business management

Topics: Environment, Entrepreneurship, Business Pages: 17 (4458 words) Published: May 2, 2014
Genie Nizigiyimana
Business Management 1 assignment
Tim Human

Section A
Question 1:
The macro environment is the business environment that cannot be controlled by the business. These factors include; political, economical, social, technological, legal and environmental. Political:

It is defined as the laws and constitutions that are combined with the public and private stakeholders that operate as well as influence the system. The government composes laws and legislations that the business must adhere to. It is said to also include the political culture of which views are held about how governments should act with respect to its citizens. (, 2014). By making reference to the case study, more and more countries have passed laws with respect to air pollution. The government has placed certain limits to reduce emissions from vehicles and to control what pollutants is legal therefore placing pressure on car manufacturers. Therefore this means that new technology is needed to improve the efficiency of the catalytic converters. Economical:

Economics is a social as well empirical science that studies the behaviour of individuals, groups as well as organizations. It is the study of how scarce resources are used to satisfy unlimited needs and wants. (Mohr, Fourie, & associates, 2012, p.5) The economical environmental factors don’t only affect businesses but also the participants of the economy, with reference to the macro-environment. These factors include; unemployment rate, interest rates, inflation and periods of growth and recession. However, in the micro economical environment such factors are; market size, demand, supply, competitors, etc. (educationportal, 2014). With reference to the case study, in 2008 there were bank rises which resulted in the failure of many banks. This caused a major drop in growth around the world because companies were incapable of obtaining loans that were essential for investment. With regards to the micro environment, the recession meant a fall in demand for many business products, including that of Johnson Matthey. Matthey managed to however use his initiative to reduce costs by increasing efficiency. Matthey is also interested in benefiting from the high levels of economic growth in China. This growth has lead to a greater demand for the plastics that the company’s products helped process. Instead of transporting goods to China he has established a manufacturing plant within the country. 4% of its global sales are in the precious metal market. Social:

The social environment of a business includes all the factors that affect the business socially. These factors being; family, education, culture as well as religion. It affects the management of a business indirectly in the form of consumer behaviour and directly in the form of the employees working for the business. (Erasmus, Strydom, Rudansky-kloppers, 2013, p.122). According to the case study, Matthey requires a highly skilled workforce in order to establish new and more efficient ways of meeting challenges. The company requires employees with skills in STEM subjects; however, it is difficult to recruit people with the required skills and knowledge. In my assumption Matthey is employing people from the community and then training them in the required subjects. They are also raising awareness for the young people to excel in the STEM subjects so that the business can offer them careers in the field that they excel in. Technological:

These are the external factors that affect the business operation externally. The changes in technology affect performance of the organisation. The business has to severely change their operating strategy due to the exponential changes. (Business-dictionary,2014). The case study shows that technological change could cause problems for Matthey due to recent replacements of the catalytic convertors into the internal combustion engine. Matthey therefore needs to look for...
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