Business organizations exist in an environment that is becoming increasingly complex and competitive. The firm in its business environment is essentially similar to any living organism in the natural environment – survival and prosperity come to those that are best able to adapt to their environment. This book explores the complexity of forces that make up the business environment, and the approaches used by managers to read their environment and to respond to change in it.

The book is structured in five parts. The first part provides contexts by analysing the general nature of the business environment. The key elements and forces in the environment are discussed within a systems framework.

In the second part, we focus on the external environment and explore in more detail the broad macro- environmental trends and forces introduced in Part 1. Part 2 begins with a review of the political environment. The social, technological and legal environments are explored in subsequent chapters. Dividing the business environment into a number of distinct areas inevitably involves some fairly arbitrary boundaries and the chapters in this part continually seek to provide links to other chapters.

Part 3 switches the focus of attention inward by looking at how organizations cope with external change. The aim here is to understand the internal factors that can facilitate or inhibit response to a changing external environment. A review is made of the different types of organization that exist in the business environment, their objectives and internal processes. Part 3 concludes with a review of the increasingly important topic of the social responsibilities of business and the ecological impacts and responsibilities of business.

Part 4 focuses on markets, which are a means through which organizations satisfy customers’ needs. Markets provide signals that should channel an organization’s resources to serve groups that present them with the greatest opportunities. We begin this part with a discussion of the economic environment of business organizations, first at the micro level of market competition between firms and, second, at the macro level of national economic policy. Basic principles of micro- and macroeconomics are introduced. With the increasing globalization of business, a chapter on firms’ international environment sets markets in this broader context.

The final part returns to a more holistic perspective of the business environment. In this part we look at methods of analysing a complex environment and making decisions about future business strategy. Great attention is given to the role of information gathering, data analysis and the ways in which change can be implemented. Further integration of the business environment is provided through five case studies.

This sixth edition has itself responded to changes in the business environment, with strengthened coverage of topics of contemporary concern. There is greater coverage of the impacts on business of ecological change, especially global warming. After a period of unprecedented economic growth, this book reports on change in many organisations’ business environment brought about by turmoil in world financial markets during 2008.

Learning throughout the book is supported in a number of ways. Each chapter contains a number of thought-provoking vignettes based on contemporary examples. In addition, each chapter has a mini-case study with review questions and a further series of chapter review questions. Key terms are introduced and defined in a glossary. Suggestions are made for further reading that will allow the reader to pursue issues raised in each chapter. The companion website provides links to relevant websites. The authors invite comments about any of the material contained in this book.