0273704249 COVER.qxd 18/4/06 08:46 Page 1 fifth edition ...

1 The Business Environmentfifth editionIan Worthington andChris BrittonAdditional student supportat imprint ofAdditional student Features Learn about the latest issues in business: technology and e-business, corporate responsibility, and socio-cultural influences Apply theory to practice through diverse cases and examples, such as Amazon, Toyota and the mobilephone market Study online! Test your knowledge through self-assessmentquestions,and find useful weblinks What roles do culture, diversityand ethicsplay in the dynamic world of businesstoday?

2 How do unpredictable political and economic conditionsaffect an organisation? What are the impacts of globalisation, social and technological changeon business decisions? Using well-known examples and case studies from the public and private sectors, this fifth edition of The Business Environmentaddresses these key questions and many students to consider the challenges and opportunities that managers face in thebusiness environment, it provides a strong basis from which to build an overall understanding ofthe context of 780273 Worthingtonis a Reader and Chris Brittona PrincipalLecturer in the Department of Strategy and management atLeicester Business School, De Montfort Business Environmentfifth editionThe Business Environmentfifth editionIan Worthington andChris BrittonWorthington and BrittonA vibrant and contemporary introduction to the business environment.

3 Worthington and Britton comprehensively examine how external influences affectthe decisions and operations of today s 18/4/06 08:46 Page 1 The Business EnvironmentVisit the The Business Environment, fifth edition , Companion Website find valuable studentlearningmaterial including: Self-test questions for every chapter Links to articles and resources on the Internet Searchable online 4/4/06 2:58 pm Page iWe work with leading authors to develop thestrongest educational materials in business,bringing cutting-edge thinking and best learningpractice to a global a range of well-known imprints, includingFinancial Times Prentice Hall, we craft high qualityprint and electronic publications which help readersto understand and apply their content, whetherstudying or at find out more about the complete range of ourpublishing please visit us on the World Wide Web 24/4/06 1.

4 46 pm Page iififth editionIan Worthington and Chris BrittonLeicester Business School, De Monfort University, LeicesterThe Business 4/4/06 2:58 pm Page iiiPearson Education LimitedEdinburgh GateHarlow Essex CM20 2 JEUnited Kingdomand Associated Companies around the worldVisit us on the World Wide Web published in Great Britain in 1994 Second edition 1997 Third edition 2000 Fourth edition 2003 fifth edition 2006 Ian Worthington and Chris Britton 1994, 1997, 2000, 2003, 2006 The right of Ian Worthington and Chris Britton to be identified as authors of this work has been asserted by them in accordance with the Copyright, Designs, and Patents Act rights reserved.

5 No part of this publication may be reproduced, stored ina retrieval system, or transmitted in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise without either the priorwritten permission of the Publishers or a licence permitting restricted copyingin the United Kingdom issued by the Copyright Licensing Agency Ltd,90 Tottenham Court Road, London W1P 0LP. ISBN-13: 978-0-273-70424-9 ISBN-10: 0-273-70424-9 British Library Cataloguing-in-Publication DataA catalogue record for this book is available from the British of Congress Cataloguing-in-Publication DataA catalogue record for this book is available from the Library of 9 8 7 6 5 4 3 2 110 09 08 07 06 Typeset in pt Stone Serif by and bound by Mateu Cromo Artes Graficas, publisher s policy is to use paper manufactured from sustainable 4/4/06 2.

6 58 pm Page ivFor Lindsey, Tom and Georgina and for Rachael, Philip, Nick and Megan, with our 4/4/06 2:58 pm Page 4/4/06 2:58 pm Page viFull contentsixContributorsxviiiPreface to the first editionxixPreface to the second editionxxPreface to the third editionxxiPreface to the fourth editionxxiPreface to the fifth editionxxiiGuided tourxxivPart One INTRODUCTION11 Business organisations: the external environment32 Business organisations: the internal environment18 Part Two CONTEXTS393 The political environment414 The macroeconomic environment805 The demographic.

7 Social and cultural context of business1206 The resource context1457 The legal environment171 Part Three FIRMS1978 Legal structures1999 Size structure of firms23110 Industrial structure26211 Government and business289 Part Four MARKETS31312 The market system31513 Market structure34114 International markets and globalisation36715 Governments and markets402 Part Five ISSUES42916 The technological environment: e-business43117 Corporate responsibility and the environment44718 Monitoring change471 Glossary496 Index513 Brief 4/4/06 2:58 pm Page 4/4/06 2:58 pm Page viiiContributorsxviiiPreface to the first editionxixPreface to the second editionxxPreface to the third editionxxiPreface to the fourth editionxxiPreface to the fifth editionxxiiGuided tourxxiv1 Business organisations.

8 The external environment3 Ian WorthingtonLearning outcomes and key terms3 Introduction4 The business organisation and its environment4 The general or contextual environment7 Mini case: A healthy business?7 The immediate or operational environment9 Analysing the business environment10 Mini case: Levi Strauss: jean therapy?10 Central themes13 Synopsis14 Summary of key points14 Case study: A shock to the system15 review and discussion questions16 Assignments16 Further reading172 Business organisations: the internal environment18 Ian Worthington and Zena CumberpatchLearning outcomes and key terms18 Introduction19 Approaches to organisation and management19 Organisation structures23 Mini case: Change at Deutsche Bank?

9 23 Mini case: Royal Dutch Shell28 ContentsPart One 4/4/06 2:58 pm Page ixThe virtual organisation29 Structural change30 Aspects of functional management30 Synopsis35 Summary of key points35 Case study: Structuring global companies36 review and discussion questions37 Assignments38 Notes and references38 Further reading383 The political environment41 Ian WorthingtonLearning outcomes and key terms41 Introduction42 Political systems44 Government in democratic states46 Mini case: Action on the environment50 The three branches or functions of government52 Mini case: Supranational lobbying54 Checks and balances in democracies57A model of the policy process58 Synopsis60 Summary of key points60 Appendix : A democratic political system in action:UK national government60 Appendix : Subnational government: UK local authorities68 Appendix : Supranational government: the European Union71 Case study.

10 Left out in the cold77 review and discussion questions78 Assignments78 Notes and references79 Further reading794 The macroeconomic environment80 Ian WorthingtonLearning outcomes and key terms80 Introduction81 Economic systems82 Eastern Europe: economies in transition86 Politico-economic synthesis88 The macroeconomy90 ContentsxPart Two 4/4/06 2:58 pm Page xMini case: Global economic crisis96 Government and the macroeconomy: objectives97 Mini case: Indicators of success103 Government and the macroeconomy: policies104 The role of financial institutions109 International economic institutions and organisations111 Synopsis114 Summary of key points115 Case study: Toyota UK116 review and discussion questions118 Assignments118 Notes and references118 Further reading1195 The demographic, social and cultural context of business120 Ian WorthingtonLearning outcomes and key terms120 Introduction121 The demographic environment of business121 The social context126 Mini case: Fit for purpose?