i The Business Environment A01_WORT6729_07_SE_FM.indd 1 9/24/14 10:32 AM A01_WORT6729_07_SE_FM.indd 2 9/24/14 10:32 AM iii The Business Environment Seventh edition Ian Worthington and Chris Britton Leicester Business School, De Montfort University, Leicester A01_WORT6729_07_SE_FM.indd 3 9/24/14 10:32 AM Pearson Education Limited Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published in Great Britain in 1994 (print) Second edition published 1997 (print) Third edition published 2000 (print) Fourth edition published 2003 (print) Fifth edition published 2006 (print and electronic) Sixth edition published 2009 (print and electronic) Seventh edition published 2015 (print and electronic) © Ian Worthington and Chris Britton 1994, 1997, 2000, 2003 (print) © Ian Worthington and Chris Britton 2006, 2009 (print and electronic) © Pearson Education Limited 2015 (print and electronic) The rights of Ian Worthington and Chris Britton to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the authors’ and the publishers’ rights and those responsible may be liable in law accordingly. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trade- mark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. Pearson Education is not responsible for the content of third-party internet sites. ISBN: 978-0-273-75672-9 (print) 978-1-292-07460-3 (PDF) 978-1-292-07459-7 (eText) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data Worthington, Ian, 1946- The business environment / Ian Worthington and Chris Britton, Leicester Business School, De Montfort University, Leicester. — Seventh edition. pages cm Includes bibliographical references and index. ISBN 978-0-273-75672-9 1. Industrial management—Great Britain. 2. Great Britain—Commerce. 3. European Union countries—Commerce. 4. Industrial policy—Great Britain. 5. Industrial policy—European Union countries. 6. International economic relations. 7. Business. I. Britton, Chris. II. Title. HD70.G7W64 2015 658—dc23 2014028345 10 9 8 7 6 5 4 3 2 1 19 18 17 16 15 Print edition typeset in 9.5/13 pt Stone Serif ITCPro by 75. Print edition printed and bound by L.E.G.O. S.p.A., Itlay. Note that any page cross references refer to the print edition A01_WORT6729_07_SE_FM.indd 4 9/24/14 10:32 AM For Lindsey, Tom and Georgina and for Rachael, Philip, Nick and Megan, with our love A01_WORT6729_07_SE_FM.indd 5 9/24/14 10:32 AM A01_WORT6729_07_SE_FM.indd 6 9/24/14 10:32 AM Brief contents Contributors xviii Preface to the first edition xix Preface to the sixth edition xx Preface to the seventh edition xxi Acknowledgements xxiii Guided tour xxv Part One InTrODuCTIOn 1 1 Business organisations: the external environment 3 2 Business organisations: the internal environment 17 3 The global context of business 39 International business in action: The global car industry and the changing business environment 55 Part Two COnTExTS 57 4 The political environment 59 5 The macroeconomic environment 97 6 The demographic, social and cultural context of business 133 7 The resource context: people, technology and natural resources 155 8 The legal environment 181 9 The ethical and ecological environment 205 International business in action: Migration 221 Part Three FIrmS 223 10 Legal structures 225 11 Size structure of firms 255 12 Industrial structure 281 13 Government and business 307 International business in action: A lot of bottle 333 Part Four markETS 335 14 The market system 337 15 Market structure 361 16 International markets and trade 385 17 Governments and markets 413 International business in action: Working with the grain of the market 441 A01_WORT6729_07_SE_FM.indd 7 9/24/14 10:32 AM viii Brief contents Part Five COnCLuSIOn 443 18 Strategy and the changing environment 445 Glossary 471 Index 489 A01_WORT6729_07_SE_FM.indd 8 9/24/14 10:32 AM Contents Contributors xviii Preface to the fi rst edition xix Preface to the sixth edition xx Preface to the seventh edition xxi Acknowledgements xxiii Guided tour xxv PPaarrtt OOnnee I INNTTRROODDUUCCTTIIOONN 1 Business organisations: the external environment 3 Ian Worthington Learning outcomes and key terms 3 Introduction 4 The business organisation and its environment 4 The general or contextual environment 7 Mini case : The impact of regional economic conditions 8 The immediate or operational environment 9 Analysing the business environment 10 Mini case : Fresh but not so easy 10 Central themes 12 Synopsis 14 Summary of key points 14 Case study: Facing the unexpected 15 Review and discussion questions 16 Assignments 16 Further reading 16 2 Business organisations: the internal environment 17 Ian Worthington Learning outcomes and key terms 17 Introduction 18 The concept of the organisation: an initial comment 18 Understanding the nature of organisations: theories of organisation and management 19 Other theoretical approaches 23 Organisational structures 23 Mini case : ‘Into the Dragon’s Den’ 24 Mini case : A merger of equals? 27 A01_WORT6729_07_SE_FM.indd 9 9/24/14 10:32 AM