Influences on, and control factors relating to the business environments

BUSINESS STUDIES

GRADE 11

PAPER 1

TERM 1

CHAPTER 1

INFLUENCES ON, AND CONTROL FACTORS RELATING TO THE BUSINESS

ENVIRONMENTS

REVISED NOTES

2025

TABLE OF CONTENTS
TOPICS PAGES
Exam guidelines for business environments 2
Terms and definitions 2-3
The components of the micro, market & macro environments. (Recap) 4
The reasons why businesses has more control over the micro 5
environment/less control over market environment and no control over
macro environment.
Ways in which businesses can be involved in the macro environment 6
Benefits/ advantages of businesses that are involved in the macro 7
environment

This chapter consists of 6 pages

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 Influences on, and control factors relating to the business environments

CONTENT DETAILS FOR TEACHING, LEARNING AND ASSESSMENT PURPOSES

INFLUENCES AND CHALLENGES OF THE BUSINESS ENVIRONMENTS

Learners must be able to:
●​ Name the components of the micro, market & macro environments. (Recap)
●​ Explain the reasons why businesses have more control over the micro-environment/less control
over market environment and less control over macro environment.
●​ Identify the challenges of the business environments from scenarios/case studies/statements
and examine the extent of control a business has over these environments.
●​ Recommend/Suggest ways in which businesses can be involved in the macro environment.
●​ Discuss/Explain the benefits/advantages of businesses that are involved in the macro
environment.
●​ Outline/Name/Discuss/Explain the challenges of the micro-environment.
●​ Outline/Name/Discuss/Explain the challenges of the market environment.
●​ Recommend ways in which businesses can overcome competition in the market
●​ Outline/Name/Discuss/Explain the challenges of the macro environment.
●​ Give examples of contemporary legislation that may affect business operations.
●​ Identify the challenges of the THREE Business Environments from given scenarios/statements.
Motivate your answer by quoting from scenarios/statements

Terms and Definitions

TERM DEFINITION
Control The power to influence or direct people’s behaviour or the course of
events.
Organisational Framework for managers which shows the division of responsibilities
structure and roles played by each stakeholder.
Organisational Controls and influences the way in which the business is conducted
culture
Vision Reflects or predicts what the future will look like.
Mission statement Shows what one does best every day in the business and how one
should go about doing it.
Human resources The personnel of a business organization regarded as a significant
asset in terms of skills and abilities.
Suppliers Factories/providers of goods/services that businesses would
obtain/buy from in order to operate their businesses.
Competitors Businesses which sell the same/similar products/services
Deforestation Removal of trees to clear land to be used for another purpose, e.g.
industrialization
Redressing To make amends or to set right
Nepotism The practise of showing favouritism towards one’s family or friends in
economic or employment terms
Retrenchment Involuntary ending of a service contract of an employee by the
employer due to operational requirements.
Go- slows When employees work more slowly and with less effort than usual to
try to persuade an employer to agree to higher pay
Trade union An organized association of workers in a trade , group of trades, or
profession formed to protect their rights and interest
Strike A work stoppage as a form of protest or to strengthen one’s bargaining
position
situation whereby workers refuse to work until their complaints/
demands are addressed by their employers.
Industrial action These are actions that include strikes or go slows
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 Influences on, and control factors relating to the business environments

Open market A market where there is no control over who may provide goods and
services or over the prices that can be charged
Demographics Statistical data relating to the population and particular groups within it.
Often includes age, gender, income groups and occupation.
Psychographics The classification of people according to their attitudes, aspirations,
and other psychological criteria.
Globalisation Greater trade and collaboration between businesses or people in
different countries which is enabled by technological advances and
communication.
Physical This is an environment that is comprising of the ecological elements
environment such as natural disasters, air pollution, water pollution, deforestation,
waste products or natural resources
Institutional These are private-public partnerships which are formed between
environment government and private enterprise
Redressing To make amends or to set right
Nepotism The practise of showing favouritism towards one’s family or friends in
economic or employment terms
Retrenchment Involuntary ending of a service contract of an employee by the
employer due to operational requirements.
Trade union An organized association of workers in a trade , group of trades, or
profession formed to protect their rights and interest

