Page 11 - Business_Studies_F5

Student's Book Form Five

referred to as the business environment. organisation’s management control. These
As a way of enhancing the understanding factors may include organisational structure,
of the business environment, one can pay leadership style, corporate governance,
attention to what is happening around and organisational climate, organisational
how it affects business. By so doing, one culture, human resources management,
can make better decisions and increase the and operational processes. Understanding
FOR ONLINE READING ONLY
chances of the business success. the internal environment is necessary
for assessing the business strengths,
Types of business environment and weaknesses, cultivating a culture of
The environment in which businesses excellence, innovation, and resilience.
operate can be classified into two main With this, businesses can unleash the full
types: internal environment and external potential of their employees, enhance
environment as shown in Figure 1.1. effectiveness, and achieve sustainable
Understanding these types of environments growth and success.
equips business operators with valuable
insights about opportunities and challenges, Components of the internal
and operational requirements present in environment
their operating landscape. By analysing and The internal environment includes a variety
adapting to these environments, businesses of elements, some of which are explained
can formulate effective strategies to thrive as follows:
in a dynamic business environment. Organisational structure: This refers to

the framework of responsibilities, roles,
hierarchies, communication channels,
and relationships within the business.
It determines how tasks are divided,
coordinated, and executed across
departments or units. An efficient and
flexible business organisational structure
facilitates communication, collaboration,
and decision-making, enabling the business
to adapt to changing market conditions.

Leadership style: Leadership plays a crucial
role in shaping the internal environment.
Figure 1.1: Business environment Different leadership styles have varying
impacts on customer orientation, employee
Internal environment motivation, engagement, and performance.
The internal environment of a business Effective leadership empowers employees,
consists of all factors within the business inspires trust, promotes transparency,

Business Studies for Advanced Secondary Schools 2

30/06/2024 19:02:28
Business Studies FORM 5.indd 2
Business Studies FORM 5.indd 2 30/06/2024 19:02:28