Basic Business Management

The business relationship and the environment

Environmental changes associated with business activities will occur at any time, generally in the form of motion changes from one or a combination of environmental factors outside of the company, both on the scale of national, regional and global.

Some of the impacts caused, evidently influenced the arrival of various business opportunities (business opportunities), but many have become obstacles in trying to (business threats and constraints).

Activities of organizations/companies will change the environment, and vice versa, the environment will drive the changes in the organization.

Direct Organizations &  Directly

The immediate environment is an environment that will directly affect the fate of the organisation. The environment is therefore referred to as stakeholders (parties who decide the fate of the Organization).

There are two types of environment directly:

• The direct External Environment


• A direct The Internal Environment

Direct External Environmental Elements

Consumers: in the language of marketing, consumers are often referred to as the market, which is defined as a person who has the need, money, and a willingness to spend his money. If the organization fails to meet the needs of consumers, the Organization will be abandoned by its customers.

• Supplier: is the party that provides input to the company. The input can be either raw materials, semi-finished materials, employees, financial capital, information, or service that is required of the organization.


• Example: McDonald's requires a steady supply of meat, vegetables, bread, souvenirs from various suppliers.


• Competitors: deliver a product that functions the same as the product that generated the Organization to meet the specific needs of consumers. A broader definition would suggest that organizations will be competing with other organizations competing for resources.


• Example: Intercity Bus Companies.


• Government: Act as "referee" and ensure the rules of the game running properly. The Government will issue legal rules that will affect the life of the Organization and the life of the community economy.


• Example: in the field of transportation Regulation.


• Financial institution: a financial institution providing financial capital inputs required, either to set up a business or working capital needed to run the business. Financial institutions would also be an intermediary for the Organization to financial markets. So managers should specify alternative funding the cheapest and most flexible.


• Other groups: these groups usually depends on the types of activities of the organization.

Direct Internal Environment Elements

Direct internal environment are in the organization. Internal environment becomes part of the environment faced by individual manager, not the Organization as a whole. Among other things:

• Workers: employees or is a resource of the organization. If the employee and the organization or Manager has the same purpose, then the Organization will run with the more effective.


• Board of Commissioners: commonly found on a company with a limited liability company (PT). The Board of Commissioners are appointed to represent the interests of shareholders and oversee the company's Board of Directors.


• Shareholders: shareholders provide capital to companies in the form of equity, thus they have the company and had rights and obligations inherent in his ownership.


• Network of Stakeholders: parties who decide the fate of the company (Stakeholders) they form networks between stakeholders and with the organization. Example: people in a corporate environment that indirectly secures the existence of factories, the village work together in maintaining cleanliness around the environment.

Indirect Environmental

Public environment or environment indirectly, not directly influential on the development of the Organization at least at the present moment. This environment affects the Organization through two ways:

1. Encourage the establishment of stakeholder


2. Creating an environment in which the Organization must anticipate changes in the environment.

Environment Indirectly

The Elements Of The Environment Do Not Directly

• Demographics: population structure is concerned environmental organizations are located. Demographic change will lead to a chance at once a threat to your organization, depending on how the Organization anticipates these changes. Example: an increase in the birth rate in women, fostering the beauty industry.


• Lifestyle: a manifestation that appears out of a person's attitudes and values. The lifestyle of the Community dynamic and dominant outside home, it will fertilize the nightlife industry, fast food restaurant.


• Social value: the social value will affect the organization. Example: in a country that is less appreciative of patent rights, copyrights, then people like Bill Gate is difficult to appear.

Economic Variables

Changes in economic variables will affect the activities of an organization. Economic change can be stuktural and can also be seasonal or cyclical in nature. In the language of statistics known term trend, seasonal, cyclical, and random. Example: inflation and unemployment rates, foreign exchange rates and others.

Political Variables

Many rules and regulations that affect the organization generated through the political process. Example: when a country's foreign policy more protectionist, then export from Indonesia will be compounded.

Variable Technology

Changes in technology will change the way of working of the Organization, and also gave rise to new stakeholders. Example: the use of robots and technology personnel information widely, will reduce the use of human resources.

Dimensions International

• Companies with global logic will find resources anywhere in the world with the aim of optimizing the use of resources.


• Organizational Relationship Model – Environment


• The Influence Of The Environment Against The Organization


• Five Forces Of Competition


• Strategy Of Facing The Environment.

The influence of Environmental content on Organizations

The model of how the influence of the environment against the organization. Two dimensional model known in the:

1. Level changes, looking at the extent to which the stability of a environmental, and


2. the level of its homogeneity, seeing the extent of the complexity of the environment.

Environmental Organisations Relationship Model

Five Forces Of Competition

Developed by Michael Porter, he thinks the company in seeking profit scramble with five powers that want to find profits. The fifth power is:

• The threat of new entrants or impediments to entry


• Product substitution


• Suppliers


• Buyer

If the company is operating in an environment where the powerful strength of the fifth, then the environment is not attractive because it does not offer the possibility of higher profits.

The Strategy Of Confronting The Environment

Direct Environmental Influence: the Manager can try to affect the environment directly through several methods, namely doing the "lobby", advertising, negotiating or bargaining.

• Monitor the environment indirectly: with active monitoring, the Manager is expected to gain an early warning if there is a change in indirect environment which would be significantly to the organization.


