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BusinessEnvironment

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The term Business Environment is composed

of two words Business and Environment. In

simple terms, the state in which a person

remains busy is known as Business. The

word Business in its economic sense means

human activities like production, extraction,

purchase or sales of goods that are performed

for earning profits.

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On the other hand, the word Environment

refers to the aspects of surroundings. Therefore,

Business Environment may be defined as a set of

conditions; Social, Legal, Economical, Political

or Institutional that are uncontrollable in nature

and affects the functioning of organization.

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Business Environment has two components:

1. Internal Environment

2. External Environment

Internal Environment includes 5 Ms man, material,

money, machinery and management, usually within the

control of business.

Business can make changes in these factors according to

the change in the functioning of enterprise.

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External Environment

Those factors which are beyond the control

of business enterprise. These factors are

government and legal factors, geo-physical

factors, political factors, socio-cultural factors

and demo-graphical factors.

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Organizational Structures

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Why do

we need

a Structure?

All businesses have to

organize what they do.

In order for the organization

to see clearer which part of

the business does certain

job.

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Some Key

Terms

Span of control

Chain of command

Hierarchy

Delegation Empowerment

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Ways to

Structure a

Business

By function - Arranging

the business according towhat each sectionor department does.

By product or activity -Organizing according tothe different productsmade.

By area - Geographical orregional structure.

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Ways to

Structure a

Business

By customer - Where

different customergroups have differentneeds.

By process - Whereproducts have to gothrough stages as they

are made.

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Functional Structure

Production Marketing Accounts Personnel IT

Board of Directors

Chief Executive

Pros and Cons of DifferentStructures

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Pros and Cons of Functional

StructureAdvantages

Specializationeach

department focuses on itsown work

Accountabilitysomeone

is responsible for the

section Clarityknow your and

others roles

Disadvantages

Departments can become

resistantto change

Coordinationmay take too long

Gap between top andbottom

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Structure by Product or Activity

Imaging andPrinting Group

PersonalSystems Group

EnterpriseSystems Group

HP ServicesHP Financial

Services

Hewlett Packard

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Structure by Product/ActivityAdvantages

Clear focus on marketsegment helps meetcustomers needs

Positive competitionbetween divisions

Better control as each

division can act asseparate profit centre

Disadvantages

Duplication of functions

(e.g. different sales forcefor each division)

Negative effects of

competition

Lack of central controlover each separate

division

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Organization by Area

Bangko de Oros National Headquarters

Luzon

Metro Manila, Manila

Visayas

Cebu City, Cebu

Mindanao

Ozamiz City,Mis. Occ.

BDO

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Organization by Area

Advantages

Serve local needs

better Positive

competition

More effective

communicationbetween firm andlocal customers

Disadvantages

Conflict betweenlocal and centralmanagement

Duplication ofresources andfunctions

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Operational Systems

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An operational system is a term used in data

warehousing to refer to a system that is used to process the

day-to-day transactions of an organization. These systems

are designed so processing of day-to-day transactions is

performed efficiently and the integrity of the transactional

data is preserved.

Sometimes operational systems are referred to

as operational databases.

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Organization ProbablyManufacturing

CompanyProduct data

Bank Account Data

Hospital Patient Data

University Student Data

Government

DepartmentPlanning data

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Operational databases can store different types of

information such as training status, personal employee

information, and previous proposal information.

Storing information in a centralized area can increase

retrieval time for users.

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Operational databases are important when information

is needed quickly. An important feature of storing

information in an operational database is the ability to

share information across the company. Another feature

of an operational database is how much information can

be stored that pertains to a business.