12-04-2014, 03:06 PM
THE BUSINESS ENVIRONMENT
INTRODUCTION
Business enterprises cannot function in isolation
Open systems interact with their environment
Business enterprises exist in and are surrounded by an ‘environment’ – the business or organisational environment
Society and business enterprises are mutually dependent
Business enterprises satisfy societal needs
Relationship between society and business enterprises takes place in a changing environment
COMPONENTS OF THE BUSINESS ENVIRONMENT
Different environmental variables exist internally and externally to the business enterprise
Environmental variables have a positive or negative influence on the enterprise
Business environment consists of two sub-environments:
Internal (micro) environment
External environment
Market environment
Macro environment
Mutual relationships exist between these environments
ENVIRONMENTAL SCANNING
Identification and forecasting phenomena in the environment
Ongoing environmental scanning is essential for strategy formulation
Enterprises continuously engage in identifying and forecasting opportunities and threats
Enterprises need to proactively or reactively respond to changing conditions in the environment
Various sources of information are available to assist with scanning