Business w02 Understanding Business Environment @1
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[email protected] Understanding Understanding Understanding Understanding the Environment of Business the Environment of Business the Environment of Business the Environment of Business Presented by : Presented by : Presented by : Presented by : Anna Riana Anna Riana Anna Riana Anna Riana Putriya Putriya Putriya Putriya Chapter 2 : Chapter 2 : Chapter 2 : Chapter 2 :
Transcript of Business w02 Understanding Business Environment @1
Understanding Understanding Understanding Understanding
the Environment of Businessthe Environment of Businessthe Environment of Businessthe Environment of Business
Presented by :Presented by :Presented by :Presented by : Anna Riana Anna Riana Anna Riana Anna Riana PutriyaPutriyaPutriyaPutriya
Chapter 2 :Chapter 2 :Chapter 2 :Chapter 2 :
understandingThe environment of business
Organizational boundaries Organizational boundaries Organizational boundaries Organizational boundaries and environmentsand environmentsand environmentsand environments
Economic environment Economic environment Economic environment Economic environment
Economic growth Economic growth Economic growth Economic growth
Global economy in 21Global economy in 21Global economy in 21Global economy in 21stststst centurycenturycenturycentury
Product & service technology Product & service technology Product & service technology Product & service technology
Business process technologyBusiness process technologyBusiness process technologyBusiness process technologyTechnological environment Technological environment Technological environment Technological environment
PoliticalPoliticalPoliticalPolitical----legal environment legal environment legal environment legal environment
SocioculturalSocioculturalSocioculturalSociocultural environment environment environment environment
Business environment Business environment Business environment Business environment
Economic stabilityEconomic stabilityEconomic stabilityEconomic stability
Customer preferences and tasteCustomer preferences and tasteCustomer preferences and tasteCustomer preferences and taste
Ethical compliance and responsible business behaviorEthical compliance and responsible business behaviorEthical compliance and responsible business behaviorEthical compliance and responsible business behavior
Redrawing corporate boundaries Redrawing corporate boundaries Redrawing corporate boundaries Redrawing corporate boundaries
Emerging challenges and opportunitiesEmerging challenges and opportunitiesEmerging challenges and opportunitiesEmerging challenges and opportunitiesin the in the in the in the environmetenvironmetenvironmetenvironmet of businessof businessof businessof business
Organizational boundaries Organizational boundaries Organizational boundaries Organizational boundaries
Multiple organizational environmentMultiple organizational environmentMultiple organizational environmentMultiple organizational environment
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Inflation, unemployment Inflation, unemployment Inflation, unemployment Inflation, unemployment
OOOOuuuuttttssssoooouuuurrrrcccciiiinnnngggg,,,, VVVViiiirrrraaaallll mmmmaaaarrrrkkkkeeeettttiiiinnnngggg,,,, Business process managementBusiness process managementBusiness process managementBusiness process management
Organizational BoundariesOrganizational BoundariesOrganizational BoundariesOrganizational Boundaries
External EnvironmentsExternal EnvironmentsExternal EnvironmentsExternal Environments
All businesses All businesses All businesses All businesses ————regardless of their size, location or missionregardless of their size, location or missionregardless of their size, location or missionregardless of their size, location or mission————
operate within a larger external environment.operate within a larger external environment.operate within a larger external environment.operate within a larger external environment.
