The Business Environment and Business Economics

2. The Business Environment What is business economics? decision making in business external influences on the firm the business environment internal decisions of the firm the external effects of business decision making What do business economists do? description analysis recommendations

3. The Business Environment Political / legal factors Economic factors the microeconomic environment the macroeconomic environment Social / cultural factors Technological factors PEST analysis relationship between the four sets of factors importance of the economic factors

4. The Structure of Industry Importance of industrial structure to the performance of firms Classifying production primary production secondary production tertiary production Shares in GDP and employment of the three sectors trends over time current position

5. Output of industrial sectors(as % of GDP)

6. Output of industrial sectors(as % of GDP)

7. Employment by industrial sector(% of total employees)

8. Employment by industrial sector(% of total employees)

9. The Structure of Industry Classifying firms into industries nature of an industry industrial sectors why classify firms into industrial sectors? helps in analysing trends identifying specific needs helps to understand relationships between firms Standard industrial classification nature of the system of classification sections, subsections divisions, groups and classes

11. The Structure of Industry Changes in the structure of UK economy expanding and contracting sections by output by employment

12. GDP by industry (1980 = 100)

13. GDP by industry (1980 = 100)

14. GDP by industry (1980 = 100)

15. GDP by industry (1980 = 100)

16. GDP by industry (1980 = 100)

17. Employment by industry (1980 = 100)

18. Employment by industry (1980 = 100)

19. Employment by industry (1980 = 100)

20. Employment by industry (1980 = 100)

21. Employment by industry (1980 = 100)

22. The Structure of Industry Changes in the structure of UK economy expanding and contracting sections by output by employment Analysing industrial structure

23. The Structure of Industry Changes in the structure of UK economy expanding and contracting sections by output by employment Analysing industrial structure changes in industrial concentration

24. The Structure of Industry Changes in the structure of UK economy expanding and contracting sections by output by employment Analysing industrial structure changes in industrial concentration the distribution of SMEs in the economy

26. Structure ? conduct ? performance relationship between business structure and business conduct (behaviour) competitive markets and competitive behaviour limited competition and collusion relationship between business conduct and business performance different indicators for measuring performance profitability, market share, growth, etc. The Determinants of Business Performance

27. The Determinants of Business Performance Internal aims and organisation profit maximisation as the prime goal other goals distinction between owners and managers importance of managers� own objectives �satisficing�

28. The Determinants of Business Performance Other factors affecting performance internal structure information competence of management quality of the workforce systems information systems motivation technical systems distribution systems financial systems