A business can not exist in isolation, it has to deal with changes taking place inside and outside and in order to operate it must interact with its surroundings, which is the environment. The environment impacts a business to large extent such that it contributes to either the success or the downfall of a business. Therefore this paper is aimed at defining what business environment is and understanding why it is important, for a business individual to understand this environment. Apart from that, it will explain how organizational objectives changes through different stages of a business life cycle after defining what objectives are.
It will also make a steady progression by analyzing how useful corporate social responsibility would be to Zambian Businesses. Lastly after defining what an environmental management system is, it will attempt to comment on its benefits and concluding by summarizing the business environment, organizational objectives, social responsibility and the environmental management system. A business cannot exist in isolation, it needs to interact with its environment and build relationships with its environment.
And in order for an organization to build good relationships with its environment it must understand the factors in an environment that pose as opportunities and threats to the organization According to Stephen R. Robbins (2007), organizations interact with its environment as it takes input and distributes outputs; this environment influences the decisions undertaken by a business. This influence can be either from external or internal environment. Therefore a business environment is the surrounding in which the organization interacts with.
He further notes that a business environment refers to those factors and forces that affect the organizations performance and includes the internal environment and the external environment. The environment can be divided into Micro and Macro environment: Micro environment- This has direct impact on the organization and includes; Customers – Organization exist to meet the needs of customers, it is the customers who uses the organization‘s input, and they represent potential uncertainty to an organization, their tastes can change and/or they can become dissatisfied with the organization’s product.
Therefore an individual needs to be able to satisfy such needs and being able to be innovative to cater for constant changing tastes. Suppliers -Organizations depends on these external groups as sources of input. These Includes providers of finance and labor inputs, who are needed to ensure a continuous supply of capital, a steady flow of needed inputs at the lowest price available. Apart from that they represent continuity for the organization in terms of finance and long term borrowing.
The unavailability or delay of supply form suppliers can significantly reduce the organization‘s effectiveness. Kotler Phillip (2008) Competitors-all organizations have one or more competitors and the business can not afford to ignore the competition. The Competitors in terms of pricing, new products, developed services offered represent an environmental force that should be monitored and which they must be prepared to respond. According to Kotler, An organization must gain strategic advantage by positioning their product strongly against competition.
The Other Business environment which has an impact of a business includes the following: Political environment/Legal-this includes local laws and government can influence what an organization can do and what it can not do. It refers to Laws and regulations that protect each business from another also provide guide lines on how to operate in a large market without exploiting its labour inputs as well as Consumers. In addition to this, governments tend to set regulations for employment and minimum wages and conditions for Trade unions which in turn influences the supply of labour inputs and employment contracts.
Governments develop public policy to guide commerce, setting out laws and regulations that limit businesses for the good of the society as a whole. Political condition refers to the stability of the country and attitudes and policies that a governing government had adopted. Economy- These are factors that affect consumers buying power and spending patterns such as How interest rate change, inflation rates, changes in disposable income, and stages of the business life cycle. Knowing whether the economy is going to recession or going in an economic recovery stage.
It involves acquiring information in about the economy. Phillip Kotler (2008) Social Culture- These are forces that affect a society’s basic values, perceptions, preference and behaviours. Organization needs to adapt their practice to the changing expectations of the society, by embracing the values and cultures and manage in ways that recognize the specific socio aspect. These can greatly influence what kind and /or type of the business that can be operated in a certain environment. Technology-The most rapid changes have occurred in technology and it is a most volatile environment.
Need to know how to use this information and information systems as a competitive advantage and having adopted such advances to stay ahead of their competitors as new technology creates new markets and opportunities for a business Ecological –This leads to Businesses being socially responsible for the environment and community apart from stake holders. This also involves using resources as they are needed as inputs with the threat of global warming, the business would need to comply with the standards set for environment protection laws, by setting up environmental management systems, waste disposal management system.
