BUSINESS ETHIC AND VALUE : ENVIRONMENT OF BUSINESS

OVERVIEW
Overview of the Business Environment and Its Historical Forces
The Six Environment of Business
Models of Business-Government-Society Relationships

Economic Environment
-Economic forces have significant impacts on business activities. For example, the fluctuations of the Gross Domestic Product (GDP) influence and affect the stability and growth of productions and markets.
-Economic forces are interdependent and affect the business environments in different ways.
-A thorough understanding of the economic environment will help businesses in the decision-making process and operational activities.

Technological Environment
Knowledge is the key factor that facilitates technological advancements.
New technologies:
=help businesses speed up work processes and procedures,
=provide for higher profits through improved production activities, and
=enable consumers to enjoy a wider variety of improved products and services.

Governmental Environment
-Governments need to control and regulate businesses in terms of what they can do and how they should them and this regulation is done through laws and legislation.
-This is especially because it is the government's role to protect the rights of the people and provide for their well being and safety.

Cultural Environment
-It is important for businesses to understand the culture of the people, where they operate especially when they want to do business outside of their origin countries.
-An understanding of the cultural environment enables businesses to capture a big market share faster and avoid rejection from the people.

Natural Environment
-Awareness of businesses of their responsibility on the natural environment is important to ensure long-term and continuous prosperity.
-Business managers should make careful considerations and in-depth studies with regard to things that could affect mother nature.
-This is because the natural environment has been jeopardized by the attitudes of businesses that are insensitive to the effects of their decisions upon the environment.
-Businesses that are socially responsible in their treatment of the environment will eventually realize that it will pay off at the end of the day, when they enjoy stability and bigger profit margins resulting from loyalty because people would respect them more.

Internal Environment
Four groups within the internal environment of businesses comprise of the:
-owner(s)
-board of directors,
-managers, and
-employees.
They are coordinated in such a way that the managers will be responsible in ensuring that employees share the same values and vision with the management as this is crucial to business growth.

MODELS OF THE BUSINESS-GOVERNMENT-SOCIETY RELATIONSHIPS
According to Steiner and Steiner, there are four models that can depict the business-government-society relationships:
-Market Capitalism Model,
-Dominance Model,
-Dynamic Forces Model, and
-Stakeholder Model.

Market Capitalism Model
-The Market Capitalism Model (since 18th century):
-government interference in economic life will be held to a minimum
-individuals have maximum freedom to pursue their own self-interests

Dominance Model
-(the latter half of the 19th century): powerful business magnates, politicians and legislatures shape the destinies of the common people

Stakeholder Model
-business firms is the center of a set of mutual relationships with individuals and groups of stakeholders