• Adjusting to the environment: if environmental power can not be changed, the Manager was forced to adapt to the environment. The process of adjustment can be done formally in a management or strategic planning. In the Planning Manager to set goals, evaluate your environment, and then determine the right strategy.

The importance of Culture in organizations

Approximately 20 years ago, the Organization almost entirely only regarded as containers that people with rational ways co-ordinate and control them in a group. These organizations have vertical levels, departments, authorities, relations and so on.

In fact, organizations can have a personality as well as mankind in General. There is a rigid or flexible, unfriendly or likes to help, there are innovative or conservative. So, in these days it has become a common opinion that the culture has an important role in the lives of the members of the organization.

Organizational culture is the values and norms that are share and is run by an organization link to the environment in which the organisation running its activities

Organizational culture is "what is perceived, what was believe to be, and what it calls" by an organization.

Determinants Of Organizational Culture:

The experience of the Organization (Organizational Experiences) is the main determining factor to the creation of a specific organizational culture. The experience of the organization can be the success or failure of the Organization through its activities from time to time.

The principles, norms, beliefs, can also be the deciding factor of the formation of an organizational culture. Principles, norms, and beliefs of certain its values to be adopt so as to determine an organizational culture.

The dimension of ethics in Management

Ethics can be defined through a variety of ways.

• Ethics can be define as a person's beliefs about the behavior is good or bad.


• The definition of the other ethics is define as the study of how a decision affects others.

Of these two definitions, ethics is define as the study of a person's rights and obligations, about the moral rules that people use in decision-making, and the characteristics of human relationships.

Ethics management is the eligibility standards of the management organization that meets the criteria of ethics.

Personal values as ethical standards

The values (Values) itself is essentially an idealized view of affecting way of looking, the way of thinking and the behavior of a person.

Personal value is essentially a way of looking, I think, and the beliefs held by a person in connection with any activity that he does.

• The value of the terminal value consists of Personal and instrumental values.


• The terminal value is basically the view and way of thinking someone who realize through his behavior, which is driven by the motive himself in reaching for something.


• Instrumental value is a view and way of thinking of a person who applies to all circumstances and accept by all parties as something indeed should be observe and execute.

The factors that affect an individual's Ethics

The Influence Of Family

Individuals will behave model the behavior of their parents or close relatives, or behave as told by his parents.

The Influence Of Situational Factors

The situation will determine individual ethics, example if someone stole her to finance because of the pain. That kind of situation help to understand why someone can do actions unethical.

Values, morals, and religion

The decisions and behavior of managers is often influence by beliefs. Examples of managers who believe in the value of togetherness will not lay off employees even though the company was having difficulty.

Life Experience

Experience is a normal process in a person's life, can experience good or bad experiences will form a person's ethics.

The Influence Of Friends

Friends will have an effect on the formation of a person's ethics. If the environment has a high ethical standard, an individual will tend to have high ethics too.

Ethics In Organizations

Ethics in the organization emerge from the Organization's relations with external parties and also internal:

Managing Corporate Social Responsibility

Corporate social responsibility or Corporate Social Responsibility is concern against external environment the company through a variety of activities conduct in the framework of the care environment, community norms, participation development, as well as various other forms of social responsibility.

Pros & cons of content on social responsibility

The Pro argument: "basically assume that the company is a part of the community. Then, the company has the power, as it may determine the amount of labor that was withdrawn. Power should be accompany by social programs undertaken obligations the company so that it will enhance the profitability of the company in the long term. "

Counter argument: "If a company is require to run the social responsibility, then there will be a conflict between the objectives of economic and social objectives. One of the supports was Milton Friedman, Economist from the United States. Friedman argues that social responsibility even into something that is unethical, because managers are being force to spend money which should belong to the shareholders. "

Approach To Social Responsibility

Avoidance Of Social

Several organizations trying to minimize their involvement in social issues. If dealing with social issues, the Organization will try to argue or cover existing problems.

Social Obligations

Where the organization is trying to meet its social obligations, especially the legal require, e.g. meet government regulations.

Social Response

The Organization sought to fulfill the obligation at minimum, plus more than just the minimum obligations. The company is willing to participate in social programs, but they must be convince that the program is beneficial to the organization.

Social Contribution.

This approach is the highest stage, in which the organization actively participating in social programs. The organisation look at itself as part of the community and actively contribute to the community.

Social Responsibility Management

The ideal approach would include:

• Combine social goals into annual planning process.


• Determine industry standards that can be use as a comparison in the achievement of social programs.


• Report on the progress of social programs to the members of the Organization.


• Perform repairs, how to achieve social goals, though perhaps with trial and error.


• Trying to calculate the costs and benefits of social programs that are running.

Stages in the planning and implementation of social responsibility

The planning phase of social responsibility include planning how to determine social responsibility activities related to the Organization's planning process.

The implementation stage is how to translate the social responsibility policies into action/action require. Stages of social control can be complete against some specific areas, or for a more general purpose.

There are four areas where the social objective measurements of every region of the require specific measurements:

• Economic regions: whether your organization carry out the economic base. E.g. manufacture of goods, giving a reasonable salary, creating good working conditions


• The region's quality of life: does your organization improve the quality of life public sector. for example, producing quality goods, maintain environmental sustainability


• Social investment area: the extent to which investment resources (money and people) organizations to help the issue facing the community, such as education.


• Troubleshooting areas: the extent to which the organization manage to solve social problems.