TECHNOLOGICAL AND

POLITICAL
ENVIRONMENT
MARCOS, Mary Rose Jane MENDEZ, Justine
MENDIOLA, John Patrick MINGI, John Fyke
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“
“The world of marketing has
changed. You can lead the
change or be a victim of
change.”
- Denise Morrison

 Technological
Environment
• What is technology?
• What are the technological
factors that affects the
business?
• What are the benefits of
technology in business?
3
 Political
Environment
• What are the factors and
the impacts of political
environment on business
organizations?
• What is the difference
between political and legal
environment?
• What is the Importance of
observing the political
environment?
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Technological Environment
Refers to the state of science and technology in
the country and related aspects such as rate of
technological progress, institutional
arrangements for development and application
of new technology, etc.
WHAT IS TECHNOLOGY?
“Systematic application of scientific or other organized
knowledge to practical tasks”
– J.K. Galbraith
“Technology is the combination of skills and
equipments that managers use in the design,
production and distribution of goods and services.”
-G. Jones and C. Hill
“Technology is the set of processes and systems used
by organizations to convert resources in to product or
services.”
- R.W. Griffin (2007)
• MACHINES (hard technology) and
SCIENTIFIC THINKING (soft technology)

• Technology includes inventions and

innovations.
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THE MAIN FEATURES OF TECHNOLOGICAL

ENVIRONMENT ARE AS FOLLOWS:

 A component of macro or indirect action

environment.
 Changes very fast.
 Affects the manner in which the resources of the
economy are covered into output.
 Self reinforcing. An invention in one place leads
to a sequence of inventions in other places.
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WHAT ARE THE

TECHNOLOGICAL
FACTORS THAT AFFECT
THE BUSINESS?
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TECHNOLOGICAL FACTORS
Pull of Opportunitie Risk of Role of
Technological s for New Technological Research
Change Innovations Environment and
• Better product • The possibility • Risk of being Developmen
• Bring down of new out of date t
costs invention • Improves
every single quality of life
• Edge out the day
competition and uplift the
economy and
• Increase society
production
capacity, etc.
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A CONCISE TIMELINE OF NOKIA’S

IMPORTANT MOMENTS:

*In October 1998, Nokia became the best-

selling mobile phone brand in the world;

*Nokia’s operating profit went from $1 billion

in 1995 to almost $4 billion by 1999;

*The best-selling mobile phone of all time, the

Nokia 1100, was created in 2003;

*In 2007, Apple introduced the iPhone;

*By the end of 2007, half of all smartphones sold in the
world were Nokia’s, while Apple’s iPhone had a mere 5
percent share of the global market;

*In 2010 Nokia launched the “iPhone killer” but failed

to match the competition;

*The quality of Nokia’s high-end phones continues to

decline;

*In just six years, the market value of Nokia declined

by about 90%;

*Nokia’s decline accelerates by 2011 and is acquired by

Microsoft in 2013.
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Nokia’s demise from being the world’s

best mobile phone company to losing it
all by 2013 When explaining Nokia’s fall
many observers found three reasons:
1.Nokia’s technology was inferior to
Apple’s; 2.The arrogance among top
level managers; 3.Lack of vision.
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BENEFITS OF
TECHNOLOGY IN
BUSINESS
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1. INCREASED PRODUCTIVITY &

EFFICIENCY AUTOMATED
business processes and operations are one of
the major benefits of technology for business.
Computers connected to internet have allowed
the workforce and authorities to collaborate
and discuss business related things more
efficiently than ever. Through technology,
production of products are made easily, faster
and cost-efficient.
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2. EFFECTIVE COMMUNICATION
Virtual meetings are increasingly implemented
by businesses and companies to keep the
business operations running even if a senior
manager is out of town or country due to some
reasons. Companies can also provide competent
customer services to build trust and it is only
possible with help of the business technology.
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3.AUTOMATED BUSINESS
processes with help of software and apps
Companies and businesses are increasingly
shifting to automation due to availability of latest
business software and apps.
4.REDUCED BUSINESS COSTS
Increase in productivity due to implementation of
technology in business is the best way to reduce
business costs by having a few workers at
workplace. Paperless and inkless concept
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5.MOBILITY
employees can use their personal devices to
complete several business related tasks even
from their homes if they are authorized by the
higher authorities to do so.
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Political Environment
 The state, government and its institutions and
legislative and the public and private
stakeholders who operate and interact with
the influence of the system.
 Forms the basis of business environment in a
country.
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WHAT POLITICAL
FACTORS AFFECT THE
BUSINESS?
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 Tax And Economic Policies

Increasing or decreasing rate of taxes is a good example of a
political component

 Political Stability
Lack of political stability within a country can significantly impact the
operations of a business

 Foreign Trade Regulations

Every business has a need to expand business operation to other
countries.

 Employment Laws
Employment laws are made to protect the rights of employees and
include every aspect of employer/employee relationship.
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IMPACTS
OF POLITICAL ENVIRONMENT ON
BUSINESS ORGANIZATIONS
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Political Impact is the effect that government policy

and its administrative practices can have on
something. Most business operators will keep a
watchful eye on any proposed legislation or
regulatory shift that could have a substantial
political impact on how their company operates and
its bottom line.
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POLITICAL IMPACT ON THE

BUSINESS ORGANIZATION
 Add a risk factor and lead to a major loss

 Increase or decrease in tax

 Least predictable elements in the business

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WHAT IS THE DIFFERENCE BETWEEN

POLITICAL AND LEGAL
ENVIRONMENT?
▫ Political refers to attitudes and approaches

▫ Legal factors are those which have become law

and regulations
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BUSINESSES MUST PLAN FOR THE VARIABILITY OF

GOVERNMENT POLICY AND REGULATIONS

1. IMPACT ON THE 2. CHANGES IN 3. POLITICAL

ECONOMY REGULATION STABILITY
- The political - Government could - Particularly for
environment in a change their rules businesses that
country affects its and regulations, operate
environment. The which could have an internationally, a lack
economic effect on a business. of political stability in
environment, in turn, any country has an
affects the effect on operations.
performance of a
business
organization.

4. MITIGATION OF RISK
- One way to manage political
risk is to buy political risk
insurance. Organizations that
have international operations
use this type of insurance to
mitigate their risk exposure as a
result of political instability.
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5. ANALYSIS TOOLS
- It is possible to analyze and
forecast the impact of
government policies on doing
business. There’s and
established model called PEST
analysis, which evaluates
political, economic, social, and
technological factors that could
affect the cost and difficulty of
doing business.
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THE IMPORTANCE OF OBSERVING

THE POLITICAL ENVIRONMENT

Firms should track

their political
environment. Change
in the political factors
can affect business
strategy because of
the following reasons:
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o The stability of a political system can affect the appeal

of a particular local market.
o Governments view business organizations as a critical
vehicle for social reform.
o Governments pass legislation, which impacts the
relationship between the firm and its customers,
suppliers, and other companies.
o The government is liable for protecting the public
interest.
o Government actions influence the economic
environment.
o Government is a major consumer of goods and
services.
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“
“Be where the world is going.” –
Beth Comstock
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Thanks!