Essay about Business Environment Assignment
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Business External Factors
There are many external factors that can touch on a business. Technological innovations affect how businesses are done, such as e-commerce which revolutionised retailing. Political factors such as new policies, for example, increased taxes affect a business. Economic factors also affect businesses, such as the financial crisis of 2007, which reduced profitability and increased unemployment. Social changes such as trends in fashion or changes in tastes and preferences affect the spending power of consumers, thus affecting businesses. Lastly, environmental factors, such as weather conditions affect production and sales. Legal factors such as patents laws affect businesses through ethical and legal practice.
PESTLE analysis Importance
PESTLE analysis is an instrument used to monitor the external environment to identify factors that have a potential impact on business performance. Through periodic analysis, a business is able to identify any changes in the external environment and make necessary adjustments. It is used together with other business tools to guide strategic decision making. For example, when a business is looking to expand to a foreign country, PESTLE analysis is significant in identifying the state of the external environment before making the decision to expand. The analysis is cost-effective and very powerful when accurately done.
Crisis management procedure
Crisis management has three major steps which include include pre-crisis, crisis management and post-crisis. The pre-crisis step involves creating a crisis management plan as well as identifying and training the crisis management team as well as selecting best practices. The other step is responding to a crisis when it hits. The crisis management plan is operationalised by the crisis management team. It involves the initial response to the more advanced application of the management plan. The last step is the post-crisis step, where follow up is done on the effectiveness of the measures put in place. The crisis management procedures used are evaluated for their success in the specific crisis and necessary changes done to the crisis management plan.
One of the factors that contribute to environmental damage is water pollution. Some business drain chemicals into water bodies, thus polluting the water. In addition, pollution is everywhere from emission carbon to deforestation. The acidification of oceans and other water bodies through mining and use of coal can affect marine life. The major factor contributing to environmental damage is global warming. As global temperatures rise, weathers conditions are affected, and ice is melted, increasing water levels in oceans and seas, thus increasing the risk of tsunamis. Overpopulation also affects the environment through overuse of resources.
How to minimise factors affecting the environment.
Global warming can be minimised by reducing carbon emission through the use of clean energy. Driving less or driving an electric car will reduce the carbon emissions, but again, the energy used to charge the cars should be clean and renewable energy. In addition, planting more trees will offset the carbon levels in the environment. Mining sites should be fully rehabilitated to ensure they do not collect acidic water and flow to other water bodies. In addition, the lost plants’ species should be restored. The use of coal in energy production should be eliminated and clean energy adopted. If all people worked to reduce their carbon footprint, then the effects on the environment can be reduced.
Business profitability and reputation and environment
Environmental protection has become a major CSR factor in the global warming era. There has been continued call from the public for businesses to offset their effects on the environment (Eccles, Newquist & Schatz, 2007). Global warming is viewed as a danger to the world and thus failing to care for the environment is perceived as failing to care for the species of the world. Businesses that do not care for the environment are seen as socially irresponsible and with society being a stakeholder in nay business, failing to addresses the needs of the stakeholders impacts the reputation. An effect on the reputation damages the profitability through reduced sales.
Function of marketing
The function of marketing is to identify the needs of the consumer and work to satisfy them. Marketing is aimed at increasing brand awareness by informing people about products and services and how they effectively meet their needs. Marketing speaks to the customers and connects with them, offering a chance to sell. Marketing consist of activities associated with pricing, promotion, distribution and product planning. Marketing is thus different from selling in that while marketing focus on customer needs, is profit-oriented, focus on the customer and planning is long terms oriented, selling focuses on the product, is oriented on sales volume and planning is short term (Reddy, 2017). Selling is the process of converting the product or service to cash, while marketing is the process of identifying and satisfying customer needs.
A marketing plan is a document commonly developed by a company to guide the marketing department in the implementation of the marketing strategy. The marketing plan ensures that the steps taken by the marketing team align with the overall objectives of the organisation. The primary function of the marketing plan is to set the company is a specific direction in marketing (Jantunen & Hellman, 2012). The marketing goals have to align with the overall organisational goals and objectives, and strategic analysis is thus required to actualise this. A new business, for example, focuses on increasing the customer base and thus, marketing efforts have to be aligned with this objective. The marketing plan also ensures that the marketing investments have a specific target by generating a marketing budget, accountability and monitoring measures.
Purpose of marketing objectives
Marketing objectives are SMART goals set by an organisation when marketing its goods or services. The purpose of the marketing objectives is to set out what a business et out to achieve through its marketing efforts. Setting marketing objectives guarantee that functional activities are consistent with the business objectives, decision making in marketing is focused, and resources are prioritised in the significant functional areas. For example, if the marketing objective is to increase market share, the business will be able to make decision aligned with this objective and prioritise significant marketing aspects to achieve the objective.
