Business Environments- the Micro environment
· 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)