Untitled

• These notes cover influences and challenges within business environments, and avenues of acquiring a business.

Terms and Definitions

• Control: Influencing or directing behavior/events.
• Organizational structure: Framework showing division of responsibilities among managers/stakeholders.
• Organizational culture: How a business conducts itself.
• Vision: Prediction of the future for the business.
• Mission statement: Describes the business' daily best practices.
• Human resources: Personnel with the ability to perform necessary skills/tasks.
• Suppliers: Providers of goods/services.
• Competitors: Businesses selling similar products/services.
• Deforestation: Clearing trees for alternative land use.
• Redressing: Making amends.
• Nepotism: Showing favoritism towards family/friends.
• Retrenchment: Involuntary contract termination due to operational needs.
• Go-slows: Reduced work effort to persuade employers.
• Trade union: Organized worker association protecting rights/interests.
• Strike: Work stoppage to protest or strengthen bargaining.
• Industrial action: Actions including strikes or go-slows.
• Open market: Uncontrolled market for goods/services pricing.
• Demographics: Statistical population data including age, gender, income, occupation, etc.
• Psychographics: Classification by attitudes/aspirations/psychological criteria.
• Globalization: Increased trade/collaboration via technology/communication.
• Physical environment: Includes ecological elements like disasters, pollution, deforestation, waste.
• Institutional environment: Public-private partnerships between government/private enterprise.
• Information management: Finding, storing, retrieving information for use.
• Strategic response: Reaction to a need with a long-term solution.
• Merger: Willing combination of similar businesses.
• Takeover: Assuming control, buying out another company against its will.
• Alliances: Associations for mutual benefit.
• Hedging: Investment to outpace inflation.
• Networking: Exchanging info/contacts for customers, suppliers, etc.
• Trademark: Legally registered symbol/word representing a company/product.
• Workplace forums: Employee representatives within a business.
• Inflation: General price increase in goods/services.
• Patent: Exclusive right granted for a new invention.
• Trade union: Organized worker association protecting rights/interests.
• Strike: Work stoppage to protest or strengthen bargaining.
• Lock-out: Employer keeping employees from work during negotiation.
• Economic crime: White-collar crime, e.g., fraudulent transactions.
• Ethical conduct: Actions aligning with individual/organizational values.
• Copyright: Exclusive right given to original work's creator.
• Dumping: Selling excess products in another market below normal price.
• Royalties: Payments to franchisor based on franchisee's turnover.
• Vendor: Entity providing outsourced function.
• Franchising: Granting rights to sell goods/services under certain regulations.
• Franchisee: Individual buying rights/using trademark in a franchise.
• Franchisor: Sells the rights business for a trademark/business model.
• Leasing: Paying for asset use rather than buying.
• Lessor: Asset owner.
• Lessee: Asset user.
• Outsourcing: Buying goods/services or paying another business to carry out a function.
• Goodwill: Value of brand name/customer base.
• Solvent: Assets exceed liabilities.
• Liquid: Company can pay daily expenses.

Components of the Micro, Market & Macro Environments

• Micro environment components: Business mission/objectives, management structure, resources, culture.
• Micro environment control: Primarily controlled by enterprise's management.
• Market environment components: Customers/buyers; suppliers, intermediaries/agents, competitors, regulator(s), strategic allies, unions.
• Macro environment components: political, economic, social, technological, legal, environmental.
• Micro environment control: Business owners have great control over internal decisions.
• Market environment control: Business owners have less control, but can influence competitors.
• Macro environment control: Factors are largely uncontrollable and change constantly.

Involvement in Macro Environment

• Ways to be involved: Influencing suppliers, creating product uses, lobbying, bargaining with unions, using annual reports to influence owners.
• Benefits: Accurate future predictions, healthier workforce, wealthier consumers, reduced conflict, societal contribution.

