Environments of LSOs

Environments is the term used to describe the context in which business is carried out. There are two main environments: Internal: inside the organisation, areas that the organisation has most control and influence over. External: outside the organisation, areas that the organisation has little or no influence. Made up of the Operating and Macro Environments.

Operating Environments Operating Environment is that external environment which the organisation has some influence over but cannot control. The organisation interacts directly with this environment in the course of conducting business.

Macro Environment Made up of broad factors which affects the LSO. The LSO has no control over these factors.

Environments of LSOs InternalExternal OperatingMacro Policy and ProceduresCustomersSocial Attitudes ResourcesSuppliers & CreditorsEconomic Factors StructuresCompetitorsTechnological Developments StylesInterest (Lobby) GroupsPolitical and Legal influences CultureGlobalisation (international factors) Staff (People)Education and Training

Operating Environment: Customers Customers are the reason the organisation exists. Customer satisfaction is central to organisation success. Customers want high quality products and value for money.

Operating Environment: Suppliers and Creditors Suppliers are the people and businesses that supply resources to an organisation. Creditors provide finance and include banks, finance companies and other businesses. In order to operate LSOs need a reliable source of resources and funds. Building positive relationships with suppliers is a key to success.

Operating Environment: Competitors Competitors are other organisations that offer rival products. Organisations need to monitor existing and new competitors in the market. Organisations need to maintain a competitive edge over rivals. Organisations may need to respond to moves from competitors.

Operating Environment: Interest Groups Also known as Lobby groups. These are groups who try and convince organisations to adopt particular policies. These include - ◦ Trade Unions: These represent employees and aim to improve working conditions for their members. ◦ Consumer Groups: These aim to protect consumers in relation to product safety, price and advertising. ◦ Specific Issue Groups: focus on one specific issue such as environmental protection, ant-gambling etc.

Macro Environment: Social Attitudes This is concerned with what society views as right and wrong. This constantly changes. This can include pressure to protect and preserve natural environment, treat people with respect, and being responsible corporate citizens.

Macro Environment: Economic Factors Current state of the economy plays an important role for LSOs Global financial crisis highlights the importance of economic factors. Factors include:  levels of consumer spending  level of unemployment  rate of inflation  wage rates  Interest rates.

Macro Environment: Technological Developments Technological innovation is constantly changing. Businesses need to keep up with technology to maintain competitiveness. Technology can lead to increased productivity and reduced costs. Mobile communication and e-commerce examples of recent technological innovations which has transformed how we do business.

Macro: Political and Legal Influences LSOs operate within a complex framework of laws and regulations made by governments. Changes in legislation can heavily impact on LSOs. For example OH&S and Employee Relations Laws. Changing governments also can introduce different policies which will affect the way organisations do business.

Macro Environment: Globalisation Organisations now operate in a worldwide market. Technology improvements have largely led to this through improved transportation and the Internet. This is both an opportunity and a challenge as organisations have access to bigger markets but also more competition.

Macro Environment: Education and Training Modern organisations need highly educated and skilled employees. Most organisations provide internal training but rely on the country’s educational institutions to provide high quality education for students.