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POLITICAL ENVIRONMENT

Political factors, in the context of the external environment in which a business functions, are a type of external constraint acting upon a business. They’re related to actions of governments and political conditions in the location where the business conducts business or seeks to conduct business. Government actions and political realities influence the success of the business.

Political environment can also affect government policies at local to federal level. Companies should be ready to deal with the local and international outcomes of politics. Changes in the government policy make up the political factors. The change can be economic, legal or social. It could also be a mix of these factors.

Change in the political factors can affect business strategy. The stability of a political system can very well decide about the appeal of a particular local market because Government is a major consumer of goods and services. Government is liable for protecting the public interest and thus it views business organizations as a vehicle for social reform. Government pass legislation, which impacts the relationship between the firm and its customers, suppliers and other companies.

Below, is a list of political factors affecting business:

§ Bureaucracy

§ Corruption level

§ Freedom of the press

§ Trade control

§ Education Law

§ Anti-trust law

§ Employment law

§ Discrimination law

§ Data protection law

§ Environmental Law

§ Health and safety law

§ Competition regulation

§ Regulation and deregulation

§ Tax policy (tax rates and incentives)

§ Government stability and related changes

§ Government involvement in trade unions and agreements

§ Import restrictions on quality and quantity of product

§ Intellectual property law (Copyright, patents)

§ Consumer protection and e-commerce

§ Laws that regulate environment pollution

ECONOMIC ENVIRONMENT

A business has many decisions to make – what to produce, how to produce, for whom to produce. However, these decisions will be affected greatly by the economy in which the firm operates. Even if the economy is quite stable, the business always has to monitor its own operations, those of the opposition and any changes to customers’ habits or even lifestyles. Where there is instability in the economy the decisions of the business will be even harder and difficult and even more important.

Economic environment refers to the aggregate of the nature of economic system of the country, the structural anatomy of the economy to economic policies of the government the organisation of the capital market, the nature of factor endowment, business cycles, the socio-economic infrastructure etc.

When the economy becomes unstable, that’s when problems will occur, when services and goods start to become in short supply or the price of the goods and services go so high that people are not able to afford them anymore. A rise in unemployment could mean that the production and supply of goods decrease and the amount of money to purchase the available goods decreases as well – due to wages being reduced. As there are less people in employment, the taxes being paid to the government are less (they need the taxes to fund services such as housing, health e.g. and education, etc.).

Economic factors that affect the business environments are as under:

· Government economic policies

· Rate of interest set by the central bank of any country

· Per capita Income which has a huge impact on business environment by changing their consumption behaviour

· Privatization policy by the government

· Instability in the economy due to bad political conditions in the county affects the business environment

· Customs duty structure

· Airline air freight charges

· Foreign investment in the country

SOCIAL ENVIRONMENT

Social environment of business means all factors around the business which affect it socially. It refers to the nature of social organisation and development of social institutions like caste, religion, customs, and socio-economic factors like class structure, social mobility, women employment etc.

Society is ever changing. The tastes and continuously changing trends are a part of it. It is highly affected by social media and social networking sites.

A business has some responsibilities towards society as it uses resources from society, so it has to return something to the society. Corporate social responsibility (CSR) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.

Below is a list of social factors which impact customer needs and size of markets:

§ Lifestyles

§ Buying habits

§ Education level

§ Emphasis on safety

§ Religion and beliefs

§ Health consciousness

§ Sex distribution

§ Average disposable income level

§ Social classes

§ Family size and structure

§ Minorities

§ Attitudes toward saving and investing

§ Attitudes toward green or ecological products

§ Attitudes toward for renewable energy

§ Population growth rate

§ Immigration and emigration rates

§ Age distribution and life expectancy rates

§ Attitudes toward imported products and services

§ Attitudes toward work, career, leisure and retirement

§ Attitudes toward customer service and product quality

TECHNOLOGICAL ENVIRONMENT

Technology has revolutionized the world. It is changing rapidly with newer innovations. It has influenced operations of the business over the world. Its influence is felt in practically all aspects on the day-to-day operations of businesses, both large and small.

Technology has also changed the face and the pace of how business functions. Business processes have been modified and organizations are now working much more efficiently than ever. At the same time, technology has opened a new way of communication, allowing businesses to communicate and collaborate beyond borders.

The growing use of IT and its tools, smartphones and various smart devices have taken the business to a next level. Today, it’s seen that those organizations are higher ranked are usually more advanced in technology. Technology has, in fact, made organizations to go digital.

The rapid development of technology requires quick reaction by businesses in order to survive in an emerging competitive environment and keep up with new trends and innovative services which other competitors might be offering.

These technological factors can include both products and processes and can present opportunities and threats but it is vital for competitive advantage and is a successful driver in globalisation. Products can be marketed in new ways and processes present immense Value to the business.

LEGAL ENVIRONMENT

The legal environment refers to the principles, rules and regulations established by the government and applicable to people. These regulations come through various legislations. The government has passed and enacted various Acts. Now due to globalization of economy, it became necessary to make changes in these Acts.

The legal environment plays a very crucial role in determining the success of a business. The government imposes taxes among other regulatory measures to promote economic growth and to cushion consumers from exploitation. Therefore, before establishing or when running a business, it is imperative to understand the role of regional tax measures and regulatory measures to determine how they affect business.

An understanding of the legal environment of business is relevant—indeed, essential—to functioning well within disciplines like accounting, finance, management and marketing. Additionally, a solid understanding of the legal environment can help avoid liability or at least minimize risk. In business, it is not enough to comport one and one’s business ethically. Business must also ensure that it understands the legal environment in which it is working. Therefore, it is important for the organization, for its employer, and for all the other people who may be relying on business expertise—such as employees and their family—to understand the legal environment. Such an understanding will help to avoid or lessen the likelihood of liability exposure, enabling organization to manage business affairs successfully, unhampered by unmanaged legal liability risks.

Most of the countries have consumer protection laws aimed at making sure that business act fairly towards their consumers. A few examples are

· Weight and Measures Act, 1976: This Act was enacted to establish standards of weights and measures, to regulate inter-State trade or commerce in weights, measures and other goods which are sold or distributed by weight, measure or number, to provide for matters connected therewith or incidental thereto. Goods sold should not be underweight. Standard weighting equipments should be used to measure goods.

· Trade Description Act, 1968: It means deliberately giving misleading impression about the product is illegal. The Act makes it a criminal offence to apply a false trade description to goods. The Act covers descriptions given both verbally and in writing. It covers any factual statement about the physical qualities of the product, e.g. size, capacity, performance, place of manufacture and previous history.

· Consumer Credit Act, 1974: According to this Act, consumers should be given a copy of the credit agreement and should be aware of the interest rates, length of loan while taking a loan. The Act also regulates what may be taken as security, limits the ways in which credit organisations can advertise and gives the county courts the ability to intercede in the case of unfair or unjust credit agreements. It also gives additional rights to the debtor, including certain limited rights to cancel concluded agreements.

· Sale of Goods Act, 1979: According to the Act, it is illegal to sell products with serious flaws or problems and goods sold should conform to the description provided. The Act applied to contracts where property in ‘goods’ were transferred or agreed to be transferred for a monetary consideration, in other words: where property (ownership) in personal chattels was sold.

NATURAL ENVIRONMENT

Business is interconnected with nature in two ways. Firstly, business gets its raw materials from the nature, whose quality and availability can affect the business to a large extent. Secondly, natural calamities which are uncontrollable and uncertain, can bring disaster for the business.

The analysis of the mega environment must also cover aspects like extent of endowment of natural resources in the country, ecology, climate, etc. These constitute the natural environment.

In today’s nature disturbances, upcoming of global warming and other hazardous issues to the environment, companies around the world are integrating environmental interest with business and are becoming proactive in finding ways to reduce environmental impact. Additionally, consumers are favouring businesses that contribute to protecting natural resources. These interconnections are explicit domains where business is heavily implicated.

There are no hard and fast rules with regard to location of plant. In practice, a large number of factors have to be considered while choosing a suitable location. Moreover, these factors differ from situation to situation and from time to time.

ENVIRONMENT SCANNING TECHNIQUES

It is essential for a company to understand the environment in which it is working, in order to stand and survive in the market. The understanding of environment can be meant as environmental scanning. This environmental scanning is used by the companies to judge its position among its competitors. It helps to identify positive points and negative points, that is, strengths and weaknesses of the company. It provides knowledge about the upcoming opportunities and threats to the company. Thus, environmental scanning gives a proper base to the company for looking its current position and improving for the better. It shows the scope of betterment in future.

There are various techniques of environmental scanning, each having its own usefulness but having some drawbacks at the same time.

SWOT ANALYSIS

SWOT analysis is an acronym of Strengths, Weaknesses, Opportunities, Threats. It is the simplest technique of all because it does not take much time and doing it forces the management to think about the company in a whole new way. SWOT analysis is calculated by a SWOT matrix.

SWOT analysis, as per the name suggests, helps company to identify its strengths and weaknesses, understand and grab the opportunities on the way and taking precautions against threats that may harm it.

Strengths and weaknesses are the internal factors of the company which can be changed from time to time but not without some work. Opportunities and threats are the external factors which cannot be changed nor there is any control over them.

Areas typically considered in the internal factors include financial resources, human resources, physical resources, access to natural resources, and current processes.

Some example of strengths, as an internal factor, that a company can consider are patents, strong brand names, good reputation among customers, cost advantages from proprietary know-how, exclusive access to high grade natural resources, favourable access to distribution networks. Some example of weaknesses, as an internal factor, that a company can consider are lack of patent, weak brand names, poor reputation among customers, high cost structure, lack of access to the best natural resources, lack of access to key distribution channels.

Areas typically considered in the external factors include market trends, economic trends, funding, demographics, relationships with suppliers and partners, and, political, environmental and economic regulations.

Some example of opportunities, as an external factor, includes an unfulfilled customer needs, arrival of new technology, loosening of regulations, removal of international trade barriers. Some example of threats, as an external factor, that a company can face include shifts in consumer tastes away from the firm’s products, emergence o f substitute products, new regulations, international trade barriers.

It is important to study SWOT analysis to determine the status of the company and providing for better future.

ENVIRONMENT THREAT AND OPPORTUNITY PROFILE(ETOP)

ETOP is the acronym of Environment Threat and Opportunity Profile. It is an environmental scanning technique in which environment is divided into different sectors and then impact of each sector is analysed separately. The impact is measured on three measures of scale: positive, negative, neutral, marked as +,-,0 respectively.

ETOP considers the environmental information and determines relative impact of threats and opportunities, for the systematic evaluation of environmental canning. It helps organization to identify opportunities and threats and to consolidate and strengthen organization’s position. It provides the strategists of which sectors have a favourable impact on the organization.

Some of the environmental factors that can be covered while undergoing ETOP analysis includes political factors, legal factors, economic factors, social factors and alike.

The strategic managers must keep focus on following dimensions:

· Issue selection

Focus on issues which have been selected, should not be missed as there is a probability of landing at incorrect practices. Some of the important issues may be related to market share, competitive pricing, customer preferences, technological change, economic policies, competitive trends, etc.

· Accuracy of data

Data should be collected from good sources otherwise the entire process of ETOP may fail. The relevance, importance, manageability, variability, and low cost of data are some of the important factors to be kept in focus.

· Flexibility in operations

Due to uncertainty in business situations, a company will be benefited by devising proactive and flexible strategies in their plans, structures, strategy, etc.

· Impact study

It should be conducted focusing on the various opportunities and threats and the critical issues selected. Efforts must be made to make the assessment more objective.

ORGANIZATIONAL CAPABILITY PROFILE(OCP)

OCP is the acronym of Organizational Capability Profile. It is summarized statement which provides overview of strengths and weaknesses in key result areas likely to affect future operation of the organization. Information in this profile may be presented in qualitative terms or quantitative terms.

The organizational capability profile is drawn in the form of a chart. The strategists are required to systematically assess the various functional areas and subjectively assign values to the different functional capability factors and sub factors along a scale ranging from values of -5 to +5.

After the preparation of OCP, the organisation is in a position to assess its relative strength and weaknesses vis-a-vis its competitors. If there is any gap in area, suitable action may be taken to overcome that. OCP shows the company’s capacity. OCP tells about company’s potential and capability. OCP tells what company can do.

STRATEGIC ADVANTAGE PROFILE(SAP)

SAP is the acronym of Strategic Advantage Profile. It is a summary statement, which provides overview of the advantages and disadvantages in key areas likely to affect future operations of the firm. It is a tool for making a systematic evaluation of the strategic advantage factors, which are significant for the company in its environment. The preparation of such a profile presupposes detailed analysis and diagnosis of the factors in each functional area.

SAP describes the organisation’s competitive position in the market place. It indicates what the organisation has done or is doing in comparison to its competitors to generate competitive advantage for itself. It is external-oriented.

INTERACTION MATRIX – PORTER’S FIVE FORCES OF MODEL

Source: www.tutorialspoint.com

The mix, character and power of the competitive forces operating in a company’s industry varies from one industry to another. The most powerful tool used for systematically diagnosing the basic competitive pressures in a market and assessing strength, weakness, opportunities and threats, is the five-forces model of competition.

Five forces model of competition was developed by Harvard Business School’s Michael E. Porter in 1979. It emphasizes on the five important factors that help determine whether or not a business can be profitable on the basis of the present strategy it is following. The strategy the business follows is what ultimately drives competition and profitability and not on what product or services it is providing.

RIVALRY AMONG EXISTING COMPETITORS

In today’s cut-throat market, competitors are prone to use whatever weapons they have in their business to attain better market positions and earn good profits as well as brand loyalty. The challenge is to adopt a competitive strategy that produces competitive edge over rivals. This strategy consists of offensive and defensive moves, action and reaction patterns, adjust and readjust process. Thus, the current leaders of the market cannot be very sure of their continued leadership in future.

Rivalry gets stronger when competitors are active in making strategies against strategies, moves after moves. Competition increases as the products of rival sellers become more standardized and diminishes as the products of industry rivals become more strongly differentiated. Competitors to stand in market, thus, should have diverse strategies and objectives.

THREAT OF NEW ENTRANTS

Val Renault, Section 14. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats, Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main

Tim Berry, What is a SWOT Analysis?, Retrieved from http://articles.bplans.com/how-to-perform-swot-analysis/

SWOT Analysis, Retrieved from http://shodhganga.inflibnet.ac.in/bitstream/10603/59535/7/07_chapter%201.pdf

Smriti Chand, Environmental Threat and Opportunity Profile, Retrieved from http://www.yourarticlelibrary.com/organization/environmental-threat-and-opportunity-profile-%D0%B5%D1%82%D0%BE%D1%80/23557/

ETOP Analysis, Retrieved from http://www.bbamantra.com/etop-environmental-threat-and-opportunity-profile/

BMS Team, Organizational Capability Profile, Retrieved from http://www.bms.co.in/organizational-capability-profile-ocp/

Strategic Management – Environmental Scanning Techniques – Notes – Business Management, Study notes for Business Administration. Banaras Hindu University,Business Administration, Retrieved from http://www.docsity.com/en/strategic-management-environmental-scanning-techniques-notes-business-management/52577/

Jim Makos, Political factors affecting business, Retrieved from http://pestleanalysis.com/political-factors-affecting-business/

Alex Pirouz, The Impact of Technology in Business, December/January 2012 issue of Business Review Australia magazine

Andrew J. Hoffman and Susse Georg, INTRODUCTION TO BUSINESS AND THE NATURAL ENVIRONMENT A history of research on business and the natural environment: conversations from the field, Retrieved from http://webuser.bus.umich.edu/ajhoff/pub_academic/2013%20Routledge%20Intro-2.pdf

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The Business Environment, Essay Example

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The business environment is ever changing; thus, presenting a number of challenges to businesspersons around. Therefore, this business environment will demand managers and business leaders to come to terms with the changes by adopting the needed changes. The managers should garner the needed experience and management skills to meet these growing challenges. I believe that the Master of Business Administration (MBA) from Henley School of Business will enable me to play a leading role towards changing the future businesses not only in South Africa, but globally.

