Micro Environment

Mrs.
V Govender MICRO ENVIRONMENT BUSINESS ENVIRONMENTS

MICRO ENVIRONMENT
Micro Environment:
- It is also known as the internal environment; it is the immediate
environment in which the business functions.
Type of control:
The business has full control over the components in this environment.
Name SIX components in the micro environment
Organisational Culture
Vision, Mission Statement, Goals and Objectives
Eight business functions
Organisational Resources
Management and Leadership
Organisational Structure
Discuss each component.

Vision, Mission Statement, Goals and Objectives
Vision
Is the dream that you want to achieve, eg. be the biggest business in the area.
Mission Statement
Gives a business clear direction on how you intend to achieve your vision, eg,
having excellent quality product.
Goals:
These are long term plans of what you want to achieve in the future, eg.
Having 500 clients in the next five years.
Objectives:
These are the short term aims that you want to meet in order to achieve your
long term goals, eg. to employ another beautician by the end of the month.
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Mrs. V Govender MICRO ENVIRONMENT BUSINESS ENVIRONMENTS
Organisational Culture
Purpose of Organisational Culture.
- Sets the tones for the way in which a business goes about doing their
business.
- Allows management interacts with its staff and how staff interact with
each other efficiently.
- Creates an atmosphere of wither being very formal and structured or
informal and relaxed style that a business can have.
- Some businesses focus on the strictness of the start and leave time of
workers, whilst other businesses focus on actual performance.
Management and Leadership
- The style of leadership a business uses has a large impact on the
business.
The vision, mission goals and objectives are all set and driven by the
management./ The culture of a business is set by management.
- The way in which a manager leads the staff will show how productive a
business will be.
- A manager needs to be supportive and motivated; the employees will be
more willing to do their work.
- Managers are responsible for the allocation of resources and ensuring
that these resources are used effectively.
Organisational Structure
The importance of an organisational structure:
- Allows for the division of Labour (who is responsible for what)
- Reflects Co-ordination in a business who reports to whom.
- A business is able to use technology and resources wisely.
- The strategic goals of the business is realised in a business.
- Management is able to determines the needs of a business depending on
the size of the business.
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Name and Explain FOUR types of organisational structures:

Functional /Hierarchical organisational structure:
- The levels of management are ranked at different levels within an
organisation.
- The functional structure has one main manager who when
communicates with each manager in charge of a department or function.
- Functional managers are generally experts in their field, who
communicate with their own team.
Flat organisational structure:
- This structure has one or a few layers of management.
- It is suitable for new entrepreneurs and small businesses
- It enables management to have control over the growth and
development of the business.
Project Structure:
- When a project has been planned, employees from different
departments are brought together to form a team to carry out the
project.
- A manager is put in charge of them, this is generally a temporary
structure that will change according to the nature of the project.
- When the task is done, the employees return to their departments.
Matrix Structure:
- Matrix structure also deals with planning a project, except employees
don't move out of their departments for a project.
- The project manager manages all the different employees on the project
and performance of all staff managers.
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Organisational Resources
These are the resources available in a business:
Human resources
- Relates to staff/employees who wok for the organisation, Eg. the correct
recruitment of staff.
- The correct keeping of staff records.
- Involves the proper selection and placement of staff, measuring
employee performance and establishing remuneration levels.
Physical resources
- ensuring that a business has the correct raw material, stock,
infrastructure and equipment in order to operate,
Financial resources
- This includes long term and short term capital needed for the business.
- The business must ensure that there is sufficient cash to pay creditors at
all times.
- Management has complete control over the cash reserves, the payment
of accounts, and the planning of the long-term capital needs of the
business.
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Eight business functions

Production:
- The production department is responsible for the production of goods
and services.
- Production has to process the raw material to ensure a quality product,
and to ensure that enough production takes place to meet the demands
of customers.
Marketing
- Marketing function carries out market research to assess the demands
from consumers.
- Marketing has to take note of trends in the market and changes in the
taste of consumers.
- The marketing function has to keep a close watch over the products and
prices of competitors.
- The marketing function is also responsible for determining the price of
the product and marketing the final product to the consumer.
Human Resources
- The function of human resources is to look after employees in the
workplace.
- Human resources staff is responsible for recruiting the right people for
the job.
- They also have to make sure that employees are happy and looked after
while they are working for the business.
- Human resources take responsibility for all conditions of employment eg.
payment to employees.
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Differentiate between Marketing Function and Public Relations

Marketing department
- Responsible for carrying out market research to check for demand of
product
- Keeps a close watch over its competitors, checking their final price of
product
Public Relations Department
- Responsible for keeping customers, suppliers, shareholders in the
business happy
- Keeps a watch over the image of the business either in public or within
the business
Distinguish between leadership and management
Leadership
- Influences human behaviour
- People orientated - focus on the people in the team
Management
- Guides human behaviour
- Task orientated - focus on the task that has to be done
The Role and importance of the functions within a business
- If you are a small business owner, the owner is responsible for all the
functions in the business.
- In a large business, each manager will be in charge of each function, with
a whole department of people to carry out each task.
- If a business does not meet its goals or make a profit, it is often because
one of the functions is not being carried out effectively.
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Micro Environment

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Mrs.

V Govender MICRO ENVIRONMENT BUSINESS ENVIRONMENTS

Discuss each component.

Name and Explain FOUR types of organisational structures:

Eight business functions

Differentiate between Marketing Function and Public Relations

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