Business studies


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this is for the grade 10s business environments.

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Business studies

  3. 3. LESSON OUTCOMES 1. The learner should able to demonstrate knowledge and analyse the impact of changing and challenging environments on business practice in all sectors.
  4. 4. Proposed content • Identifying the components of business environments (micro, market and macro). • Analysing and describing the features of the business environment and their interrelationship. • Exploring contemporary socio-economic issues (e.g. poverty, HIV/AIDS, unemployment, gambling, skills levy, violence, crime, riots, inclusivity) and analysing their impact on business. • Investigating and classifying the nature of business (primary, secondary and tertiary sectors).
  6. 6. MICRO ENVIROMNMENT.  The micro environment refers to the internal factors that will influence the performance of the business.  These include aspects such as: -The different business functions; - The resources available to the business; and The business policy. All the' elements of the micro environment are directly controlled by management
  7. 7. Business Functions: There are eight main functions in a business. The entrepreneur must know how to manage all aspects of the business, but if he does not know how to do everything himself, he can employ other people to help in the business. The functions in the business are as follows:  Purchasing  Production  Personnel/Human resources (HR)  Administration  Marketing  Public relations (PR)  Financial  General management
  8. 8. Resources:  human resources (employees),  financial resources (capital) or  physical resources such as raw material or equipment used in the business in order to produce goods and services. ORGANISATIONAL CULTURE The organisational culture can be described as the values and beliefs that are shared within the business. People's attitudes and behaviour will be guided by the culture in the organisation. .
  9. 9. If the culture is positive, cooperation and achievement will be the mutual goal, while a negative culture could lead to conflict and employees undermining one another. STRUCTURE The organisational structure refers to the way in which labour, authority, responsibility and other resources are organised to ensure all components will work together to form a system in which business objectives can be met
  10. 10. MARKET ENVIRONMENT. The market environment consists of elements immediately outside the business; therefore management has very little control over the market environment. IT CONSIST OF ;  Consumer  Supplier  Competitors  Intermediaries  Alliances  Regulators  NGO’S
  11. 11. MARKET ENVIRONMENTS.  The market environment will consist of SUPPLIERSselling the required quality and quantity products to the business at a fair price at the time when they are needed. These products will then be delivered to the place where they are needed. Alternatively the supplier does not have to sell a product, but can also deliver a service to the business.  CONSUMERS are the A purchaser of a good or service in retail. Or An end user, and not necessarily a purchaser, in the distribution chain of a good or service.
  12. 12.  COMPETITOR are other businesses that sell the same, similar or substitute products to the same target market. It is not only existing competitors that will influence the business's actions, but also potential new entrants to the market. The higher the level of competition, the better the quality of product that has to be delivered to the consumer and the lower the business has to keep the price in order to make it attractive to the customer.  A business may decide to form a STRATEGIC ALLIANCE with another business in order to potentially expand the target market. An example of such an alliance is the agreement between Edcon and Medicross that patients may use their Edgars cards to pay for doctors' consultations at Medicross. This ensures that people who do not have cash or medical aid facilities to pay for the doctor can use their Edgars credit facility to obtain the services they need. This enlarges the potential customer base for sales transactions for both Medicross and Edgars
  13. 13. Agents or brokers act as INTERMEDIARIES between the business and the consumer and therefore they also form part of the market environment. In fact all members of the distribution channel can be seen as intermediaries between the manufacturer and the consumer. The wholesaler acts as a link between the producer and retailer, while the retailer interacts with the consumer as the last link in the distribution channel Non-Government Organisations (NGOs) are usually non-profit organisations that focus on environmental, social or educational issues. One such organisation is Junior Achievement (JA) which uses sponsorships from businesses to provide entrepreneurial education to both the youth and adults.
  14. 14. Industry regulators also form part of the business' market environment as they control and guide the actions of businesses to ensure consumers are not exploited. Examples of such regulators include the Financial Services Board and the Ombudsman for Insurance
  15. 15. MACRO ENVIRONMENT Developments on the national and international scene, technological advances, economic influences, po-litical pressures and social factors all impact on the business from the macro environment. P - Political environment E - Economics S - Social factors T - Technology L - Legislation E - Environmental factors Extended PESTLE or P*E*STLE P - Physical E - Ethical
  16. 16. On the political front developments may impact on the businesses of the country. Do we need a better example than our neighbour to the north, Zimbabwe, to see what the impact of politics can be on con-sumers, businesses and the economy in general?  Factors in the economic sphere that are impacting on the business include aspects such as inflation, fluctuating exchange rates (imports and exports), interest rates, unemployment, globalisation and the state of the world economy. In late 2008 the world entered a period of recession which caught up with South Africa in the second quarter of 2009. This means that people in the country are experiencing economic hardship and as a result the general standard of living will be lower due to the reduced purchasing power. Businesses also feel the pressure on their bottom line (profit) as employees demand higher wages while consumers spend less.
  17. 17.  Socio-economic issues form part of the macro- or external environment, and especially in the South African context they influence the day-to-day management of the business. It is important to be aware of these issues and how they affect the business.  Technology is constantly changing at a rapid pace and this leads to both opportunities and challenges for the business. Think about the impact of technology such as the advancement in computers and the Internet and how this has impacted on the world of business. New production processes also mean faster and mostly more accurate production, but may lead to socio-economic problems such as job losses and unemployment as a result of retrenchments
  18. 18. Legislation (the laws of the country) could have a huge influence on the corporate world should Govern-ment decide to introduce new laws. In this regard we may think about labour laws such as Employment Equity or the Credit Agreement Act that stipulates conditions for allowing credit to consumers. Environmental factors such as pollution (noise, water and air), bio-fuels, recycling and nature conservation may also have an impact on the business
  19. 19. Physical factors relate to the immediate environment of the business. Is it situated in a mountainous area where access is difficult; next to the coast where the weather may affect the products; etc? Ethical factors are becoming increasingly important as businesses are held responsible for the morality of their decisions and the effect that those decisions have on their employees, clients and other stakeholders.
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