Business Environments- the Micro environment

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·        The micro environment refers to the internal factors that will influence the performance of the business.

·        The business and management has full control over this environment.

Below, we will look at the COMPONENTS of the micro environment:

1.      Vision, Mission, Goals and Objectives

Vision

Vision should be clear and concise, giving an idea of a desired image. It reflects: the dream of the business and what it wants to become to become in the future.

Mission

The mission will:

• describe the purpose and basic activities of the business

• explain why the business exists

• explain how it aims to achieve its vision

Goals

Goals are long term aims that the business expects to achieve:

• It gives the business a sense of direction

Objectives

Objectives explain how a goal will be reached (it follows steps as to how to achieve specified goals)

 

2.      Organisational culture

• Organisational culture is the personality of the organisation.

• Culture is made up of different beliefs, values, norms and expectations of employees and management.

• It influences people’s actions and attitude.

• Positive culture helps staff to be motivated and productive.

• A negative culture makes workers feel discouraged, disinterested and could lead to conflict.

 

3.      Organisational resources

Physical resources

Raw materials or equipment used in the business to produce goods

Financial resources

Refers to capital, which can be provided by the owner(own capital) or can be obtained from financial institutions (borrowed capital)

Information and technology resources

Books, statistics, websites, emails, research articles used by the business.

Human resources

These are the employees who will be working in the business.

 

4.      Management and leadership

Managers have FOUR main tasks or basic activities, planning. Organising, leading and control

Planning

Look at what you need to do. Decide how to do it

Organising

Allocates resources in the business to achieve desired goals

Leading

Guide and motivates people to carry out plans (gives direction)

Control

Checking that business plans are carried out as planned.

5.      Business organisational structure (organisational chart / organogram)

• Every business must be organised into a basic structure that shows: tasks, level of authority and responsibility.

• Structure shows flow of instructions and feedback

 

6.      Business functions

The micro environment consists of 10 business functions

1.      General management

2.      Purchasing

3.      Production

4.      Marketing

5.      Administration

6.      Human resources (HR)

7.      Public relations (PR)

8.      Finance

9.      Risk management

10.   Information and communication technology

 

(Read over pages 5-18 in the notes attached on the business functions)

Lesson Questions