Business environment
A business organization is a sustainable system (can be open or
closed where an open system is the business organization itself plus its
environment) that turns inputs into goods and/or services.
Businesses are sustainable systems since they care about making sure
that future generation have the amount of resources that they need.
A business environment is whatever relevant (based on the
inteupreneur’s ideas) surrounds the business system.
These relevant factors change during time thanks to the transformation
occurring in markets.
Firms need to take decisions based on how the factors characterizing
the environment influence the firm.
Those influences can be classified:
• According to the origin (ex: Political)
• According to the proximity (micro vs macro environment)
The Micro environment, that surrounds a firm, is characterized by
factors, actors institutions outside the firm that affect it directly.
These elements are in fact closely linked to the firm. (ex: suppliers,
buyers, rival firms…).
The Macro environment instead is about influences that come from
factors beyond the control of the business organization. (ex: political
factors, inflation…).
,Pestel analysis: Analysis of the macro environment
The pestel analysis is a tool that allows us to properly examine the
Marco environment without leaving any influence behind.
It makes sure we cover all possible factors deriving from the macro
environment that could influence the firm someways.
The name pestel is an acronym for:
• Political: what is the political landscape, what is the relationship
between countries that import/export and what is the tax burden put
on import/export.
• Economic: unemployment rate, average earnings (GDP per capita),
saving ratio, consumer’s spending, inflation rate…
• Social: for example rise in divorces cause a decrease in demand of
family packed goods.
• Technological: technological developments
• Environmental: environmental issues and the perception of the
consumers of those issues. Also environmental regulations set by the
government.
• Legal: affects the succeeding of happenings in a very direct way, but,
most of the times technology comes first than regulations.
Social factors Technological factors
,Legal factors
Steve Jobs once said “i wake up every day and I think that I want to
help the world become a better place”. Some companies in facet
actually help the world become a better place by transforming the
surrounding environment an the pestel factors.
The main concern of the pestel factors is that they continuously change
; therefore a pestel analysis should include factors that affect the firm
now and a prediction of factors that can be affecting the firm in the
future.
, The industrial sector
“In an economy where the only certainty is uncertainty the only source
for a lasting competitive advantage is knowledge”
-Ikujiro Nonaka
Characteristics of businesses
• It is an economic activity, so, it concerns the creation of wealth
trough the satisfaction of human wants and needs.
• It is a system: a systematic arrangement of various resources and
elements (ex: man, machineries, money…)
• The goal of a business is to generate profit or surplus (Profit
motive).
• A business always involves risks and uncertainties on returns on
investments made.
• Involve creation of utility because they satisfy human wants and
needs
Scope of businesses
A business’ ecosystem is composed of:
• Investment: it is provided by the investor (or investors) with the intent
of making profit from it.
• Operation: a business needs to establish effective operations in order
to distribute the product or the service
• Consumers: actors (economic agents) to whom the business’ output
can be sold.
The nature of businesses is then the one of creating profit by selling
products or providing services.
Difference between business orgs and non-profit orgs
A. Businesses try to earn profit by providing a product or a service that
satisfy people wants and/or needs.
The goal of a business organization is to earn profit
B. Non-profit organizations o not have the central goal to gain profit
but might satisfy people’s wants and/or needs. (ex: NGOs or non-
governmental organization: the one that wants to achieve social or
political aims but is not controlled by the government).
A business organization is a sustainable system (can be open or
closed where an open system is the business organization itself plus its
environment) that turns inputs into goods and/or services.
Businesses are sustainable systems since they care about making sure
that future generation have the amount of resources that they need.
A business environment is whatever relevant (based on the
inteupreneur’s ideas) surrounds the business system.
These relevant factors change during time thanks to the transformation
occurring in markets.
Firms need to take decisions based on how the factors characterizing
the environment influence the firm.
Those influences can be classified:
• According to the origin (ex: Political)
• According to the proximity (micro vs macro environment)
The Micro environment, that surrounds a firm, is characterized by
factors, actors institutions outside the firm that affect it directly.
These elements are in fact closely linked to the firm. (ex: suppliers,
buyers, rival firms…).
The Macro environment instead is about influences that come from
factors beyond the control of the business organization. (ex: political
factors, inflation…).
,Pestel analysis: Analysis of the macro environment
The pestel analysis is a tool that allows us to properly examine the
Marco environment without leaving any influence behind.
It makes sure we cover all possible factors deriving from the macro
environment that could influence the firm someways.
The name pestel is an acronym for:
• Political: what is the political landscape, what is the relationship
between countries that import/export and what is the tax burden put
on import/export.
• Economic: unemployment rate, average earnings (GDP per capita),
saving ratio, consumer’s spending, inflation rate…
• Social: for example rise in divorces cause a decrease in demand of
family packed goods.
• Technological: technological developments
• Environmental: environmental issues and the perception of the
consumers of those issues. Also environmental regulations set by the
government.
• Legal: affects the succeeding of happenings in a very direct way, but,
most of the times technology comes first than regulations.
Social factors Technological factors
,Legal factors
Steve Jobs once said “i wake up every day and I think that I want to
help the world become a better place”. Some companies in facet
actually help the world become a better place by transforming the
surrounding environment an the pestel factors.
The main concern of the pestel factors is that they continuously change
; therefore a pestel analysis should include factors that affect the firm
now and a prediction of factors that can be affecting the firm in the
future.
, The industrial sector
“In an economy where the only certainty is uncertainty the only source
for a lasting competitive advantage is knowledge”
-Ikujiro Nonaka
Characteristics of businesses
• It is an economic activity, so, it concerns the creation of wealth
trough the satisfaction of human wants and needs.
• It is a system: a systematic arrangement of various resources and
elements (ex: man, machineries, money…)
• The goal of a business is to generate profit or surplus (Profit
motive).
• A business always involves risks and uncertainties on returns on
investments made.
• Involve creation of utility because they satisfy human wants and
needs
Scope of businesses
A business’ ecosystem is composed of:
• Investment: it is provided by the investor (or investors) with the intent
of making profit from it.
• Operation: a business needs to establish effective operations in order
to distribute the product or the service
• Consumers: actors (economic agents) to whom the business’ output
can be sold.
The nature of businesses is then the one of creating profit by selling
products or providing services.
Difference between business orgs and non-profit orgs
A. Businesses try to earn profit by providing a product or a service that
satisfy people wants and/or needs.
The goal of a business organization is to earn profit
B. Non-profit organizations o not have the central goal to gain profit
but might satisfy people’s wants and/or needs. (ex: NGOs or non-
governmental organization: the one that wants to achieve social or
political aims but is not controlled by the government).
