The Changing and Dynamic Nature of Business Essay

Individual Essay for Context
of Business

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
Understanding the changing and dynamic nature of business ...................................................3
LO 2.................................................................................................................................................5
Need for individuals and organisations to manage sustainably, responsibly and have to behave
ethically in relation to cultural, social, economic and environmental issues.............................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................1

INTRODUCTION
Every business is effected by its environment in which the business operates, business
environment refers to the factors both internal and external and the forces which effects the
organisation's ability to develop and maintain successful customer relationship (Sujatha, 2016).
Present report discusses about the changes in modern business and what are the reasons of the
change and importance of organisations and individuals to manage sustainability, responsibly
and have to behave ethically in relation to economic, social, cultural and environmental issues.
LO1
Understanding the changing and dynamic nature of business
Business is changing rapidly in the current scenario and there are various factors and
forces which is has brought changes in the modern business like advancement in technology,
globalisation, customer need and preferences, etc. There are various micro and macro
environmental factors which have played an important role in changing the nature of modern
business in the present global environment. These factors can is described below:
Macro environmental factors: These are the factors which are present outside the organisation
and are not under the control of an organisation (Surbhi, 2015). These factors have a significant
impact on the modern business. The factors which are responsible for changing the nature of
modern business in the global environment are as follows:
Demographic environment: it includes the growth and size of the population, rural urban
distribution of the population, education levels of the labour force, technical skills and the
expectancy of the life. All of these demographic factors have a signifiant importance for the
functioning of the business operations. For example the size of the population can effect the
profitability of the business and also the age composition and growth rate of the population can
determine the demand patterns of the goods like India will surpass China in population by 2050
which have a signifiant impact on the business.
Economic environment: The economic conditions of the economy in any country can bring the
change in the modern business as global market is never stable it keeps on fluctuating and
business depends on the economy of all inputs and various factors of production. If the economic
conditions is good all the business will be benefited for example the existing business

environment is highly complex so this have forced the organisations which are operating in the
same economic environment have to often take different decisions.
Political and legal factors: Political and legal factors are the major reasons for changing the
modern business (PESTLE Analysis, 2019). The political philosophies of the government keep
on changing with the change in political parties and it yields the great influence over the business
policies. For example Britain's decision on Brexit which change the entire business policies for
the European Nations.
Socio-cultural factors: This factor is also responsible for bringing the changes in the modern
business for example customer awareness, customers perception, changing life styles, etc are the
contributory factors for changing the modern business.
Technological factors: This is the factor which keeps the business changing continuously,
improvement in the technologies have raised the factor of productivity and have reduced the cost
of inputs (Nishadha, 2016). For example implanting of the artificial intelligence in production
areas and customers preferences towards more technically advanced products have forced to
change the modern business.
Micro Environmental Factors: These are the factors which are totally in the control of an
organisation but have equally forced to change the nature of modern business in the global
context (Umar, F. 2015). There are various micro factors some of the micro factors are
mentioned below:
Workers and unions: Workers are considered as a vital input for the production and plays an
important role for towards the profits of the business. Worker and unions have changed the
nature of modern business, if the workers of the organisation are organised it will lead them in a
position to bargain better for example in present business world any policy which disturbs the
labour peace will adversely effects its profitability and competitiveness.
Customers: Customer are considered as a king of marker and is the most important micro
environment factor and their loyalty towards the product always depends upon its high level of
satisfaction. For example in order to track customers satisfaction businesses across the world
have to track customers satisfaction as it is the ultimate success of the business.

Competitors: This factor have changed the shape of modern business because it has decreased
the monopoly which have been beneficial for the customers and increased the power of
customers.
Suppliers: It is the important micro factor as it is vital for the success of business which is
determined by the cost of production. In present world companies have multiple sources of input
suppliers in order to reduce the risk and face uncertain conditions.
LO 2
Need for individuals and organisations to manage sustainably, responsibly and have to behave
ethically in relation to cultural, social, economic and environmental issues
Managing responsibly, sustainably and to behave ethically is really important for the
individuals and for an organisation because it will help the organisations to deal with the social
and cultural issues which will develop a good image for the organisation and for the employees
in an organisation (Why Corporate Social Responsibility is important, 2019). In order to
maintain the sustainability, organisation have to develop a sense of responsibility towards the
society and towards the environment which is also important for the growth and profitability of
the business. The employees of an organisation have to behave ethically like while increasing the
level of production they have to maintain the quality of the their work which will help the
company in growth and development. Also, organisations addressing the economic issues will
increase the economic stability of the society by providing the jobs and meeting the
environmental standards can improve the image of the company which will improve the standard
of the company.
CONCLUSION
It can be concluded from the report that the nature of modern business keeps on
challenging continuously and there are various micro and macro environmental factors which
result in the change of modern business. Present report also concludes that there are various
reasons for the individuals and organisations to manage responsibly, sustainably and have to
behave ethically in relation to addressing the social, cultural, economic and various
environmental issues.

REFERENCES
Books and Journals
Nishadha, S. 2016. Why Every Business Needs a PESTLE Analysis. [Online]. Available Through:
<https://tweakyourbiz.com/marketing/every-business-needs-pestle-analysis>.
PESTLE Analysis. 2019. [Online]. Available Through: <https://www.groupmap.com/map-
templates/pestle-analysis/>.
Sujatha, T. 2016. Influence of Business environment on the success of an organisation. [Online].
Available Through: <https://myventurepad.com/influence-business-environment-
success-organisation/>.
Surbhi, S. 2015. Difference Between Micro and Macro Environment. [Online]. Available
Through: <https://keydifferences.com/difference-between-micro-internal-and-macro-
external-environment.html>.
Umar, F. 2015. Marketing Environment – Micro and Macro Environments.[Online]. Available
Through: <https://www.businessstudynotes.com/marketing/principle-of-marketing/
marketing-environment-and-its-classification/>.
Why Corporate Social Responsibility is important. 2019. [Online]. Available Through:
<https://doublethedonation.com/tips/why-corporate-social-responsibility-is-important/>.