The MBA program has provided me with the necessary tools that will allow me to understand, as well as implement business and management principles. The business and management principles are important in the modern business environment because I will use them to better my managerial skills and that of others. Since I have working for more than 8 years in challenging positions with mining companies and non-governmental organizations, I will be able to increase my knowledge towards understanding the problems that businesses and markets face nowadays. This will offer me an opportunity to address these challenges, thus making the future of the businesses bright. I believe also that leadership is a core principle while pursuing MBA program. Therefore, with my program I will encourage businesses to adopt a culture of effective leadership among their managers and other leaders. If the businesses understand that leadership is about influencing others, they will succeed in their everyday operations.

Decision-making and strategic planning are important elements towards the success of the business. The MBA program equipped me with knowledge regarding the role of business investing in strategic planning and decision-making approaches to make the needed changes in an organization. The strategic planning will ensure that the business develop effective mission and objectives and develop and implement approaches to realize the mission and work towards objectives. This can be carried out through adopting market research, feasibility studies, or cost-benefit analysis. MBA provides all these tools and by encouraging companies to adopt these strategies will ensure that the businesses will survive in future.

In the present business environment and in future, coordinating the works of others in a team is important towards attaining the goals of a business. Thus, the MBA program will equip me with team skills and knowledge that I will use to influence others. I believe that teamwork is an important component of any given business because it boosts motivation, hence increasing productivity among the team members. Teamwork permits businesses to be more flexible and responsive. In addition, teams also motivate workers to be more creative, to develop a broader view of objectives, and to contribute across the whole business. Thus, with my MBA, I will emphasize and encourage businesses to adopt teams. . With my MBA, I believe that the companies will be effective in meeting their goals if they embrace teams that are multi-cultural team. This is because cross-border mobility has become widespread, which forces managers to form multi-cultural teams. MBA program has thought me to encourage businesses to develop effective communication strategies that will allow them to communicate effectively with different teams and departments. The communication process should be two-way to make sure that every activity in the business and avoids duplication of responsibilities.

Globalization is another principle that I believe with my MBA program, I will be able to encourage businesses to adopt. It has a reality that business should go past their boundaries to global arena through expansion strategies to reap the full benefits of markets. The business will realize the benefits of going global since they will increase their market share and diversify their businesses, thus reducing potential risks. When businesses move to global environments, they will gather more experiences, because they will meet diverse persons form different cultures. In addition, through the MBA program I will be in a position to encourage the business world to create and adopt multi-cultural environment. Multi-cultural environment will allow the business to have diverse workforce that will allow the company to increase productivity through diversity.

MBA stresses the importance of technology and information systems in the present business environment and in future. The present business environment demands businesses to adopt latest technologies in business in order to survive. It is no doubt that technology and information systems play a vital role to the success and future of the business .MBA programs demands that business should be at par with technologies to remain relevant in the market. Technology has emerged to key drivers in the world that business should become part of this changing trend. I will ensure that I stress the importance of technology wherever I will work and in business forums and workshops. The managers should be equipped with better ways of managing employees through technology and information systems in a business to realize the full potential of the business. Technology should integrate with the element of creativity and innovation. I believe that encouraging businesses to adopt innovation and creative strategies are important towards fashioning an enabling environment that enhances problem-solving skills and developing outstanding strategies to pursue business strategies.

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Business Environment – Definition, Components, & Features

Several internal and external factors directly or indirectly influence business operations. While some of these are within the business’s control, most of these are not; and the business has to adapt itself to avoid being affected by changes in such factors. Both of them combined forms the business environment.

Today’s fast-paced business world witnesses a trend of a rather dynamic business environment – that is, it’s never stable. Hence, keeping track of these changing trends, demands, strategies, and policies is crucial in the business world.

But first, what is a business environment and what are the factors that influence it?

What Is Business Environment?

A business environment is a combination of internal and external factors and forces that significantly influence the operations of a business.

The business environment comprises an internal and external environment that directly or indirectly affects business operations.

Internal Environment: It includes all the factors that are well within the control of a company. These factors are relatively predictable and can be worked on by the company to eliminate forces that negatively impact its operations.
External Environment: It includes factors that exist outside the company’s control. They tend to be unpredictable as a company cannot possibly control or predict a change in them. Their unpredictable nature has the potential to abruptly hinder or even boost a company’s functioning.

Components Of Business Environment

The business environment can be categorised into two types based on the factors within the control or outside the control of a business.

Internal Environment

The internal business environment constitutes several internal forces or elements within the control of a business that influences its operations. These include:

Value System: It is the ethical belief that guides the business towards achieving its mission and objective. The value system includes all components that form a business’s regulatory framework – organisational culture , climate, work processes, management practices and organisational norms.
Vision, Mission, and Objectives: The vision, mission, and objective of a business relate to what it wants to achieve or accomplish in future. It is the reason why the business exists.
Organisational Structure: It outlines how the activities are directed within the organisation to achieve its goals. It includes the rules, roles, and responsibilities, along with how tasks are delegated and how the information flows among the organisation’s levels.
Corporate Culture: It is a powerful system of shared norms and attitudes that works as a homogenising factor for an organisation’s employees and gets appropriated by them.
Human Resources: Human resources form all the employees and other personnel associated with the business. It forms the most valuable asset of the organisation as success or failure depends on it.
Physical Resources and Technological Capabilities: It includes tangible assets and the technical know-how that play an essential role in ascertaining the business’s competitive capability and future growth prospects.

External Environment

External components are those factors that a business cannot control. These exist beyond a business’ jurisdiction and supervision limit. External components influencing a business environment are further classified into two categories:

Micro Environment

Macro Environment

Micro environment is the business’s immediate external environment that influences its performance as it has a direct bearing on the firm’s regular business operations.

It includes factors outside of the business’s control but can be analysed and worked upon by managing the business to prevent any business losses.

Micro factors include:

Customers comprise the target group of the business.
Competitors are other market players who target a similar target group and provide similar offerings.
Media is the channel the business use to market its offering to the customer.
Suppliers include all the parties that provide the business with the resources it needs to perform its operations.
Intermediaries comprise the parties involved in delivering the offering to the final customers.
Partners are all external entities like advertising agencies, market research organisations, consultants, etc., who conduct business with the organisation and satisfy customer needs.
Public includes any group with actual or potential interest in the business’s operations or a group that affects its ability to serve its customers.

Macro Environment: PESTLE

The macro environment includes remote environmental factors that influence an organisation. The extent of influence a macro element can have on a business is significant as they usually affect the industry as a whole.

These factors are classified under PESTLE: P – Political, E – Environmental, S – Social, T – Technological, L – Legal, E – Economical.

Political Factors comprise government policies, political stability, corruption in the system, tax policies, labour laws, and trade restrictions that affect the business or the industry.
Economical Factors relate to the economy of the country. They include economic growth, exchange rate, interest and inflation rates, etc.
Social Factors comprise the demographics of the country. They include population growth rate, age distribution, career attitudes, health consciousness, etc.
Technological Factors pertain to innovation in technology that affects the operations of the business. This refers to automation, research and development activities, technological awareness, etc.
Legal Factors are laws that affect business operations. They include business-specific, industry-specific, and even state-specific laws.
Environmental Factors comprise of all those that influence or are determined by the environment a business operates in. It includes the weather, climate, environmental policies, and even pressure from NGOs to care for the environment.

Importance of Business Environment

The market is essentially flooded with competing businesses. It is, thus, integral for a business to keep a lookout for the forces that affect it.

Emphasis is laid on maintaining continuous interaction with a company’s business environment. Understanding this environment allows companies to –

Plan For Long Term: A sound knowledge of the business environment helps the company know its advantages and limitations, making it easier to choose the better positioning and plan to stay in the market for the long term.
Identify Opportunities and Trends – Timely analysis allows a company to identify and consequently explore new opportunities and better performance ideas. A business opportunity is a factor that, upon identifying, allows the initiation of a business venture or aids the development of an existing business. An example of this is Nokia , a company that has previously held a whopping 49.9% of the global market share for mobile phones. However, the company did not adapt to the market’s changing demands as it failed to analyse new trends. Keeping a constant lookout for the new trends that rival firms are setting allows the company to adapt accordingly.
Identify threats – Identifying potential threats to the business is another reason why a company needs to keep a watch on its environment. Threats are factors that have the potential to hurt a business. Steering clear of any possible threats ahead of time is integral for the survival of a company. Staying updated and adapting to the turbulent state of the overall business environment grants the company better flexibility when it comes to coping when a sudden, unexpected threat approaches the company. Understanding these conditions and forces thoroughly allows analysts to determine what direction the company should steer towards to stay relevant in the market.
Gain First- Mover Advantage – A company gains the first-mover’s advantage if it succeeds to identify market demands at the right time. This allows the company to create its brand and gain brand recognition which benefits the business in the long run. As time passes, competitors try to enter the market after having examined the product’s expansive market demand. By that time, the first mover has plenty of time to establish strong customer loyalty and hence a significant market share which will be hard to compete with. A closer look at the history of Amazon shows how Jeff Bezos had recognised the power of the internet after having come across a statistic that claimed that the internet would change the way businesses operate. Identifying the internet’s potential ahead of time has made Amazon the world’s largest e-commerce company today.

Features Of Business Environment

A business environment is:

Dynamic : The constant changing of the environment – be it socially, politically, economically and technologically – results in the dynamic nature of the business environment. A heavy interrelatedness of factors that consequently lead to this ever-changing environment is witnessed.
Unpredictable : Due to its dynamic nature, an air of uncertainty always persists. Precognition is impossible, and hence, there is no way to foresee a future event that might impact the business environment.
Complex : The interrelatedness of factors and circumstances form a rather tangled environment which is often difficult to analyse. It is an arduous task to keep track of the sources and their impacts on conditions and forces that make up the business environment. Hence, it is a complex task to measure the relative impact a certain force may have on a business.
Susceptible : It is difficult to foresee the impact a slight change in the environment can have on a business. An insignificant change may influence a company’s operations largely. It has the potential to impact a business’ entire existence, its revenue and development.
Relative : The business environment is not the same at all places. It varies from place to place. The political crisis in one nation affects the business environment only in that nation, not elsewhere. Hence, the business environment is a relative concept.
Multiple-angled : A social, political or economic occurrence may have different impacts on different businesses. A political move that seems beneficial for one business might seem threatening to another. Hence, there exist multiple perceptions in a business environment.

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1.2 Understanding the Business Environment

What are the sectors of the business environment, and how do changes in them influence business decisions?

Businesses do not operate in a vacuum but rather in a dynamic environment that has a direct influence on how they operate and whether they will achieve their objectives. This external business environment is composed of numerous outside organizations and forces that we can group into seven key subenvironments, as Exhibit 1.4 illustrates: economic, political and legal, demographic, social, competitive, global, and technological. Each of these sectors creates a unique set of challenges and opportunities for businesses.

Business owners and managers have a great deal of control over the internal environment of business, which covers day-to-day decisions. They choose the supplies they purchase, which employees they hire, the products they sell, and where they sell those products. They use their skills and resources to create goods and services that will satisfy existing and prospective customers. However, the external environmental conditions that affect a business are generally beyond the control of management and change constantly. To compete successfully, business owners and managers must continuously study the environment and adapt their businesses accordingly.

Other forces, such as natural disasters, can also have a major impact on businesses. While still in the rebuilding stage after Hurricane Katrina hit in 2005, the U.S. Gulf Coast suffered another disaster in April 2010 as a result of an explosion on the Deepwater Horizon oil-rig, which killed 11 workers and sent more than 3 million barrels of oil into the Gulf of Mexico. This event, which played out for more than 87 days, severely affected the environment, businesses, tourism, and people’s livelihoods. Global oil conglomerate BP, which was responsible for the oil spill, has spent more than $60 billion in response to the disaster and cleanup. Seven years after the explosion, tourism and other businesses are slowly recovering, although scientists are not certain about the long-term environmental consequences of the oil spill. 7

No one business is large or powerful enough to create major changes in the external environment. Thus, managers are primarily adapters to, rather than agents of, change. Global competition is basically an uncontrollable element in the external environment. In some situations, however, a firm can influence external events through its strategies. For example, major U.S. pharmaceutical companies have been successful in getting the Food and Drug Administration (FDA) to speed up the approval process for new drugs. 8 In recent years, the five largest companies in the S&P Index— Google , Facebook , Amazon , Microsoft , and Apple —have spent close to $50 million on lobbying activities in the nation’s capital in an effort to help policy makers understand the tech industry and the importance of innovation and an “open” internet. 9 Let’s now take a brief look at these varied environmental influences.

Economic Influences

This category is one of the most important external influences on businesses. Fluctuations in the level of economic activity create business cycles that affect businesses and individuals in many ways. When the economy is growing, for example, unemployment rates are low, and income levels rise. Inflation and interest rates are other areas that change according to economic activity. Through the policies it sets, such as taxes and interest rate levels, a government attempts to stimulate or curtail the level of economic activity. In addition, the forces of supply and demand determine how prices and quantities of goods and services behave in a free market.

Political and Legal Influences

The political climate of a country is another critical factor for managers to consider in day-to-day business operations. The amount of government activity, the types of laws it passes, and the general political stability of a government are three components of political climate. For example, a multinational company such as General Electric will evaluate the political climate of a country before deciding to locate a plant there. Is the government stable, or might a coup disrupt the country? How restrictive are the regulations for foreign businesses, including foreign ownership of business property and taxation? Import tariffs, quotas, and export restrictions also must be taken into account.

In the United States, laws passed by Congress and the many regulatory agencies cover such areas as competition, minimum wages, environmental protection, worker safety, and copyrights and patents. For example, Congress passed the Telecommunications Act of 1996 to deregulate the telecommunications industry. As a result, competition increased and new opportunities arose as traditional boundaries between service providers blurred. Today the dramatic growth in mobile technology has changed the focus of telecommunications, which now faces challenges related to broadband access and speed, content streaming, and much-needed improvements in network infrastructure to address ever-increasing data transmissions. 10

Federal agencies play a significant role in business operations. When Pfizer wants to bring a new medication for heart disease to market, it must follow the procedures set by the Food and Drug Administration for testing and clinical trials and secure FDA approval. Before issuing stock, Pfizer must register the securities with the Securities and Exchange Commission . The Federal Trade Commission will penalize Pfizer if its advertisements promoting the drug’s benefits are misleading. These are just a few ways the political and legal environment affect business decisions.

