The Business Environment: A Global Perspective, Ninth Edition PDF by Ed Thompson, Ian Worthington and Chris Britton

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The Business Environment: A Global Perspective, Ninth Edition

Ed Thompson, Ian Worthington and Chris Britton

The Business Environment

Contents

Contributors xix

Preface to the Ninth Edition xx

Publisher’s Acknowledgements xxii

Guided tour xxiv

Part One INTRODUCTION

1 Business organisations: the external environment 3

Learning outcomes and key terms 3

Introduction 4

The business organisation and its environment 4

The general or contextual environment 7

Mini case : The impact of regional economic conditions 8

The immediate or operational environment 9

Analysing the business environment 10

Minicase : Fresh but not so easy 10

Central themes 12

Synopsis 14

Summary of key points 14

C a se study : Facing the unexpected 14

Review and discussion questions 15

Assignments 16

Further reading 16

2 Business organisations: the internal environment 17

Learning outcomes and key terms 17

Introduction 18

The concept of the organisation: an initial comment 18

Understanding the nature of organisations: theories of

organisation and management 19

Other theoretical approaches 23

Organisational structures 23

M ini case : ‘Into the Dragon’s Den’ 24

M ini case : Mergers and competition 27

The virtual organisation 29

Structural change 30

Aspects of functional management 30

Synopsis 35

Summary of key points 35

C a se study : Reshuffle at Microsoft 36

C a se study : Thomas Cook expansion 37

Review and discussion questions 37

Assignments 38

Further reading 38

3 The global context of business 39

Learning outcomes and key terms 39

Introduction 40

Globalisation versus internationalisation 40

The role of multinational enterprises 43

M ini case : Transfer pricing 44

Globalisation and business 46

M ini case : Currency crisis in emerging markets 47

Globalisation and the small and medium-sized firm 48

Synopsis 49

Summary of key points 49

C a se study : Global financial markets – too big to fail 50

C a se study : FDI flows 51

Review and discussion questions 52

Assignments 53

Further reading 53

4 De-globalising factors: sovereignty, conflicts and

political priorities 55

Learning outcomes and key terms 55

Introduction 56

What is globalisation? 57

Bretton Woods System (or the ‘New World Order’) 58

The 1970s to the present 59

Isolationism 59

International conflicts 62

Sanctions 63

C a se study: Local solutions to global problems 65

Environmentalism 65

Summary of key points 66

C ase study: Weetabix – local solutions to global problems 67

Assignments 68

Further reading 68

Part Two CONTEXTS

5 The political environment (P) 71

Learning outcomes and key terms 71

Introduction 72

Political systems 74

Government in democratic states 76

Mini case: Brought to book 79

The three branches or functions of government 82

Mini case: The power of the purse 83

Checks and balances in democracies 87

A model of the policy process 87

Synopsis 89

Summary of key points 89

A ppendix 5.1: A democratic political system in action: UK national

government 90

The executive branch of government 92

The judicial branch of government 97

Appendix 5.2: Subnational government: UK local authorities 97

Appendix 5.3: Other levels of government 99

Case study: The business of lobbying 100

Case study: Political campaign funding 101

Review and discussion questions 102

Assignments 102

Further reading 102

6 The macroeconomic environment (E) 103

Learning outcomes and key terms 103

Introduction 104

Economic systems 105

Economies in transition 109

Politico-economic synthesis 110

The macroeconomy 111

Government and the macroeconomy: objectives 117

Mini case: Digging in for the long term 123

Government and the macroeconomy: policies 123

The role of financial institutions 128

M ini case: A new kid on the block: the rise of the credit rating

agency 130

International economic institutions and organisations 131

Synopsis 134

Summary of key points 135

Case study: Austerity 136

Case study: Quantitative easing (QE) 136

Review and discussion questions 138

Assignments 138

Further reading 139

7 The demographic, social and cultural context

of business (S) 141

Learning outcomes and key terms 141

Introduction 142

The demographic environment of business 142

The social context 147

Mini case: A new class structure? 148

Lifestyles 151

The cultural environment 153

Mini case: National cultures 155

Application: market segmentation 156

Synopsis 158

Summary of key points 158

Case study: An invitation to ‘tweet’ 159

Case study: Supply and demands – a changing workforce 160

Review and discussion questions 160

Assignments 161

Further reading 161

8 The resource context: people, technology and

natural resources (T) 163

Learning outcomes and key terms 163

Introduction 164

People 164

Mini case: Zero-hours contracts 166

Technology 173

Technological change 173

Mini case: The robots are coming 175

Natural resources 180

Synopsis 183

Summary of key points 183

Case study: Agricultural work and Brexit 184

Case study: Fracking 184

Review and discussion questions 186

Assignments 186

Further reading 187

9 The legal environment (L) 189

Martin Morgan-Taylor

Learning outcomes and key terms 189

Introduction 190

Classification of law 190

Public and private law 190

Mini case: Verity and Spindler v Lloyds Bank (1995) 191

The legal system: the courts 194

Mini case: Jean-Marc Bosman – a case of foul play? 196

Business organisations and the law 197

Contract law: the essentials 197

Agency 201

Law and the consumer 202

Codes of practice 209

Synopsis 210

Summary of key points 210

C a se study : The sale of goods on the Internet 211

Review and discussion questions 213

Assignments 213

Further reading 214

10 The ethical and ecological environment (E) 215

Learning outcomes and key terms 215

