Nigerian Business Environment (BUS 221) Assignment Topic: Term paper on business and its interrelatedness with the environment. Student Name: UKA KALU PETER University of Lagos BUS 221 Assignment – The interrelatedness of business and its environment – According to George Santayana, Man is a gregarious animal. Gregarious, in terms of him not being able to exist in solitude but needs and seeks the company and input of others. This has also been said of countries, as is depicted in another popular saying – “no nation is an island”.
Of course this is not taken to literally mean that there are no island countries (countries wholly confined to an island), but that no country exists without some kind of interaction, input and even interdependence with other countries. As it appears, that pattern is not restricted to only individuals and countries but is obviously also true of the business organisation. The business organisation exists and operates in an environment which can be broadly classified into two; the external and internal environments.
The external environment consists of elements and variables which the business has no control over: the economical environment, social environment, cultural environment etc. The internal environment on the other hand, consists of the business’ own key organic functions like the marketing, financial, human resources departments etc. This paper will very briefly look at business, the business organisation and its relationship (with focus on its interrelatedness) with the overall business environment.
How the business organization makes demands on its environment and the environment in return, makes demands on the business – what demands they make of each other and what inputs they receive from each other. A brief explanation of the meaning of the terms “business” and “the business environment” would make a good starting point. PETER KALU UKA | University of Lagos 2 BUS 221 Assignment – The interrelatedness of business and its environment – What is business? Business may be viewed as an activity or as an organisation.
As an activity, business may be defined as any legal, commercial activity aimed at supplying goods and services for profit. As an institution, it may be defined as a formal organisation involved in the creation and distribution of goods and services for profit. It may take quite a number of forms and sizes; from small sole proprietorships to large corporations. People have always had varied needs and wants which are provided for by their religious organisation (church, mosque etc. ), family, NGO, government (federal, state and local) and of course, businessmen or business organisations.
The main difference here is that while business supplies the needs & wants for the primary purpose of making profit, it is not the same with these other organisations and institutions. Business coexists and operates with all these organisations and institutions and their different and at times conflicting interests, within the framework of a society or community. As business makes demands on society and society in return, makes demands on business, the interplay between the business and the various elements in the community it operates in amounts to the business environment.
The business environment? Business environment may be defined as the inter-relationship that exists between the business organisation and the community/society (or country, as it were) in which it is sited and operates. And this business ‘environment’ varies from one society and community to another. Depending on what activities the business is involved in, as against the beliefs, expectations and demands of the environment, the business environment may have positive or negative effects on businesses and their activity. PETER KALU UKA | University of Lagos 3
BUS 221 Assignment – The interrelatedness of business and its environment – The business environment is made up of elements which can be roughly classified into two; macro and micro. The macro elements of the business environments are: The social environment The legal environment The political environment The economic environment The cultural & ethical environment The technological environment The international business environment The micro elements on the other hand include: Customers/consumers Suppliers Investors Government agencies Non Governmental Organisations Other businesses (competition) The general public
Interrelatedness? Earlier in this paper we started by establishing the fact that man and even countries cannot exist in isolation, without any interaction with other people and countries. It’s quite the same with the business organisation. It also doesn’t exist or operate in solitude but is in fact, both in terms of its goals of profitmaking and even its survival, intricately interrelated and even interdependent with the other elements that make up the business environment. PETER KALU UKA | University of Lagos 4
BUS 221 Assignment – The interrelatedness of business and its environment – The business organisation relates with its environment by making demands and in turn meeting the demands of society on it. This interrelationship and interdependence is mutually beneficial to both the business and its environment. While the community or environment where the business is sited needs the products and services that the business produces, the business itself also requires a host of other factors in the form of input from its environment in order to run smoothly.
It works as a kind of mutual, reciprocal system as is diagrammatically depicted below: Conclusion In a nutshell (and as shown in the diagram above), the business provides goods and services to the market and in return receives money (in the form of sales), feedback raw materials etc. And the cycle repeats itself over and over again. However, it is not in all cases that this happens like this all the time. There are inputs the business needs from the environment that it cannot even exist
PETER KALU UKA | University of Lagos 5 BUS 221 Assignment – The interrelatedness of business and its environment – without, not to mention producing and supplying anything. Some of these key inputs are labour and raw materials, without which production and distribution cannot take place at all. It is when inputs such as these are available to the business that the business can then carry out production and supply of the products and services that society needs from it.
In the process, the business receives income (realized from sales) and profit, from which it also pays back to the society in the form of wages and salary paid to the workers, and it goes on and on like that. Finally, while the business on one hand has its own purpose and goal of making profit by producing and providing goods and services that satisfy the needs and wants of society, and society on the other hand has its own goals and aims, both cannot achieve their aims without the inputs from each other. PETER KALU UKA | University of Lagos 6