1​ COMPONENTS OF THE MICRO, MARKET & MACRO ENVIRONMENTS. (RECAP)

Components of the Components of the market Components of the macro

micro environment environment environment

●​ The business vision, ●​ Customers/ Consumers/ ●​ Physical/Natural

mission statement Buyers; are the final users environment
●​ goal and objectives of the product/services. ●​ Economic environment
●​ organisational ●​ Suppliers: include ●​ Social/Cultural/Demographi
structure factories/providers of c environment
●​ organisational goods/services that ●​ Technological environment
resources businesses would ●​ Legal/Political
●​ organisational culture obtain/buy from in order to ●​ Environmental/Global
●​ management and operate their businesses. environment
leadership. ●​ Intermediaries/Agents, ●​ Institutional environment
●​ eight business who help to promote, sell
functions and distribute products to
consumers.
●​ Competitors, which sell the
same/similar
products/services may
have a greater impact on
the market of the
business.
●​ A regulator: is a
person/organisation with
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Influences on, and control factors relating to the business environments

official power to control an

activity and make sure that
it is done in a satisfactory
way/make rules by which
enterprises in the different
industries must abide.
●​ Strategic allies: refer to
two or more businesses
that work together to allow
them to obtain the
expertise they lack from
another business.
●​ Unions: are the employee
organisations that aim to
improve working
conditions of the labour
force.
●​ other organisations/civil
society such as CBOs,
NGOs, regulators,
strategic allies, and
unions.

1​ Reasons why businesses have more control over the micro environment/less
control over market environment and less control over macro environment

1.1​ Reasons why businesses have full control over the micro environment
●​ Business owners and managers have a great deal of control over the internal/micro
environment of business, which covers day-to-day decisions.
●​ They choose the suppliers they purchase/which employees they hire/the products they
sell, and where they sell those products.
●​ They use their skills and resources to create goods and services that will satisfy existing
and prospective customers.
●​ Establish and revising its vision, mission statement, goals and objectives in line with
current trends.
●​ Engages strategic management systems and ensures that plans are implement and
revised when necessary.
●​ Establish policies, procedures and management structures that could move the business
in the right direction.
●​ Ensuring that all the business resources are used efficiently and effectively to the benefits
of the business.
●​ Ensuring that all employees understand the culture of the business, and are working
towards the agreed goals and values that accommodate all the stakeholders of the
business.
●​ Leading employees, organising and directing that activities, and controlling their action to
achieve the goals and objectives of the business.

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Influences on, and control factors relating to the business environments

1.2​ Reasons why businesses have influence/limited control over the market
environment
A business only has limited control over the market environment but, in some cases, it is
possible to influence and shape some components in this environment. Some components of
the market environment may be easier to influence than others. Below are examples of how
entrepreneurs could influence some aspects of the market environment.