Introduction 216

Ethics and business 217

M ini case : Illegal or unethical? 218

Corporate social responsibility 219

T he ‘environment’ as a business issue: the emergence of

corporate environmentalism 220

Drivers of ‘green’ business 221

Why and how firms become more environmentally responsible 225

M ini case : Going round in circles: Desso Carpets 226

Another perspective: the ‘outside-in’ view 227

Summary of key points 228

C a se study : Doing well by doing good 228

Review and discussion questions 229

Assignments 230

Further reading 230

Part Three FIRMS

11 Legal structures 235

Learning outcomes and key terms 235

Introduction 236

Private sector organisations in the UK 236

M ini case : Companies under pressure 242

Social enterprises 245

Public sector business organisations in the UK 246

Legal structure: some implications 249

Franchising, licensing and joint ventures 254

M ini case : Cross-national joint ventures 256

Synopsis 257

Summary of key points 258

C a se study : Uber 258

Review and discussion questions 259

Assignments 259

Further reading 260

12 Size structure of firms 261

Learning outcomes and key terms 261

Introduction 262

The size structure of UK industry 262

Organisational growth 263

Methods of growth 264

Mini case: The story of a failed merger 267

Finance for growth 268

Small firms 273

Mini case: ‘Olderpreneurs’ and small firms 274

Multinationals 281

Synopsis 282

Summary of key points 282

Case study: The Scottish National Investment Bank 283

Review and discussion questions 283

Assignments 284

Further reading 284

13 Industrial structure 285

Learning outcomes and key terms 285

Introduction 286

The structure of industry 286

Mini case: The end of manufacturing? 290

Mini case: The life cycle model 295

Deindustrialisation 297

Synopsis 300

Summary of key points 301

Appendix 13.1: The Standard Industrial Classification (SIC), 2007 301

Case study: The rise of the public service companies 302

Review and discussion questions 304

Assignments 305

Further reading 305

14 Government and business 307

Learning outcomes and key terms 307

Introduction 308

Government and business: an overview 308

Selected urban policy instruments 309

Developments in urban policy: 1997–2010 312

Urban and industrial policy developments in the UK since 2010 313

Local government and business in the UK 315

Business as an influence on government 320

Mini case: A taxing issue 321

Synopsis 322

Summary of key points 322

C a se study : Public sector procurement – the Royal Navy 323

Review and discussion questions 324

Assignments 324

Further reading 324

Part Four MARKETS

15 The market system 327

Learning outcomes and key terms 327

Introduction 328

The market mechanism 328

eDmand 328

uSpply 331

Shifts in demand and supply 335

M ini case : The effect of a factory fire on the market for microchips 336

Price controls 337

M ini case : The price of toilet rolls in Venezuela 339

Elasticity of demand 340

Cross-price elasticity of demand 343

Elasticity of supply 343

The importance of the market to business 344

Synopsis 345

Summary of key points 345

C a se study : The housing market in the UK 346

Review and discussion questions 348

Assignments 348

Further reading 349

16 Market structure 351

Learning outcomes and key terms 351

Introduction 352

Market structures – in theory and practice 353

Porter’s five-forces model 360

M ini case : Open Skies and contestability 363

M ini case : Blizzard, Activision and Microsoft 365

Measuring the degree of actual competition in the market 366

Synopsis 368

Summary of key points 368

C a se study : A Porter’s five-forces analysis of the cigarette industry

in the UK 369

Review and discussion questions 371

Assignments 372

Further reading 372

17 International markets and trade 373

Learning outcomes and key terms 373

Introduction 374

International trade – why it takes place 374

Restrictions to international trade 375

Mini case: The cotton dispute 376

The establishment and growth of the European Union 377

‘Brexit’ and Euroscepticism 379

The balance of payments 380

The history of the balance of payments in the UK 383

Mini case: The current account of the balance of payments 385

Exchange rates 388

Exchange rates and business 394

Synopsis 394

Summary of key points 394

Case study: Post-Brexit trade 395

Review and discussion questions 396

Assignments 397

Further reading 397

18 Pandemics and Covid-19 399

Learning outcomes and key terms 399

Introduction 400

Pandemics 400

Pandemics in history 403

Global spread 406

Prevention 407

Case study: Covid-19 408

Mini case: FFP2/N95 respirators and surgical masks 408

Mini case: Peloton bikes 409

UK government support measures 411

The future 416

Returning to normal 417

Synopsis 417

Assignments 418

Further reading 418

19 Governments and markets 419

Learning outcomes and key terms 419

Introduction 420

Privatisation policy in the UK 420

Mini case: Government to the rescue 426

Competition policy 429

Mini case: Accusations of price fixing 431

Government and the labour market 432

Synopsis 436

Summary of key points 436

C a se study : Who leads who? 437

C a se study : ‘What a fine mess you’ve got me into’ 438

Review and discussion questions 439

Assignments 439

Further reading 439

Part Five CONCLUSION

20 Strategy and the changing environment 443

David Orton

Learning outcomes and key terms 443

Introduction 444

The need to monitor environmental change 445

Analysing the business environment: broad approaches 446

M ini case : Multinational inward investment: a PESTLE analysis 447

Techniques 450

Limitations to environmental analysis 455

Sources of information 455

Synopsis 463

Summary of key points 463

C a se study : Scenario planning at Shell 464

Review and discussion questions 466

Assignments 466

Further reading 467

Glossary 469

Index 489

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