Learning Unit 4 Part 1 The Macro Environment. Learning unit Outcomes 4 reasons why managers need to...
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Transcript of Learning Unit 4 Part 1 The Macro Environment. Learning unit Outcomes 4 reasons why managers need to...
Learning Unit 4Part 1
The Macro Environment
Learning unit Outcomes
•4 reasons why managers need to understand the macro environment.
•Sub-environments of the macro environment.
•Briefly explain the sub-environments.•What are ‘threats’ and ‘opportunities’ .•Major economic systems in the world
Learning Outcomes
•Characteristics of the SA economic system.
•The SA government structure.•Corporate governance principles.•Discuss 5 laws that influence
management decisions.•Discuss BEE and BBBEE in SA.•Identify and discuss at least 3 sources
provided by SA government to support business initiative.
External
Market Macro
Introduction
•Macro environment:▫Furthest away▫AKA remote environment▫Volatile, cannot control▫Variables directly and indirectly impact the
business▫Variables = uncontrollable = AKA mega
trends▫Survival = monitor changes indentify
opportunities (maximise) and threats (minimise)
The macro environment
Macro
Market
Micro
International
Ecological
Technological Social
Political
Economic
The macro environment
Macro
International
Ecological
Technological Social
Political
Economic
Change Opportunity or Threat!Opportunity:
Variable has + impact on the
business
Threat: Variable has - impact on the
business
Characteristics
•Variables are interdependent•Increasingly unstable•Uncertain•Complex•Becoming increasingly unpredictable
Why must managers understand the macro environment?
•Direct or indirect impact on all organisations
•Adjust to changes in order to survive•Opportunity or threat to be managed•Knowledge and info on macro better
decision-making•Knowledge and info on macro pro-active
response to change
Political Environment
•Influence of government on organisations such as law
•Include:▫Sanctions▫Wars▫Terrorism▫Political unrest and instability▫Laws
Political Environment•Government Huge impact on business•Influence investors decisions•Examples:
▫Employment Equity act▫National Credit act▫Skills Development act▫Decrease in subsidies▫Department of Environmental Affairs and
Tourism
Employment Equity Act 55 of 1998•Improve employment equity•First step: Affirmative action•On the grounds of:
▫Race ▫Sex▫Sexual orientation▫Disability▫Religion
Skills Development Act 97 of 1998•Develop skills of labour
▫Improve quality of life•Improve productivity and competitiveness•Increase entrepreneurship•SETA: Service Sector Education •and Training Authority
▫Quality of education/skills training
National Credit Act 34 of 2005
•Protect consumers•Must be written•Greater responsibility of credit suppliers
Group Work:
•Identify what possible impact the sub-environments (page 72) of the macro environment might have on Starbucks in South Africa
Economic environment
•Health of the country affecting business and individuals
•General factors in the economic environment:▫Employment rates▫Distribution of wealth▫Competitive pricing in free market
Economic environment
•Factors that affect business: ▫Economic growth: Increase in production▫Employment levels: % people employed▫Consumer income: Income Demand for
goods▫Inflation: Increase in price level of G&S▫Exchange rate: One currency for another▫Trade balance: Exports - Imports
Economic environment
•Characteristics:▫Interdependent▫Determine countries prosperity or
adversity▫Specific implications on business and
managers
Social environment
•Concerned with society’s attitudes and cultural values.
•New trends Continuous appearance New type of customer.▫Healthy eating
•SA workforce large % infected with HIV/Aids▫How does this affect the business?
Social Environment•Include:
▫Changing fashion▫Changing lifestyle▫Role of women in society▫Crime and prostitution▫Growth in subcultures▫Age and race structures▫Geographic shifts in population▫Family life cycles changing▫Education levels increasing▫Household sizes decreasing▫Birth and death rates
Social Environment•Other social problems:
▫Unemployment▫Poverty▫Crime
•Social changes not always negative!
Social Environment•Changes in social environment which
pose a threat or opportunity:▫More women in the workplace▫Move to a more balanced lifestyle▫More single-parent households▫More single people
Technological Environment
•Include trends such as:▫Way customers purchase▫Internet▫Sophisticated communication channels▫Changes in transport
Technological Environment
•The knowledge of how to do something.• Tech Affect whole organisation.•Information technology: Combination of
people and technology to support operations, management and decision-making.
▫Internet▫E-mail▫Cellular phones
International Environment
•Operations in SA or internationally direct or indirect impact.
•Operate internationally Exposed to more opportunities and threats▫Each country has own unique macro
environment
Ecological Environment
•Conserve limited resources in the physical environment.
•Corporate Governance recommend reporting on ‘triple bottom lines’ annually.
Ecological Environment: - Triple bottom line
Financial Responsibility
Social Responsibilit
y
Environmental
Responsibility
To show profitTo benefit from
investment
Go ‘GREEN’Take
responsibility for actions
People are better off
Citizenship
Responsibility of organisations toward shareholders, people and
environment
Ecological Environment•Org to report on:
▫Environmental protection policies▫Comply with consumer protection
standards▫Comply with environmental laws and
regulations▫Existing and planned pollution control▫Protection and restoration costs▫Potential liability and current
and pending investigations