The business

organization
and its environment

Module 04-The business organization and its environment 1

 Stakeholders

• Groups or individuals
directly or indirectly
affected by an
organization’s pursuit
of its goals.
• There are internal and
external stakeholders.

Module 04-The business organization and its environment 2

 Internal stakeholders
Employees
• individuals responsible for work
in an organization
Shareholders and Board of
Directors
• owners
• representatives of the firm’s
various owners; voted to make
decisions for the company
Module 04-The business organization and its environment 3
 External stakeholders

Customers
• exchange resources,
usually in the form of
money, for an
organization’s products
and services.

Module 04-The business organization and its environment 4

 External stakeholders

Suppliers
• provide the
input/resources needed
by the firm to produce its
output.

Module 04-The business organization and its environment 5

 External stakeholders

Competitors
• companies that offer
similar or alternative
products or services

Module 04-The business organization and its environment 6

 External stakeholders

Financial institutions
• organizations that
provide or lend funds
needed by business for
their operations or capital
investments

Module 04-The business organization and its environment 7

 External stakeholders
Government
• aids and protects industries
and the national economy
• provides infrastructure,
utilities, and security

Special Interest Groups

• use the political process to
advance their position on
particular issues
Module 04-The business organization and its environment 8
 External stakeholders
The Media
• provide general public with
information, opinion, and
entertainment on relevant issues
Labor Unions
• voice of the workers to top
management
• organized within the company or
outside the organization
Module 04-The business organization and its environment 9
 The STEP Environment
On national and international levels the
organization is affected by these variables:

Social
Technological
Economic
Political
Module 04-The business organization and its environment 10
 Soci al Envi ronment

• demographics
• lifestyle changes
• social/cultural values

Examples:
• The rise of the “yuppy”
• Overpopulation
• Strong catholic influences

Module 04-The business organization and its environment 11

 Technol ogi cal
Envi ronment

• Advances in basic sciences

• New developments in products, processes,
and materials

Examples:
• the Internet
• Biotechnology (genetics)
• cellular mobile technology services

Module 04-The business organization and its environment 12

 Eco nomi c Envi ronment

• monetary and fiscal policies of national and

foreign governments
• wages and employment

Examples:
• GNP/GDP
• Liberalization trends
• purchasing power of consumers

Module 04-The business organization and its environment 13

 Poli ti cal Env iron ment

• laws, regulations, and policies

• political processes

Examples:
• Elections
• GATT and GATS
• Zoning regulations

Module 04-The business organization and its environment 14

 Bus ines s envi ronment
Social Technologic
al
competitors customers
employees
the media suppliers
The Firm government
labor unions
shareholders and special
financial board of directors interest
institutions groups

Economi
Module 04-The business organization and its environment
Political
15