States and local governments also exert control over businesses—imposing taxes, issuing corporate charters and business licenses, setting zoning ordinances, and similar regulations. We discuss the legal environment in greater detail in a separate appendix.

Demographic Factors

Demographic factors are an uncontrollable factor in the business environment and extremely important to managers. Demography is the study of people’s vital statistics, such as their age, gender, race and ethnicity, and location. Demographics help companies define the markets for their products and also determine the size and composition of the workforce. You’ll encounter demographics as you continue your study of business.

Demographics are at the heart of many business decisions. Businesses today must deal with the unique shopping preferences of different generations, which each require marketing approaches and goods and services targeted to their needs. For example, the more than 75 million members of the millennial generation were born between 1981 and 1997. In 2017 they surpassed baby boomers as America’s largest generation. 11 The marketing impact of millennials continues to be immense. These are technologically savvy and prosperous young people, with hundreds of billions of dollars to spend. And spend they do—freely, even though they haven’t yet reached their peak income and spending years. 12 Other age groups, such as Generation X—people born between 1965 and 1980—and the baby boomers—born between 1946 and 1964—have their own spending patterns. Many boomers nearing retirement have money and are willing to spend it on their health, their comforts, leisure pursuits, and cars. As the population ages, businesses are offering more products that appeal to middle-aged and senior markets. 13

In addition, minorities represent more than 38 percent of the total population, with immigration bringing millions of new residents to the country over the past several decades. By 2060 the U.S. Census Bureau projects the minority population to increase to 56 percent of the total U.S. population. 14 Companies recognize the value of hiring a diverse workforce that reflects our society. Minorities’ buying power has increased significantly as well, and companies are developing products and marketing campaigns that target different ethnic groups.

Social Factors

Social factors—our attitudes, values, ethics, and lifestyles—influence what, how, where, and when people purchase products or services. They are difficult to predict, define, and measure because they can be very subjective. They also change as people move through different life stages. People of all ages have a broader range of interests, defying traditional consumer profiles. They also experience a “poverty of time” and seek ways to gain more control over their time. Changing roles have brought more women into the workforce. This development is increasing family incomes, heightening demand for time-saving goods and services, changing family shopping patterns, and impacting individuals’ ability to achieve a work-life balance. In addition, a renewed emphasis on ethical behavior within organizations at all levels of the company has managers and employees alike searching for the right approach when it comes to gender inequality, sexual harassment, and other social behaviors that impact the potential for a business’s continued success.

Managing Change

Balancing comes easy at h&r block.

In an industry driven by deadlines and details, it’s hard to imagine striking a balance between work and everyday life for full-time employees and seasonal staff. Fortunately, the management team at H&R Block not only believes in maintaining a strong culture, it also tries to offer flexibility to its more than 70,000 employees and seasonal workers in 12,000 retail offices worldwide.

Based in Kansas City, Missouri, and built on a culture of providing exceptional customer service, H&R Block was recently named the top U.S. business with the best work-life balance by online job search site Indeed. Analyzing more than 10 million company reviews by employees, Indeed researchers identified the top 20 firms with the best work-life balance. H&R Block headed the 2017 list, followed by mortgage lender Network Capital Funding Corporation , fast food chain In-N-Out Burger , Texas food retailer H-E-B , and health services company Kaiser Permanente , among others.

According to Paul Wolfe, Indeed’s senior vice president of human resources, empathy on the part of organizations is a key factor in helping employees achieve balance. Wolfe says companies that demonstrate empathy and work diligently to provide personal time for all employees tend to take the top spots on the work-life balance list. “Comments we have seen from employee reviews for these companies indicate ‘fair’ and ‘flexible work environments,’” he says. Surprisingly, none of the tech companies known for their generous work perks made the top 20 list in 2017.

In this 24/7 world, when no one is far from a text or tweet, finding time for both family and work can be difficult, especially in the tax services industry, which is so schedule driven for a good part of the year. Making a commitment to help workers achieve a healthy work-life balance not only helps its employees, but it also helps H&R Block retain workers in a tight labor market where individuals continue to have choices when it comes to where and for whom they want to work.

How does management’s support of employee work-life balance help the company’s bottom line?
What can other organizations learn from H&R Block when it comes to offering employee perks that encourage personal time for workers even during the busy tax season?

Sources: “Career Opportunities,” https://www.hrblock.com, accessed May 25, 2017; “About Us,” http://newsroom.hrblock.com, accessed May 25, 2017; Abigail Hess, “The 20 Best Companies for Work-Life Balance,” CNBC, http://www.cnbc.com, May 4, 2017; Kristen Bahler, “The 20 Best Companies for Work-Life Balance,” Money, http://time.com, April 20, 2017; Rachel Ritlop, “3 Benefits Companies Can Provide to Boost Work-Life Balance,” Forbes, http://www.forbes.com, January 30, 2017.

The application of technology can stimulate growth under capitalism or any other economic system. Technology is the application of science and engineering skills and knowledge to solve production and organizational problems. New equipment and software that improve productivity and reduce costs can be among a company’s most valuable assets. Productivity is the amount of goods and services one worker can produce. Our ability as a nation to maintain and build wealth depends in large part on the speed and effectiveness with which we use technology—to invent and adapt more efficient equipment to improve manufacturing productivity, to develop new products, and to process information and make it instantly available across the organization and to suppliers and customers.

Many U.S. businesses, large and small, use technology to create change, improve efficiencies, and streamline operations. For example, advances in cloud computing provide businesses with the ability to access and store data without running applications or programs housed on a physical computer or server in their offices. Such applications and programs can now be accessed through the internet. Mobile technology allows businesses to communicate with employees, customers, suppliers, and others at the swipe of a tablet or smartphone screen. Robots help businesses automate repetitive tasks that free up workers to focus on more knowledge-based tasks critical to business operations. 15

Concept Check

Define the components of the internal and the external business environments.
What factors within the economic environment affect businesses?
Why do demographic shifts and technological developments create both challenges and new opportunities for business?

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Access for free at https://openstax.org/books/introduction-business/pages/1-introduction

Authors: Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt
Publisher/website: OpenStax
Book title: Introduction to Business
Publication date: Sep 19, 2018
Location: Houston, Texas
Book URL: https://openstax.org/books/introduction-business/pages/1-introduction
Section URL: https://openstax.org/books/introduction-business/pages/1-2-understanding-the-business-environment

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Understanding Economic Systems and Business

Understanding the business environment.

What are the sectors of the business environment, and how do changes in them influence business decisions?

Businesses do not operate in a vacuum but rather in a dynamic environment that has a direct influence on how they operate and whether they will achieve their objectives. This external business environment is composed of numerous outside organizations and forces that we can group into seven key subenvironments, as (Figure) illustrates: economic, political and legal, demographic, social, competitive, global, and technological. Each of these sectors creates a unique set of challenges and opportunities for businesses.

The diagram is a circle, with a core that is labeled, and sections surrounding the core that are labeled. Outside of the circle is the external environment, which affects the contents of the circle. The core is labeled as, Internal Environment; entrepreneurs, managers, workers, and customers. The sections surrounding the core are as follows; technological, and economic, and political slash legal, and demographic, and social, and competitive, and global. All these sections have arrows pointing inward to the core internal environment.

Exhibit 1.4 The Dynamic Business Environment (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

No one business is large or powerful enough to create major changes in the external environment. Thus, managers are primarily adapters to, rather than agents of, change. Global competition is basically an uncontrollable element in the external environment. In some situations, however, a firm can influence external events through its strategies. For example, major U.S. pharmaceutical companies have been successful in getting the Food and Drug Administration (FDA) to speed up the approval process for new drugs. [2] In recent years, the five largest companies in the S&P Index— Google , Facebook , Amazon , Microsoft , and Apple —have spent close to $50 million on lobbying activities in the nation’s capital in an effort to help policy makers understand the tech industry and the importance of innovation and an “open” internet. [3] Let’s now take a brief look at these varied environmental influences.

Economic Influences

Political and Legal Influences

Demographic Factors

Demographics are at the heart of many business decisions. Businesses today must deal with the unique shopping preferences of different generations, which each require marketing approaches and goods and services targeted to their needs. For example, the more than 75 million members of the millennial generation were born between 1981 and 1997. In 2017 they surpassed baby boomers as America’s largest generation. [5] The marketing impact of millennials continues to be immense. These are technologically savvy and prosperous young people, with hundreds of billions of dollars to spend. And spend they do—freely, even though they haven’t yet reached their peak income and spending years. [6] Other age groups, such as Generation X—people born between 1965 and 1980—and the baby boomers—born between 1946 and 1964—have their own spending patterns. Many boomers nearing retirement have money and are willing to spend it on their health, their comforts, leisure pursuits, and cars. As the population ages, businesses are offering more products that appeal to middle-aged and senior markets. [7]

In addition, minorities represent more than 38 percent of the total population, with immigration bringing millions of new residents to the country over the past several decades. By 2060 the U.S. Census Bureau projects the minority population to increase to 56 percent of the total U.S. population. [8] Companies recognize the value of hiring a diverse workforce that reflects our society. Minorities’ buying power has increased significantly as well, and companies are developing products and marketing campaigns that target different ethnic groups.

Social Factors

Managing Change

How does management’s support of employee work-life balance help the company’s bottom line?
What can other organizations learn from H&R Block when it comes to offering employee perks that encourage personal time for workers even during the busy tax season?

Key Takeaways

Define the components of the internal and the external business environments.
What factors within the economic environment affect businesses?
Why do demographic shifts and technological developments create both challenges and new opportunities for business?

Summary of Learning Outcomes

The external business environment consists of economic, political and legal, demographic, social, competitive, global, and technological sectors. Managers must understand how the environment is changing and the impact of those changes on the business. When economic activity is strong, unemployment rates are low, and income levels rise. The political environment is shaped by the amount of government intervention in business affairs, the types of laws it passes to regulate both domestic and foreign businesses, and the general political stability of a government. Demographics, or the study of people’s vital statistics, are at the heart of many business decisions. Businesses today must deal with the unique preferences of different generations, each of which requires different marketing approaches and different goods and services. The population is becoming increasingly diverse: currently minorities represent more than 38 percent of the total U.S. population, and that number will continue to increase over the next several decades. Minorities’ buying power has increased significantly as well, and companies are developing products and marketing campaigns that target different ethnic groups. Social factors—our attitudes, values, and lifestyles—influence what, how, where, and when people purchase products. They are difficult to predict, define, and measure because they can be very subjective. They also change as people move through different life stages.

Environmental Defense Fund, “Seven Years Later: What’s Ahead for the Gulf,” http://www.edf.org , accessed May 15, 2017; “Oil Spills Fast Facts,” CNN, http://www.cnn.com , February 9, 2017; Steven Mufson, “BP’s Big Bill for the World’s Largest Oil Spill Reaches $61.6 Billion,” Washington Post, https://www.washingtonpost.com , July 14, 2016; Debbie Elliott, “5 Years after BP Oil Spill, Effects Linger and Recovery Is Slow,” NPR, http://www.npr.org , April 20, 2015. ↵
Melissa Healy, “Speed Up Drug Approvals at FDA? It’s Already Faster Than Europe’s Drug Agency,” Los Angeles Times, http://www.latimes.com , April 6, 2017. ↵
Hamza Shaban, “Google for the First Time Outspent Every Other Company to Influence Washington in 2017,” Washington Post, https://www.washingtonpost.com , January 23, 2018; Saleha Mohsin, “Silicon Valley Cozies Up to Washington, Outspending Wall Street 2–1,” Bloomberg, http://www.bloomberg.com , October 18, 2016. ↵
“CIO Journal: 2017 Telecommunications Outlook,” The Wall Street Journal, http://deloitte.wsj.com , March 1, 2017. ↵
Richard Fry, “Millennials Overtake Baby Boomers as America’s Largest Generation,” Pew Research Center, http://www.pewresearch.org , April 25, 2016. ↵
Ashley Lutz, “Everything You Know about Millennial Spending Is about to Change,” Business Insider, http://www.businessinsider.com , October 1, 2016. ↵
Geoff Gross, “5 Ways to Effectively Market to Baby Boomers,” Entrepreneur, http://www.entrepreneur.com , June 1, 2016. ↵
U.S. Census Bureau, “Projections of the Size and Composition of the U.S. Population: 2014 to 2060,” http://www.census.gov , accessed May 15, 2017. ↵
“Why Move to the Cloud? 10 Benefits of Cloud Computing,” http://www.salesforce.com , accessed May 15, 2017; Jim Rock, “How Robots Will Reshape the U.S. Economy,” Tech Crunch, http://techcrunch.com , March 21, 2016. ↵
Intro to Business. Authored by : Gitman, et. al. Provided by : OpenStax. Located at : http://cnx.org/contents/[email protected] . License : CC BY: Attribution . License Terms : Download for free at http://cnx.org/contents/[email protected]

How to Write a Business Essay for Impactful Communication and Analysis

So, you've got a business essay coming up, and you're feeling a mix of excitement and a tad bit overwhelmed, right? Totally get it. Writing a business essay might sound boring, but trust me, it's a skill that's gonna come in handy when you're out there in the real world.

In this article, we're dishing out some awesome tips just for you if you have question on how to start a business essay. Think of it as your secret weapon to tackle those business essays like a pro. We'll keep it real, easy, and super practical – no fancy jargon or complicated theories. Let's dive into the world of business essay writing, where your words can make a big impact. In case you lack time or motivation to finish your assignment, use our business essay writing service to streamline the process.

What Is a Business Essay

Business essays are written pieces that explore and analyze various aspects of business-related topics, often focusing on management, marketing, finance, or entrepreneurship. They provide a platform for students and professionals to articulate their understanding of business concepts, theories, and real-world applications. Typically written in a formal and structured manner, a business essay requires critical thinking, research skills, and the ability to communicate ideas effectively. Whether delving into case studies, discussing industry trends, or evaluating business strategies, the essay aims to provide insights, draw conclusions, and contribute to a deeper understanding of the dynamic world of business.

How to Write an Introduction for a Business Essay

A business essay introduction sets the tone for the entire paper and captures the reader's attention. Here are some steps and tips to help you write an effective introduction for a business essay:

Understand the Purpose of the Introduction

Clearly understand the purpose of your essay. Are you providing an overview of a business concept, analyzing a case study, or arguing a specific point? Tailor your introduction accordingly.

Start with a Hook

Grab the reader's attention with a compelling hook. This could be a relevant quote, a surprising fact, a rhetorical question, or a thought-provoking statement. The goal is to make the reader want to continue reading.

Provide Context

After the hook, provide some background or context related to the topic of your essay. Help the reader understand the significance and relevance of the subject matter in the business world.

Thesis Statement

Clearly state your thesis or the main argument of your essay. This should be a concise and focused statement that outlines what the reader can expect from the rest of the essay. Make sure it is specific and reflects the purpose of your writing.

Outline the Scope

Briefly outline the main points or areas that your essay will cover. This gives the reader a roadmap of what to expect and helps them understand the structure of your essay.

Use Clear and Concise Language

Keep your introduction clear and concise. Avoid unnecessary jargon or complex language that might confuse the reader. Aim for clarity and precision.

