L. \J . J

)IXTH EDITION

Adrian Palmer & Bob Hartley

MeGrawHill

McGraw-HillHigher Education

London Boston Burr Ridge, IL Dubuque, IA Madison, Wl New York San FranciscoSt. Louis Bangkok Bogota Caracas Kuala Lumpur Lisbon Madrid Mexico City

Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto

PrefaceGuided TourTechnology to Enhance Learning andTeachingCustom Publishing SolutionsMake the Grade!Acknowledgements

PART 1 Contexts1 What is the Business Environment?

1.1 Defining the businessenvironment

1.2 Why study the businessenvironment?

1.3 The macroenvironment1.4 The microenvironment1.5 The internal environment1.6 Contextual issues in a dynamic

environmentCase study: A war of words overgreen airline claims

PART 2 The Macroenvironment2 The Political Environment

2.1 Defining the politicalenvironment

2.2 Political systems2.3 The importance of monitoring

the political environment2.4 Political ideologies2.5 The structure of government2.6 Central government2.7 Regional and national

government2.8 Local government2.9 The European Union2.10 Supranational governmental

organizations2.11 Improving the standards of

government administration2.12 Impacts of government on

business operations

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i.\5 innuences on governmentpolicy formation

Case study: Should government berunning the railways?

3 The Social and DemographicEnvironment3.1 Social change and its effects

on business organizations3.2 The cultural environment3.3 The family3.4 Reference groups3.5 Values, attitudes and lifestyles3.6 Identifying and measuring

social groups3.7 DemographyCase study: A journey throughLiverpool - European Capitalof Culture 2008

4 The Technological and InformationEnvironment4-.-1,. What is technology?4.2 Technology and society4.3 Expenditure on research and

development4.4 Forecasting new technologies4.5 Impacts of technology on

business operations4.6 Product design and

development4.7 Manufacturing and processing4.8 Supply chain management4.9 Point of sale, order and

payment processing4.10 Communicating with

customers4.11 Managing customer

relationships4.12 Performance measurement4.13 Technology and the ecological

environment

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VU1 DETAILED TABLE OF CONTENTS

4.14 The internet and electronicbusiness

4.15 Data security and privacyCase study: Will 3G phone companylearn from a Rabbit?

5 The Legal Environment5.1 Introduction5.2 The law of contract5.3 Non-contractual liability5.4 Legal processes5.5 Legislation affecting the

supply of goods and services5.6 Statutory legislation on

employment5.7 The Human Rights Act5.8 Protection of a company's

intangible property rights5.9 The law and production

processes5.10 Legislation to protect the

competitiveness of marketsCase study: Legislation strengthenedin a bid to end 'nightmare' holidays

PART 3 Firms6 Types of Business Organization

6.1 Introduction: organizationsand their environment

6.2 The sole trader6.3 Partnerships6.4 Limited companies6.5 Commercial and quasi-

commercial organizationsoperating in the public sector

6.6 Non-departmental publicbodies

6.7 Public-private partnerships6.8 Other types of organizationCase study: Cooking by yourself orwith company?

7 Business Relationships andNetworks7.1 Introduction7.2 Types of business relationship7.3 Theories and explanations

underpinning networks andrelationships

7.4 Power in value chains 252160 7.5 Developing close relationships766 with customers 253

Case study: Contaminated food768 spreads through the value chain

from the fields of India to the774 supermarkets of Sheffield 257175177 8 Organizational Objectives, Growth779 and Scale 264181 8.1 The objectives of organizations 265

8.2 Organizational size and growth 272183 8.3 Small and medium-sized

enterprises (SMEs) 272191 8.4 Reasons for growth 276199 8.5 Organizational scale 277

8.6 Globalization and multinational200 organizations 278

8.7 Growth and organizational203 life cycles 279

8.8 Horizontal and vertical205 integration 289

8.9 Sources of finance for growth 290205 8.10 Limits to growth 294

Case study: Can Tesco become277273

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too big?

9 The Internal Environment9.1 The link between internal and

external environments9.2 Defining the organizational

strategy9.3 Creating engagement by

employees9.4 Training and development9.5 Rewarding staff9.6 Controlling and empowering

staff9.7 Industrial relations9.8 The internal functions of

commercial organizations9.9 Bases for organizing a

commercial organization9.10 The flexible organization9.11 Reducing dependence on

human resourcesCase study: A 24/7 society maybe good for customers, but canemployees cope with the stress?

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10 Corporate Responsibility 34710.1 Introduction 34210.2 The stakeholders of

organizations 34210.3 Philosophical underpinnings

of corporate socialresponsibility 349

10.4 Corporate governance 35310.5 Ethics 35610.6 Ecological responsibility 358Case study: Life after death forold products? . 362

PART 4 Markets 36711 The Principles of Market Forces 369

11.1 Introduction 37011.2 The characteristics of very

competitive markets 37711.3 Bartering and auctions 38711.4 Going rate pricing 38311.5 Elasticity of demand 38411.6 Imperfect competition and

elasticity of demand 38611.7 Elasticity of supply 38711.8 Limitations of the theory

of perfect competition 388Case study: Can marketmechanisms reduce globalclimate change? 390

12 Distortions to Market Forces 39412.1 Introduction 39512.2 Oligopoly 40712.3 Monopolistic markets 40212.4 Competition policy 405Case study: Competitive marketfor mobile phones still needsregulation 474

13 The National EconomicEnvironment 47913.1 Macroeconomic analysis 42013.2 The structure of the

economy 42013.3 The circular flow of income 42613.4 The business cycle 43213.5 Macroeconomic policy 447Case study: Boom and bustin China? 453

14 The International BusinessEnvironment 45814.1 The trend towards a global

business environment 45914.2 Theory of international trade 46414.3 Overseas trade patterns 47414.4 International trade institutions

and agreements 47914.5 Evaluating overseas business

opportunities 48214.6 Sources of information on

overseas markets 48514.7 Market entry strategies 48714.8 Adapting to foreign business

environments 494Case study: Indian call centres createnew international trade 499

PART 5 Bringing it Together:Environmental Analysis 50515 The Dynamic Business Environment 507

15.1 Introduction 50815.2 The importance of

environmental knowledge 50815.3 Information systems 57715.4 Forward planning with research 57515.5 Frameworks for analysing the

business environment 57815.6 Forming a view of

environmental influence 52815.7 Managing operational risk 532Case study: Strategic challenges andopportunities at Thomas Cook 534

16 Case Studies 5391 Plenty of Beer in the Czech

Republic, But Where's the Profit? 5402 Does Ford Make Cars or Sell

Services? 5443 How Many Winning Ideas Can

You Back? 5464 Health Services Go Online in

an Increasingly CompetitiveEnvironment 548

5 Taking an Ethical Line at theCo-operative Bank 557

Glossary 554Index 567