Challenges of the micro environment Business Studies Grade 11

Micro (external) environment – small forces within a company that influence its ability to serve its customers. Internal environment – can control, but cannot influence the external environment. Macro (external) environment – ​​larger social forces that influence the micro environment.

Types of Challenges of the Micro Environment Business Studies Grade 11

Difficult employees 

• Difficult employees may have a negative attitude on new employees.
• They need a lot of supervision to complete their tasks satisfactory.
• Difficult employees can do harm to the enterprise image if they say negative things about the business.

Difficult Employees Examples:

• Example 1: A retail store where employees are resistant to change, affecting team morale.
• Example 2: A small café where a senior employee is reluctant to follow new health protocols.
• Example 3: A tech startup where a key developer requires constant oversight, slowing down project timelines.

Lack of vision and mission statement 

• Lack of vision and mission statement will hamper meaningful guidance and leadership to employees.
• When there is no mission the business will lack focus/direction and single long term objective.

Lack of Vision and Mission Statement Examples (‘VML’):

• Example 1: A local bakery that lacks a clear business direction.
• Example 2: A community library that operates without a defined mission, leading to inconsistent service.
• Example 3: An independent clothing store without a clear vision, struggling to establish its brand.

Lack of adequate managerial skills 

• Lack of adequate managerial skills will result in the business not achieving its objectives.
• Managers may not be able to provide meaningful guidance and leadership to employees.
• Managers have different styles of managing and leading and this can be the source of enormous conflict with other managers and with staff.
• Ineffective management can affect the productivity and profitability of a business.

Ineffective Management Examples:

• Example 1: A South African restaurant where poor management led to high staff turnover.
• Example 2: A local hardware store that failed to adapt to market changes due to ineffective leadership.
• Example 3: A small IT company in Johannesburg facing client dissatisfaction due to poor project management.

The impact of unions 

• Trade unions may create tension between management and employees.
• Businesses may not be able to meet the demands of the trade unions.
• Once employees have a grievance against their employers relating to payments/workers’ rights/work conditions they will declare an industrial dispute.

Impact of Unions Examples:

• Example 1: Mining Industry: In South Africa’s mining sector, unions have a strong presence. They advocate for workers’ rights and better working conditions. However, their activities can sometimes lead to operational disruptions or increased labor costs for mining companies.
• Example 2: Automotive Industry: Unions in the automotive sector have been known to negotiate for higher wages and better benefits. While they play a crucial role in protecting workers’ rights, their demands can sometimes lead to strained relations with management and affect production schedules.
• Example 3: Public Sector: In the public sector, unions representing employees in government services, like healthcare and education, can significantly influence government policies and labor practices. Their actions can have a direct impact on public service delivery and budget allocations.

Strikes and go-slows 

• Strikes and go-slows may affect the business negatively as it cannot meet its expected units of production.
• Employees may not report to work due to a complete shutdown strike.
• Employees may report to work but work slowly so that the business cannot meet its targets due to go-slows.

Examples for Strikes and go-slows

1. Strikes:
   • Example 1: National Transport Strike: A strike in the national transport sector, such as by bus or train operators, can cause widespread disruption, impacting daily commuting and logistics across the country.
   • Example 2: University Staff Strike: Strikes by university staff, including lecturers and administrative personnel, can lead to the suspension of classes, affecting students’ academic progress.
   • Example 3: Healthcare Workers Strike: Strikes by healthcare workers in hospitals can critically affect patient care and emergency services, highlighting the need for effective negotiation and conflict resolution in essential services.
2. Go-slows:
   • Example 1: Port Operations: Go-slows at major ports, where workers intentionally slow down operations due to grievances, can lead to significant delays in importing and exporting goods, affecting the national economy.
   • Example 2: Municipal Services: Go-slows by municipal workers, responsible for services like waste collection and water supply, can lead to public health concerns and general inconvenience for residents.
   • Example 3: Manufacturing Sector: In the manufacturing sector, go-slows can result in reduced production output, delayed order fulfillment, and financial losses, affecting the business’s bottom line and market reputation.

Downloadable Notes on Challenges of the Micro Environment for Grade 11 Business Studies

• Gr-11-Business-Studies-3-in-1-Extracts
• Term-1-notes-compilation-1-6
• 2023-Business-Studies-Gr11-Workbk