Be Relevant

Ensure that every sentence in your introduction is directly related to the topic of your essay. Avoid going off on tangents or providing excessive information that doesn't contribute to the main points.

Consider the Tone

Choose a tone that is appropriate for your audience and the nature of your essay. Business essays can vary in tone, from formal and academic to more conversational, depending on the context.

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Business Essay Introduction Example

Here’s an example of an introduction for an essay titled “The Rise of E-commerce: Shaping the Future of Retail”:

The retail landscape is undergoing a seismic shift as e-commerce continues to redefine the way consumers shop. In this essay, we explore the profound implications of this digital transformation on traditional retail models and analyze the key strategies businesses are employing to thrive in this dynamic environment. From changing consumer behaviors to the strategic use of technology, the impact of e-commerce on the retail sector is undeniable, prompting businesses to adapt or face the risk of obsolescence.

How to Write a Business Essay

Working on a business essay might seem daunting, but it doesn't have to be. In this guide, we'll break down the process into simple steps to help you navigate through it smoothly. In this next section. We’ll be breaking down the essentials of drawing up a business essay from start to finish. From defining your main argument to structuring your points effectively, let's explore the key strategies that will set you on the path to success.

Analyze the Prompt

Start by carefully reading and understanding the essay prompt. This involves breaking down the question to grasp what it's asking for, identifying the main topics, and recognizing any specific tasks or points to cover. This step helps you set the stage for a focused and relevant essay by ensuring you address all aspects mentioned in the prompt. You can hire a business essay writer to expedite the process if you want.

Think of a Thesis Statement

When writing a business essay, think of the thesis statement as the essay's compass. It should be a concise, strong sentence that lays out your main argument or viewpoint on the topic. Your thesis guides the entire essay, so make sure it's specific, debatable, and gives readers a clear idea of what to expect in your writing.

Create an Outline

We’ve already shared tips on how to write an introduction for a business essay, so let’s move on to the next stages. Organize your thoughts by outlining the main points and structure of your essay. This doesn't have to be too detailed; just a roadmap that helps you see how different ideas connect. An outline ensures a logical flow in your writing and prevents you from going off track. By the way, have you already picked business essay topics ? If not, here’s a list of great ideas you can use!

Provide Topic Background

Before diving into your main points, the business essay writing format implies giving your reader some context about the topic. Briefly introduce the key concepts, relevant facts, or historical background that will help readers understand the importance and relevance of your essay.

Write the Main Body

Start developing your essay by expanding on the main points outlined in your thesis. Each paragraph should focus on a specific idea or argument supported by evidence or examples. Be clear and concise, ensuring a smooth transition between paragraphs. It’s the most difficult part of the assignment, meaning you can use our college essay service to simplify it.

Write a Conclusion

Summarize your key points and conclusively restate your thesis. The conclusion should tie up the loose ends and leave a lasting impression on the reader. Avoid introducing new information but rather reinforce your main argument. For more details about how to write a conclusion for an essay , please refer to our guide.

Add a Bibliography

List all the sources you used in your research. Be meticulous about citing your references properly, following the chosen format (APA, MLA, etc.). This adds credibility to your essay and avoids plagiarism issues.

Edit and Proofread

As you’ve learned how to write a business essay, it’s time to master the art of self-revising. Review your essay for clarity, coherence, and grammatical errors. Editing ensures that your ideas flow smoothly, and proofreading catches any overlooked mistakes. It's a crucial step to polish your essay and present a professional piece of writing. Do you have another assignment on business management ? This guide will help you!

Choose the Writing Format

Reiterate the importance of selecting and adhering to the chosen writing format throughout the essay. Consistency in formatting, citations, and other style elements contributes to the overall professionalism of your work.

Business Essay Example

Business essay examples offer practical assistance to students tackling assignments by showcasing the application of essential writing principles in a real-world context. As a tangible reference, it demonstrates an effective essay structure and how to formulate a clear thesis statement and provide coherent arguments. By examining examples, students can glean insights into research techniques, proper citation practices, and overall essay organization, empowering them to approach their business assignments with increased confidence and proficiency.

Example 1: “The Impact of Technological Advancements on Modern Business Operations”

This essay explores the multifaceted impact of technology on operational efficiency, innovation, customer relations, and global connectivity. From integrating automation and artificial intelligence for streamlined processes to facilitating global expansion through digital platforms, technology emerges as a driving force shaping the success and sustainability of contemporary enterprises. While acknowledging the numerous benefits, the essay also highlights the challenges and ethical considerations inherent in adopting these technologies, emphasizing the need for businesses to navigate these complexities responsibly for long-term growth and competitiveness.

Example 2: “Sustainable Business Practices: A Strategic Imperative for Corporate Success”

This essay explores the pivotal role of sustainable business practices as a strategic imperative for corporate success in the contemporary entrepreneurship scene. Addressing environmental concerns, social consciousness, and economic viability, the essay delves into the multifaceted benefits of adopting sustainable approaches. It discusses how businesses can align profitability with responsible practices, emphasizing environmental stewardship, social impact, and community engagement. The essay underscores the importance of regulatory compliance and risk mitigation in business by examining the economic advantages and innovation opportunities arising from sustainable initiatives.

Final Considerations

Students engage in writing business essays to develop essential skills and knowledge crucial for success in the professional world. These essays serve as a platform for honing critical thinking, analytical, and communication skills, allowing students to articulate and analyze complex business concepts. Through the process of researching, organizing thoughts, and constructing coherent arguments, students gain a deeper understanding of business principles and practices. Business essays also cultivate the ability to synthesize information, evaluate various perspectives, and present well-reasoned conclusions. If you find with task troublesome, you can always tell us, ‘ write my research paper ,’ and one of our wordsmiths will fulfill the assignment quickly.

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List of Commerce Articles
Business Environment

What is Business Environment?

Meaning of business environment:.

The word ‘business environment’ indicates the aggregate total of all people, organisations and other forces that are outside the power of industry but that may affect its production. According to an anonymous writer- “Just like the universe, withhold from it the subset that describes the system and the rest is environment”. Therefore, the financial, cultural, governmental, technological and different forces which work outside an enterprise are part of its environment. The individual customers or facing enterprises as well as the management, customer groups, opponents, media, courts and other establishments working outside an enterprise comprise its environment.

Also Check: Important Questions for Business Environment

Importance of Business Environment:

Just like us, business operations do not survive in confinement. Every enterprise is not an island to itself; it subsists, endures and develops within the circumstances of the part and forces of its situation. While an individual enterprise is able to do minute to change or manage these forces, it has no choice to reacting or modifying according to them. Good knowledge of the environment by business managers allows them not only to recognise and assess but also to respond to the forces outside to their enterprises. The significance of the business environment and its perception by managers can be understood if we contemplate the below-mentioned following points:

(A) It Helps in Identifying Opportunities and Making First Mover Advantage

The environment provides numerous opportunities, and it is necessary to identify the opportunities to improve the performance of a business.
Early identification gives an opportunity to an enterprise be the first to identify opportunity instead of losing them to competitors. Example: ‘Airtel’ identified the need for fast internet and took first-mover advantage by providing 4G speed to its users followed by Vodafone and Idea.
Asian paints lost market share to Nerolac because it failed to match its technology.

(B) It Helps the Firm Identify Threats and Early Warning Signals

The business environment helps in understanding the threats which are likely to happen in the future.
Environmental awareness can help managers identify various threats on time and serve as an early warning signal. Example: Patanjali products have become a warning signal to the rest of the FMCG
The sector to develop similar products. Similarly, if an Indian firm finds that a f oreign multinational is entering the Indian market with new substitutes; it needs to prepare accordingly.
Chinese mobile phones have become a threat for Indian mobile phone manufacturers.

Business and industry avail the resources (inputs) from the environment and convert them into usable products (outputs) and provide to society.
The environment provides various inputs (resources) the like finance, machines, raw materials, power and water, labour, etc.
The business enterprise provides outputs such as goods and services to the c ustomers, payment of taxes to the government, to investors and so on.

Example: With the demand for the latest technology, manufacturers will tap the resources from the environment to manufacture LED TVs and Smart TVs rather than collecting resources for colour or Black & White TVs.

(D) It Helps in Coping With Rapid Changes

The business environment is changing very rapidly, and the industry is getting affected by changing market conditions.
Turbulent market environment, less brand loyalty, divisions of markets, changes in fashions, more demanding customers, and global competition are some examples of changing the business environment.

Example: Jack Ma started Alibaba as he could see the potential of interest in E-Commerce.

(E) It Helps in Assisting in Planning and Policy Formulation

The business environment brings both threats and opportunities to a business.
Awareness of business environment helps in deciding future planning or decision making.

Example : Multiple entries of Chinese phones like VIVO, Gionee, OPPO, etc. have posed a threat to local players like Micromax, Karbonn, Lava etc. to think afresh how to deal with the situation.

(F) It Helps in Improving Performance

Environmental studies reveal that the success of any enterprise is closely bound with the changes in the environment.
The enterprises which monitor and adopt suitable business practices not only improve their performance but become leaders in the industry also.

Example: Apple has been successful in maintaining its market share due to its proper understanding of the environment and making suitable innovations in its products.

Also Read: Dimensions of Business Environment

Features of Business Environment:

(A) The totality of External Forces

Business environment includes everything which is outside the organisation.
If we add all these forces, they will form a business environment.

Example: When Pepsi and Coca-Cola got permission to set up their business in India, it was an opportunity for them and threat for local manufacturers like gold spot, camp-cola etc.

(B) Specific and General Forces

Specific forces are those forces which directly affect the operational activities of the business enterprise.
Example: Suppliers, Customers, Investors, Competitors, Financers etc.
General forces are those forces which indirectly affect the functioning of business enterprises.

Example: Economic, Social, Political, Legal and Technological conditions.

Different forces of business environment are interrelated to each other.
One component of the business environment affects the functioning of other components.

Example: The increased life expectancy of people and awareness of health consciousness has increased the demand for many health products like diet coke, olive oil, and so many health products.

(D) Dynamic Nature

The business environment is dynamic in nature and keeps on changing in terms of :

(a) Technological improvement,

(b) Shifts in consumer preferences,

Example: Many established companies in FMCG (Fast Moving Consumer goods) sector are focusing on producing the goods with natural ingredients with the entry of ‘Patanjali Products’.

(E) Uncertainty

The changes in the business environment cannot be predicted accurately because of future uncertainties.
It is very difficult to predict the changes in the economic and social environment.

Example : There has been a sharp decline in the prices of Android smartphones due to the entry of many new companies.

(F) Complexity

All forces of the Business environment are interrelated and dynamic, which makes it difficult to understand.
Complex nature of Business environment can be understood if we study it in parts.
Example : Increase in goods and service tax to 15 % would increase the revenue of the government (economic), which would help the government to improve social being of people (social) and reduce the personal disposable income of rich people and thereby controlling inflation.

(G) Relativity

Business Environment differs from place to place, region to region and country to country.

Example: In China, the electricity to the industry is provided at cheaper rates as the consumption increases and hence, it leads to mass production whereas, in India, it is otherwise, higher consumption of electricity leads to costly electricity which results in lower production & higher cost of production.

Why It is Important for Business Enterprises to Understand Their Environment?

A) It Benefits in Tapping Useful Resources

Business and industry avail the resources (inputs) from the environment and convert them into usable products (output) and provide to society.
The environment provides various inputs (resources) like finance, machines, raw materials, power and water, labour etc.
The business enterprise provides outputs such as goods and services to the customers, payment of taxes to the government, interest/dividend to investors and so on.

(B) It Helps in Coping With Rapid Changes

The business environment is changing very rapidly and the industry is getting affected by changing market conditions.
Turbulent market environment, less brand loyalty, divisions of markets, changes in fashion, more demanding customers, and global competition are some examples of changing the business environment.

Example: Jack Ma started Alibaba as he could see huge potential in E-Commerce.

The above mentioned is the concept, that is elucidated in detail about the Business Environment for the Class 12 Commerce students. To know more, stay tuned to BYJU’S.

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Business Essay Topics

A Comprehensive List of Unique Business Essay Topics

15 min read

Published on: May 1, 2023

Last updated on: Jan 30, 2024

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Are you a student struggling to come up with a good topic for your business essay?

Choosing the right topic is crucial to the success of your essay. A well-chosen topic can make your paper stand out, while a poor choice can make it fall flat. It can be challenging to narrow down the options and find a topic that is interesting and relevant.

But worry not, we've got you covered!

In this blog, we'll provide you with a comprehensive list of business essay topics that are sure to impress your professors. We'll cover everything from business ethics to trending topics. Whether you're an undergraduate, or graduate student, we have topics that will suit your level of study.

So, if you're ready to take your business essay to the next level, let's dive in!

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Business Management Essay Topics

If you're studying business management, you may be tasked with business essay writing. Here are some topics to help you get started:

The role of effective communication in business management
How to develop and implement successful business strategies
The impact of leadership styles on organizational culture and productivity
The benefits and challenges of global expansion for businesses
The importance of ethical behavior in business management
How to effectively manage workplace diversity and inclusivity
The role of technology in modern business management
The impact of environmental factors on business management decisions
The benefits and drawbacks of decentralized decision-making in business management
How to effectively manage change in the business environment

Human Resources Essay Topics

Human resources is a critical function in any organization, responsible for managing the recruitment, training, and retention of employees. Check out the following HR essay topics for inspiration:

The importance of diversity and inclusion in the workplace
Strategies for effective employee recruitment and retention
The role of human resources in ensuring workplace safety
How to manage conflict in the workplace
The impact of technology on human resources management
The importance of employee engagement and motivation
The impact of employee benefits on job satisfaction and retention
How to effectively manage remote employees
The role of human resources in managing employee performance and development
The impact of globalization on human resources management practices

Organizational Behavior Essay Topics

Organizational behavior is the study of how people interact within organizations. It covers topics such as leadership, teamwork, communication, and motivation.

Here are some topics to inspire your writing:

The impact of leadership styles on organizational culture and employee behavior
How to effectively manage conflict in teams and organizations
The role of emotional intelligence in effective leadership
The impact of diversity on organizational behavior and performance
The importance of employee motivation and engagement in achieving organizational goals
The impact of organizational structure on employee behavior and job satisfaction
The role of communication in creating a positive organizational culture
How to develop and implement successful change management strategies
The impact of employee empowerment on organizational behavior and performance
The importance of ethics and social responsibility in organizational behavior

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Business Ethics Essay Topics

Business ethics refers to the moral principles and values that guide behavior in the world of business. It covers topics such as corporate social responsibility, sustainability, and fair trade. Letâs take a look at business ethics essay topics to get you started:

The importance of corporate social responsibility in modern business
The ethics of business practices in developing countries
The impact of globalization on business ethics
The role of ethical leadership in creating a culture of integrity in organizations
The ethics of outsourcing and offshoring
The impact of environmental regulations on business ethics
The ethics of marketing practices and advertising
The role of ethics in supply chain management
The ethics of executive compensation and corporate governance
The ethics of data privacy and cybersecurity in business

Supply and Demand Essay Topics

The law of supply and demand is a fundamental concept in economics. It explains how the availability of goods and services and the desire for them determine prices in the market.

If you're studying economics, you may be asked to write an essay on a topic related to supply and demand.