That which separates the organization from its That which separates the organization from its That which separates the organization from its That which separates the organization from its environmentenvironmentenvironmentenvironment
Dimensions of the External EnvironmentDimensions of the External EnvironmentDimensions of the External EnvironmentDimensions of the External Environment
ECONOMIC ENVIRONMENTECONOMIC ENVIRONMENTECONOMIC ENVIRONMENTECONOMIC ENVIRONMENT
Conditions of the economic system Conditions of the economic system Conditions of the economic system Conditions of the economic system
in which an organization operatesin which an organization operatesin which an organization operatesin which an organization operates
Key Goals of Economic SystemKey Goals of Economic SystemKey Goals of Economic SystemKey Goals of Economic System
• Economic GrowthEconomic GrowthEconomic GrowthEconomic Growth– Aggregate Output and Aggregate Output and Aggregate Output and Aggregate Output and
Standard of LivingStandard of LivingStandard of LivingStandard of Living– Gross Domestic Gross Domestic Gross Domestic Gross Domestic
Product (GDP) & Gross Product (GDP) & Gross Product (GDP) & Gross Product (GDP) & Gross National Product National Product National Product National Product (GNP)(GNP)(GNP)(GNP)• Purchasing Power Purchasing Power Purchasing Power Purchasing Power
ParityParityParityParity– ProductivityProductivityProductivityProductivity– Balance of TradeBalance of TradeBalance of TradeBalance of Trade– National DebtNational DebtNational DebtNational Debt
• Economic StabilityEconomic StabilityEconomic StabilityEconomic Stability
– InflationInflationInflationInflation
– UnemploymentUnemploymentUnemploymentUnemployment• Recessions and Recessions and Recessions and Recessions and
DepressionsDepressionsDepressionsDepressions
• Global economy in 21Global economy in 21Global economy in 21Global economy in 21stststst
centurycenturycenturycentury
Aggregate Output and Standard of LivingAggregate Output and Standard of LivingAggregate Output and Standard of LivingAggregate Output and Standard of Living
• Business cycleBusiness cycleBusiness cycleBusiness cycle is a pattern of shortis a pattern of shortis a pattern of shortis a pattern of short----term ups and downs term ups and downs term ups and downs term ups and downs ((((expansionsexpansionsexpansionsexpansions and and and and contractionscontractionscontractionscontractions) in an economy) in an economy) in an economy) in an economy
• Aggregate outputAggregate outputAggregate outputAggregate output is the total quantity of goods and services is the total quantity of goods and services is the total quantity of goods and services is the total quantity of goods and services produced by an economic system during a given periodproduced by an economic system during a given periodproduced by an economic system during a given periodproduced by an economic system during a given period
• Standard of livingStandard of livingStandard of livingStandard of living is the total quantity and quality of goods is the total quantity and quality of goods is the total quantity and quality of goods is the total quantity and quality of goods and services that a countryand services that a countryand services that a countryand services that a country’’’’s citizens can purchase with the s citizens can purchase with the s citizens can purchase with the s citizens can purchase with the currency used in their economic systemcurrency used in their economic systemcurrency used in their economic systemcurrency used in their economic system
Gross Domestic ProductGross Domestic ProductGross Domestic ProductGross Domestic Product
• GDP, or gross domestic productGDP, or gross domestic productGDP, or gross domestic productGDP, or gross domestic product, is the total value of all , is the total value of all , is the total value of all , is the total value of all goods and services produced within goods and services produced within goods and services produced within goods and services produced within
a given period by a national economy a given period by a national economy a given period by a national economy a given period by a national economy
through domestic factors of productionthrough domestic factors of productionthrough domestic factors of productionthrough domestic factors of production
• GNP, or gross national productGNP, or gross national productGNP, or gross national productGNP, or gross national product, is the total value of all , is the total value of all , is the total value of all , is the total value of all goods and services produced by a national economy goods and services produced by a national economy goods and services produced by a national economy goods and services produced by a national economy within a given period within a given period within a given period within a given period regardless regardless regardless regardless of of of of
where the factors of production are locatedwhere the factors of production are locatedwhere the factors of production are locatedwhere the factors of production are located
What Is Purchasing Power Parity?What Is Purchasing Power Parity?What Is Purchasing Power Parity?What Is Purchasing Power Parity?
Principle that exchange rates are set so that the prices Principle that exchange rates are set so that the prices Principle that exchange rates are set so that the prices Principle that exchange rates are set so that the prices of similar products in different countries of similar products in different countries of similar products in different countries of similar products in different countries are about the sameare about the sameare about the sameare about the same
What Is Productivity?What Is Productivity?What Is Productivity?What Is Productivity?
Measure of economic growth that compares Measure of economic growth that compares Measure of economic growth that compares Measure of economic growth that compares how much a system produces with the how much a system produces with the how much a system produces with the how much a system produces with the
resources needed to produce itresources needed to produce itresources needed to produce itresources needed to produce it
What Is Balance of Trade?What Is Balance of Trade?What Is Balance of Trade?What Is Balance of Trade?
Economic value of all the products that a country Economic value of all the products that a country Economic value of all the products that a country Economic value of all the products that a country exportsexportsexportsexports minus the economic value of minus the economic value of minus the economic value of minus the economic value of importedimportedimportedimported productsproductsproductsproducts
What Is National Debt?What Is National Debt?What Is National Debt?What Is National Debt?
