes all the forces and elements, also known as the key role players, that interact, with the organisation on a more direct basis.

Macro business environment. 

This environment includes those elements which influence all organisations, although organisation have limited to no influence on these elements.

The extent to which the business has control over and can influence the micro, market and macro business environment.

The organisation, which represent the micro environment, functions within the external environment.The organisation is directly exposed to the market environment and indirectly exposed to the macro environment. An organisation is therefore interacting with its market environment while being influenced by the element and forces within the macro environment.

Challenges of the business environment.

Challenges in the micro environment.

• Difficult employees,
• Lack of vision and mission,
• Lack of adequate management skills, 
• Trade unions, 
• Strikes and go-slows.

Challenges of the market environment.

• Competition 
• Shortage of supply,
• Changes in consumer behaviour, 
• Demographic and psychographics, 
• Socio-culture issues.

Challenges in the macro environment.

• Changes in income levels,
• Political changes,
• Contemporary legal legislation,
• Labour restrictions,
• Globalization or international challenges, 
• Social values and demographics, socioeconomic issues.

Ways in which a business can adapt to challenges of the macro environment, and whether this is to the benefits of the business.

responsibility

 Lobbying, networking and power relations

o Lobbying  

• Hedging against inflation, 
• Bargaining sessions between management and unions, 
• Influencing supervisory body/regulators, etc.

o Networking

• finding new customers etc.

o Power relationships 

• Strategic alliance agreements, 
• Persuasion of large investors, 
• company representatives’ influence, etc.