For use with Business in Context 6e by David Needle 9781408095218 © 2015 Cengage Learning EMEA Ltd 1.0 THE CONCEPT OF BUSINESS IN CONTEXT What is business?

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.0 THE CONCEPT OF BUSINESS IN CONTEXT

What is business?

The ‘Business in Context’ model

The contexts of business

How the model works

The systems and contingency approaches

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.1 WHAT IS BUSINESS?

An organized effort to produce goods and services to meet the needs of society

A broad concept - manufacturing and service industry, not for profit organizations, voluntary sector and public services

The growth of the ‘business model’ in which all organizations are run as businesses

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.2 THE BUSINESS IN CONTEXT MODEL

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.3 THE BUSINESS IN CONTEXT MODEL II

Business can best be understood as a series of related activities in a number of different contexts

These contexts can be seen as levels and comprise:- Activities or functional level- Strategic level- Organizational level- Environmental level

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.4 BUSINESS ACTIVITIES OR FUNCTIONS

Innovation

Operations

Marketing

Human resource management

Finance and accounting

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.5 THE STRATEGIC CONTEXT

The nature of management and leadership

The formulation of a set of objectives and the means of achieving those objectives

Issues of ethics and corporate social responsibility

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.6 THE ORGANIZATIONAL CONTEXT

Goals

Structure

Ownership

Size

Organizational/corporate culture

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.7 THE ENVIRONMENTAL CONTEXT

Globalization – an overriding factor

The economy

The state

Technology

Labour

Culture

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.8 KEY ASPECTS OF THE BUSINESS IN CONTEXT MODEL

Businesses are a complex network of interrelationships

Business activities are both influenced by and in turn influence the strategic, organizational and environmental contexts in which they operate

Interaction occurs within each level of the model as well as between levels

Decisions that affect one part of the business will impact on other parts as well

Decisions are made by people with all the subjectivity that entails

Interactions are influenced by history

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.9 KEY ASPECTS OF THE BUSINESS IN CONTEXT MODEL II

Interactions and influences operate within each context between the various elements.

Interactions and influences operate between elements at different levels.

Influences operate in every direction

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.10 THE SYSTEMS APPROACH I

All organizations are made up of interdependent parts

Organizations may be viewed as a series of inputs, processes and outputs (see slide 1.11)

The job of management is to balance the inputs, processes and outputs

Equilibrium between the organization and its environment is important

Feedback is an important element of the system - from the outputs to the processes and the inputs and from the processes to the inputs

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.11 THE SYSTEMS APPROACH II

For use with Business in Context 6eby David Needle

9781408095218 © 2015 Cengage Learning EMEA Ltd

1.12 THE CONTINGENCY APPROACH

Organizations and their activities are shaped by the environments in which they operate

Organizations should adapt to the prevailing environment

Most successful organizations have a ‘best fit’ with their environment

Organizations that do not adapt will fail