2. 1. Some of the ways to handle cultural differences:
A. Adapt your products
B. Deal with the individual
2. The buying of goods or services from a supplier in another country
A. Exporting
B. Importing
3. The selling of products outside the country in which they are
produced.
A. Exporting
B. Importing
C. Trafficking
C. Offer bribes to officials
D. Show respect
C. Trade
Test Idea
3. Business environment is composed of two words
“business” and “environment”
Business in simple terms the state in which a person
remains busy.
Environment refers to the aspects of surroundings
Business Environment may be defined as “a set of
conditions social, economical, political or institutional
that is uncontrollable in nature and affects the
functioning of the organization and the consist of
various micro and macro factors” which sets the
mission and vision statements of the organization.
Abdulahi Abukar “ ABAJEY”
4. Globalization—global competition
characterized by networks of international
linkages that bind countries, institutions,
and people in an interdependent global
economy. In contrast, globalization refers
to the increase or decline in the degree of
globalism.
It focuses on the forces, the dynamism or
speed of these changes.
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5. Globalism, its core, seeks to describe and explain nothing
more than a world which is characterized by networks of
connections that span multi-continental distances.
It attempts to understand all the inter-connections of the
modern world — and to highlight patterns that underlie
(and explain) them.
Basic Difference of Globalization & Globalism
In short, consider “globalism as the underlying basic
network, while globalization refers to the dynamic
shrinking of distance on a large scale”
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6. “GLOBAL”, “BUSINESS” &
“ENIVRONMENT” these three words
describe a reality of the nature of
international trade: it is evolving in a
fundamental way as a result of
numerous forces shaping the nature
and dynamics of global commerce.
“Global Business” is broadly viewed in
the context of shared, increasingly
integrated environment.
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7. The global business environment can be
defined as the environment in different
sovereign countries, with factors
exogenous to the home environment of
the organization, influencing decision
making on resource use and capabilities.
The global business environment can be
classified into the external
environment and the internal
environment.
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9. •Value System
•Mission & Objectives
•Organizational Structure
•Corporate Culture
•Quality of Human Resources
•Labour Unions
•Physical Resources
•Technological Capabilities
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10. INTERNAL ENVIRONMENT: Internal
environment refers to all factors within the
organization that impact strength or cause
weaknesses of a strategic nature.
EXTERNAL ENVIRONMENT: External
environment includes all the factors outside
the organization which provide opportunities
or pose threats to the organization.
Abdulahi Abukar “ ABAJEY”
11. The environmental factors influencing the internal
and external environment are as follows:
SWOT Analysis PEST Analysis
SWOT is an acronym for Strengths, Weakness,
Opportunities and Threats.
PEST analysis (political, economic, social and
technological) describes a framework of macro-
environmental factors used in the environmental
scanning component of strategic management.
Other factors: Environmental factors and Legal
factors.
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13. PEST analysis consists of components that
influence the business environment and each
letter in the acronym denotes a set of factors
that directly or indirectly affect every
industry. The letters denote the following
things:
Political – Here government regulations and
legal factors are assessed in terms of their
ability to affect the business environment and
trade markets.
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14. Economic – Through this factor, businesses
examine the economic issues that are bound to
have an impact on the company. This would
include factors like inflation, interest rates,
economic growth, the unemployment rate and
policies, and the business cycle followed in the
country.
Economic Growth
Economic Stability
Managing the Economic
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15. 1 Norway $103,630
2 Qatar $92,200
3 Macau $76,270
4 Luxembourg $75,990
5 Australia $64,540
6 Sweden $61,610
7 Denmark $61,310
8 United States $55,200
9 Singapore $55,150
10 Netherlands $51,890
Highest Income Earning Countries In The World
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16. Social – With the social factor, a business
can analyze the socio-economic
environment of its market via elements
like:
Religion: Religion can be defined as a
system beliefs and rituals that are
concerned with the realm of the sacred.
Like : Islam, Christianity, Hinduism,
Buddhism, Confucianism,
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17. Language : The language of a society allows it
to communicate but also directs the attention of
people towards certain features of the world and
human interactions.
Education : Schools, as a part of social
structure of a society and one that individuals are
exposed to their formative years, convey many
cultural values and norms.
Culture and the Workplace : For an
international business with operations in different
countries, it is important to understand how a
society's culture impacts on the values found in the
workplace.
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18. Technological factors: Technology greatly
influence a business, therefore PEST
analysis is conducted upon these factors
too.
Technology changes every minute and
therefore companies need to stay
connected along the way and integrate as
and when needed. Also, these factors are
analyzed to understand how the
consumers react to technological trends
and how they utilize them for their
benefit.
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19. Other factors
1. Legal factors: Legislative changes occur
from time to time and many of them affect
the business environment. For example, if a
regulatory body would set up a regulation
for the industries, then that law would
impact all the industries and business that
strife in that economy, therefore businesses
also analyze the legal developments
happening in their environment.
Abdulahi Abukar “ ABAJEY”
20. 2. Environmental factors: The location of
countries influence on the trades that
businesses do. Adding to that, many
climatic changes alter the trade of
industries and the way consumers react
towards a certain offering that is launched
in the market. The environmental factors
include geographical location, the climate,
weather and other such factors that are not
just limited to climatic conditions.
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21. 1. What is Globalism?
2. What is Global Business Environment?
3. Global business environment can be classified into two
categories What are they ?
4. What are the TYPES OF BUSINESS ENVIRONMENT? What are
they ?
5. What are the Elements of Social Environment?
6. What is the Difference between Globalization & Globalism?
Abdulahi Abukar “ ABAJEY”