MGB1010 · Introduction To Management
The Business Environment
Carrying the systems view forward, an organisation is an open system inside an environment that constantly pushes on it — so a manager's job is to scan, then respond. The subject splits that environment into three layers: the general (macro) environment of broad forces no firm controls, scanned with PESTLE; the specific (task) environment of actors the firm deals with directly — customers, suppliers, competitors, regulators — its stakeholders; and the internal environment, above all culture, modelled by Schein's three levels (artefacts, espoused values, underlying assumptions). This is the backbone of the Week 3 written task — an environment analysis of a real Australian company — where the marks come from linking a general-environment force to a specific-environment actor. Globalisation simply widens the PESTLE scan across borders.
What this chapter covers
- 013.1 The three layers — general, specific, internal
- 02General vs specific — the key split, and environmental uncertainty
- 033.2 PESTLE — six lenses on the macro environment
- 04The Qantas / oil-shock ripple — linking the layers
- 053.3 Organisational culture — Schein's three levels
- 063.4 Stakeholders (and the shareholder-vs-stakeholder preview)
- 073.5 Globalisation — widening the scan
Worked example: run PESTLE on a real firm and link the layers
- +1(a) PESTLE letter + layer. A fuel-cost shock is an Economic (E) force, and it sits in the general (macro) environment — broad, beyond the firm's control.
- +1(b) Ripple — suppliers. Higher fuel costs change what suppliers charge the airline — a specific-environment actor it deals with directly.
- +1(b) Ripple — customers. To cover the cost the airline raises fares, hitting customers — another specific-environment actor. (COVID-19 is framed the same way: one shock cascading.)
- +2(c) The marking move. Don't just list a PESTLE factor — connect it to a specific-environment actor: “rising fuel prices (Economic, general) force renegotiation with suppliers and higher fares for customers (specific).”
Key terms
- General (macro) environment
- The broad forces that affect every organisation and that no single firm can control — political, economic, sociocultural, technological, legal and environmental. Scanned with PESTLE. Contrast the specific (task) environment, which the firm can partly influence.
- Specific (task) environment
- The actors a firm deals with directly and can partly influence — customers, suppliers, competitors and regulators. These are the firm's stakeholders; a general-environment force typically reaches the firm by changing what these actors do.
- PESTLE
- The framework for scanning the general environment: Political, Economic, Sociocultural, Technological, Legal, Environmental. Variants exist (PEST is four letters; STEEPLE adds Ethics), but MGB1010 uses the six-letter PESTLE.
- Schein's three levels of culture
- Edgar Schein's model of organisational culture from surface to core: artefacts (visible signs — dress, layout, slogans), espoused values (stated values and rules), and underlying assumptions (taken-for-granted, unspoken beliefs — the real driver, and the reason culture is so hard to change).
- Stakeholder
- Any party affected by, or able to affect, the organisation's decisions and actions — internal (employees, owners) and external (customers, suppliers, community, government, regulators). Managing the broad set, not just owners, sets up the shareholder-vs-stakeholder debate in the ethics chapter.
The Business Environment FAQ
What is the difference between the general and the specific environment?
The general (macro) environment is the weather — political, economic, sociocultural and technological forces that hit every firm and that no single firm can control. The specific (task) environment is the firm's own neighbourhood — customers, suppliers, competitors and regulators — actors it deals with directly and can partly influence. A general-environment force usually reaches the firm by changing what a specific-environment actor does.
How do I actually use PESTLE in the written task?
Run the firm through all six letters — Political, Economic, Sociocultural, Technological, Legal, Environmental — but the marks are not in the list. They are in linking a general-environment factor to a specific-environment actor: “rising fuel prices (Economic) force the airline to renegotiate with suppliers and raise fares for customers.” That general → specific connection is where the Week 3 marks live.
What are Schein's three levels of culture?
From the visible surface down: (1) artefacts — what you can see, like dress code, office layout, logos and slogans; (2) espoused values — the values and rules the firm says it holds; and (3) underlying assumptions — the deepest, unspoken, taken-for-granted beliefs that actually drive behaviour. Culture is hard to change because the real driver sits at level 3, where no one even states it.
What is the difference between a stakeholder and a shareholder?
A stakeholder is any party affected by or able to affect the firm — employees, customers, suppliers, community, regulators and owners. A shareholder is specifically an owner. The chapter previews a debate the ethics chapter completes: the shareholder (classical, Friedman) view says management's prime duty is to maximise owner profit within the law; the stakeholder view says managers owe responsibility to the broad set.
Exam move
Sort, don't just recall. The quiz hands you a factor and asks for its layer (general vs specific) or its PESTLE letter, and gives a cultural signal and asks for its Schein level — so drill the sorting until it is automatic (a logo = artefact; a mission statement = espoused value; an unspoken “that's just how we operate” = underlying assumption). For the written task, the whole game is the general → specific link: pick a PESTLE force, then connect it to a named stakeholder, with APA 7 sources. Remember PESTLE generates the external half of SWOT (Opportunities and Threats), so this chapter feeds straight into planning — and for an international firm, run PESTLE per region.