Here are supply/demand business essay ideas to consider for your next assignment.

The impact of supply and demand on price stability in markets
The role of elasticity in supply and demand analysis
The impact of technology on supply and demand in modern markets
The effects of government policies on supply and demand
The role of advertising in shaping consumer demand
The impact of income inequality on consumer demand and market outcomes
The effects of globalization on supply and demand in different industries
The role of consumer behavior in shaping supply and demand
The impact of shortages and surpluses on market outcomes
The role of the labor market in shaping supply and demand in the economy

Business Law Essay Topics

Business law covers the legal regulations and requirements that apply to business activities and operations. It is an important field for business students, and here are some topics for help:

The role of contract law in business transactions
The legal requirements for forming a business entity
The impact of intellectual property laws on businesses and innovation
The legal requirements for protecting consumer privacy in business operations
The role of antitrust laws in regulating competition and market power
The legal requirements for workplace safety and health
The impact of employment laws on hiring and termination practices
The legal requirements for protecting the environment in business operations
The role of international trade laws in shaping business practices and outcomes
The impact of bankruptcy laws on business operations and reorganization

Entrepreneurship Paper Topics

Entrepreneurship is the process of starting and growing a new business venture. It requires a combination of innovation, risk-taking, and business acumen. Check out the following topics related to entrepreneurship:

The role of creativity and innovation in entrepreneurship
The challenges and opportunities of social entrepreneurship
The impact of government policies on entrepreneurial activity
The role of entrepreneurial ecosystems in supporting new business ventures
The importance of market research in developing successful business ideas
The challenges and opportunities of international entrepreneurship
The impact of technology on the entrepreneurship landscape
The role of mentorship and networking in supporting new entrepreneurs
The importance of financial management in entrepreneurship
The challenges and opportunities of female entrepreneurship

International Business Essay Topics

International business is a complex and dynamic field that encompasses a wide range of issues related to global commerce and trade.

Letâs take a look at some potential essay topics:

The role of cultural differences in international business negotiations
The impact of globalization on the international business landscape
The challenges and opportunities of cross-border mergers and acquisitions
The impact of international trade agreements on global business practices
The role of international finance in supporting global business ventures
The challenges and opportunities of international marketing and branding
The impact of geopolitical factors on international business operations
The role of corporate social responsibility in global business practices
The challenges and opportunities of emerging markets in international business
The impact of digital transformation on international business models

Value Essay Topics

Values are the guiding principles that shape our beliefs, actions, and attitudes towards life. In business, values play an essential role in defining a company's culture, ethics, and identity.

If you're looking for value essay topics, here are some ideas to inspire your research and writing:

The importance of ethical values in business decision-making
The role of values in shaping company culture and employee behavior
The impact of shared values on team collaboration and productivity
The relationship between personal values and career success
The role of social and environmental values in sustainable business practices
The importance of values-based leadership in creating a positive organizational culture
The influence of cultural values on international business operations
The role of values in shaping consumer behavior and brand loyalty
The impact of technological advancements on traditional values and ethical frameworks
The intersection of religious and secular values in the workplace

Argumentative Business Essay Topics

Let's take a look at some argumentative essay topics for business students:

The pros and cons of remote work for businesses and employees
The ethical implications of using artificial intelligence in business decision-making
The impact of social media on consumer behavior and brand reputation
The effectiveness of traditional marketing vs. digital marketing strategies
The role of government regulation in business operations and profitability
The benefits and drawbacks of globalization for businesses and economies
The impact of minimum wage laws on small businesses and their employees
The ethics of corporate social responsibility and philanthropy
The effectiveness of diversity and inclusion initiatives in the workplace
The role of unions in protecting the rights and interests of employees

Persuasive Business Essay Topics

Here are 10 persuasive business essay topics to inspire your business essay writing:

Should companies be required to disclose their carbon emissions and environmental impact?
Should employers offer unlimited paid time off for their employees?
Should businesses be allowed to pay employees less than a living wage?
Should companies be required to offer equal pay for equal work, regardless of gender or race?
Should corporations be held responsible for the social and environmental impact of their supply chains?
Should businesses be required to prioritize sustainability in their operations and products?
Should employers be allowed to monitor employees' social media activity outside of work?
Should businesses be required to offer mental health services to employees?
Should companies be allowed to patent and profit from genetic engineering and biotechnology?
Should businesses be required to disclose the diversity of their leadership and staff?

Business Extended Essay Topics

Let's explore some extended essay topics for business students:

An analysis of the impact of corporate social responsibility on shareholder value
The effectiveness of leadership development programs in improving business performance
An investigation of the relationship between workplace diversity and organizational performance
A case study of a successful corporate turnaround strategy
An analysis of the impact of technology on the future of work
An investigation of the factors that contribute to successful mergers and acquisitions
A comparative study of the marketing strategies of two competing companies in the same industry
An examination of the role of corporate governance in preventing corporate scandals and failures
A study of the relationship between employee engagement and customer satisfaction in service industries
An analysis of the effectiveness of performance management systems in improving employee performance and motivation

Business Essay Topics For College Students

Here are some business essay topics for college students:

The impact of social media marketing on consumer behavior
The challenges and opportunities of e-commerce in developing countries
The effect of workplace diversity on organizational performance
The ethics of corporate social responsibility
The impact of globalization on small businesses
The importance of supply chain management in business operations
The use of big data in business decision making
The challenges and benefits of implementing sustainable business practices
The role of innovation in driving business growth and success

Essay Topics For BBA Students

If you're a BBA student struggling to select a topic for your assignment, we have some inspiring topic ideas for you.

Exploring ways to make the workplace more inclusive for people with disabilities.
Strategies for reducing psychological pressure in the workplace.
Developing effective short and long-term goals for business success.
Analyzing the effectiveness of a thesis statement in a business essay.
Discussing a business concept that does not work and exploring alternative solutions.
The group training and cons of ai based technology in job analysis: A comparative study.
Examining the impact of massive changes in an unethical business environment on employee morale and company reputation
An analysis of the business strategies used to select a higher demand for products aimed at children in the toy industry
How can companies create a supportive work environment for people with disabilities and reduce psychological pressure in the workplace?
Storage and cons of AI-based technology in job analysis: A critical analysis of its impact on job roles and responsibilities.

Business Essay Topics IELTS

Here are business essay topics for IELTS:

How has globalization affected the way businesses operate?
Discuss the impact of social media on modern businesses.
Should companies prioritize profit over social responsibility?
In what ways can small businesses compete with large corporations?
Evaluate the effectiveness of different leadership styles in business.
Discuss the advantages and disadvantages of remote work for businesses.
Should businesses be allowed to collect and use personal data for marketing purposes?
Evaluate the impact of e-commerce on traditional brick-and-mortar stores.
Discuss the role of government regulation in promoting ethical business practices.
Should businesses prioritize sustainability over economic growth?

Interesting Business Essay Topics

The impact of social media on consumer behavior: A case study of Instagram.
Exploring the role of emotional intelligence in leadership effectiveness.
The ethics of corporate social responsibility: A critical analysis.
An investigation into the challenges of managing virtual teams in the 21st century.
The impact of globalization on small businesses: Opportunities and challenges.
The role of corporate culture in driving business success: A case study of Google.
How to effectively manage workplace diversity: Strategies for creating an inclusive workplace.
An analysis of the factors contributing to successful entrepreneurship in the tech industry.
The impact of e-commerce on traditional brick-and-mortar businesses.
The role of innovation in driving sustainable business growth: A case study of Tesla.

Small Business Essay Topics

The impact of technology on small business growth and success.
The role of entrepreneurship in small business development.
Analyzing the challenges faced by small businesses in accessing funding and financing.
How to effectively market a small business on a tight budget.
The importance of creating a strong brand identity for small businesses.
The benefits and drawbacks of small business franchising.
The role of social media in the success of small businesses.
The impact of government regulations on small businesses.
The importance of customer service in small business success.
The role of small businesses in economic growth and development.

How to Pick a Business Essay Topic That Stands Out

Follow these steps to choose an ideal topic for your business essay:

Step 1: Understand the Assignment Requirements Before selecting a topic, make sure you understand the assignment requirements. Consider the length, format, and scope of the essay to help guide your topic selection.

Step 2: Brainstorm Ideas Think about your own experiences, interests, and knowledge in the field of business. Brainstorm a list of potential topics that align with the assignment requirements.

Step 3: Research Current Business Trends Research current events, news articles, and emerging trends in the business world. Consider how these trends relate to the assignment requirements and incorporate them into your topic ideas.

Step 4: Narrow Down Your List Review your list of potential topics and identify the ones that stand out the most. Consider which topics you have the most knowledge and passion for, as well as which ones are the most unique.

Step 5: Conduct a Preliminary Search Before finalizing your topic, conduct a primary search to ensure there is enough information available to support your essay. Look for scholarly articles, books, and other sources that can help you develop your argument.

Step 6: Finalize Your Topic Based on your research and evaluation, select the topic that you are most confident and passionate about. Make sure your topic is specific, manageable, and aligns with the assignment requirements.

By following these steps, you can pick a business essay topic that showcases your knowledge and expertise in the field.

The Bottom Line!

Writing a business essay can be a tiring task, but it can also be a rewarding one. By choosing the right topic you can create an insightful essay that impresses your professor and earns you a top grade.

However, if you are short on time or need additional assistance, our Essay Writer AI is here to help!

Our essay writing service online can provide you with expert guidance and support to help you achieve academic success.

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Framing the fourth sector – dystopia or future contours?

Original Article
Open access
Published: 27 May 2024

Cite this article

You have full access to this open access article

Marisa R. Ferreira ORCID: orcid.org/0000-0003-4194-9127 1 ,
Vítor Braga ORCID: orcid.org/0000-0002-3644-3992 1 ,
María Isabel Sánchez-Hernández ORCID: orcid.org/0000-0002-6806-1606 2 &
Joana Gomes 3

Nowadays, society faces complex social, economic, and environmental problems which the traditional sectors of activity (public, private and third sector) are not able to solve alone. To respond to these challenges, their missions and strategies have been converging, leading to a phenomenon known as the blurring of boundaries between sectors. Together, they give rise to a new and promising sector in society: the fourth sector. The literature on this new sector is still scarce, even though its impact is already being felt all over the world. The concept of the fourth sector is in itself broad and clearly lacking defined borders. In addition, there are three currents in the literature that use this term with different meanings.

This paper aims to contribute to the theoretical knowledge on the fourth sector by clarifying its definition and framing its activity. A qualitative methodology was carried out by using the papers featuring the topic “fourth sector”, indexed to the Web of Science, to generate a textual corpus that led to a similarity analysis. Subsequently, written interviews were conducted with seven academic specialists on the fourth sector topic, selected through the snowball sampling method, to complete the data obtained through the literature review. These data were added to the initial textual corpus, and a new similarity analysis was generated. It is concluded that the fourth sector as a spectrum of hybrid organizations is currently the most accepted approach, and the existence of an activity that combines a business framework with a social purpose seems to be its main characteristic. So, the main implication is related with significant opportunities that have yet to be fully explored, considering the extensive rise of the fourth sector.

Avoid common mistakes on your manuscript.

1 Introduction

Traditionally, organizations are categorized into the public, private, and third sectors (Avidar, 2017 ; Carswell et al., 2012 ; Hyde, 2023 ), and have long shaped our collective landscape by reflecting the cultural patterns, values and norms of the society in which they emerged. Nevertheless, globalization, the shifts of technological advancement, and the growing complexities of contemporary societies have reshaped the narrative of organizational existence (Fourth Sector Network, 2009 ; Pires, 2017 ; Rask et al., 2020 ).

Nowadays, society faces complex problems, dispersed on a global scale (Carswell et al., 2012 ; Stötzer et al., 2020 ) of economic, social and environmental nature, such as corruption, global warming and even a pandemic crisis (Martins et al., 2021 ), not to mention a large disparity between rich and poor, and traditional sectors (public, private sector, and the third sector) by themselves are not able to respond to these challenges, forcing them to work together (Guerrero & Hansen, 2018 ; Howlett & Lejano, 2013 ). Increased awareness of social and environmental issues, and the desire of individuals and organizations to address these issues in a meaningful way have led to a shift in values, as more and more people prioritize the impact of their actions on others and the planet. Given their complexity, these deep and progressive changes in society imply new ways of thinking and acting, triggering the emergence of activities that do not fit into traditional sectors and constitute new organizational configurations (Sánchez-Hernández et al., 2021a , b ). At the same time, we now face a growing trend of migration to urban areas, which has led to increased demand for services and support, thus creating opportunities for organizations to address pressing social and environmental issues in urban settings. Several authors call this phenomenon the blurring of boundaries between traditional sectors (Avidar, 2017 ; Carswell et al., 2012 ; Fourth Sector Network, 2009 ; Sabeti, 2011 ).

In the public sector there has been a slimming down of the state, for sometimes we face the inability of governments to fully address social issues on their own, and other times we have smaller governments and the delegation of some responsibilities characteristic of the welfare state to third-sector entities (Laurett & Ferreira, 2018 ), with a concomitant reduction in funds, privatization and decentralization of services (Carswell et al., 2012 ). States intervene on a national scale, but social problems go beyond borders, are globalized and multicultural (Escobar & Gutiérrez, 2011 ). In the profitable sector, companies have adopted more socially responsible and sustainable stances to respond to the demands of their stakeholders who are attentive to their practices (Carswell et al., 2012 ). Third-sector organizations find themselves in an increasingly competitive environment, and have to respond to growing social problems with less state funding (Faulkner et al., 2023 ; Pärl et al., 2022 ). Thus, they are forced to turn their practices to the market to obtain alternative forms of financing (Song, 2022 ; Zhu & Sun, 2020 ). They increasingly use the strategy of creating networks of partners that allow them to obtain added value (Escobar & Gutiérrez, 2011 ). It is in the context of this convergence of missions from the various sectors that a new entity emerges, the so-called fourth sector (Fourth Sector Network, 2009 ; Sabeti, 2011 ). The fourth sector is a new and promising sector of society, marked by a dual purpose: to generate profit and social impact by using different strategies, such as intersectoral collaboration and hybrid organizations (HO) (Escobar & Gutiérrez, 2011 ). As it is a relatively recent phenomenon, the fourth sector remains shrouded in ambiguity, with definitions dispersed amidst a sparse landscape of literature. Therefore, it is clear that we need a more holistic and collaborative approach, and in this study, we start from the following research proposition: The fourth sector arises from the intersection of the three traditional sectors, and it is defined by pursuing social objectives but with profit-making purposes (Fig. 1 ). This work aims to clarify the definition and frame the scope of its activity, generating a theoretical contribution to the existing knowledge on the fourth sector and main related concepts.

The fourth sector as the intersection of traditional sectors. Source: Author’s creation, adapted from Sánchez-Hernández et al. ( 2021a )

2 Literature review

In broad terms, the fourth sector refers to a new type of organization/model that exists alongside the traditional three sectors of the economy — the public sector, the private sector, and the nonprofit sector —, and is characterized by its focus on social and environmental impact, rather than solely on profit (Rask et al., 2020 ). There are currently three main approaches (see Table 1 ) that use the designation fourth sector, despite having very different characteristics.

