TOPIC 1 - INFLUENCES ON BUSINESS ENVIRONMENTS

Question 1

Name the components of the micro environment and state the extent of control.

Answer 1

1. vision, mission statement,
   goals and objectivities
2. organisational structure
3. organisational resources
4. organisational culture
5. management and leadership
6. eight business functions
   A business has full control over it.

Question 2

List the components of the market environment and state the extent of control.

Answer 2

1. customers
2. suppliers
3. intermediaries
4. competitors
5. other organisations
   A business has less control over it.

Question 3

Outline the components of the macro environment and state the extent of control.

Answer 3

1. social factors such as low-income levels of consumers and employment
2. political factors such as government policies and political stability
3. legal factors such as recent legislation and labour laws
4. economic factors such as inflation rate and fluctuation in prices of foreign currency
5. technological factors such as changes in new technology and internet infrastructure
6. physical factors
7. global environments such as climate change and environmental sustainability
   A business has no control over it.

Question 4

Explain the reasons why businesses have more control over the micro environment, less control over the market environment and no control over the macro environment.

Answer 4

1. All six components of the micro environment can be controlled by the
   management of the business.
2. All components of the market environment work independently of the business.
3. This environment operates outside of the influence of the business.

Question 5

Ways in which businesses can be involved in the macro environment?

Answer 5

1. Create job opportunities for the people in their communities.
2. Undertake social responsibility programmes to improve the welfare of people in the community.
3. Improve export markets by expanding into new African markets.

Question 6

Benefits/advantages of businesses that are involved in the macro environment:

Answer 6

1. They will gain good publicity and so attract and retain loyal customers.
2. They will attract and retain skilful employees in their communities.
3. Government tenders and contracts are normally given to businesses that are
   involved in the macro environment.