Besides that, Stephen R. Robbins (2004) argues that it is important for a business individual to understand this environment, this is so because not all businesses are the same; they differ by what is called as environmental uncertainty; the degree of change and complexity in the organizations. According to David Needle (2004) Business individual must understand the environment in which their business exists in because of the following reasons:- -They need to know how culture influences human resources strategies as Human capital is needed for the operation of the Business.
The impact of Culture on skills and trade union policy towards such change and deter how human capital is employed. -Apart from that, the need to understand how technology impacts a business and society and cultural attitudes towards technology. -Besides that, they need to understand how the government interacts with the businesses; how the it supports innovations, technical change and how it specifically impacts on certain industries for example defence. To know what and how government policies change on the labour market and regulations established such as minimum wages, the legislation on Trade unions as set by the government affects the labour supply in a business. Cultural explanations for the differences between nations regarding state intervention. -It is imperative that a business individual understands the economic environment, the extent and direction of state intervention in the economy, the power of the multinationals in influencing policy especially if the business has to enter a market which has big competitors or monopoly.
Understanding how important the impact of innovation is on economic growth, and types and levels of employment. -“The environment continues to change rapidly and both consumers and marketers wonder what the future will bring” Kotler Pg 64. -For the above reason an individual must constantly know and adapt to the constantly changing environment, and can help to adopt strategies to meet new opportunities and challenges. There is need to understand the impact of changing technology especially that it has lead to shifting organization al boundaries, virtual workplaces, more mobile workforce, flexible work arrangements and empowered employees. -The environment can pose as a security threat such that individual need to deal with increasingly security threats such as risk management, restructed workplaces, discrimination concerns and globalization concerns. -Due to increased competitiveness the business individual need to know how to improve customer care, innovation, and being able to adopt efficiency and productive methods.
ABE, Marketing Study Manual Stephen R. Robbin says that for individuals to be able to respond to change in the enviroment, they need to know the dynamic and unpredictable environment of an organization, the components that change frequently, knowing complexity measured in terms of knowledge an organization needs about its environment. Understanding the relationship between an enterprise and its environment which will enable individuals to mange stakeholders’ relationships. The more obvious and secure these relationships, the more influence managers will have over organizational outcomes.
Stakeholders are individuals or groups that have a direct interest in the activities of a business. Peter Stimpson 2002. He further argues that understanding a stakeholder relationship management can lead to organizational outcomes such as improved predictability of environmental changes and organizational flexibility to reduce the impact of change and being able to set up Environmental Management system for the organizations. Objectives An organization exists to accomplish something: to make a certain product, lend money and/or make profit. Its specific mission is clearly stated when the business begins to operate.
Philip Kotler (2000). Apart from that it develops specific goals to achieve in order to accomplish something; the led out mission; of what it intends to do. This provides a guide as to how to accomplish and when to accomplish it, becoming objectives as they are quantified. That they are stated in such a way that it is possible to see whether they, usually indicating a time scale for their achievement Peter Stimpson (2006) notes that objectives are targets or outcomes that a business attempts to achieve . He further explains that objectives provide a much clearer guide for management action or starategy.
Overall corporate objectives might include survival, profit, market share and growth of an organization; An example of Objectives could includes: -Profit maximization- An objective that manager might establish would require the firm to only take or make decisions that maximize the profits. The profits are necessary to persuade business owners the stakeholders in a business. -Growth- The desire to see the business achieve its full potential, planned for growth can lead to proper cash flows; large business can experience economies of scale. Increasing Market Share- This objective means increasing market share, benefits resulting form having the highest market share, retailers are keen to stock and promote the brand. Apart from that it could be survival of an organization, where it creates barriers to entry. The objectives must be based on the corporate aim, be achievable and measureable if they are to motivate employees, and they must be communicated to employees and investors in the business. Businesses go through different stages in its life cycle as they begin to operate and include the following stages: Initial Stage, Growth, Maturity and Decline stages.
