Business Essay

1714 WordsJul 26, 20117 Pages
Business and its Environment This section is concerned with understanding of the purpose and nature of business activity and the factors that influence and constrain business behaviour and decisions. It provides the basic framework around which the other sections of the syllabus are developed. It also provides a means for integrating business activities, which should always be seen as a whole rather than as individual parts. Central to the understanding of Business and its environment is the idea that the world in which business operates is constantly changing and this requires businesses, if they are to be successful, to adapt and respond to these changes. The development of mission and objectives involves analysis and appraisal of environment. The results of internal and external appraisals will help managers determine what goals and mission they can or should adopt, and the strategic options that are available. Therefore, in formulating a strategy, the effective general manager makes strategic choices which are consistent with environmental factors. The biases or preferences for action shape the decision makers' view of the situation. In spite of these decision-making biases, there are some common elements in the environment that decision makers analyze in their strategic decision making processes. Moreover, there are some common relationships between the strategic choices and the environment. This chapter attempts to show how all organizations interact with and are affected by the environment in which they function. Organizations do not exist in a vacuum. Many factors enter into the forming of a company's strategy. Each exists within a complex network of environmental forces. These forces, conditions, situations, events, and relationships over which the organization has little control are referred to collectively as the organization's environment.

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