Internal and external data and information.
For the strategic running of any business, it is important to consider both internal and external data. Internal data is data retrieved from the company to make decisions such as sales, financial data, human resource data or marketing data. These are all data types that are internally found in the specific organisation. On the other hand, external data is data generated from outside the organisation. Such data can be accessed from a variety of sources such as open data intuitive such as datasets provided by governments or research data from scholars. Both internal and external data are employed in the analysis of the business environment, both internally and externally, for effective decision making (Löfgren, Gravem & Haraldsen, 2011).
Differences between primary and secondary information
Primary data is data that is composed from first-hand sources through methods such as interviews, surveys, experiments or questionnaires. Primary data is composed for a specific purpose as intended by the collector to fulfil a specific objective. On the other hand, secondary data is data that was previously collected for a specific purpose and is readily available for use for other purposes. Secondary data include sources such as census which is collected initially for planning as primary data but can be used for other purposes as secondary data (Ajayi, 2017). Primary data is advantageous in that it is collected for a specific purpose, while secondary data is advantageous in that it takes less time and resources to access.
Benefits to organisations of behaving ethically
Business ethics is the moral and beliefs system that guides the decisions, behaviours and values of an organisation as well as individuals within the organisation. In any industry, there are ethical codes of practice that guide how business is conducted in the industry to protect the consumers and foster competition. Other ethical requirements are embedded in laws, policies, regulations and restrictions such as insider trading (Horton, 2019). Behaving ethically in the era of improved access and sharing of information is a competitive factor for organisations. Awareness of ethics has increased, and stakeholders favour organisations that are considered ethical. Thus, behaving ethically provides a competitive advantage, and today, organisations compete on ethical practice as well as CSR. An ethical business is considered socially responsible and improves its brand awareness and value. Improved brand awareness improves productivity through increased market share.
An ethical organisation is able to attract and retain talented employees. Employees are ethically conscious and want to work in an ethical workplace. Talented employees are on-demand since talent management has become a major management concern. An organisation that behaves unethically will not only fail to attract talented employees but will also lose already existing talented employees to more ethical competitors. Another major benefit of behaving ethically is that avoiding legal and regulatory repercussions. Some ethical practices are embedded in law, such as minimum wages for employees (Arnold, Beauchamp & Bowie, 2019). Failing to observe laws and regulations is considered both illegal and unethical and will attract repercussions. Furthermore, behaving ethically builds a culture of ethical practice in an organisation, thus providing a moral compass during tough times. When faced with a dilemma, employees are able to apply ethics due to their knowledge and practice of ethical practice.
Effect of organisational culture on business
Organisational culture, as defined by Jarratt & O’Neill (2002) learned and shared beliefs, values and practices in an organisation. Organisational culture determines how employees interact with each other and with other stakeholders as well as how an organisation run its business. A positive organisational culture is performance-oriented. Organisational culture has an effect on the thinking, perceptions and actions of employees more so in relation to organisational practice (Jarratt & O’Neill, 2002). How employees think and perceive an organisation affects their motivation. In that employee motivation improved productivity and performance, and organisational culture can foster improved performance. Organisational culture also ensures that conflicts within the organisation are avoided. Dimensions of organisational couture such as values and beliefs are significant for employees’ relationships. The culture lays the ground rules employee interactions as well as other elements such as ethical practice. This reduces conflicts not only within the organisation but also from external sources.
Ajayi, V. (2017). Primary Sources of Data and Secondary Sources of Data. Benue State University.
Arnold, D. G., Beauchamp, T. L., & Bowie, N. E. (2019). Ethical theory and business. Cambridge University Press.
Eccles, R. G., Newquist, S. C., & Schatz, R. (2007). Reputation and its risks. Harvard Business Review, 85(2), 104.
Horton, M. (2019). Why is business ethics important?. Retrieved 3 January 2020, from https://www.investopedia.com/ask/answers/040815/why-are-business-ethics-important.asp
Jantunen, E., & Hellman, A. (2012). Marketing plan.
Jarratt, D., & O’Neill, G. (2002). The effect of organisational culture on business-to-business relationship management practice and performance. Australasian Marketing Journal (AMJ), 10(3), 21-40.
Löfgren, T., Gravem, D., & Haraldsen, G. (2011). A glimpse into the businesses’ use of internal and external data sources in decision-making processes. In BLUE-ETS Conference on Business Burden and Motivation in NSI Surveys Statistics Netherlands, Heerlen.
Reddy, V. (2017). Difference Between Selling and Marketing » Mu BIT. Retrieved 3 January 2020, from https://mu-bit.com/blog/selling-and-marketing/
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