The first approach (Williams, 2002 , 2005 ) associates the fourth sector with informal volunteering (IV), also called one-on-one, which is distinct from that associated with third-sector organizations (Heley et al., 2022 ). It is characterized by a spontaneous movement of people towards their community.

The second approach, Hybrid Organizations (HO), is in line with our research proposition. It is the most devoted to organizations that do not purely belong to any traditional sector. It arises from the premise that today’s most significant social problems cannot be addressed without the participation of the three traditional sectors (Escobar & Gutiérrez, 2011 ; Sánchez-Hernández et al., 2021a , b ). It is in this proximity of missions from the various sectors that a new entity emerges, the so-called fourth sector. In this approach, it is defined as “a new protagonist in the socioeconomic sphere that results from the convergence of various sectors in organizations and business models that seek to respond to social and environmental problems through social innovation” (Escobar & Gutiérrez, 2011 , p33). In this approach, the fourth sector revitalizes the concept of the social economy (Ávila & Campos, 2018 ) by encompassing the traditional sectors (Rubio-Mozos et al., 2019 ). Under the hybrid business string (Zurbano et al., 2012 ), the identification of the fourth sector generally applies to one of the following alternatives:

i) Social organizations with economic results: Organizations that generate economic and social value in the market, such as social enterprises (Borzaga et al., 2020 ), but also traditional companies with aspirations that identify themselves as companies that go beyond classic CSR.

ii) New ways of doing business (from the point of view of positive social and environmental impact), and those entities in the public sphere that try to be more oriented to the specific needs of people, but also those that intend to innovate regarding the participation and involvement citizens in the co-creation of public services by using market methods (Sánchez-Hernández et al., 2021b ).

The third approach, called self-organized civic activism (SOCA), refers to civic movements spontaneously generated in the community that use new technologies and social networks (Raisio et al., 2019 ). According to Rask et al. ( 2018 ), its main characteristics are spontaneity, great dynamism, the absence of bureaucracies, a horizontal structure without hierarchies, and dissociation from formal organizations. The same author states that these movements are criticized for their potential risk, since these are initiatives based on goodwill, but lack knowledge and coordination.

According to Rask et al. ( 2018 ), these various approaches can be summarized to try to find an integrative perspective, by considering them as a growth regarding the level of organization and stability over time. The integrative definition is the following: “the fourth sector is an emerging field, composed of actors or actor’s groups whose foundational logic is not the representation of established interest, but rather, the idea of social cooperation through hybrid networking” (Rask et al., 2018 p.46).

To sum up, the fourth sector works in a spectrum of HO. At one end of the spectrum there are third-sector organizations with profitable activities, social enterprises at the center and, at the opposite end, companies whose activity has significant social impact. These organizations bear characteristics such as greater or lesser presence in the market, and different degrees of focus on social concerns (Fourth Sector Network, 2009 ). These HO have a dual purpose: on the one hand, they are economically viable and, on the other hand, their purpose goes beyond profit and seeks ethical and sustainable goals, as well as creating benefits through their activities for society as a whole and the planet (Rubio-Mozos et al., 2019 ). Sabeti ( 2011 ) summarizes some of these characteristics: having a social purpose, a business method, transparency, social and environmental responsibility and giving fair compensation to employees. These main arguments consider that can generate returns for investors and shareholders if they do not jeopardize their ability to act in favor of their mission. These hybrid entities combine the best that each of the traditional sectors has to offer, in order to respond to shared social objectives in a sustainable and lasting way, through social innovation (Avidar, 2017 ; Escobar & Gutiérrez, 2011 ; Sánchez-Hernández et al., 2021b ). Sabeti ( 2011 ) considers that these HO feature a new model of entrepreneurship, developed by entrepreneurs motivated by social causes, which are not exclusively profitable or non-profitable, and can be called “for benefit”, since they generate income, but prioritize the social mission, acting in a variety of areas, such as poverty, social exclusion, health, decent work, among others. In the fourth sector, initiatives can exist without a formal organizational structure, constituting themselves merely as “entities” that fill the empty spaces left by traditional sectors and also as forms of cooperative and networked functioning (Escobar & Gutiérrez, 2011 ).

The fourth sector can be considered a transition towards sustainable businesses by introducing social purpose into the strategic management line of organizations (Rubio-Mozos et al., 2019 ). To sum up, and according to the Ibero-American Secretariat General of the IE University, the fourth sector “is a complement, not a substitute, to the other sectors” (IASG, 2019 , p. 21) that works to achieve the Sustainable Development Goals (SDGs) by 2030. Consequently, sustainability is the heart of the emerging fourth sector. At this point, it is important to mention that it can be challenging to measure the performance and the impact of the fourth sector (Núñez-Barriopedro & Llombart Tárrega, 2021 ), as it may involve intangible outcomes, such as increased social cohesion or improved quality of life. As such, it is important for organizations in the fourth sector to be transparent about their impact measurement processes and to continuously strive to improve the quality and reliability of their data.

In general, the distinction between the third and fourth sectors lies in their fundamental purposes, organizational structures, and orientations towards profit and social impact. The third sector, often referred to as the nonprofit sector, comprises organizations that operate primarily to address social, environmental, or cultural needs, rather than to generate profit. These organizations, including charities, non-governmental organizations (NGOs), and community groups, typically rely on donations, grants, and volunteer efforts to sustain their operations (Stühlinger & Hersberger-Langloh, 2021 ). The third sector plays a crucial role in filling gaps left by government and business in addressing societal challenges and advocating for social change.

The fourth sector represents a novel paradigm that bridges the gap between traditional for-profit and nonprofit sectors by integrating social and environmental objectives into business models (Piedrahita et al., 2021 ). Fourth-sector organizations, which might be dubbed as social enterprises or impact-driven businesses, aim to generate revenue while simultaneously addressing social or environmental issues (Martins et al., 2021 ; Rask et al., 2020 ). They operate under a hybrid model that emphasizes both financial sustainability and positive social impact. The fourth sector encompasses a wide range of entities, including B Corporations (B Corps), social purpose corporations, and cooperatives, all of which prioritize the triple bottom line — people, planet, and profit.

While the third sector focuses primarily on addressing social needs through philanthropy and community service, the fourth sector represents a more integrated approach to social change by leveraging market mechanisms and entrepreneurial strategies. Both play vital roles in advancing social progress and addressing complex challenges, but they differ in their approaches to resource mobilization, governance structures, and models of social impact (Sanzo-Pérez et al., 2022 ; Zhu & Sun, 2020 ). As the boundaries between sectors continue to blur, understanding the distinctions and synergies between the third and fourth sectors is essential for developing effective strategies to address pressing global issues and promote sustainable development.

3 Methodology

We used an innovative approach by combining a very specific literature review with the opinion of experts on the topic via a similarity analysis. Our research is based on a qualitative methodology, using content analysis performed through the IRaMuTeQ software. Content analysis is a research method used in qualitative studies and encompasses different techniques to generate knowledge in a systematic and rigorous way, based on textual information generated during the investigation (White & Marsh, 2006 ). In the context of the IRaMuTeQ software, similarity analysis refers to the examination of similarities or patterns within textual data, particularly in qualitative analysis, such as text mining and content analysis (Camargo & Justo, 2013 ). The software employs various techniques for lexical analysis, including frequency counts, co-occurrence analysis, and concordance analysis; subsequently, similarity is measured and the software offers visualization tools to represent it graphically. The similarity analysis involves a method called Hierarchical Cluster Analysis (HCA), which we will use in our analysis, and the software arranges the data into a hierarchy of clusters based on their similarities. At each step of the process, the algorithm merges the two most similar clusters, until all data points are grouped into a single cluster.

A qualitative methodology combining content analysis and expert interviews can be well-suited to achieve the objective of contributing to the theoretical knowledge (Döringer, 2021 ) on the fourth sector by clarifying its definition and framing its activity, because (i) this allows exploring deeply into the content of papers and interviews, potentially uncovering nuances, patterns, and themes within the data that may not be apparent through quantitative methods; (ii) as a relatively new and evolving concept, the fourth sector requires an exploratory approach; (iii) by analyzing the content of relevant papers and conducting interviews with experts, we gain a deeper understanding of how the fourth sector is conceptualized, operationalized, and practiced in different contexts and settings, and this contextual understanding is crucial for framing the activity of the fourth sector within its socio-economic, political, and cultural contexts.

The selection of articles included in the sample is presented in Fig. 2 . At first, the Web of Science (WoS) database was used to search for the term “Fourth Sector”, resulting in a total of 31 results over the period from 1996 to 2023. Only scientific papers were included in the sample. After a brief reading, all those papers that did not correspond to the concept under study were excluded. This selection resulted in 13 papers, dated from 2011 to 2020, associated to the database through the areas of study of management, economics, sustainability, and public policies (Appendix 1 ). Finally, the abstracts of these papers were formatted in a document that constitutes the textual corpus, imported to the IRaMuTeQ program and subsequently analyzed. To understand which concepts stand out in the summaries of the literature analyzed and the relationship between them, a similarity analysis was carried out, the result of which can be seen in Appendix 2 .

Selection of articles included in the sample

Subsequently, written interviews were conducted, consisting of two open-answer questions to seven academic specialists regarding the definition of the fourth sector, its main characteristics, and what distinguishes it from more traditional sectors of activity, as well as a practical example of what that could be considered a fourth sector entity. These specialists were selected through the snowball sampling method to complete the data obtained through the literature review. Firstly, we identified two specialists and sent them emails because of their research proximity to this topic under study. We requested them to respond to our questions and to recommend a colleague who works closely on the topic. We ceased the identification of new specialists upon reaching saturation, meaning that we began to hear the same themes, patterns, or information repeatedly across the interviews. This indicated that the data collection process had sufficiently captured the range and depth of experiences or perspectives related to the research topic. We had 4 Portuguese and 3 Spanish experts, from the areas of economics (3), geography (2), social economy (1) and marketing (1), as we can see in Table 2 . These data were added to the initial textual corpus, and a new similarity analysis was generated (see Appendix 3 ); the insertion of the data regarding the experts’ interviews has caused some changes in the similarity analysis.

The data collected originated two similarity analysis. Similarity analysis A (Appendix 2 ) refers to the content of the abstracts of the papers included in the sample, and similarity analysis B (Appendix 3 ) cumulatively encompasses the textual data of the papers and the answers to the interviews carried out with experts on the field of the fourth sector. The interviews were completely transcribed and added to the software.

4.1 Similarity analysis A

The abstracts of the articles included in the analysis originated 3 clusters with 11 distinct related sections. The sections are potential thematic or conceptual grouping of textual data that identify patterns and /or relationships. Two of the clusters were equivalent to the previously identified theoretical frameworks (HO and IV), and the third one was devoted to the third sector (TS cluster). The number of occurrences for the same word ranged from 18 to 3.

1st) HO cluster, including most of the sections:

Section 1 – The central concept is the research term “fourth sector”, either because it is the most frequent (18 times), or because it has the most sections that are directly associated with overlapping (5 times in total). Associated with the concept “fourth sector”, there is the word “emergence” (4 times). Also directly associated with this are words that refer to the various traditional sectors of activity, namely “government”, “third sector” and “company”. The word “company” occurs a total of 16 times, and it is the central concept of Sect. 2, responsible for bridging the gap between Sect. 1 and several other Sects. (3, 8, 9, 10, 11). Less expressiveness is found for the concepts “government” and “third sector”, with 3 and 4 occurrences, respectively, thus occupying a secondary position within this section. Also noteworthy is the word “purpose” associated with the “fourth sector” concept.

Section 2 – The word “company” is very central, and we have the word “contribute” (7 occurrences) linked with “planet” (4); “person” (4) and “community” (3). Concepts related with sustainability concerns are “sustainability” (6) “sustainable development goals” (8) “corporate social responsibility” (4), and “sustainable strategic management model” (3) feature prominently in this section, and are shared with the adjacent Sects. 3 and 4.

Section 3 – Highlights the intersectoral relationship characteristic of one of the trends in the fourth sector. The most prominent concept is “business”, centrally positioned between the concepts “for-profit” (7) and “nonprofit” (5). The term “nonprofit” branches out into concepts such as “for-benefit” (4), “benefit corporation” (6), “structure” (8), “legal” (3) and “entrepreneur” (5). From the concept “for-profit”, words such as “environmental” (4), “social” (8) and “economy” (4) are linked through the word “combine”. This section highlights the dual purpose of the fourth sector to generate profit and social impact.

Sections 4 ,5 ,6 ,7 – These represent examples of fourth-sector initiatives, such as the protection of coral reefs (Cruz-Trinidad et al., 2011 ) and collaboration between universities, industry and technology in Saudi Arabia (Shin et al., 2012 ). As they are specific cases in the literature, the concepts that represent them have little prominence in the general panorama, and are notable for their small frequency and ramification.

2nd) TS cluster, including the following 3 sections:

Section 8 – Emerges as a transition section between the sections of empirical approach to the fourth sector (1, 2, 3) and Sects. 9 and 10, which feature theoretical content. As concepts of connection to the first group, words such as “sustainable development goals” (8) and “management” (5) can be highlighted, which branch out into theoretical concepts, such as “model” (12) and “academic” (5).

Sections 9 and 10 – These are theoretical sections, featuring “notion” (14) and “concept” (16) as central concepts.

3rd) IV cluster for one isolated section:

Section 11 – This is one of the most distant sections from Sect. 1. It does not share concepts or overlap with any other section. It is linked to Sect. 3 through the word “public” (10), which will branch out to the concept “policy” (14). At the far end appear concepts related to the definition of the fourth sector presented by Williams ( 2002 ), which refer to informal volunteering, namely “micro-volunteering” (6) and “volunteering” (4).

The HO cluster is the most important one. It should be noted that of the 3 traditional sectors of activity, the most referred to is the private sector, with a high frequency of words: “company” (16), “business” (10), “for-profit” (7), “corporate” (4), “corporate social responsibility” (4), and “private” (4), with a total of 45 references. Even so, the reference to the involvement of the three traditional sectors are clear, which, given the new dynamics of action, gives rise to the fourth sector. On the side of the public sector, we can find occurrences of several terms such as “policy” (13) “public” (8) and “government” (1), with a total of 22 references. Non-profit organizations are represented by terms such as “social economy” (9), “social” (10), “nonprofit” (5), “third sector” (4), in a total of 28 references.

4.2 Similarity analysis B

The insertion of data related to the interviews with experts in the previous textual corpus presents some remarkable modifications:

In similarity analysis A, there were 11 sections, while B is composed of 12. The term fourth sector lost some of its centrality, and now there are two distinct groups. Thus, the HO cluster involving the term “fourth sector” (Sect. 1) is spatially separated from a new cluster (HO business) involving the concept of “business” (3-a).

Section 3, whose most prominent terms is “business”, undergoes changes compared to the previous similarity analysis, and concepts that lacked great prominence in this section, gain greater preponderance in this new analysis, giving rise to 3 distinct and overlapping Sect. (3-a, 3-b, and 3-c). Section 3-c has as its central term the word “social”, and Sect. 3-b the word “for-profit”, which denotes that there is a subdivision of types of business, some pursuing a social purpose and others an exclusively economic purpose.