In every Stages of a business life cycle, they are set priority objectives on what to accomplish. Philip Kotler States that overtime objective may change in order to take advantages of new opportunities or respond to new market conditions. -Initial stage-This is the stage when the business commences to operate, the objectives set and these are usually stated in the mission statement includes: -on how to enter a market, what markets to enter. -what market in the firm is going to penetrate. -Break boundaries to entry in markets. -gaining consumer acceptance.
And informing potential customers about the new products -Inducing product trial and -securing distribution. However, Objectives change as the Business undergoes the growth stages. According to Peter Stimpson 2002, the objectives change from entering a new market to; -Attracting customers and creating customer relationships. -Creating loyalty and consistency provision of product -Identifying major growth areas in existing markets and target consumers within them with large promotional campaign. -discovering several ways to grow, looking at integrative growth opportunities -Lastly developing corporate brand name and product.
In the maturity stage the objective change from attempting to lure the customers to supporting products with high image promotion changing by; -Diversification of product to make an effective contribution to gaining a large market share as well as using with its current products. -To focus on the immediate operating environment. -Taking advantage of a large market share to maximize profits and going increasingly market share. -Obtaining and monopolizing the channels of distribution. Lastly objectives change in the Decline stages as follows; survival become the prime objective, it become easier in a declining market if one has a large market share to begin with and raising finance to invest in new products. – From gaining market share to survival in the market. -It involves visiting existing customers, offering potential new clients with promotional discounts to stay. -analyzing strengths of competitors, creating barriers to entry such as achieving sufficient economies of scale, as breaking into the market is difficult owing to considerable customer loyalty to existing products and brands. This is done so that it avoids closure, preventing the loss of investment and usually place high value on its survival. David Needle (2004). – Objectives being s targets will have to change on each stages of a business cycle from the initial stages, to growth, to maturity and decline will be evident to people outside the company in various ways such product design, customer relations and lastly competitors will notice that products will face more challenging competition from a new product or a modified product. ABE Marketing Study Manual. Corporate Social Responsibility in Zambia
Peter Stimpson (2007) defines Social Responsibility as the accountability of a business towards stakeholders other than shareholders, accepting theses responsibilities towards customers, community, employees and the environment and acting according can give a firm a major competitive advantage. As for G. A. Cole (2004) notes that it is more than just playing an economic role in society, they are expected to play a direct role in meeting community needs in education ,health and environmental matters, in an addition to their roles as employers and producers.
Social responsibility is a business’s intention beyond the legal and economic obligations, to do the right thing s and act in ways that are good for society; it goes beyond marking profits to include protecting and improving society’s welfare. Organizations are not independent entities responsible only to stockholders. “Corporate social Responsibility involves the application of business ethics is concerned predominately with the firm and its relationship to its various stakeholders such as shareholder, customers, employees, suppliers and the community and its relationship to the environment. David Needle 2004 pg He further explains that it is when organization take responsibility for society at large and through their actions attempt to make the world a better place in which to live in. Corporate social responsibility will be useful to Zambian Business in the following ways: •The community makes up the consumers who are becoming increasingly aware of environmental issues such that a growing numbers of the community supports businesses that adopt policies that ensure the community benefits. Companies that damage the environment can suffer an adverse consumer reaction.
However, if it gains favor with consumers, it gives them satisfaction and is likely to result in repeat purchases. •Low polluting production methods and responsible waste disposal will reduce the chances of business breaking laws designed to protect the environment, and contribute to the global warming. Social responsibility will enable organizations avoid lawsuits from communities for negligence. •If Zambian Businesses switched to more environmentally friendly strategies often they would report an improvement in the numbers and quality of applications they receive from potential employees.
Staff would rather work for a company that they can have pride in and which adopts policies which reflect their own personal views and standards. •Apart from that it could have long term financial benefits having more secure long run profits too, from cost savings to reduced costs of production; which includes damaging the enviromental,health effects form pollution at workplaces, or the cost of clearing rivers from polluted waste, Stephen R.
