ORGMAN KIMKIM WITH FRIENDS CHAP 2!!.pptx
- 1. Chapter 2: The Firm And Its Environment Prepared by: Dagami, Kimberly Afante, Monday Garcia, Ashley Gabay, Irish Fontanilla, Ashley Dela Cruz, Rikki Mae
- 2. Topic Objectives The learners have an understanding of the role of business in the environment, and how the environment affects the firm (Content Standard). The learners shall be able to analyze the various environmental forces affecting the firm and summarize these using Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis frameworks (Performance Standard)
- 3. Chapter Outline 1. Environment Forces and Environment Scanning 2. The Local and International Business Environment of the Firm 3. Phases of Economic Development 4. Forms and Business Organizations
- 4. Chapter Outline 1. Identify the various forces/elements of the firms environment and summarize these forces using SWOT analysis; 2. Describe the local and international business environment of a firm; and 3. Explain the role of business in relation to the economy, discuss the different phases of economic development, and differentiate the various forms of business organizations.
- 5. Lesson 1 Environmental Forces and Environmental Scanning
- 6. Lesson 1: Environmental forces and environmental scanning Essential ideas Business Environment refers to the factors or elements affecting a business organizations. It may be divided into the External and Internal Business Environments. The External Business Environment includes the factors and elements outside the organization which may affect its performance, either positively or negatively, the performance of the organization. The Internal Business Environment refers to the factors/elements within the organization which may effect, either positively or negatively, the performance of the organization.
- 7. Lesson 1: Environmental forces and environmental scanning Essential ideas The environment in which a business operates is a major consideration (such as uncertainty, procurement, and competition are linked with the external environment) in determining an organizations design or structure. A companys strategy and approach to operations must also be aligned with the limitations of its external environment as well as its internal environment.
- 8. Components of the external business environment: General and specific The general business environment includes the economic, sociocultural, politico-legal, demographic, technological and world and ecological situations. All these must be considered as managers plan, organize, staff, lead and control their respective organizations.
- 9. Components of the external business environment: General and specific Economic Situation Sociocultural Situation Politico-legal Situation Demographic Situation Technological Situation World and Ecological situations Are considered as the GENERAL components of the external business environment
- 10. Components of the external business environment: General 1. ECONOMIC SITUATION Inflation, rates of interest, changing options in stock markets, and peoples spending habits are some examples of factors / elements of economic situation. Economic situation may affect management practices in organizations. For example, companies may postpone expansion plans if bank loan interests are too high.
- 11. Components of the external business environment: General 2. SOCIOCULTURAL SITUATIONS Include the customers changing values and preferences; customs could also affect management practices in companies. For example, Filipino customers are now conscious about the importance of avoiding fatty foods, so many food companies now make sure that the products they offer are cholesterol- free or are low in cholesterol. In doing so, they avoid losing their customers.
- 12. Components of the external business environment: General 3. POLITICO-LEGAL SITUATIONS Refers to national or local laws, international laws, and rules and regulations that influence organizational management. For example, labor laws related to preventing employers from firing their employees without due process require the former to allow the latter to exercise their right to present their position during disciplinary action before their employment can be terminated.
- 13. Components of the external business environment: General 4. DEMOGRAPHIC SITUATIONS Such as gender, age, education level, income, number of family members, geographic origin, etc may also influence some managerial decisions in organizations.
- 14. Components of the external business environment: General 5. TECHNOLOGICAL SITUATIONS Companies involve the use of varied types of electronic gadgets and advanced technology such as computers, robotics, microprocessors, and others that have revolutionized business management; e-commerce, teleconferencing, and sophisticated information systems have rapidly changed the ways that business is conducted in the 21st century.
- 15. Components of the external business environment: General 6. WORLD AND ECOLOGICAL SITUATIONS Are related to the increasing number of global competitors and markets, as well as the nature and conditions of the changing natural environment. Products produced by companies, of course, must cater to the changing needs of people in the global community, while, at the same time, considering their impact on the natural environment.
- 16. Components of the external business environment: General and specific Stakeholders Customers Suppliers Pressure Groups Investors or Owners Employees Are considered as the SPECIFIC components of the external business environment
- 17. Components of the external business environment: SPECIFIC 1. STAKEHOLDERS and CUSTOMERS Are parties likely to be affected by the activities of the organization, while customers are those who patronize the organizations products and services. Increasing customer sophistication makes it necessary for managers of organizations to make crucial decisions regarding the development of products with higher value and the improvement of their services to meet their patrons increasing demands.
- 18. Components of the external business environment: SPECIFIC 2. PRESSURE GROUPS Are special-interest groups that try to exert influence on the organizations decisions or actions. For instance, pressure from the Food and Drug Administration on some department stores and drug stores led them to stop selling beauty products containing lead and to stop ordering or importing such products from their suppliers.
- 19. Components of the external business environment: SPECIFIC 3. INVESTORS OR OWNERS Provide the company with the financial support it needs and of course, cannot exist without them, thus, greatly influence organizational management. Top-level, Middle-level and Lower-level managerial decisions are all influenced, in one way or another, by the investors or owners of organizations. Branching out, offering new products and services, and applying for needed loans are affected by their way of thinking
- 20. Components of the external business environment: SPECIFIC 3. EMPLOYEES Are comprised of those who work for another or for an employer in exchange of salaries or wages or other considerations. Employees execute the companys strategies and are important for the maintenance of the companys stability. For example, managerial decisions are influenced by the companys knowledge about their workers.
- 21. COMPONENTS OF INTERNAL BUSINESS ENVIRONMENT
- 22. Internal Business Environment It is composed of its resources, research and development, production, procurement of supplies, and the products and services it offers. Internal environment of the organization must be subjected to internal analyses. Internal strengths and weaknesses, opportunities, and threats (SWOT) with regards to its resources (financial, physical, mechanical, technological, and human resources), research and development endeavors, production of goods, procurement of supplies (materials, inputs, and finance), and products and services must all be considered prior to organizational planning.
- 24. Components of environmental scanning Developing a Competitive Mindset, Considering Future Business Scenario, Business Prediction (Business Forecasting), SWOT Analysis, and Benchmarking
Editor's Notes
- #10: Inflation. A period of above normal general price increases, as reflected in the consumer and wholesale price indexes. Interest Rates. The total amount that a borrower must pay annually to the lender and above the total amount borrowed. Changing Options. The consumers change in preference of goods and services offered. Peoples spending habits. The consumers changing ways of spending their money on goods and services.