Section 4 in the first analysis ceases to exist as an autonomous section and the words that constitute it are integrated into Sect. 3, thus losing relevance. This was expected, as experts were informing about the topic but avoiding examples or specific practical evidence. These words were mostly related to a particular case study, having little impact on the overall picture.

Section 11 subdivides into Sect. 1-a and Sect. 1-b (a new cluster for the relationship between the public and the private sector, the PL-PR cluster). In addition, Sect. 1-a continues to encompass the definition of the fourth sector as informal volunteering. Section 11-b, which is the new PL-PR cluster, becomes the transition section between Sect. 1 “fourth sector” and Sect. 3-a “business”. The central words are “sector”, “public” and “private”, and the supporting word “integrate” also appears, coming from the concept “third sector” that appears at the far end of Sect. 1 “fourth sector”. This list of words once again suggests the intersectoral collaboration of the fourth sector.

The connection of Sect. 1 “fourth sector” to transition Sect. 1-b (“private” and “public”), and subsequently to section business, is the word “third sector”, suggesting that it is particularly this sector that makes the connection between everyone and enhances their collaboration in market initiatives.

5 Discussion

Analyzing the two similarity analyzes, it is possible to verify the prominence of terms such as “emergence”, defined as the emergence or becoming prominent, directly associated with the term “fourth sector” denotes the novelty that it constitutes.

One of the objectives of this research was to clarify the definition of the fourth sector, and the results obtained point to the majority trend in the scientific literature to use the term as a spectrum of hybrid organizations (HO). In the similarity analyses, concepts that could be associated with the fourth sector, such as self-organized civic activism (Rask et al., 2020 ), were not evident. Therefore, in the context of the fourth sector, civic activism underscores the idea of citizen-led efforts to drive social innovation and impact, thus blurring the lines between traditional sectors and fostering collaborative, community-driven solutions to complex problems, although this bottom-up approach was not clearly present in the similarity analyses.

The definition of the fourth sector as informal volunteering was mentioned in a single paper, and therefore is of little significance for the results, with only two associated terms — “micro-volunteering” (6) and “volunteering” (4). In these cases, the term fourth sector is used as a synonym for informal volunteering (Williams, 2002 , 2005 ), and, more recently, it has been used in the context of organizations that promote social good through business initiatives (Cuthill & Warburton, 2005 ). In this context, informal volunteering (individual-based help) is as prevalent as formal volunteering (group-based help), and is predominant among deprived populations, although the third-sector approach should be complemented by a fourth-sector approach that focuses on one-to-one aid, because while affluent populations engage more in voluntary groups for social reasons, lower-income groups rely heavily on one-to-one aid to improve their material circumstances (Williams, 2002 ). Nevertheless, the scarcity of more recent papers that support the definition of informal volunteering is quite evident. Therefore, the data obtained in this research corroborate the idea that the definition of the fourth sector as informal volunteering is in disuse.

The presence of terms related to the three traditional sectors of activity, which appear in various sections, related to each other and associated with the concept of fourth sector, are a contribution to the premise that the growing dimension and complexity of emerging socioeconomic problems greatly exceeds the capacity of organizations, and the public, private and social sectors alone are not able to generate adequate responses (Austin & Seitanidi, 2012 ). Thus, organizations from various sectors (public, private and social) are pressured to collaborate in multi-sector partnerships (MacDonald et al., 2019 ). However, the presence of terms such as “business” and “company” is obvious, which could suggest a special focus on the private sector. These terms are associated with words such as “for-benefit”, denoting the central role of HO in the fourth sector. Despite having a strong focus on the market, these are a new model of entrepreneurship, developed by entrepreneurs motivated by social causes — which are not exclusively profitable or non-profitable — and are called for-benefit, as they generate income and prioritize the social mission, acting in a variety of areas such as fighting against poverty, health, environment, among others (Sabeti, 2011 ). Therefore, the data are suggestive and present a fourth sector that does not fully overlap with the concept of multi-sector partnerships. In addition to the convergence of missions and planned joint action, the existence of profitable activity and focus on social problems seems to be essential for it to be considered an entity in the fourth sector. This same perspective is mentioned in the literature (Wilburn & Wilburn, 2014 ) when referring to the fourth sector as a new business model that enables a structure that helps (1) the expansion of third-sector organizations, (2) a profitable sector whose activity is intrinsically linked to social responsibility, and (3) entrepreneurs who intend to invest in businesses committed to transforming society. Despite this evidence, another explanation for the prominence of terms related to the profit sector is the fact that market-oriented organizations, such as the Benefit Corporation (Koehn & Hannigan, 2016 ), are more legally supported than others (e.g., networks and multisectoral partnerships), thus being easier to identify and study, and therefore resulting in a greater number of scientific papers.

The results found seem to suggest that the main role of the public sector in the fourth sector is the creation of policies and laws that regulate this sector. This focus on the “policy” concept may be due to the existence of three papers by the same author (Rubio-Mozos et al., 2019 , 2020a , b ) in a small sample. The authors advocate the need for a systemic approach, including governments, the academic community, the entities of the fourth sector and civil society. The proposed approach is called “4s SME’s engagement ecosystem”, which involves small and medium-sized companies in the fourth sector. The aim is to contribute to its development and the measurability of this “sustainable welfare economy”. Other authors corroborate this emphasis on the inexistence of basic policies for this sector. This trend has emerged organically, without a base structure to support it (Fourth Sector Network, 2009 ), and there is no environment prepared with adequate legislation, market regulation, accountability systems, among others, that are specific to this new sector of activity (Sabeti, 2011 ). The inexistence of these specificities will force entrepreneurs to fit into existing structures for other sectors, thus blurring their mission and objectives, increasing the bureaucracy and complexity of structures, and unnecessary expenditure of resources, resulting in a competitive disadvantage (Fourth Sector Network, 2009 ).

Economic, social and environmental sustainability were highlighted in the results obtained, and have been mentioned before (Ávila & Campos, 2018 ; Rubio-Mozos et al., 2019 ; Ventura, 2020 ). The fourth sector can catalyze society’s role in the pursuit of sustainability (Carswell et al., 2012 ), which is defined as “the development that seeks to respond to the needs of the present without compromising the capacity of future generations to respond to their own needs” (United Nations, 1987 ). Carswell et al. ( 2012 ) state that sustainability is triple bottom-line, requiring a balance between people, the planet and profit, and these same words were found in our similarity analyses. Although the two similarity analyses are relatively overlapping, there is something significant that differentiates them. There is a more marked separation between the “fourth sector” section and the “business” section, with the bridge being mediated by the term “third sector”, which will produce an island cluster, which includes the terms “public” and “private”. To note that the first similarity analysis was performed using international data, with papers from Europe, Asia, and America, while the second one includes data provided exclusively by Spanish and Portuguese specialists. As mentioned above, there is specific legislation at the international level that directly relates the fourth sector to the market, such as benefit corporations. However, this type of legislation does not exist in both countries, where the tradition of social causes is closely related to the third sector. Thus, it seems that, in Spain and Portugal, this fourth sector appears to be mediated by the third sector, which forms the bridge between the third and the public and private sectors. Thus, it seems that the second similarity analysis reflects the culture and legislation of both countries, in the sense that it gives greater prominence to the third sector as the main player in the emergence of the fourth sector. Two of the articles included in the sample (Cruz-Trinidad et al., 2011 ; Shin et al., 2012 ) refer to case studies that have little impact on the presented sections, even lacking associated concepts in similarity analysis B.

6 Conclusions and limitations

This study suggests that both the literature review and the opinions of experts converge to affirm that the definition of the fourth sector as a spectrum of hybrid nature organizations is the most accepted approach on the topic. The definition of the fourth sector as voluntary actions seems to be currently out of favor. Finally, there is no clear evidence of the association of the fourth sector with any kind of civic activism.

The results obtained corroborate the fourth sector as an emerging sector made up of actors from the three traditional sectors (public, private and third sector) that collaborate closely with each other. The focus on the business, especially from the experts’ side, is evident, and this practice seems to be the main factor that defines belonging to this sector. However, profit is not an objective in itself, as there must be a social purpose arising from the activity. The data obtained suggest that the main contribution of the public sector to the fourth sector is the creation of policies that legally frame its activity.

The widespread emergence of the fourth sector offers great potential that still remains largely untapped. Contrary to the American model, social enterprise in Europe and neighboring nations arises primarily from ingrained organizational structures and values intrinsic to European societies (Borzaga et al., 2020 ; LaVoi & Haley, 2021 ). These values encompass solidarity, self-help, participation, and the pursuit of inclusive, sustainable growth. Consequently, social enterprise thrives as a collective endeavor, embodying a communal entrepreneurial spirit. Many EU Member States exhibit imbalanced ecosystems, often neglecting critical components, such as capacity-building, networking, and cooperation. Therefore, a holistic ecosystem must prioritize improving public procurement processes (Borzaga et al., 2020 ).

The concept of sustainability closely intersects with the fourth sector, which represents a hybrid sector that blend elements of the public, private, and non-profit sectors. The SDGs established by the United Nations provide a framework for addressing global challenges, such as poverty, inequality, and climate change. Achieving the SDGs requires the active participation of various sectors, including government, civil society, and the private sector, namely the emerging fourth sector. Therefore, in this context, the fourth sector plays a crucial role in advancing sustainable development by integrating social, environmental, and economic considerations into its practices. Organizations operating within the fourth sector strive to create positive impact across multiple dimensions while ensuring long-term viability and resilience (IASG, 2019 ).

This study was delimited by specific keywords to guide the research, and therefore this targeted approach may not capture the totality of the scholarly discourse within this field. The main difficulties of our research were the limited number of papers available in the WoS database at the time of survey, which weakens the robustness of the results obtained, and consequently of the conclusions presented. We can also mention limitations related to the interviews, like the existence of preconceptions that might have influenced the answers, as well as the social desirability bias, where interviewees may have given answers that they believe are socially acceptable rather than reflecting their true thoughts or experiences.

However, the scarcity of research papers dedicated to the fourth sector justifies the analysis and makes this article a valuable contribution to shed light on this emerging field. We understand that having done the research only in the WoS database, despite its extensive citation analysis tools, has some limitations that might affect the comprehensiveness of the literature available on a given topic. Therefore, future research might include other databases and other classification criteria to ensure a more comprehensive and wide coverage.

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Marisa R. Ferreira and Vítor Braga gratefully acknowledges financial support from FCT- Fundação para a Ciência e Tecnologia (Portugal), national funding through project UIDB/04728/2020.

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The new book of jobs: How India Inc. is navigating through a changing work environment

Byline: Krishna Gopalan
Producer: Arnav Das Sharma

Companies are scrambling to meet the demands of the disruptive post-pandemic business environment. They are creating new functions even as they confront a huge change in the composition of the workforce

For the past two years, Hindustan Unilever Ltd (HUL) has gone to business schools specifically looking for graduates inclined towards digital commerce. That’s nothing unusual, except that traditional sales and marketing functions have made way for new job descriptions. It indicates a changing India where many opportunities have forced companies regardless of size to look for talent but with a difference, and this comes forth in the BT -Taggd survey of The Best Companies to Work For in India this year.

Just what is the change? Today’s talent—and there’s plenty of that in India—is looking for a new set of challenges and new-age roles. For them, a sales and marketing job is passé. For instance, HUL has created the position of e-commerce manager. Large FMCG companies see around 10% of their revenues in the digital age coming from e-commerce channels, and even the most conservative estimates suggest the number could touch 30% by the end of the decade. Besides, every company recognises the need to have a closer look at their business. That has led to the creation of new positions, with clear job descriptions.

“All this is in line with the change we are bringing about in each of our businesses,” says Anuradha Razdan, Executive Director (HR) and CHRO, HUL & Unilever South Asia.

This process will test the mettle of the best companies as the workforce gets reoriented across levels.

“ At senior management levels, we are seeing a greater focus on reskilling with a robust understanding of tech. It is pushing them to focus a lot more on cognitive, EQ and leadership skills ” DEEPTI SAGAR Chief People and Experience Officer Deloitte India

Redefining Roles

This change is recent. Around a decade ago, any large organisation had a defined set of positions. There was a CFO, a CHRO, a CMO, a COO and, of course, a CEO. “Today, a Chief Data Officer or a Chief Information Security Officer (CISO) are realities,” says Aditya Narayan Mishra, MD & CEO of recruitment and staffing services firm CIEL HR. Apart from talent wanting new-age roles, they also see the need to specialise in one area, he adds.

Earlier, only a CTO would suffice; but in several companies there is a need for a CISO as well. “In a lot of industries, data protection is an important piece and a part of the overall boardroom agenda. A generalist may not fit the bill here in an age of such a specialised need,” explains Mishra.

Speaking of new-age sectors—such as companies in the tech space—finance is a key role. Mishra points out that these firms tend to have a Chief Accounting Officer as well as a CFO. “For these companies, fundraising is a big part of their overall business. A CFO may be very good with a treasury function, but this is a very different requirement.”

Likewise, a CHRO is now complemented by a Chief Talent Officer, who looks after the employer brand and areas related to talent management but will not oversee, say, issues related to payroll.

Digitisation has expedited the extent to which technology dominates business functions in a post-pandemic world. The consensus among experts is that what would have taken a decade to change, has happened in less than two years. The thrust on AI and its impact on our lives has been profound and the stage is set for an extremely dynamic future.

Deepti Sagar, Chief People and Experience Officer at consultancy Deloitte India, says job profiles across levels at her organisation are being driven by technological disruptions, economic advances, and a progressive business ecosystem.

“There are also macro trends like a heightened focus on ESG and an increasing proportion of Gen Z at work. All this means there is a significant shift in client demands and requirements from professional services,” she says. The result of this is a greater focus on newer job families and skills. “In the last 12-18 months, this has further been accelerated by the advent of Gen AI.”

“ For these [new-age tech] companies, fundraising is a big part of their overall business. A CFO may be very good with a treasury function, but this is a very different requirement ” ADITYA NARAYAN MISHRA MD & CEO CIEL HR

Time to Reorient

But one can’t just bet on tech disruption. For instance, in many industries it was believed that technology would supersede (and even replace) the conventional ways of doing business. But that has not been the case. For example, edtech flourished at one point, but once classrooms were back in vogue, its popularity waned.

Mishra points out that large conglomerates like the Tata group, Reliance Industries, Aditya Birla Group, and the likes of Asian Paints and HUL struck up a healthy combination of both new-age and conventional methods of doing business. “The Tatas, for instance, launched Cliq and Neu, and even reoriented some of their older businesses like automobiles. However, it has been marked by judiciousness in investment at all levels.”

A new-age organisation needs people across levels to have a better understanding of the business. Bhavishya Sharma, MD of Athena Executive Search & Consulting, says a CFO, for instance, must necessarily grasp what social media is all about and its impact, without operating in a silo. The new B2C companies run on these fundamentals and that, over time, helps the more conventional businesses become more agile, he explains.

“A large FMCG major today needs to look at its channel of distribution from the perspective of adding digitisation attributes. The reorientation is not only for the freshers off campus, but a reskilling across levels is the big theme.” He speaks of a large consumer company that his organisation works with where the requirement was to have a gamification of training for its blue-collar workers. “That was never the case before and it is an indication of how much things have changed.”