Amount of money that a government owes its creditorsAmount of money that a government owes its creditorsAmount of money that a government owes its creditorsAmount of money that a government owes its creditors
What Is Stability?What Is Stability?What Is Stability?What Is Stability?
Condition in an economic system Condition in an economic system Condition in an economic system Condition in an economic system in which the amount of money available in which the amount of money available in which the amount of money available in which the amount of money available
and the quantity of goods and services produced and the quantity of goods and services produced and the quantity of goods and services produced and the quantity of goods and services produced are growing at about the same rateare growing at about the same rateare growing at about the same rateare growing at about the same rate
What Is Inflation?What Is Inflation?What Is Inflation?What Is Inflation?
Occurrence of widespread price increases throughout an economic Occurrence of widespread price increases throughout an economic Occurrence of widespread price increases throughout an economic Occurrence of widespread price increases throughout an economic systemsystemsystemsystem
What Is Unemployment?What Is Unemployment?What Is Unemployment?What Is Unemployment?
Level of joblessness among people actively seeking work in an Level of joblessness among people actively seeking work in an Level of joblessness among people actively seeking work in an Level of joblessness among people actively seeking work in an economic systemeconomic systemeconomic systemeconomic system
Recessions and DepressionsRecessions and DepressionsRecessions and DepressionsRecessions and Depressions
• RecessionRecessionRecessionRecession is a period during which aggregate output, is a period during which aggregate output, is a period during which aggregate output, is a period during which aggregate output, as measured by real GDP, declinesas measured by real GDP, declinesas measured by real GDP, declinesas measured by real GDP, declines
• DepressionDepressionDepressionDepression is a particularly severe and longis a particularly severe and longis a particularly severe and longis a particularly severe and long----lasting lasting lasting lasting recessionrecessionrecessionrecession
The Global Economy in the 21The Global Economy in the 21The Global Economy in the 21The Global Economy in the 21stststst CenturyCenturyCenturyCentury
Major forces driving the economy:Major forces driving the economy:Major forces driving the economy:Major forces driving the economy:
– The The The The information revolutioninformation revolutioninformation revolutioninformation revolution will continue to enhance will continue to enhance will continue to enhance will continue to enhance productivity across all economic sectors.productivity across all economic sectors.productivity across all economic sectors.productivity across all economic sectors.
– New New New New technological breakthroughstechnological breakthroughstechnological breakthroughstechnological breakthroughs will create entirely new will create entirely new will create entirely new will create entirely new industries.industries.industries.industries.
– Increasing Increasing Increasing Increasing globalizationglobalizationglobalizationglobalization will create much larger will create much larger will create much larger will create much larger markets while fostering tougher competition among markets while fostering tougher competition among markets while fostering tougher competition among markets while fostering tougher competition among global businesses. global businesses. global businesses. global businesses.
TECHNOLOGYTECHNOLOGYTECHNOLOGYTECHNOLOGY
All the ways by which firms create value for their All the ways by which firms create value for their All the ways by which firms create value for their All the ways by which firms create value for their constituentsconstituentsconstituentsconstituents
Product and Service TechnologiesProduct and Service TechnologiesProduct and Service TechnologiesProduct and Service Technologies
Technologies employed for creating productsTechnologies employed for creating productsTechnologies employed for creating productsTechnologies employed for creating products
————both physical goods and servicesboth physical goods and servicesboth physical goods and servicesboth physical goods and services————
for customersfor customersfor customersfor customers
Business Process TechnologiesBusiness Process TechnologiesBusiness Process TechnologiesBusiness Process Technologies
Business process technologiesBusiness process technologiesBusiness process technologiesBusiness process technologies are used not so much to create are used not so much to create are used not so much to create are used not so much to create products as to improve a firmproducts as to improve a firmproducts as to improve a firmproducts as to improve a firm’’’’s performance of internal s performance of internal s performance of internal s performance of internal operations.operations.operations.operations.
