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Summary Business Management 113
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INTRODUCTIONResources need to be combined to find an optimum.
CLASSIFICATION OF BUSINESSES
Business: the organized effort of individuals to produce and sell, for a profit, the goods and
services that satisfy society’s needs.
Manufacturing business
- Process various materials into tangible goods.
- Deliver physical product.
Service business
- Produce services.
Marketing intermediaries
- Buy products from manufacturers then resell them.
STAKEHOLDERS
The different individuals / groups who are affected by the policies, activities and decisions
made by organization.
ECONOMIC SYSTEMS
Microeconomics
Study of the decisions made by individuals and businesses.
Macroeconomics
Study of the national economy and the global economy.
CIRCULAR FLOW IN MIXED ECONOMY
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BUSINESS ENVIRONMENTS [PESTLE]
THE POLITICAL ENVIRONMENT
Trend one:
- The new world order is ruled by global corporations and megacities not countries.
- Cities and companies gain in influence, while the power of nation-state decreases.
, - A few corporations have more influence in world than many countries.
Trend two:
- The pendulum swings against immigrants.
Trend three:
- Nationalism and national pride on the rise.
- A belief that present governments should protect their countries’ best interests from
outsiders.
Trend four:
- North Korea rattling its sabre.
- NK continuing to develop their missile capability.
Trend five:
- Political stability / instability.
THE ECONOMIC ENVIRONMENT
Trend one:
- Global economic growth.
Trend two:
- SA unemployment at a high?
Trend three:
- SA credit rating.
Trend four:
- ZAR exchange rate deteriorating.
- A rapid change in rand exchange rate can have a significant impact on a business.
- Importers benefit from rand strength.
- Exporters benefit from rand weakness.
THE SOCIAL ENVIRONMENT
Trend one:
- Generation Z and teetotalism.
- Gen Z is rejecting alcoholic beverages in favour of clean-living alternatives.
- Young people are much more concerned w. their health, and aware of how their
food and beverage choices affect their long-term wellness.
- The teetotaler trend will lead to a boom in low and no-alcohol beverages and an
increase in alcohol-free party venues and events.
Trend two:
- Circular economy.
- Involves finding a way to ensure the things we buy, and sell can be reincarnated
repeatedly.
- Goes beyond recycling.
- Aim of is to ultimately eliminate all waste and pollution to create an entirely
sustainable way of living.
Trend three:
- Food waste.
Trend four:
- Shared workspaces.
,THE TECHNOLOGICAL ENVIRONMENT
Trend one:
- Virtual reality.
Trend two:
- Checkout-free shopping.
Trend three:
- Augmented reality.
Trend four:
- Touch-screen interactive shopping windows.
THE LEGAL ENVIRONMENT
Trend one:
- Intellectual property.
Trend two:
- POPI.
- Protection of Personal Information Act sets requirements according to which personal
information of individuals and legal entities is used / managed.
National Credit Act promotes and advances the social and economic welfare of South
Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient,
effective and accessible credit market and industry and to protect the consumers…
Labour Relation Act: to change the law governing labour relations, and for that purpose to
give effect to the public international law obligations of the Republic relating to labour
relations…
THE ECOLOGICAL ENVIRONMENT
Trend one:
- Day zero and its consequences.
- Saving water and the panic that surrounds it.
Trend two:
- “Fridays for future”.
Trend three:
- Recycling.
- A growing trend amongst consumers.
IMPACT OF ECOLOGICAL TRENDS ON BUSINESSES AND BRANDS
- Every brand that comes into contact w. consumers needs to have a position on the
environment. If consumers believe in that position, the value of the brand – and the
attraction to use / buy it – goes up. Visa versa.
ETHICS AND SOCIAL RESPONSIBILITY
BUSINESS ETHICS DEFINED
Ethics
- Study of right and wrong and of morality of the choice’s individuals make.
- Ethical decision is one that is “right” according to some standard of behavior.
Business ethics
- Application of moral standards to business situations.
, GENERAL ETHICAL ISSUES
Ethical issues arise out of a business’s relationship w. investors, customers, employees,
creditors, suppliers, or competitors.
Fairness and honesty
- Businesspeople are expected to refrain from knowingly deceiving, misrepresenting or
intimidating others.
- Consequences of failing to do this can be expensive.
Organizational relationships
- Businessperson should put welfare of others and that of organization above his / her
own personal welfare.
- Plagiarism: knowingly taking someone else’s words, ideas, or other original material
without acknowledging the source.
Conflict of interest
- Issues arise when a businessperson takes advantage of a situation for personal gain
rather than for employer’s interest.
- May occur when payments and gifts make their way into business deals.
Communications
- False, misleading, or deceptive advertising is illegal and unethical and can infuriate
customers.
FACTORS AFFECTING ETHICAL BEHAVIOR
Three general sets of factors appear to influence the standards of behavior in an
organization:
Individual factors
- Individual knowledge of an issue.
- Personal values.
- Personal goals.
Social factors
- Cultural norms.
- Actions and decisions of coworkers.
- Values and attitudes of significant others.
- Use of the internet.
Opportunity
- Refers to the amount of freedom an organization affords an employee to behave
unethically if he / she makes that choice.
- Presence of opportunity.
- Ethical codes.
- Enforcement.
ENCOURAGING ETHICAL BEHAVIOR
Government’s role in encouraging ethics
Can encourage ethical behavior in business by enacting more stringent regulations.
Trade association guidelines
Provide ethical guidelines for their members.
Individual companies
Code of ethics: a written guide to acceptable and ethical behavior as defined by an
organization; it outlines policies, standards, and punishments for violations.
Organizational environment: management direction and employee training.
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