BUSINESS ENVIRONMENT

Business Environment

Table of Contents

Introduction2

Types of Stakeholders2

Different Organisational Types2

Evaluation of Public, Private and Third Sector Organisations2

Private Sector Organisations and Influence on Purchasing Function3

Public Sector Organisations and Purchase & Supply of Goods and Services4

Third-Sector Organizations5

Stakeholder Mapping5

Power / Interest Matrix6

Stakeholder Mapping: Power / Interest Matrix6

Conflicts between these different Stakeholder Groups6

Macro-Environment Influence-Analysis of IKEA9

Political Forces9

Legal Forces9

Economic Forces9

Social Forces10

Technological Forces10

Environmental Factors10

Stakeholder Analysis Model and Environment of the Organization11

References12

Business Environment

Introduction

A stakeholder is “any group or individual who can affect or is affected by the achievement of an organization's objectives” (Freeman, 1984: 24) (i.e., those who have or could have a stake or interest in the organization's activities). The stakeholder concept originates in Role theory, which posits a complex interdependent network of relationships for every person, marked by differing interests and expectations for each role relationship. Similarly, stakeholders constitute a complex relational environment for organizations.

Types of Stakeholders

An organization's core stakeholders - those with ongoing, intensely interdependent relationships - depend to some extent on the nature of the organization and its activities. Most organizations have the following types of core stakeholders: (1) constituents on whose behalf the organization exists and operates (e.g., business owners or voluntary association members); (2) employees who conduct the organization's affairs; (3) customers who receive the goods or services the organization produces; (4) suppliers who provide the input materials for the organization's activities; (5) government that guarantees an organization's rights and privileges, enforces its responsibilities, and regulates its behaviors through political processes.

Organizations have many other stakeholders, including local communities, competitors, media, financial analysts and markets, financial institutions, voluntary organizations, environmental and consumer protection groups, religious organizations, military groups, political parties or factions, etc. Depending on the cultural context, any of these stakeholders can be very important to an organization. Furthermore, an organization's stakeholder set changes over time, as stakeholders enter and exit the environment, and as stakeholder interests and interdependencies change.

Different Organisational Types

Role of public, private, and third sector organizations differ greatly due to their approach towards profit maximization and corporate social responsibility. Purchasing function of these organizations is dependent on the corporate principles and objective. This paper aims at examining the contextual approach towards corporate objectives, and its impact on stakeholders. State authorities need to reform its structure to enhance regulatory compliance to effectively deal with stakeholders' issues. Porter, purchasing theorist, once said that the best thing that Britain could have done to correct its balance of payments would have been to make its export industry more competitive, improve methods of manufacturing and marketing in order to sell more abroad.

Evaluation of Public, Private and Third Sector Organisations

Private organizations are owned by selective group of individuals. These organizations may be formed either as sole proprietorship or under general partnership. Main objective of private organizations is to serve interest of particular group of people. It focuses on profit maximization and customer needs (Atkin 2009, 66). Public organizations are formed under the legislations of Securities and Exchange Commission. It includes government department and local authorities. Public organizations run under the government control and its main ...