Business Environment Analysis Report: Semester 1, 2024

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Context of Business
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Table of Contents
Introduction................................................................................................................................3
Main Body..................................................................................................................................3
Conclusion..................................................................................................................................5
Reference List............................................................................................................................6
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Introduction
The business environment, in the present times, has experienced drastic changes and
therefore has coerced the business organisation to make changes in their process of operation.
The business environment plays a crucial role in the development and growth of the
businesses. The different environmental factors, both internal and external have extensively
influences the operations of an organisation. In addition to this, there are other imperative
factors that are of high significance in the present global market, ethical responsibility being
one of them. Presently, maintaining ethics in business processes and carrying out successful
CSR activities have become necessary for the business organisations, as it is the current
demand of the modern market. In this paper, the different environmental factors, both
external and internal and its impact upon different business operations will be discussed.
Additionally, the role of ethics in business will be highlighted.
Main Body
Micro and Macro factors affecting the business environment
The factors that influence the business operation in a direct manner are referred to the micro
environmental factors; whereas, the factors that affect the business in an indirect manner are
known as the external or macro factors. The factors such as, the suppliers, labours,
consumers, business associates, investors and the other stakeholders who are closely related
to the business organisations are the internal environmental factors of the business. On the
other hand, the economy, socio-culture, demographic, international, technological, and other
factors those are distantly associated with the businesses are the macro factors of a business.
Both the types of environmental factors are equally responsible for determining the success
or failure of a business (Zinovieva et al., 2016). Therefore, it is necessary for every business
organisation to ensure successful identification and evaluation of these factors in order to
understand the present market scenario; by this means, being able to gain better market share
and profitability.
As per the discussion of Fang et al. (2014), the customers are the most important internal
factors that can influence the business activities and processes of an organisation. In the view
of the fact that, the preferences and needs of the customers is changing drastically with time,
it is necessary for the companies to make sure that they are well-aware of the changing
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demands of the customers. This facilitates the business organisations in meeting the customer
needs effectively; thereby, ensuring better productivity and performance. The other factors
such as the investors, suppliers and others can also influence the business activities and
decision-making process of an organisation; therefore, it is necessary for the organisations to
build good and effective relationship with its suppliers and investors; thus, ensuring better
supply chain, risk management and so on.
The external environment is generally the factors of the country wherein the business
organisations operate (Maletič et al., 2014). The economic condition of a country is indirectly
accountable for the growth and success of a business. If a country has a strong economy, it
provides the business organisations with huge opportunity of growth. With better inflation
rates, the business organisations do not experience glitches or hindrance in its operations;
thus, ensuring smooth flow of activities. On the other hand, the political stability of a country
also influences the operations a company. For instance, if a country has strong political
relations with the other nations, the flow of foreign direct investments becomes effortless; in
this manner, expanding business operations to a great extend (Maletič et al., 2014).
Key changes in business owing to different environmental factors
According to Brito et al. (2014), changes in external as well as the internal factors such as,
the suppliers and natural environment may has a noteworthy impact on the business activities
of an organisation. The suppliers being the key source for raw materials, they can influence
the business processes. Delay in the supply of raw material may delay the production process;
thus, delaying the distribution of the products to the end consumers. This may result in
unsuccessful customer retention; thus, being disadvantageous for the business. Therefore, it is
necessary for the companies to maintain effective keenness with its suppliers to ensure on-
time delivery of raw materials and other necessary supplies. In addition to this, natural factors
such as, climatic conditions, weather, and so forth may also affect the functions of an
organisation. For instance, any sort of natural disasters such as, floods, cyclones, and so on
may lead to scarcity of natural resources; in that way, affecting the functions and activities of
a business.
Ethical issues witnessed in business and their responsibilities in managing ethics in
workplace
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In the words of Ferrell and Fraedrich (2015), business ethics looks at the ethical or moral
problems or principles, which may take place in the environment of a business. In other
words, it can be stated that, it is the modern organisational principles, standards, set of norms
and values, which governs the behaviour and actions of people in a business organisation. At
the moment, having ethical standards in a business is highly significant. The key ethical
issues that arise in the present business world are honesty, justice, fairness, and so on. These
are considered to be some of the key issues, which are creating complex predicaments in the
businesses. Presently, any biased or wrong decision taken by the business organisations may
impose profound impact upon the goodwill and brand image of a business; thereby, affecting
the market position of the company.
Goodwill and brand image is highly noteworthy for every business and further facilitates the
companies in ensuring substantially developed working environment. It further facilitates in
maintaining a moral way in times of turbulence. Additionally, it helps in building strong
productivity and teamwork within the workplace (Haig, 2015). It further facilitates in
supporting employee development and growth. Therefore, it is the core responsibility of the
business organisations to ensure ethical practices within the premises of the organisations; in
so doing, improving brand image and reputation. Another significant way in which the
business organisations can improve its market reputation is through successful CSR activities.
It facilitates in attracting the consumers and investors; thus, being advantageous of the
businesses.
Conclusion
The above paper has discussed the changing and dynamic business environment and its
impact upon the organisations and its operations. It has been further witnessed that, the
external along with the internal environment of a business can significantly determine the
growth and advancement of a business. Furthermore, the importance of ethical responsibility
and its influence on the business has been explained with examples.
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Reference List
Brito, L.A.L., Brito, E.P.Z. and Hashiba, L.H., 2014. What type of cooperation with suppliers
and customers leads to superior performance?. Journal of Business Research, 67(5), pp.952-
959.
Fang, S.R., Chang, E., Ou, C.C. and Chou, C.H., 2014. Internal market orientation, market
capabilities and learning orientation. European journal of marketing, 48(1/2), pp.170-192.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases.
Nelson Education.
Haig, B., 2015. Brand credibility measurement: A new measure for brand equity/brand value:
Part 1. Journal of Brand Strategy, 4(2), pp.177-189.
Maletič, M., Maletič, D., Dahlgaard, J.J., Dahlgaard-Park, S.M. and Gomišček, B., 2014.
Sustainability exploration and sustainability exploitation: From a literature review towards a
conceptual framework. Journal of Cleaner Production, 79, pp.182-194.
Zinovieva, C.G., Kuznetsova, M.V., Dorfman, T.V., Limarev, P.V. and Limareva, J.A., 2016.
Study of external and internal factors affecting enterprise’s stability. Advances in Systems
Science and Applications, 16(1), pp.62-71.
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