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Business w02 Understanding Business Environment @1
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Business w02 Understanding Business Environment @1



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  • 1. Chapter 2 : Understanding the Environment of Business Presented by : Anna Riana Putriya anna_riana@yahoo.com
  • 2. understanding The environment of business Organizational boundaries Organizational boundaries and environments Multiple organizational environment Aggregate output & standard of living, GDP & GNP, Economic growth productivity Economic environment Economic stability Inflation, unemployment Global economy in 21st century Product & service technology Technological environment Business process technology Political- Political-legal environment Customer preferences and taste Sociocultural environment Ethical compliance and responsible business behavior Redrawing corporate boundaries Business environment Emerging challenges and opportunities Outsourcing, Viral marketing, in the environmet of business Business process management anna_riana@yahoo.com
  • 3. Organizational Boundaries That which separates the organization from its environment External Environments mission— All businesses —regardless of their size, location or mission— operate within a larger external environment. anna_riana@yahoo.com
  • 4. Dimensions of the External Environment anna_riana@yahoo.com
  • 5. ECONOMIC ENVIRONMENT Conditions of the economic system in which an organization operates anna_riana@yahoo.com
  • 6. Key Goals of Economic System • Economic Growth • Economic Stability – Aggregate Output and – Inflation Standard of Living – Gross Domestic – Unemployment Product (GDP) & Gross • Recessions and National Product Depressions (GNP) • Purchasing Power • Global economy in 21st Parity century – Productivity – Balance of Trade – National Debt anna_riana@yahoo.com
  • 7. Aggregate Output and Standard of Living • Business cycle is a pattern of short-term ups and downs short- (expansions and contractions) in an economy • Aggregate output is the total quantity of goods and services produced by an economic system during a given period • Standard of living is the total quantity and quality of goods country’ and services that a country’s citizens can purchase with the currency used in their economic system anna_riana@yahoo.com
  • 8. Gross Domestic Product • GDP, or gross domestic product, is the total value of all product, goods and services produced within a given period by a national economy through domestic factors of production • GNP, or gross national product, is the total value of all product, goods and services produced by a national economy within a given period regardless of where the factors of production are located anna_riana@yahoo.com
  • 9. What Is Purchasing Power Parity? Principle that exchange rates are set so that the prices of similar products in different countries are about the same anna_riana@yahoo.com
  • 10. What Is Productivity? Measure of economic growth that compares how much a system produces with the resources needed to produce it anna_riana@yahoo.com
  • 11. What Is Balance of Trade? Economic value of all the products that a country exports minus the economic value of imported products What Is National Debt? Amount of money that a government owes its creditors anna_riana@yahoo.com
  • 12. What Is Stability? Condition in an economic system in which the amount of money available and the quantity of goods and services produced are growing at about the same rate anna_riana@yahoo.com
  • 13. What Is Inflation? Occurrence of widespread price increases throughout an economic system What Is Unemployment? Level of joblessness among people actively seeking work in an economic system anna_riana@yahoo.com
  • 14. Recessions and Depressions • Recession is a period during which aggregate output, as measured by real GDP, declines • Depression is a particularly severe and long-lasting long- recession anna_riana@yahoo.com
  • 15. The Global Economy in the 21st Century Major forces driving the economy: – The information revolution will continue to enhance productivity across all economic sectors. – New technological breakthroughs will create entirely new industries. – Increasing globalization will create much larger markets while fostering tougher competition among global businesses. anna_riana@yahoo.com
  • 16. TECHNOLOGY All the ways by which firms create value for their constituents anna_riana@yahoo.com
  • 17. Product and Service Technologies Technologies employed for creating products services— —both physical goods and services— for customers anna_riana@yahoo.com
  • 18. Business Process Technologies Business process technologies are used not so much to create firm’ products as to improve a firm’s performance of internal operations. – Enterprise Resource Planning, or ERP, is a large-scale ERP, large- information system for organizing and managing a firm’ firm’s processes across product lines, departments and geographic locations anna_riana@yahoo.com
  • 19. ERP Applications anna_riana@yahoo.com
  • 20. POLITICAL- POLITICAL-LEGAL ENVIRONMENT Conditions reflecting the relationship between business and government anna_riana@yahoo.com
  • 21. SOCIOCULTURAL ENVIRONMENT Conditions including the customs, mores, values and demographic characteristics of the society in which an organization functions anna_riana@yahoo.com
  • 22. Customer Preferences and Tastes • Customer preferences and tastes vary both across and within national boundaries. • Consumer preferences can vary widely within the same country. • Consumer preferences and tastes change over time. anna_riana@yahoo.com
  • 23. BUSINESS ENVIRONMENT • Redrawing Corporate Boundaries – Core competencies are the skills and resources with which an organization competes best and creates the most value for owners • Disruption management is a method by which some organizations are responding to crises in their environments anna_riana@yahoo.com
  • 24. Emerging Challenges and Opportunities in the Business Environment • Outsourcing is the strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials or services • Viral marketing is a strategy of using the Internet and word- word- of- of-mouth marketing to spread product information • Business process management is an approach by which firms department- move away from department-oriented organization and toward process-oriented team structures that cut across old process- departmental boundaries anna_riana@yahoo.com