The Role of The Environment in Business Success

Success of a business is largely dependent on the managers appointed by the companies to ensure business objectives are met and in order to achieve this, they need to be aware of the environment in which the business is operating as unless they know the operating environment and the risk and challenge it poses, they will not be prepared to adapt to the changes required to manage the business operations successfully. These changes could be internal like business culture or location which is at the discretion or control of the manager or may be external such as social influence which is usually outside the control of a business manager.

Business culture, also known as corporate culture refers to the beliefs and values and influences the way employers and employees interact within a business. In order for a business to thrive, they should be able to translate all their values and beliefs into actions. An effective business culture is one that is practiced and acted upon by management and employees alike and provides a conducive environment for employees to perform their job in an optimal way, allowing to meet the business’s purpose. It is also important that the managers and employees embrace change as it provides them with the opportunity to satisfy consumer needs better than its competition. For example, Aldi, a private retailer, held onto the Canstar Blue Most Satisfied Customers Award for 2019 because of its value for money, innovative weekly special Buys and Super Savers for the seventh consecutive year, beating its competitors, Woolworths and Coles in overall satisfaction, Aldi was also the only retailer to receive five stars. Aldi has been working hard to improve the quality of its products and the freshness of its fruits, vegetables and meat. This indicates that the managers and employers, when given the opportunity or when they experience change, are able to make positive changes to their products to meet consumer demands and understand and deliver better than their competition. Another example is of Kmart, an Australian chain of discount retail stores that has beaten its rivals, Target and Big W in consumer satisfaction according to Roy Morgan. Kmart provides a variety of products with a good quality at lower prices, making it a favourite with Australian shoppers. Over the last five years, Kmart has seen an increase in sales of 9.4% whereas for the comparative period, Big W decreased by 2.2% and Target has declined by 4.1%. This implies that Kmart has a successful business culture in which employers and employees make sure that the company’s primary goals are being achieved by keeping pace with the requirements of the Australian customer.

Social influence refers to the factors of the society, including beliefs and values which affect consumer trends and spending habits. Some managers and the business they are representing may be very quick in responding to these changes while some may take more time to react to the social changes. Businesses involved in manufacturing or clothing are easily affected by the social changes as the consumers’ belief and needs are constantly changing. For instance, a current example of a social influence is the Covid-19 outbreak which is severely impacting the businesses and wreaking havoc on the economy. As the virus spreads worldwide, this has created panic and led to a decrease in consumer activity in areas such as cinema halls and travel. Qantas, one of the leading airlines is now reducing the number of flights, replacing larger planes by smaller planes and all together suspending flights to some of the worst affected areas by the outbreak, all with the intent to control the costs, keep people in jobs and keep the airlines operational. The managers of the companies have demonstrated good understanding of the business environment and have positively responded to the outbreak by taking these decisions to manage through the uncertain period. Another example is the environmental trends. As the world is impacted by climate change, people are taking more action by starting campaigns and holding marches to raise awareness and urge the governments and organisations to take action before it is too late. Woolworths, an Australian supermarket and retail giant, decided to ban all single use plastic bags in 2018 to help in contributing to improving the environment and promoting a greener future. There was a call of action to these supermarkets to lead this change and managers of Woolworths acknowledged by supporting this trend and took action to implement this ban, demonstrating the leadership required to promote the cause and manage the change. This was a decision that had a positive impact on the environment as well as the business itself.

To conclude, it can be seen that an environment in which the business operates had an important bearing on the success of the business. If the managers of the business are aware of the challenges and risks faced by the business due to the environment or social influences like changing customer trends,and they are well aware of these changes, managers will be better prepared to make informed decisions to facilitate the success of the business.