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Chapter2,Thebusinessenvironment,1Analysingtheenvironment,Theenvironmentiseverythingthatsurroundsanorganisation,physicallyandsocially.Managementcannotcontroltheenvironment,howeveritinfluencesallaspectsoforganisationalactivityandsomustbeviewedstrategically.,Organisationmustconsideritsenvironment,Global/localGeneral/taskGeneral(ormacro)environmentinfluenceallorganisationsindirectly.PESTfactorsTask(ormicro)environmenthasadirectimpactontheorganisation.Fivecompetitiveforces,Theenvironmentisasourceofuncertainty.Simplicity/complexityThevarietyofinfluencesfacedbyanorganisationTheamountofknowledgenecessaryTheinterconnectednessofenvironmentalinfluencesStability/dynamism,1.1ThechangingenvironmentGlobalisationofbusinessScienceandtechnologydevelopmentsMergers,acquisitionsandstrategicalliancesChangingcustomervaluesandbehaviourIncreasedscrutinyofbusinessdecisionsbygovernmentandthepublicIncreasedliberalisationoftrade,andderegulationandco-operationbetweenbusinessandgovernmenthaveeasedaccesstoforeignmarketsChangesinbusinesspractices:downsizing,outsourcingandreengineeringChangesinthesocialandbusinessrelationshipsbetweencompaniesandtheiremployees,customersandotherstakeholders.,Questions,WhichofthefollowingheadingsisnotpartofanormalPESTanalysis?APoliticalBEcologicalCSocialDTechnologicalAnswer:B,2Thepoliticalandlegalenvironment,2.1ThepoliticalandlegalenvironmentCommonlegalfactorsinenvironmentGeneralcommerciallaw(contract,tort)Criminallaw(theft,insiderdealing)Companylaw(directorsduties,reporting)Employmentlaw(tradeunion,minimumwage),MorecommonlegalfactorsHealthandSafety(fire,personalsafety)Dataprotection(useofinformation)Marketing/sales(consumers,advertising)Environment(emissions,wastedisposal)Taxlaw(VAT,PAYE),2.2TheimpactofgovernmentPorternotesseveralwayswherebythegovernmentcandirectlyaffecttheeconomicstructureofanindustryCapacityexpansionDemandDivestmentandrationalisationEmergingindustriesEntrybarriersCompetitionRegulatetheadoptionofnewproductsinsomeindustriesNationalandEUinstitutionsalsoaffecttheoperatingactivitiesofsomeorganisations,2.3InfluencinggovernmentEmploylobbyiststoputtheircasetoindividualministersorcivilservants.GiveMPs(MemberofParliament)non-executivedirectorshipsTrytoinfluencepublicopinion,andhencethelegislativeagenda,byadvertisingEUregulations,forpracticalpurposes,takepriorityovernationallawItisthereforemuchbettertoinfluencethedraftingprocessofnewregulationsthantotryandgetthemchangedoncetheyhavebeenimplemented,2.4PoliticalriskandpoliticalchangeInUK,governmentwillpublishagreenpaperdiscussingaproposedchangeinthelaw,beforeissuingawhitepaperandpassingabillthroughparliament.Thepoliticalriskinadecisionistheriskthatpoliticalfactorswillinvalidatethestrategyandperhapsseverelydamagethefirm.,2.5InternationaltradePotentiallysubjecttoahigherlevelofpoliticalrisk2.6TheEuropeanUnionTheEuropeanUnionoperatesasingleEuropeanmarket,allowingforthefreemovementoflabour,goodsandservices,andfreecompetitions.Harmonisingtechnicalstandards,openingupareassuchastelecommunicationstocompetition,consumerprotection,mutualrecognitionofprofessionalqualificationsandsoon.,2.7Internationaltradeliberalisation:theWorldTradeOrganisation(WTO)TheWorldTradeOrganisationwassetuptopromotefreetradeandresolvedisputesbetweentradingpartners.Thetheoryofcomparativeadvantagesuggeststhatfreetradeisthebestwaytopromoteglobaleconomicgrowthand,byimplication,domesticprosperity.,3Employmentprotection,3.1RetirementBanageismRetirementagesformenandwomenarebeingequalised.3.2ResignationExitinterviewPeriodofnotice,3.3DismissalStatutoryminimumperiodofnoticeAwrittenstatementofthereasonsfordismissal3.4WrongfuldismissalTheemployerhasdismissedanemployeehowevertheyhavebreachedthetermsofthecontract.Itrelatestothemethodofdismissal.3.5UnfairdismissalTheemployeehasbeendismissedforanarbitraryreasontheonusisontheemployertoprovethatitwasafairdismissal.3.6Disciplinaryprocedures,3.7RedundancyCertainlegalminimaforcompensationoffered,basedonageandlengthofservice3.7.1ProcedureforhandlingredundanciesTheimpactofaredundancyprogrammecanbereducedinseveralwaysRetirementofstaffoverthenormalretirementageEarlyretirementtostaffapproachingnormalretirementageRestrictionsonrecruitmenttoreducetheworkforceovertimebynaturalwastageDismissalofpart-timeorshort-termcontractstaffOfferingretrainingand/orredeploymentwithintheorganisationSeekingvoluntaryredundanciesLIFOprincipleProvidebenefitsinexcessofthestatutoryminimumProvideadviceandoutplacementcounseling3.8Equalopportunities,4Dataprotectionandsecurity,4.1Whyisprivacyanimportantissue?4.2TheDataProtectionAct1998Protectsindividualsaboutwhomdataisheld.BothmanualandcomputerisedinformationmustcomplywiththeAct.,4.3DefinitionoftermsusedintheActPersonaldataisinformationaboutalivingindividual.Datausersareorganisationsorindividualswhocontrolpersonaldataandtheuseofpersonaldata.Adatasubjectisanindividualwhoisthesubjectofpersonaldata.,4.4ThedataprotectionprinciplesToprotectindividualprivacyToharmonisedataprotectionlegislation,DataProtectionAct1998principles,dataprocessedfairlyandlawfullyobtainedforspecified,lawfulpurposesadequate,relevantandnotexcessiveaccurateandup-to-datenotkeptforlongerthannecessaryprocessedinlinewithrightsofdatasubjectsappropriatemeasurestakenagainstunauthorisedusenotransfertocountrieswheredataprotectionrightsnotupheld,4.4.1TherightsofdatasubjectsSeekcompensationPutinaccuratedatarightorwipedoffObtainaccesstodataSueadatauser,Questions,TheDataProtectionActenablesorganisationstoindiscriminately(不加选择地,任意地)utiliseinformationheldonalldatabases.Trueorfalse?ATrueBFalseAnswer:B,5Healthandsafety,5.1ImportanceofmaintaininghealthandsafetyatworkAnemployerhaslegalobligationsunderUKandEUlawAccidentsandillnesscosttheemployermoneyThecompanysimageinthemarketplaceandsocietymaysuffer,5.2EmployersdutiesSafeworkpractices/environmentPlant/machinerymaintainedTraining:encouragesafeworkingpracticesCommunicationofpoliciesRiskassessmentsandcontrolsShareinformationregardinghazardsandrisksIdentifythosemostatriskEmploycompetentadvisers,5.3EmployeesdutiesTakereasonablecareAllowemployertocarryoutdutiesNotinterferewithmachineryInformemployerofdangersUseallequipmentproperly,5.4AccidentandsafetypoliciesAccidentareexpensiveAnemployeecansueReducingthefrequencyandseverityofaccidentsAccidentreportingsystemsAccidentreportformStatisticaltrendsFollow-upRiskauditorsamplingReportingnear-misses,5.5HealthandsafetypolicyStatementofprinciplesDetailofsafetyproceduresCompliancewiththelawDetailedinstructionsonhowtouseequipmentTrainingrequirementsSeniormanagersmustsetagoodexample,Questions,Whichofthefollowingcouldbefoundasafeatureofanorganisationalhealthandsafetypolicy?AEmployeesmedicalassessmentsBDetailedinstructionsonhowtouseequipmentCThecompanymissionstatementDAnanalysisofemployeebenefitsinkind,includingprivatehealthcareAnswer:B,ExamplesSlipperyorunevenfloorsFrayedcarpetsTrailingelectricleads,telephonecablesandotherwiresObstacles(boxes,files,books,opendrawers)ingangwaysStandingonchairs(particularlyswivelchairs)toreachhighshelvingBlockedstaircases,forexamplewheretheyareusedforextrastoragespaceLiftingheavyitemswithoutbendingproperlyRemovingthesafetyguardonamachinetofreeablockageortomakeitrunfasterEmployerhasaresponsibilitytoconformwithrelevantHealthandSafetylegislationinprovidingasafeenvironmentandtrainingstafftobeabletooperateintheworkenvironmentsafelyEmployeehasadutytotakereasonablecare,reportanybreachesofhealthyandsafety.,6Consumerprotection,6.1Whatisacontract?Acontractisalegallybindingagreement.Thisrequiresanoffermadebyoneparty,acceptancebytheotherpartyand,inEnglandandWales(butnotScotland),someconsiderationpassingbetweenthem.Theydonothavetobewrittenorspoken.SellofGoodsAct1979,6.2Saleofgoodsandservices6.2.1ImpliedtermsTheeffectofdelayinperformanceTitle,orthesellersrighttosellthegoodsDescriptionofthegoodsQualityofthegoodsFitnessofthegoodsforthepurposeforwhichtheyaresuppliedSalebysample,6.2.2TimeofperformanceTimeisoftheessence6.2.3SellerstitleThesellerhasarighttosellthegoods,orwillhave,atthetimeofsale.6.2.4Example:Sellerstitle,6.2.5GoodstocorrespondwithcontractdescriptionThedescriptionmaybeofingredients,components,age,dateofshipment,packing,qualityetc.6.2.6Example:SalebydescriptionTradeDescriptionAct1968,6.2.7SatisfactoryqualityInthecourseofbusiness,theyshouldmeetthestandardthatareasonablepersonwouldregardassatisfactory,takingaccountofanydescriptionofthegoods,thepriceandotherrelevantcircumstances.Fitnessforallthepurposesforwhichgoodsofthekindinquestionarecommonlysupplied.AppearanceandfinishFreedomfromminordefectsSafetyDurability,6.2.8FitnessofgoodsforadisclosedpurposeThegoodssuppliedtobereasonablyfitforthatpurpose,inthecourseofbusiness,7Socialanddemographictrends,7.1PopulationandthelabourmarketPopulationaffectsanorganisationssupplyoflabourandhenceitspoliciestowardsrecruitingandmanaginghumanresources.GrowingpopulationsofferalargerlabourmarketThechangingagestructureofthelabourforceWomenareincreasingtheirparticipationinthelabourforce,7.2ImplicationsforemployersEstablishthelabourmarkettheorganisationisin(Whodowewanttorecruit?)Discovertheorganisationscatchmentareas(locationofpotentialrecruits)Discernthesupplysidetrendsinthecatchmentarealabourforce(howmanyschoolleaversareexpected?Whatistherateofgrowth/declineoflocalpopulation?)ExamineeducationtrendsintheareaAssessthedemandfromotheremployersfortheskillsyouneedAssesswhethersomeofyourdemandcanbesatisfiedbyasupplyfromothersources,7.3FamilylifecycleFormarketingpeople7.4SocialstructuresandclassMemberssharecommonfeatures,suchastypeofoccupation,incomelevel,educationbackgroundandothervariables.Someresearchhasbeenabletorelateconsumptionbehaviourtoclassstanding,7.5Socio-economicposition,incomeandwealthSocialclassformarketingorplanningpurposesshouldbeusedwithcaution.Sometimespeopleslifestyleareareflectionoftheireconomicconditioninsociety,notthereasonfortheirposition.7.6Socio-economicstatusComparingpeoplesincomeisasimplematter.Butitisnotenough.,7.7BuyingpatternsDemographyandtheclassstructurearerelevantinthattheycanbebothbehaviouraldeterminantsandinhibitors.Behaviouraldeterminantsencouragepeopletobuyaproductorservice.Inhibitorsarefactorsthatmakethepersonlesslikelytopurchasesomething.,Questions,WhichofthefollowingisNOTafactorwhenconsideringsocialclass?AEducationalattainmentBInheritedwealthCNumberofchildrenDStatusAnswer:C,Buyingbehaviourisanimportantaspectofmarketing.Whatisaninhibitor?AAnindividualspersonalityBAfactorthatmakesapersonlesslikelytopurchasesomethingCAnindividualssocialclassDAnindividualscultureAnswer:B,Thefamilylifecycleidentifiesthevariousstagesthroughwhichhoushouldsprogress.Isthisstatementtrueorfalse?ATrueBFalseAnswer:A,8Culturaltrends,8.1Healthanddietissues8.2ImpactofhealthanddietonbusinessesGrowingmarketforsports-relatedgoodsEmployeehealthNewfoodsAmarketfornewsortsofconveniencefoodOrganicfoods,8.3WomeninworkOvertdiscriminationiswhereonegroupistreatedlessfavourablythananother.Indirectdiscriminationmakesitharderforsomebodyofaparticulargrouptofulfillrequirement.Equalpayforequalworkandforequalvalue,8.4Environmentalism8.5ThebusinessresponseGreenproductsChangedpracticesLimitsEducationandconfusionEnvironmentalimpactassessments,Questions,Whichofthefollowingprovidesanexampleofindirectdiscrimination?AWhenonegroupistreatedlessfavourablythananotherBWhenconditionsareimposed,withwhichasubstantialproportioncannotcomplyCWhenapersonispenalisedforgivinginformationortakingactionDTheuseofthreatening,intimidarory,offensiveorabusivelanguageorbehaviourAnswer:B,9Theimpactoftechnologyonorganisations,9.1Organisationstructure,Newstructuresthrough,Downsizing,Delayering,Outsourcing,9.1.1SpanofcontrolAbilityofthemanagerAbilityofthesubordinatesNatureofthetaskThegeographicaldispersalTheavailabilityofgoodqualityinformation,9.1.2Tallandflatorganisations,9.1.3OrganisationstructureandinformationsystemsRelated,9.2OthereffectsofITonorganisations9.2.1Routineprocessing(quickerroutineprocessing)9.2.2Digitalinformationandrecordkeeping(digitalinformationeasilysorted)9.2.3Employmentissues(employeeskillsbasechanging)9.2.4Technologicalchange(continuedchangetokeepup)9.2.5Customerservice(customerserviceenhanced)9.2.6Informationmarkets(informationasacommodity)Informationisacommoditywhichcanbebought,soldorexchanged.9.2.7Developmentsincommunications(Email,voicemail,video-conferencing),9.3ITandtheemployee/employerrelationshipReducedneedtofollowthechain-of-commandInformationoverloadNatureofworkClosebusinessrelationshipsregardlessofgeographicallocationMoreflexibleworkingarrangementsGreatermonitoringandcontrolDelayeringDownsizing,9.4HomeworkingandsupervisionTelecommuting9.5OutsourcingThecontractingoutofspecifiedoperationorservicestoanexternalvendor9.5.1TypesofoutsourcingAd-hocProjectmanagementPartialTotal,9.5.2TheadvantagesanddisadvantagesofoutsourcingAdvantagesRemoveuncertaintyaboutcostLong-termcontractsencourageplanningforthefutureEconomiesofscaleAspecialistorganisationisabletoretainskillsandknowledgeNewskillsandknowledgebecomeavailableFlexibility(contractpermitting),DisadvantagesInformationanditsprovisionisaninherentpartofthebusiness,tooimportanttobecontractedoutConfidentialinformation,riskyNoonusuponinternalmanagementtokeepupwithnewdevelopmentsortosuggestnewideasLockedintoanunsatisfactorycontractUnawarenessofthepotentialcostsandbenefitsofIS/ITwithintheorganisation,Questions,Whichofthefollowingisnotlikelytoeffectanorganisationsspanofcontrol?ANatureofthetaskBAgeoftheorganisationCAbilityofthemanagersDAvailabilityofgoodqualityinformationAnswer:B,Businessautomationoftenresultsinthelossofjobsformembersofmiddlemanagement.Thisisknownas:ADownsizingBDelayeringCOutsourcingDDegradingAnswer:B,Whatdoestheterminformationmarketreferto?AThetransferofinformationbetweennetworksandsystemscanbecarriedoutBSystemsarelikelytobesupersededbyneweronesCAnyusercanshareorexchangeinformationDInformationisacommoditywhichcanbebought,soldorexchangedAnswer:D,WhichofthefollowingisNOTapotentialdisadvantageofoutsourcing?AAnorganisationmayfinditselflockedintoanunsatisfactorycontractBThereisnoonusuponinternalmanagementtokeepupwithnewdevelopmentsCCertainfunctionsmaybetooimportanttobecontractedoutDThereisoftenalong-termcontractwhereservicesarespecifiedforafixedpriceAnswer:D,Whichofthefollowingprovidesanexampleofad-hocoutsourcing?AEmployingprogrammersonashort-termcontractBOngoingwebsitemanagementCAthirdpartyownsorisresponsibleforequipmentandstaffDContractualhardwaremaintenanceAnswer:A,10Environmentalfactors,10.1Significanceofenvironmentaleffects10.2ImpactonenvironmentofeconomicactivitiesEnvironmentalfootprintistheimpactthatabusinesssactivitieshaveupontheenvironmentincludingitsresourceenvironmentandpollutionemissions.DepletionofnaturalresourcesNoiseandaestheticimpactsResidualairandwateremissionsLong-termwastedisposalUncompensatedhealtheffectsChangeinthelocalqualityoflife,10.3ImpactonorganisationofenvironmentalcostsDirectorindirectenvironmentalcostsWastemanagementRemediationcostsorexpensesCompliancecostsPermitfeesEnvironmentaltrainingEnvironmentallydrivenresearchanddevelopmentEnvironmentallyrelatedmaintenanceLegalcostsandfinesEnvironmentalassurancebondsEnvironmentalcertificationandlabellingNaturalresourceinputsRecordkeepingandreporting,ContingentorintangibleenvironmentalcostsUncertainfutureremediationorcompensationcostsRiskposedbyfutureregulatorychangesProductqualityEmployeehealthandsafetyEnvironmentalknowledgeassetsSustainabilityofrawmaterialinputsRiskofimpairedassetsPublic/customerperception,10.4Socialimpactsofactivities10.4.1StakeholderexpectationsIncreasingexpectationsofstakeholders10.4.2ReputationriskIncreasinglyabusinessmusthavethereputationofbeingaresponsiblebusinessthatenhanceslong-termshareholdervaluebyaddressingtheneedsofitsstakeholders.,10.5CorporatesocialresponsibilityandriskmanagementSustainabilitycanbeapproachedfromaperspectiveofriskmanagement,seeingcorporateresponsibilityissuesasprovidingopportunitiesaswellasdangersUnderstandingthepresentEnvisioningthefuturePlanningthejourneyPlanningandbuildingExecutionReviewandrevisionReportingandcommunicatingAssuringinternallyAssureexternally,11Competitiveforces,11.1SWOTanalysis11.1.1Internalappraisal:strengthsandweaknessesStrengthsshouldbeexploitedbysuitablestrategiesWeaknessesshouldbeimprovedbysuitablestrategiesToshapetheorganisationsapproachtotheexternalworld,11.1.2Externalappraisal:opportunitiesandthreatsOpportunitiesWhatopportunitiesexistinthebusinessenvironment?Whatistheirinherentprofit-makingpotential?Cantheorganisationexploittheworthwhileopportunities?Whatisthecomparativecapabilityprofileofcompetitors?Whatisthecompanyscomparativeperformancepotentialinthisfieldofopportunity?ThreatsWhatthreatsmightarisetothecompanyoritsbusinessenvironment?Howwillcompetitorsbeaffected?Howwillthecompanybeaffected?,11.2UsingaSWOTanalysisTheorganisationcandevelopresource-basedstrategieswhichenabletheorganisationtoextendtheuseofitsstrengths.Thebusinesscandeveloppositioning-basedstrategies,toidentifywhatopportunitiesareavailableandwhatthefirmhastodoexploitthem.,12Convertingresources:thevaluechain,Competitiveadvantagearisesoutofthewayinwhichfirmsorganiseandperformactivitiestoaddvalue.12.1ValueactivitiesValueactivitiesarethemeansbywhichafirmcreatesvalueinitsproducts.12.2Example,12.3Thevaluechain,Primaryactivitiesaredirectlyrelatedtoproduction,sales,marketing,deliveryandservice.Inboundlogistics:receiving,handlingandstoringinputstotheproductionsystem:warehousing,transport,inventorycontrolandsoonOperations:convertresourceinputsintoafinalproductOutboundlogistics:storingtheproductanditsdistributiontocustomers:packaging,testing,deliveryandsoonMarketingandsales:informingcustomersabouttheproduct,persuadingthemtobuyit,andenablingthemtodoso:advertising,promotionandsoonAftersalesservice:installingproducts,repairingthem,upgradingthem,providingsparepartsandsoforth,Supportactivitiesprovidepurchasedinputs,humanresources,technologyandinfrastructuralfunctionstosupporttheprimaryactivities.ProcurementTechnologydevelopmentHumanresourcemanagementFirminfrastructure,Linkagesconnecttheactivitiesofthevaluechain

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