Business Environment

Lecture Notes for Business and

Management
Dr. Fahmy Radhi, MBA

Business Environment
Business Environment is
individual and organization
that exist outside the
business and have
influence direct and
indirect to the business.

Business Environment Elements

Supplier supply materials, machine,

service and information used to produce
its products and services
Financial institution the capital
resources that available for the firm
Customers targets for the firm to
market its products and services
Competitor - all of the entities that
compete with the firm in marketplace

Business Environment Elements

Stockholders/owners persons who are

invest money in the firm and represent the
high level of management
labor union organization of skilled and
unskilled workers
The community people in the area where
the firm perform its operation
Government federal, state and local level
government that provides not only
constraints in the form of law, regulation, and
taxes taking but also provides assistance in
form of purchases, information and funds.

Environmental management
Environmental management how to manage the
environmental elements by executing strategies
that alter uncertainly environment to a certain
extent
Environmental Management Strategy:
Independent Strategy carry out its own
resources to make better its environment
Cooperative Strategy involve working with
other environmental element for the same purpose
Strategic Maneuvering try to alter its
environment

Environmental management
Basic
Strategy

Specific Strategy

Example

Independent
Strategy

Competitive
aggression
Legal Action
Political Action

Product differentiation
Aggressive Pricing and
Advertising
Suits brought against
competitors
Lobbying

Cooperative
Strategy

Co-optation
Coalition

Consumer representatives
Industry Association

Strategic
Domain Selection
Maneuver Diversification
ing
Merger and
Acquisition

Entry in specific market

Wide product mix
Merger with competitors

Social Responsibility
Social Responsibility the
awareness that business
activities have an impact on
its environment so it should
try to balance its
commitment in its
environment

Social Responsibility

Responsibility to consumers, such as:

the right to safety,

the right to be informed
the right to choose,
the right to be heard

Responsibility to employees, such as:

The right to safety

The right to equality in the workplace,
The right to improve its capability

Social Responsibility

Responsibility to investors, such as:

Responsibility to the environment, such as

The right to be proper management of funds

The right to access information
Preventing to water and air pollution,
Safe to the land and Forest
natural resources

Social responsibility, such as

Community support
Social audit

Business Challenges

Challenges in the Economic Environment

Challenges in the Competitive
Environment
Challenges in the Social and Culture
Environment
Challenges in the Political-Legal
Environment
Challenges in the Technological
Environment

Challenges in the Economic Environment

Macroeconomics
Microeconomics
The Forces of Supply and Demand
The Business Cycle
State Budget
International Trade

Challenges in the Competitive Environment

Types

of Market Structure
Global Competition
Dealing with Competitors

Challenges in the Social and

Culture Environment
Changing

Population
Cultural Values
Social Responsibility
Consumerism and Ecology
Business Ethics

Challenges in the Political-Legal

Environment

Government Role
Business and Politics
Law enforcement

Challenges in the Technological

Environment
Technology

Development
Applying Technology
Technology Transfer

SEKIAN