Week 2_The Firm and its Environment PDF

PRESENTATION THE FIRM AND ITS ENVIRONMENT Environmental Forces Environmental Scanning Local and International Business Environment Global Trends Effects of Globalization to Management Principles  ENVIRONMENTAL FORCES The business environment...

PRESENTATION THE FIRM AND ITS ENVIRONMENT Environmental Forces Environmental Scanning Local and International Business Environment Global Trends Effects of Globalization to Management Principles  ENVIRONMENTAL FORCES The business environment can be classified into two types External Internal Forces or factors outside of Forces or factors within the the organization that can organization that can affect either affect the performance the performance of the of the organization negatively organization negatively or or positively. positively. ENVIRONMENTAL FORCES EXTERNAL General Specific Economic Stakeholders Socio Cultural Customers Politico Legal Pressure Groups Demographic Investors Technological Employees World and Ecological Situations ENVIRONMENTAL FORCES INTERNAL Resources Research & Development Production Procurement of Supplies Products & Services ENVIRONMENTAL SCANNING Process of gathering, analyzing, and dispensing data about the organization’s environment for tactical or strategic purposes.  COMPONENTS OF ENVIRONMENTAL SCANNING Benchmarking Considering of Comparing your products to those future business leading the scenarios industry for improvement The Business development of prediction or a competitive forecasting mindset LOCAL AND INTERNATIONAL BUSINESS ENVIRONMENT OF THE FIRM Local International Businesses Businesses A business whose economic A business which is not transaction is conducted restricted to a single within the geographical country, i.e. a business which limits of the country. is engaged in the economic transaction with several countries in the world. LOCAL AND INTERNATIONAL BUSINESS ENVIRONMENT OF THE FIRM Local Businesses Examples: A grocery store that sells food and household items to customers in its local community. A law firm that offer legal services to clients in its state. A manufacturing company that produces goods for sale in its country. A bank that provides financial services to customers in its region. LOCAL AND INTERNATIONAL BUSINESS ENVIRONMENT OF THE FIRM International Businesses Examples: Foreign Direct Investment (FDI): Companies establishing subsidiaries, branches, or production facilities in foreign countries to access new markets, resources, or cost advantages. International Franchising: Granting the rights to use a brand and business model to a foreign partner in exchange for fees and royalties. Licensing Intellectual Property: Allowing foreign entities to use technology patents, copyrights, or trademarks in exchange for licensing fees. International Joint Ventures: Collaborative partnerships between companies from different countries to pursue shared business opportunities and share risks. DIFFERENCES BETWEEN THE TWO? GLOBAL TRENDS Defined as a general development or change in a situation that affects many countries of the world. GLOBAL TRENDS AI AI solutions have the potential to drastically increase the efficiency of customer service operations, reduce spending, and boost overall customer satisfaction. Furthermore, training generative AI with models and prompts will simplify creation of advertising and marketing materials. GLOBAL TRENDS E-COMMERCE The pandemic has drastically changed the e- commerce landscape, from altering consumer behavior to the creation of new channels of distribution. Post pandemic, it’s still growing modestly with companies launching new e-commerce opportunities every day. GLOBAL TRENDS REMOTE / HYBRID WORK We’ve seen that employees who’ve had the opportunity to work remotely aren’t quick to give in to companies who’d like them back in the office. Employees are continuing to see financial benefits from working remotely. As this trend persists, we expect to see more companies opting for monitoring technology that will ensure worker productivity. GLOBAL TRENDS SOCIAL MEDIA With the number of social media users increasing gradually, business owners see this as an opportunity to seize. Additionally, running a business without having social media presence is almost unheard of in 2024.  EFFECTS OF GLOBALIZATION TO MANAGEMENT PRINCIPLES Globalization Refers to the interconnectedness of the world’s economies and cultures. It encompasses everything from international trade and investment to communication and cultural exchange. EFFECTS OF GLOBALIZATION TO MANAGEMENT PRINCIPLES Rising need for cross-cultural communication skills for managers. Increased competition. Rise of outsourcing and offshoring to lower costs. Need for effective and consistent communication. EFFECTS OF GLOBALIZATION TO MANAGEMENT PRINCIPLES Increased access to new markets. Greater flexibility in sourcing materials and labor. Learn from other cultures and adapt. More opportunities for innovation. PRESENTATION P OLITICAL It is an analytical tool E CONOMIC available to companies to determine how external factors influence their S OCIOCULTURAL operations and make them more competitive in the market. T ECHNOLOGICAL This method looks at the factors in a nation or L EGAL marketplace, and examines how those factors affect the consumer E NVIRONMENTAL POLITICAL Includes government policy and legislative changes that affect the economy, such as tax and employment laws. ECONOMIC These are inflation, exchange rates, recessions, and supply and demand. SOCIOCULTURAL Includes consumer demographics, culture, and lifestyle. TECHNOLOGICAL These are factors like changes in technology, how technology is used in different sectors and industries, and research. LEGAL These are legal aspects that affect businesses such as consumer law, copyright law, and health and safety law. ENVIRONMENTAL These have little to do with the actual business, including climate, pollution, weather, and environment-related laws. PESTLE analysis allows managers, marketing, and financial experts to examine specific factors (outside of money) when making decisions about the company's services or products. Results from PESTLE analysis allow the company to make specific choices when planning the company's future, from how the brand should be presented, to any changes within the structure of the company's organization, to the development of new products. WRITTEN ACTIVITY#1 Look for either local or international companies and identify their PESTLE e.g. cite 2 specific articles or news for each factor Output: (1) Printed output (TNR or Arial, 12) (2) Double-spacing, follow APA7 for citations (3) Submit next meeting (4) Total points: 60 SOURCES https://www.slideshare.net/slideshow/abm-organization-and-management/67111575#3 https://prezi.com/dwsv788swdtf/local-and-international-business-environment-of-the-firm/ https://www.shiksha.com/online-courses/articles/difference-between-domestic-business-and-international- business/#:~:text=Domestic%20and%20international%20business%20are,and%20services%20across%20national%20borders. https://explodingtopics.com/blog/business-trends https://zoetalentsolutions.com/impact-of-globalization-on-international-business-management-practices/ https://www.investopedia.com/ask/answers/041015/whats-difference-between-porters-5-forces-and-pestle-analysis.asp