– Enterprise Resource Planning, or ERPEnterprise Resource Planning, or ERPEnterprise Resource Planning, or ERPEnterprise Resource Planning, or ERP, is a large, is a large, is a large, is a large----scale scale scale scale information system for organizing and managing a information system for organizing and managing a information system for organizing and managing a information system for organizing and managing a firmfirmfirmfirm’’’’s processes across product lines, departments and s processes across product lines, departments and s processes across product lines, departments and s processes across product lines, departments and geographic locationsgeographic locationsgeographic locationsgeographic locations
POLITICALPOLITICALPOLITICALPOLITICAL----LEGAL ENVIRONMENTLEGAL ENVIRONMENTLEGAL ENVIRONMENTLEGAL ENVIRONMENT
Conditions reflecting Conditions reflecting Conditions reflecting Conditions reflecting
the relationship between business the relationship between business the relationship between business the relationship between business and government and government and government and government
SOCIOCULTURAL ENVIRONMENTSOCIOCULTURAL ENVIRONMENTSOCIOCULTURAL ENVIRONMENTSOCIOCULTURAL ENVIRONMENT
Conditions including the customs, mores, values Conditions including the customs, mores, values Conditions including the customs, mores, values Conditions including the customs, mores, values and demographic characteristics of the society in and demographic characteristics of the society in and demographic characteristics of the society in and demographic characteristics of the society in
which an organization functionswhich an organization functionswhich an organization functionswhich an organization functions
Customer Preferences and TastesCustomer Preferences and TastesCustomer Preferences and TastesCustomer Preferences and Tastes
• Customer preferences and tastes vary both across and within Customer preferences and tastes vary both across and within Customer preferences and tastes vary both across and within Customer preferences and tastes vary both across and within national boundaries.national boundaries.national boundaries.national boundaries.
• Consumer preferences can vary widely within the same Consumer preferences can vary widely within the same Consumer preferences can vary widely within the same Consumer preferences can vary widely within the same country.country.country.country.
• Consumer preferences and tastes change over time.Consumer preferences and tastes change over time.Consumer preferences and tastes change over time.Consumer preferences and tastes change over time.
BUSINESS ENVIRONMENTBUSINESS ENVIRONMENTBUSINESS ENVIRONMENTBUSINESS ENVIRONMENT
• Redrawing Corporate BoundariesRedrawing Corporate BoundariesRedrawing Corporate BoundariesRedrawing Corporate Boundaries
– Core competenciesCore competenciesCore competenciesCore competencies are the skills and resources are the skills and resources are the skills and resources are the skills and resources with which an organization competes best with which an organization competes best with which an organization competes best with which an organization competes best and creates the most value for ownersand creates the most value for ownersand creates the most value for ownersand creates the most value for owners
• Disruption managementDisruption managementDisruption managementDisruption management is a method by is a method by is a method by is a method by which some organizations are responding which some organizations are responding which some organizations are responding which some organizations are responding to crises in their environmentsto crises in their environmentsto crises in their environmentsto crises in their environments
Emerging Challenges and Opportunities in the Business Emerging Challenges and Opportunities in the Business Emerging Challenges and Opportunities in the Business Emerging Challenges and Opportunities in the Business EnvironmentEnvironmentEnvironmentEnvironment
• OutsourcingOutsourcingOutsourcingOutsourcing is the strategy of paying suppliers and is the strategy of paying suppliers and is the strategy of paying suppliers and is the strategy of paying suppliers and distributors to perform certain business processes or to providedistributors to perform certain business processes or to providedistributors to perform certain business processes or to providedistributors to perform certain business processes or to provideneeded materials or servicesneeded materials or servicesneeded materials or servicesneeded materials or services
• Viral marketingViral marketingViral marketingViral marketing is a strategy of using the Internet and wordis a strategy of using the Internet and wordis a strategy of using the Internet and wordis a strategy of using the Internet and word----ofofofof----mouth marketing to spread product informationmouth marketing to spread product informationmouth marketing to spread product informationmouth marketing to spread product information
• Business process managementBusiness process managementBusiness process managementBusiness process management is an approach by which firms is an approach by which firms is an approach by which firms is an approach by which firms move away from departmentmove away from departmentmove away from departmentmove away from department----oriented organization and toward oriented organization and toward oriented organization and toward oriented organization and toward processprocessprocessprocess----oriented team structures that cut across old oriented team structures that cut across old oriented team structures that cut across old oriented team structures that cut across old departmental boundariesdepartmental boundariesdepartmental boundariesdepartmental boundaries