Robbins •It creates a favorable public image by pursuing social goals, therefore Zambian Companies will recognized in the community hence reducing promotional cost as the community will be able to identify with. Corporate social responsibility can lead to greater awareness and increased sales, increasing profits. David Needle 2004. •The business involvement can help solve difficult social problem providing jobs and taking an interest in its community ‘Giving back to the Community’ before they become serious and costly to correct.
Zambian Business has the resources to support a public and charitable project that needs assistance. •Social responsibility adds an ethical imperative to do those things that make society better and not do those that could make it worse. Therefore the business can support social entrepreneurs. •It will be easy to introduce a new product in the market if it has social responsible policies and have implemented it. •The highlighting of corporate social responsibility attracts the interest of the media, the coverage attracted is not only good public relations, but may be more effective than costly adverting campaigns. Zambian Business can benefit from Social Responsibility as they spend on the community, therefore can get tax rebates if they give to the community as the social responsibility becomes an expenditure which is not taxed. •Lastly it would attract investors who would like to invest in an organization that practices Social responsibility. Environmental management System A business has a large impact on the environment, managing the impact to the environmental can have some benefits to the organization.
Therefore an environmental Management system refers to the set of processes and practices that enable a company or organization to systematically assess and manage its environmental impact associated with the activities, products and services of an organization. It involves developing a statement of your organization’s commitment to the environment and using this policy to identify environmental attributes of your products, activities and services, determining those that could have significant impacts on environment, it also involves establishing environmental goals for your organization.
Apart from that establish roles and responsibilities for environmental management and provide appropriate resources. And lastly establish processes for internal and external communications on environmental management issues. These are designed to identify and assess and reduce the environmental impacts on an organization. The benefits of an environmental Management system include; -it provides a means for addressing non regulated environmental aspects such as energy efficiency and resource conservation -It increase operating efficiency, creates standard operating procedures and capture institutional knowledge of experienced employees. Increase employee’s environmental awareness and involvement throughout the organization. -It provides a competitive edge and improves public relations as they reduce waste and implement better business practices that have the additional benefit of saving cost. -The other benefits of implementing an Environmental management system can include energy management ,water management as well as reduced risk and liability for accidents, wastes and reduced legal costs. product and process innovation ,enhanced revenues due to product improvements . In conclusion businesses exist in an environment and their environment either internal or external impacts how the business operates. It is therefore imperative for a business individual to understand this internal and external environment and how it influences the business so that he/she is able to plan on how to respond to changing aspects of the environment, without the effects being drastic.
Apart from that an organization has objectives which are specific and quantified and these change according to priority in a business life cycle, the objectives are different and different strategies are used. Objectives will change at each stage as priority of what is to be accomplished in each stage changes. The objective change from attempting to establish a product in a existing market to how to attract potential customers, to acquiring a large market share and lastly survival.
Apart from that Zambian Business would greatly benefit from a corporate social responsibility because it Lastly organizations should implement Environmental management systems as they benefit the organizations and with global warming and green house effects being a threat to the environment ,soon it will be a compulsory regulation as business will be expected to adopt Environmental management systems that are designed to identify, assess and reduce the effects of the business on its ecological environment.
BIBLIOGRAPHY Association Business Executive Study Manual, Marketing, London G. A. Cole. , (2004), Management Theory and Practice, 6ed, Thomson Learning, London David Needle, (2004), Business in context: An introduction to Business and its environment. Thomas Learning, London. Peter Stimpson, (2006), Business studies AS level and A level, Cambridge University Press, London. Robert C. Appleby (1995), Modern Business Administration, 6ed, Pitman, London. Kotler Phillp, Keller Kevin Lane, (2006). Marketing Management. 12ed. Prentice Hall, India.