Challenges of the Business Environments

• Micro environment challenges: Difficult employees, lack of vision, inadequate management/skills, union issues, strikes, skill shortages, turnover, absenteeism.
• Market environment challenges: Competition, supply shortages, changing consumer behavior, demographics/psychographics, socio-cultural factors.
• Macro environment challenges: Income levels, political changes, policies, labour restrictions, micro lending, globalization, social values, socio-economic issues

Adapting to Challenges

• Micro environment recommendations: Businesses should revisit recruitment policies, management must have a clear vision and that is implemented, and managers need to develop interpersonal skills, deal fairly with trade unions, and strive to build relationships to minimize strikes.
• Market environment recommendations: Businesses must account for market entry/operation, conduct research, identify customer needs, select reliable suppliers, maintain relationships, and potentially integrate suppliers.

Adapting to Challenges in the Macro Environment

• Businesses can adapt using information management, strategic responses, mergers/takeovers, organizational design/flexibility, direct influence/social responsibility.
• Information must be recorded, stored, retrieved, and used.
• Companies should invest in IT to improve operations.
• Management must analyze information to identify stakeholder viewpoints when designing strategic responses.
• Businesses should be aware of new competitors.
• Businesses should make quick decisions to survive changes & address challenges with a combination of mergers, takeovers, acquisitions or alliances.
• Organizational design should encourage integration of people/tech.
• Successful businesses adapt to their environment by creating a competitive environment.

Social Responsibility

• Businesses are pressured to become socially responsible by giving back to communities by giving back financially or by doing charitable work which improves community relations.
• Companies should create a code of conduct.
• Companies should aim to follow a triple "P" bottom line, Planet, People and Profit.
• Benefits of CSI projects: Increased morale, teamwork, attractiveness to employees, goodwill, marketing, brand image.

Lobbying, Networking, and Power Relations

• Lobbying seeks to influence legislation/decision-making and acquire public support
• Reasons for lobbying: Trying to influence prices/changes to existing laws.
• Businesses can use hedging to protect their finances, spread risk and outperform inflation
• Bargaining with unions can prevent strikes.
• Businesses should take an active role in professional bodies.
• Networking means activity for exchanging information/ideas.
• Businesses should develop partnerships which can help parties involved with access to infrastructure.
• If a business has a powerful investor, the business can often benefit in terms of better financing.

Trade unions

• Trade unions protect and lobby for the rights of workers in negotations.
• Trade unions provide protection to members, engage in bargaining, and assit workers with grievances
• This offers a collective voice in the workplace plus ensures fair treatment, social dialogue.
• Improves working conditions, represents interests, influences policy, and fights unfairness.

Primary, Secondary and Tertiary Business Sectors

• Primary sector extracts raw materials.
• Secondary sector changes those raw materials into useful products. Examples of each type: Primary (mining, fishing), Secondary (manufacturing, construction), Tertiary (banking, retail).
• Relationship between each sector: The Primary sector supplies, the Secondary sector transforms then the Tertiary sector sells

Forms of Ownership

• Essential aspects include legal status, profit sharing, capital, and lifespan.
• Define key company ownership structure/concepts related to the incorporation.
• Look at issues with white collar crime include fraudulent transactions.
• Act Ethical; follow a company or own's own sense of what values should be upheld which also means avoiding sexual harrasment.
• Be literate because training becomes expensice so make sure staff can read.
• Always avoid strikes but bargain appropriately so staff can work

Companies

• A company is a legal person who has capacity and powers to act on its own.
• Private Company and public companies are voluntary associations who follow act 71 of 2008
• If the the company is in the public domain then a shareholder is required with shareholders ahving some level of limited liability
• SO consider buying or selling stocks depending on what kind company you have

Franchising

• Royalities pay for the right to sell so follow through the contracts on both side of the businesses.

Business Strategies

• Franchising provides you with a distribution
• Try to be involved if the company is outsourced.
• So it is wise to engage in an agreement
• By leasing you are improving cash flow by having the ability to have certain tax advantages