BUSINESS NOTES
GRADE 12
CHAPTER 2: OVERALL ORGANISATION PERFORMANCE
Business Environments
Before addressing business problems and strategies, it is important
to understand the three business environments:
• Micro Environment
• Market Environment
• Macro Environment
The Macro Environment consists of external influences, identified
using PE(2)STLE analysis:
• Political factors
• Economic factors
• Ethical factors
• Social/Socio-Economic factors
• Technological factors
• Legal environment
• Environmental factors
The Market Environment is analysed using Porter’s Six Forces
Model:
• Level of rivalry/power of competitors
• Power of buyers
• Power of suppliers
1
, • Impact/threat of complementary products
• Threat of new entrants
• Availability of substitute products
The Micro Environment includes the eight business functions:
• Purchasing department
• Production department
• Financial function
• Human Resources/Human Capital function
• Marketing department
• Public Relations
• Administrative function
• General Management
The overall performance of a business is influenced by factors in
these environments. The impact may be positive, neutral, or
negative, depending on the strategies the business implements in
response.
1. Importance of Creative Thinking & Problem-Solving Techniques
• Businesses must find innovative solutions to challenges rather
than relying on outdated methods.
• Creative thinking involves identifying a problem that consumers
may not even be aware of and finding a solution.
2
, • If customers are unhappy, they may take their business
elsewhere, affecting business performance (Power of the
Consumer – Porter’s Model).
• The goal of creative solutions is to establish and maintain
competitive advantage.
• Due to short product life cycles, businesses must constantly
adapt to meet customer needs.
Problem-Solving Process Steps
1. Identify the resource gap and acquire necessary resources.
2. Explain the impact on the business and evaluate possible
solutions.
3. Choose the best solution(s) and provide a detailed
explanation.
2. Problem-Solving Techniques for Business Performance
Improvement
2.1 Pros and Cons Chart
• Helps managers make decisions by weighing advantages
and disadvantages of an option.
• Example: Introducing a new subject at school
• Pros:
• Gives learners a wider choice
• May attract more learners
• Cons:
• Additional costs for hiring a teacher
3
GRADE 12
CHAPTER 2: OVERALL ORGANISATION PERFORMANCE
Business Environments
Before addressing business problems and strategies, it is important
to understand the three business environments:
• Micro Environment
• Market Environment
• Macro Environment
The Macro Environment consists of external influences, identified
using PE(2)STLE analysis:
• Political factors
• Economic factors
• Ethical factors
• Social/Socio-Economic factors
• Technological factors
• Legal environment
• Environmental factors
The Market Environment is analysed using Porter’s Six Forces
Model:
• Level of rivalry/power of competitors
• Power of buyers
• Power of suppliers
1
, • Impact/threat of complementary products
• Threat of new entrants
• Availability of substitute products
The Micro Environment includes the eight business functions:
• Purchasing department
• Production department
• Financial function
• Human Resources/Human Capital function
• Marketing department
• Public Relations
• Administrative function
• General Management
The overall performance of a business is influenced by factors in
these environments. The impact may be positive, neutral, or
negative, depending on the strategies the business implements in
response.
1. Importance of Creative Thinking & Problem-Solving Techniques
• Businesses must find innovative solutions to challenges rather
than relying on outdated methods.
• Creative thinking involves identifying a problem that consumers
may not even be aware of and finding a solution.
2
, • If customers are unhappy, they may take their business
elsewhere, affecting business performance (Power of the
Consumer – Porter’s Model).
• The goal of creative solutions is to establish and maintain
competitive advantage.
• Due to short product life cycles, businesses must constantly
adapt to meet customer needs.
Problem-Solving Process Steps
1. Identify the resource gap and acquire necessary resources.
2. Explain the impact on the business and evaluate possible
solutions.
3. Choose the best solution(s) and provide a detailed
explanation.
2. Problem-Solving Techniques for Business Performance
Improvement
2.1 Pros and Cons Chart
• Helps managers make decisions by weighing advantages
and disadvantages of an option.
• Example: Introducing a new subject at school
• Pros:
• Gives learners a wider choice
• May attract more learners
• Cons:
• Additional costs for hiring a teacher
3
