The Business Environment Context
The Business Environment Context
Think of a business as a ship on the high seas. The captain and crew of the ship are steering the ship on its journey but the ship is also affected by other influences such as the weather, tides and currents. The captain and crew have no control over these but they must be able to respond effectively to the intervention of events such as a storm in order for the ship to successfully complete its voyage.
Just like a ship has to respond to the influences of its environment (the ocean) a business must also react to a number of factors that will be beyond its control. These can come from hugely varied sources, from the weather to a war on the other side of the world. The economy and government attempts to control it are more obvious influences on business activities but how each business will be affected are vastly different.
During this unit you will investigate the differences in businesses; how they are run organised and influenced. Why certain businesses are organised in different ways and which individuals and organisations are interested in the progress of different businesses. By the end of this unit you should understand: The range of different businesses and their ownership.
How businesses are organised to achieve their purposes.
The impact of the economic environment on business.
How political, legal and social factors impact on a business. Scenario
A bank wants to put together an information pack to help students understand the business world and have asked you to put certain parts of the pack together.
P1 – Describe the type of business, purpose and ownership of two contrasting businesses. [RL] To complete this you must investigate two businesses that are very different to each other. You must present the findings of your investigating in a manner appropriate to the scenario. For each of the two businesses you must describe and explain: The type of business it is in terms of which industrial sector it is in and whether it operates on a local, national or international scale.
What the business does. Meaning does it make a profit, provide a service or have another purpose. In explaining this you must clarify exactly what need the business meets in order to fulfil this purpose. Explain details about the ownership of the business and why this type of ownership suits the business being examined.
P2 – Describe the different stakeholders who influence the purpose of two contrasting businesses. [CT] Explain what is meant by a stakeholder. For each of the businesses you examined draw up a table of stakeholders, using a format similar to this:
Name of Business
Why concerned about the business?
P3 – Describe how two businesses are organised. [IE]
You will be required to find out how each of the two businesses in tasks 1 and 2 are organised in terms of:
Who is in charge?
Is there a line of control?
How are functional areas carried out?
Produce diagrams to show the organisational structure of each organisation.
P4 – Explain how their style of organisation helps them to fulfil their purposes. For each organisation explain how the organisation structure helps them meet their purposes.
P5 – Describe the influence of two contrasting economic environments on business activities within a selected business organisation. Using research material from the Internet you should find out how a business of your choice has managed during the last 20 years. This will include the period during which the UK economy grew very rapidly and then sank into recession in the last two years. Think about: Factors that can influence the demand for a product or service. Changes in the level of supply of a product or service.
Levels of inflation during the period.
Government policy in relation to business.
Global and environmental issues.
P6 – Describe how political, legal and social factors are impacting of the business activities of the selected business organisations and their stakeholders. For this task you should return to the organisations you have examined in tasks 1 to 4. This requires you to carry out a PESTLE analysis of the businesses you have examined. That is Political, Economic, Social, Technological, Legal and Environmental influences on the two businesses. This can be done in a chart.
M1 – Explain the points of view of different stakeholders seeking to influence the aims and objectives of two contrasting organisations Within each organisation various stakeholders have varying degrees of control over the organisation. They may also have opposite views on events affecting the organisations. Explain this and offer examples.
M2 – Compare the challenges to selected business activities within a selected organisation, in two different economic environments [IE] Expanding on task 5 but offering examples from your two contrasting organisations and explaining how changes in the economy have affected them.
M3 – Analyse how political, legal and social factors have impacted on the two contrasting organisations. Developing from task 6 you must offer examples of how each of your businesses have been affected by changing political, legal and social factors have impacted on your two businesses.
D1 – Evaluate the influence different stakeholders exert in one organisation. [IE] Choosing one of your organisations you must judge how different stakeholders have affected the business in recent years.
D2 – Evaluate how future changes in economic political, legal and social factors, may impact on the strategy of a specified organisation. Selecting one of your organisations research and explain what future trends might have an impact on the business.