business environment

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MODULE 2MODULE 2

Economic Perspective and Business Environment

Introduction:

The concept of business environment refers to all of the internal and

external factors that affect how a business organisation functions.

Internal and external factors can also influence each other and work

together to impact a business.

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Business environment can be broadly classified into two categories,

namely microenvironment and macroenvironment. Microenvironment

consists of factors that affect the company's ability to serve its

customers; these factors include the company itself, suppliers, marketing

intermediaries, customer markets and the public. Macroenvironment, on

the other hand, refers to all forces that are part of the broader business

environment and affect society at large; these forces can be political,

economic, social, technological, legal, environmental or ethical.

Image sourced from http://www.eps2017-

wiki3.dee.isep.ipp.pt/doku.php?id=report

Environmental scanning refers to the process of systematically studying

and interpreting external and internal factors to develop a forecast of

the organisation’s future. Internal analysis focuses on the internal

organisational environment to reveal the organisation's strengths and

weaknesses. The analysis involves the study of organisational structure,

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operational potential, performance, internal resources, and current

strategies.

External analysis examines the elements of the industry environment

such as the competitive position of the business and its rivals, and

macroenvironment including the macroeconomic, social, government,

legal, technological and international factors. The external analysis of the

environment identifies opportunities and threats for an organization.

The strengths, weaknesses, opportunities and threats uncovered

through environmental scanning can be used, for example, in strategy

formulation to implement effective policies, assess competitors, and

identify new markets and potential customers.

To understand how a business functions, we need to know something

about the economic environment in which it operates.

Economics studies the production, distribution, and consumption of

goods and services. Microeconomics looks at how individual consumers,

households and businesses behave, and macroeconomics examines the

behaviour of the economy as a whole (Stiglitz, Walsh, Gow, Richmond,

Tani & Guest, 2015, p. 11). Stiglitz et al. (2015, p.7) use Australia as an

example of a mixed economy – it relies primarily on the interaction of

producers and consumers to determine what is produced, how, and for

whom. In some areas, e.g. the legal structure, the government makes

decisions and imposes regulations that affect businesses and

households. While in many areas, both the private sector (households

and businesses) and the public sector (local, state, and federal

governments) are involved, like in healthcare.

ReferencesReferences

Stiglitz, J. E., Walsh, C. E., Gow, J., Richmond, W., Tani, M. & Guest, R.

(2015). Principles of Economics (2nd ed.). [Ebook]. Retrieved from

https://lesa.on.worldcat.org/oclc/903004760

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This Module will cover:

Module 2.1

Four types of competition, supply and demand

Economic policy and how the government can impact the

economy

Module 2.2

Microenvironment, mesoenvironment, macroenvironment

Introduction to PESTLE and industry analysis

This Module will help you achieve the following outcomes:

b) Critically evaluate economic principles and stakeholders’

viewpoints in business environments.

c) Analyse and synthesise the fundamentals of business in the

contemporary environment.

Time Management:

Student workload expectation is 20 hours for this module.

3 hours Per weekly topic Facilitated study: Attending class,

responding to facilitator feedback

7 hours Per weekly topic Personal Study: Assessment progression,

reading and viewing resources, self-directed and collaborative

online learning activities

Assessment Progression:

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Assessment 1, Part AAssessment 1, Part A

Assessment 1, Part A is due at the conclusion of Module 2.2

Please ensure that you have begun your final draft by Module 2.1

ready for submission.

Assessment 2Assessment 2

Assessment 2, is due at the conclusion of Module 5.2

Please familiarise yourself with the assessment brief and begin

preliminary research

You are required as part of Assessment 2 to participate in the

Assessment 2 Discussion Forum. Your first questions are detailed

in module 2.2 learning activities. Please ensure you participate.

Class Expectation:

Participate in all scheduled Collaborate or face-to-face classes.

This time is intended to be used by students and their lecturer to

work through activities and engage in discussion about the weekly

content.

These sessions provide a space for students to raise questions

and seek guidance on writing their assessments

Students will review and explore more deeply the information

presented in the learning material