Deloitte’s Sagar highlights how at the entry level, jobs related to technology, AI, creativity, and sustainability are in demand. “At the mid- and senior management [levels], we are witnessing a greater focus on reskilling with a robust understanding of technology. It is pushing them to focus a lot more on cognitive, EQ (emotional quotient) and leadership skills to [get the] best out of the new generation and hone future leaders in an era of AI,” she explains.

For an organisation, a lot depends on where it is today and the industry it is in. While bifurcation of functions is very much the “done thing” today, a big development can radically change how the business is viewed. In that context, Sharma of Athena cites the example of, say, a conventional company on a steady growth path, being acquired by a private equity fund. “Suddenly, areas like cloud service and security become very critical. The company starts to invest in that and the composition of the workforce can look very different,” he says.

While the workforce is changing, where are we in terms of the change cycle? Ronesh Puri, MD of executive search firm Executive Access, says this is the beginning of a phase of much bigger changes. “The opportunities lie in the throes of multiple changes. In the next five years, we will see a transformation across businesses that will be more profound than what we saw over the last two decades.”

That will happen because India is getting a lot of global attention and it being the fastest-growing major economy makes for a heady combination, he says. “The quantum of action has increased manifold across industries and we are still in second gear. For companies, the bet is on getting it right tomorrow and to make that possible, it needs to lay the foundation today.”

Puri says the need is for transformational leaders who have a clear vision of the future. “Companies are looking for talent with adaptability, humility, maturity, and confidence. The focus is on execution skills, people skills and the ability to look at the larger picture.” Much as strategy will be a key ingredient, a sound understanding of the market is necessary.

For recruiters, the FMCG sector was a happy hunting ground for talent. Executives from this space could easily move to industries like telecommunications and insurance, given their experience in sales, marketing and distribution. Sharma says this will not work anymore. People position themselves these days as growth experts with experience across sectors, he says. “Be it consumer or automobiles, they have the confidence to pull it off,” says Sharma. That is an indication of how things have changed and are likely to change in the times to come.

“ Companies are looking for talent with adaptability, humility, maturity, and confidence. The focus is on execution skills, people skills and the ability to look at the larger picture ” Ronesh Puri Managing Director Executive Access

Puri of Executive Access says the need for premium talent will always remain, and those candidates demonstrating a hunger for growth will command a higher premium. “Nomenclatures will change when it comes to job titles but the person who can effect change is the one you want to recruit,” he says. In the middle of this disruption, employees who have been with an organisation for a long time may not gain substantially if they are unable to be a part of the change, adds Puri. In the coming years, the ability to manage change will command even more premium. “New blood coming in means challenging the status quo. A leaner and hungrier organisation with a constant focus on reorientation is what we are going to see for many years.”

As a result of this transformation, functions like data entry and analytics-led jobs have already been replaced, says Deloitte’s Sagar. “We see a lot more demand for roles like tech architecture, green UI/UX, cloud engineering, business experience, and insights management,” she says. “For example, clients can deploy Gen AI to design a new-age intuitive dashboard but would need help from partners like us for deriving real-time insights and driving a value-accretive call to action.” It means her clients need to be served across the end-to-end transformation cycle as opposed to just “advise, implement or operate cycles”.

These days, roles and job responsibilities are being aligned with global requirements specifically in the context where a sizeable portion of the tech delivery for global clients takes place out of India. “There could be minor variations to suit the local market, but overall, new-age job families and skills are aligned with global changes,” she says.

That only demonstrates how much India Inc. needs to do to get the best out of its talent. But to do that, companies themselves need to continuously go through the process of reorientation. There is no letting up on that.

In the pages that follow, read about how companies are coping with these trends.

UI Developer : Pankaj Negi Creative Producer : Raj Verma Illustrations : Anirban Ghosh

The Future of the Global Business Environment Essay

Introduction, the future of the global business environment, information exchange in business, universalism and developments and business environment, financial institutions and business environment, reference list.

In the past as Albrecht & Sack (2010) point out businesses have relied institutional information like accounting to make choices pertaining the growth of a business organization. Traditionally, information would be compiled and analyzed to make a report that would form a basis for decision making. Before the decision was concluded and implemented the business organization consulted expertise for accurate translation of the reports.

This procedure was cumbersome and costly. Besides challenges with the cost and time, obtaining information was difficult for shareholders. The businesses also had to keep up with the competition posed by other players (p. 5).

Ferguson in the first episode Dreams of Avarice of the video series The Ascent of Money reveals that the historical events that have taken place in relation to money are of relevance to understanding the global business environment in the future. He highlights practices that have been used in the past, and are being used and those likely to be used in the future.

Practices such as borrowing and lending of finances, how it grew from shylocks and borrowing to bank loans which led to the credit cards. This essay will discuss the future of global business environment using the first episode dreams of avarice.

The future of global business environment is changing to technological advancement. Information storage and retrieval are advantages that come with the use computerized systems in banking.

The information is also made easily accessible for processing of information and there are fewer error experienced as would have been with paperwork. The cost is remarkably low. It relieves the shareholders of large sums that would be used obtain data.

Exchange of information has become easy as digitalized devices have been made affordable to citizens. In addition there are computer programs designed specifically to meet the needs of banking and therefore data presentation as well as transmission is conducted in a straightforward manner.

The use of credit facilities by citizens is an example. The credit cards are used to pay for services or goods on credit. The card bears information about the client’s bank details. During the transaction, information is exchanged, the card is authenticated and then the client is able to purchase goods and services.

The future of the global business environment is universal as Albrecht & Sack (2010 p. 5) indicates. The inaccessible parts of the world are slowly being made reachable through the developments in infrastructure. Roads are being built.

In the past the wars that took place in the world cause major damages to infrastructure and crippled businesses. As a result banking institutions were closed. This is revealed in the dreams of avarice because as it portrays, every war that happened in the world has affected the finances of institutions. Some gain while others loose.

Developments and universalism has made it possible for people to access both imported and locally produced goods in localities. People can pay overseas products recognized universal credit cards.

Into the bargain, developments in transport system have contributed to the completion of companies to sell their product to possible consumers. The competition is going to be more advanced because recent developments make availability of information accessible to those who need it and those who do not.

The banking system is not immune to this competition and the free flow of information. The financial institution whether private or state owned will fight to dominate the consumer market as evident in Ferguson dreams of avarice.

Competitors have information about other financial institution such that the slightest changes would be detected immediately and measures of correcting the alteration be employed within the shortest period possible.

The global business environment is dominated by the power that also controls the economy. The dream of avarice shows them that power is concentrated among few financial institutions that set the pace for the rest. To improve the financial income, an institution can borrow and expand its range of services to improve on the income. Borrowing is therefore seen as an inevitable to realize the dream of being a millionaire.

The powerful financial institutions set the ladder for competition so high so that they maintain their superiority. The borrowing firm must conform to the laid down instructions of the company that lends as it has always been. The powerful institutions led to gain more revenue as the get interests from the lending.

The client’s needs are taken as the priority in organization. The goals and objectives of the company major on customer satisfaction. In order to make huge profits, the organizations must meet the client’s needs adequately, efficiently and effectively. For instance, client’s instant solutions and the credit card are widely used.

They can purchase utilities and pay for them later. In this case, the client will use their credit card to purchase goods and services on credit and pay later. The credit is given without collateral. Credits are given on the assumption that the client will pay. The process involved in paperwork on borrowing and time are eliminated as the credit card brings a lot of convenience.

The future of the globalised business environment will have fewer people trained in the financial accounting as new software being used has replaced them. Thus there is going to be few experts whose main task will be to invent computer software that can be used to for accounting and financing.

Using their expertise they can make large sums of money after they establish their business. The dreams of having a lot of money is the driving force of many and therefore people are determined to make money at the slightest opportunity.

Share holders will invest only in the dominant institution as they are assured of making revenue if they invest in organizations that have the power. This is because over time business theories that have been used in the past have become outdated and investors would wish to make millions by investing with those who dictate the market (Albrecht & Sack, 2010, p. 7).

In future, the banking industry is likely to modify its strategy in order to make use of short term opportunities. These opportunities last within a specific period favored by certain conditions and the organizations can make a lot of money. This environment requires administrators who make accurate choices within the shortest period possible. Decisions made consider the option that will lead to maximum benefits in order to gain the millions.

It is possible for other financial institutions to emerge. They bring with them new innovative of ideas making the competition steeper. The new companies meet the wants of the customer as they use available information as well as research to come up with the new ideas.

The existing companies modify their services not to lose clients. The main purpose of creating other institutions is to make services available to consumers and get revenue in the competition. Competition benefits the client because they receive quality goods and services. For instance credit facilities enable clients to expand their businesses.

The future global business environment will require experts who are conversant with the modern systems of business. Accordingly, new careers will emerge. They will be capable of working in a dynamic and changing world that is full of contest. For this reason, they will be responsible of helping the organization survive from unpredictable market trends. These risks will require specialized business deals like contracts.

In future technology will be much advanced. New software’s that are created after a short period are likely to be more superior. As already observed, technology has reduced the bulkiness that was experienced during storage of data. In the days to come, data will be stored in storage devices that are small in size offered by banks become outdated within a short time (Albrecht & Sack, 2010, p. 9).

Employees will be recruited for shorter contract in the future global business environment. The competition in the markets make product last for a short time. Workers thereby live with job insecurities because projects taken on contracts can only be extended only if they are relevant in the time and bring income.

According to Albrecht & Sack (2010) risks in the globalised business environment can be a used in a business to be successful. The important thing is to be able to manage the risk. The risks are evident in contracts that are made without certainties of returns as well as the credit facilities given to clients (p. 9).

The future global business environment will have different mechanisms of administration and strict controls in the finances. The traditional budgeting process and the procedures used making future plans will be abandoned. This is due to the nature of the market which is constantly changing.

To be able to maximize on profits, the organization must make the arrangement for raising capital for a new project flexible. This is because delays in allocation of resources of a certain service might lead to loss of clients and loss of profit.

Products such as bank statements have been replaced by technology and financial institutions must quickly change to the use of technology to give statements online like other banks.

Consequently, the bureaucracy in organizations will be faced out as devolution in management is being adopted in the global environment. Therefore decision making and implementing changes will be made in time. Furthermore, management information will be available to more employees.

The dreams of avarice have always guided the economic actions of financial institutions. Over time people have formed revolutions and even gone to war with a motive to accumulate wealth. As an initiative to develop institutions and individuals have borrowed money to expand and increase their wealth. In the modern global business environment there are changes that will lead a global economy.

The future will be dominated by the use of technology to make it possible to acquire money easily. There are also short term contracts that capitalize on opportunities in the dynamic environment to make profits. Consequently, experts with understanding about the dynamic environment will be used to make quick and accurate decisions.

Albrecht, W. S & Sack, R. J. (2010). Accounting education series. Accounting Education: Charting the course through a perilous future, 16 chapters 2. Retrieved from: < http://aaahq.org/ >

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A business environment is all the components that affect a business. These include both internal factors, like employees and resources, and external factors, like customers and markets. Each of these contributes to a company's working environment and can influence how the business functions.
What is Business Environment?
The word 'business environment' indicates the aggregate total of all people, organisations and other forces that are outside the power of industry but that may affect its production. According to an anonymous writer- "Just like the universe, withhold from it the subset that describes the system and the rest is environment".
The Business Environment
Introduction. Business environment refers "to a set of political, economic, social, technological, environmental and legal (PESTEL) forces that are largely outside the control and influence of a business and that can potentially have both a positive and negative impact on the business" (Varian,2003,p 4). Today's world is a rapidly ...
An Introduction To Business Environment Business Essay
An Introduction To Business Environment Business Essay. Business environment may be distinct as the set of external and internal factors which affect the decision of business. We can split business environment into two parts. The Micro Environment of Business are powers which are extremely interrelated with company and company can direct these ...
(PDF) Essays on Business Environment and Firm Performance
Abstract and Figures. Firm performance is central to the economic growth of developing economies. However, it is affected by the business environments in which a firm operates. These business ...
Business Environment Essay
Business environment really affects the business it may be form role in the betterment of business or in the damaging the business. The term 'business environment' means external forces, factors that are not in the control of the business and they effect the functions…. 997 Words. 4 Pages. Improved Essays.
Global business environment
The business environment is a vital factor to take into consideration in an examination. The marketing environment of a business is made up of the macro-environment, the internal environment, and the micro-environment. PEST analysis is an scrutiny on the various factors that influence the setting up and running of any business organization.
150+ Competitive Business Essay Topics For Students
Brainstorm a list of potential topics that align with the assignment requirements. Step 3: Research Current Business Trends. Research current events, news articles, and emerging trends in the business world. Consider how these trends relate to the assignment requirements and incorporate them into your topic ideas.
Essay on Business (3000 Words): Models, Strategies & Risks
CSR stands for Corporate Social Responsibility. It is a business approach that involves companies taking responsibility for their impact on society, both environmentally and socially. 1. Environmental Sustainability: Implementing sustainable sourcing and production techniques, cutting carbon emissions, and implementing eco-friendly strategies.
Framing the fourth sector
In broad terms, the fourth sector refers to a new type of organization/model that exists alongside the traditional three sectors of the economy — the public sector, the private sector, and the nonprofit sector —, and is characterized by its focus on social and environmental impact, rather than solely on profit (Rask et al., 2020).There are currently three main approaches (see Table 1) that ...
The new book of jobs: How India Inc. is navigating ...
Companies are scrambling to meet the demands of the disruptive post-pandemic business environment. They are creating new functions even as they confront a huge change in the composition of the ...
The Future of the Global Business Environment Essay
This essay will discuss the future of global business environment using the first episode dreams of avarice. The future of the global business environment. The future of global business environment is changing to technological advancement. Information storage and retrieval are advantages that come with the use computerized systems in banking.
Novelis IPO: US subsidiary of Hindalco Industries declares price band
Recently, Novelis filed papers with the US securities regulator, the Securities and Exchange Commission, for its proposed IPO. At present, Hindalco owns 100 per cent of Novelis through A V Minerals.

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Business Environment – Definition, Components, & Features

What Is Business Environment?

Components Of Business Environment

Internal Environment

External Environment

Micro Environment

Macro Environment: PESTLE

Importance of Business Environment

Features Of Business Environment

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1.2 Understanding the Business Environment

Economic Influences

Political and Legal Influences

Demographic Factors

Social Factors

Managing Change

Concept Check

Understanding Economic Systems and Business

Economic Influences

Political and Legal Influences

Demographic Factors

Social Factors

Managing Change

Key Takeaways

How to Write a Business Essay for Impactful Communication and Analysis

What Is a Business Essay

How to Write an Introduction for a Business Essay

Are You a Business Student with a Hectic Schedule?

Business Essay Introduction Example

How to Write a Business Essay

Analyze the Prompt

Think of a Thesis Statement

Create an Outline

Provide Topic Background

Write the Main Body

Write a Conclusion

Add a Bibliography

Edit and Proofread

Choose the Writing Format

Business Essay Example

Final Considerations

Writing Business Essays Doesn’t Work for You?

How Many Paragraphs Does a Business Essay Have?

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What is Business Environment?

Importance of Business Environment:

Features of Business Environment:

Why It is Important for Business Enterprises to Understand Their Environment?

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