Unit 1 - Business organisation and environment

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  • Business organisation and environment
    • Types of organisations
      • Public
        • Owned and controlled by government
          • Public corporations
          • Local authorities
    • Stakeholders
      • External stakeholders
        • Government   (they regulate organisations in order to protect the public interest)
        • Banks (they lend organisations funds so they can invest and carry out their operations)
        • Media
        • Customers (They demand good service and quality products that are also safe and are sold at a reasonable cost
        • Suppliers (they are the individuals and businesses that sell goods and services to another organisation
        • Pressure groups
        • Environmental organisations (may step in to make sure corporate behaviour does not adversely impact the planet and its residents)
      • Internal stakeholders
        • Employees (are motivated by compensation, benefits, job security, and working conditions
        • Owners/shareholders (invest in a business in order to receive a return on their investment
        • Managers (responsible  for setting aims and objectives and making sure they are met.
    • External environment
      • STEEPLE
        • Social - relates to the way people live and what they believe and value
        • Technological - related to the explosion of innovations in information technology    - also includes nanotechnology and genetic engineering which is leading to advances in medical and agricultural science          - takes into consideration the availability of infrastructure, particularly in developing countries which basically includes things like ports and road and rail networks, drinking water and sanitation facilities, and communication networks and reliable electricity, all of which are necessary to doing business
        • Economical - The demand for products and services is not the same in poor countries as it is in wealthier ones.              - As economies develop, consumers have more money to spend which means that the businesses will respond to improving living standards by adapting their product offerings
        • Environmental - one is that Climate change has already had a huge impact on businesses worldwide        - disturbances occurs when the weather patterns are altered which increases the frequency of storms and floods, as well as forest fires and droughts   - The necessity to protect species and their habitats can limit the development of some businesses
        • Political             - all the types of businesses needs which needs permission should take all the political factors into account
        • Legal - needs to follow laws and regulation which are generally made by the central government     - the potential for litigation is an issue in many industries since they can be sued by governments for anti-trust behaviour, by other companies for anti-competitive practices, by employees for unfair practices, and by consumers for producing harmful or potentially harmful products
        • Ethical - movements opposing unfair labour practices must be considered in few countries and under pressure there can be many more ethical problems        - pricing policies, such as discriminatory pricing and predatory pricing, may have ethical components    - corruption can be another problem
    • Organisational planing tools
      • Fishbone diagram - it is used to determine the origin of a problem, or 'the causes of the causes' behind a problem     - Facilitates brainstorming and discussion       - Permits the investigation of the many possible causes behind problems that may be just symptoms of an underlying dysfunction, thus identifying the root problem(s)       - Shows areas of weaknesses that can also be improved
      • Decision tree - it is another name for a probability tree                  - Instead of diagnosing the causes of a problem, decision trees are used to make decisions in the face of uncertainty      - Provides a visual representation of a complex problem, making the alternatives presented easier to understand and communicate   - and also identifiesthe costs, the benefits and the probabilities for each option
      • Force field analysis           - can be used to study the factors that are driving change and those that oppose it (restraining forces)             - Permits better understanding of the stakeholders that may be preventing positive change, thus management can plan how to reduce or some of the restraining forces              - Allows the graphic representation of complex information that might otherwise be difficult to describe and debate.Note


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