ADDITIONAL CHALLENGES TO THE BUSINESS ENVIRONMENTS
OTHER CHALLENGES TO THE BUSINESS ENVIRONMENT
CHALLENGES IN THE MICRO ENVIRONMENT
1. Promoting a culture of entrepreneurship
A business must encourage a culture of entrepreneurship that allows employees to create and come forward with new ideas to improve the business. To achieve this, the distinction between employees and management should be small. The business must evaluate ideas to see whether they are feasible and must support the employees by making the required resources available for feasible ideas.
2. Participative decision-making
3. Identify and deal with risk
4. Managing union activities and strikes
CHALLENGES IN THE MARKET ENVIRONMENT
1. Consumer preferences
Changes in society influence consumer’s buying habits and preferences
How are consumer’s preferences affected?
2. Consumer related – main source of concern for the business operations should strive to best satisfy needs of consumers.
Consumerism – brings pressure of unsafe goods; the business should refrain from manufacturing and selling unsafe goods; keep business practices sound and within legal parameters.
Spending patterns – have changed because of the increased employment of women; businesses in rural areas due to urbanisation are faced with a decrease in demand; and the growing teen market à different spending patterns.
3. Competition
Trademark preferences play an important role, with regard to products for young people, cars and technology.
Low import tariffs have resulted in increased imports at lower prices
Huge presence of shopping malls have changed consumer’s preference to shopping areas and they also offer modern displays and entertainment areas.
4. Supply of resources
CHALLENGES IN THE MACRO ENVIRONMENT
1. Political challenges – redressing past imbalances, businesses have to employ previously disadvantaged individuals (PDIs), e.g. women and people with disabilities. Businesses have to contribute to the skills development programmes.
2. Contemporary business legislation challenges – business must protect consumers; obtain quality products at affordable prices; labour force not treated fairly; unsafe working conditions.
Acts passed in Parliament since 1996 to protect:
· Agricultural labour act
· Basic conditions of employment act
· Employment equity act
· Labour relations act
· Protected disclosures act
· Skills development act
· Promotion of equality and prevention of unfair discrimination act
3. HIV/AIDS challenges – negative impact on productivity; high absenteeism; losing skilled workers; retraining
Steps that can be implemented by businesses to monitor HIV/AIDS include:
· Formulate a strategy to address the threat of HIV/AIDS
· Establish workplace awareness
· Encourage openness in workplace - feel free to disclose status
· Provide voluntary HIV-testing in workplace
· Make use of educational programmes
· Motivate peers to counsel each other
· Get HIV counsellors to visit the business
· Monitor absenteeism and follow it up
· Create a positive environment
· If possible provide free treatment
4. Technological changes – loss of jobs; production of dangerous gases/nuclear weapons
5. Social responsibility – business needs to consider the impact it has on employees, clients and society.
Employees – business pays benefits to employees, e.g. assist with housing and bursaries.
Clients – right to safety, right to be informed, freedom of choice, right to be heard.
Society at large – business can fund educational, cultural, scientific and social institutions.