Customers
●​ Entrepreneurs can influence the decisions of consumers/customers by using a
well-considered and well-executed marketing strategy. A marketing strategy is a plan of
action that describes the marketing objectives of the business and the strategies and
activities that will be used to achieve these objectives.
●​ The entrepreneur could conduct market research to identify the needs/wants of the target
market and the devise strategy to provide goods or services that will be required by
consumers/customers to satisfy those needs/wants.
●​ A business could attract and influence customers’ decisions through good marketing
campaign such as promotional sales, discount prices, extended working hours, persuasive
advertisement and so on.
Suppliers
●​ Entrepreneurs could also influence the decisions and actions of their suppliers by signing
long-term contacts for their inputs (raw materials) at fixed prices, or by forming strategic
alliance with them.
●​ Businesses could also buy in bulk to get discounts from their suppliers, and in this way
ensure that they have adequate raw material at all times.
Competitors
●​ Although businesses have little or no influence over their competitors, they might form a
strategic alliance, join a community business forum, or form a consortium with other
business owners to share ideas and resources to undertake a project that will benefit all
the members of the group.
Regulators
●​ A single business cannot influence the decisions of its regulators, Regulators are
government bodies that make rules and regulations to check the activities of the business.
●​ However, when businesses join together, they could influence regulators to some extent.
For example, a representative for the businesses can lobby with their regulators to take
away or pass legislation that will help them to achieve their goals.
Unions
●​ Business can also influence the decisions of unions if they try to maintain a good
relationship with them.
●​ Businesses can achieve this by engaging in a collective bargaining session with trade
union to explain certain concerning issues to the leader to try to persuade them to side
with their point of view

1.3​ Reasons why businesses have no control over the macro environment
Businesses have no control over the macro environment. The following factors are not within
the control of the business:
●​ Political factors such as government policies and political stability.

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Influences on, and control factors relating to the business environments

●​ Economic factors such as inflation rate and fluctuation in prices of foreign currency.
●​ Social factors such as low-income levels of consumers and unemployment.
●​ Technological factors such as changes in new technology and internet infrastructure.
●​ Legal factors such as a recent legislation and labour laws.
●​ Environmental factors such as climate change and environmental sustainability.

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Influences on, and control factors relating to the business environments

1.4​ Ways in which businesses can be involved in the macro environment

●​ Influencing suppliers by signing long term contracts.
●​ Create job opportunity for the people in their communities
●​ Undertake social responsibility programmes to improve the welfare of people in the
community
●​ Improve exports markets by expanding into new African markets.
●​ Undertake scientific research to improve traditional medicines
●​ Enter into Private Public partnership to provide infrastructure in the country.
●​ Provide education and training programmes for workers to improve service delivery.
●​ Creating new uses for a product by finding new customers.
●​ Influencing regulators through lobbying and bargaining.
●​ Initiating bargaining sessions between management and unions.
●​ Influencing its owners using information contained in annual reports.
●​ Negotiating strategic alliance agreement through contractual processes.
●​ Knowing government regulations and operating within them.
●​ Keeping up with new technologies to improve production and marketing.
●​ Lowering its impact on the environment.
●​ Entering the global market by using the internet to source suppliers and customers.
●​ Working within the law to set up contracts.
●​ Taking advantage of economic changes such as exchange rate, tax breaks.
●​ The business can stay informed about the challenges and developments in the macro
environment and can adapt to challenges quickly.
●​ Entering the global market by using the internet to source suppliers and customers
●​ Working within the law can assist the business to set up contracts.
●​ Getting involved in research/development so that they can continue to operate.

1.5​ Benefits/advantages of businesses that are involvement in macro environment

●​ Businesses will gain good publicity and so attract and retain loyal customers
●​ They will attract and retain skilful employees in their communities
●​ Government tenders and contracts are normally given to businesses that are involved in
the macro environment.
●​ Businesses that support their communities normally get some tax rebates.
●​ Businesses that get involved in the macro environment can anticipate likely challenges
and devise strategies to turn them into opportunities.
●​ Top investors are attracted to businesses that are involved in the macro environment.
●​ It prevents environment damage by decreasing the business carbon footprint
●​ Knowing peoples age, customs, traditions, and preferences will make it easier for
businesses to appeal to customers.
●​ The business can more accurately predict future events, threats and opportunities that
may arise
●​ The business can contribute to a healthier, more skilled and productive workforce
●​ It can protect natural resources and meet consumer needs in a sustainable way
●​ The business can contribute to wealthier consumers.
●​ Reduced industrial conflict and increase productivity.
●​ The business can accurately promote a cause that is a concern to the society.
●​ The business can contribute its expertise and resources that can influence the public
opinion. This is called advocacy.