Environment factors affecting business. An organizations environment is composed of numerous factors:

(C)  Economic Factor

Economic conditions in an environment will vary over time.  Factors such as the level of inflation,  consumer disposable income,  interest rates,  foreign exchange availability of credit,  general growth trends,  the availability of labour and level of unemployment, etc.,  will have a major influence on an organization’s success and survival.

(D)  Technological Factor

Technological developments of one industry generate technological spin-offs,  which are adopted by other industries.  Consumers respond to such development by requiring products incorporating the latest technology.  A business must respond accordingly and develop products which are compatible with the latest developments.  Only by these means may a business retain or increase its share of the market.  e.g.  computerization.  Many large businesses conduct their own research for eventual changeover to completely new products or re-designed products to suit the needs of the market.

(E)  Physical Environment Factor

The climatic conditions;  geographical condition;  environmental pollution problems and natural hazards such as earthquake, typhoon are the physical environment factor that businesses have to encounter in the course of running a firm.

(F)  The organization’s customers

The customers is one of the most important constituents of an organization’s immediate environment.  An organization which neglects the needs of the customers,  or which fails to anticipate or recognize changes in these needs,  inevitably will lose its relative position in the market, therefore,  organizations need to be familiar with customer data on geographical distribution,  demographic characteristics,  including age,  sex and income level,  and information on customer  behaviour.

(G)  The organization’s suppliers

The organization also needs to maintain an effective relationship with its suppliers.  This may be particularly so where the supplier controls the raw materials source, or is the unquestionable leader on quality.

An organization will need to assess the competitive position amongst suppliers and also relative power positions between supplier and user organizations.  Information will also be required on such matters as service,  reputation, price , competitiveness and availability of credit amongst the supplier community.

H)   Competitors

Most organizations operate in a competitive environment,  in that they compete against others for a limited number of consumers.   To compete successfully an organization will need to appraise itself constantly of its competitors’ profiles.  e.g.  market share,  profitability,  productivity,  commitment to research and development,  product strength and weakness and public image.

If an organization does not monitor its competitors’ status constantly it runs the risk of losing market share,  more importantly,  in the long-term it may fail to hold a leading position in the area of innovation.

Apart from competitor profiles,  it is also important that the organization assesses the position with regard to the possible entry of new competitors into the market or the possibility of substitute products or services becoming available.

(A) Protecting Consumers

(I)  Laws influencing business

• Trade Description Ordinance

• Trade Mark

• Weight and Measures Ordinance

• Pharmacy and Poison Ordinance

• Public Health & Municipal Services Ordinance

• true & non-misleading advertisement
• safety in consumption and disposal
• warning statements
• serving the purpose as expected.

(II)  Effect on Business

1.   Extra costs in meeting the requirements. These costs include

• fully test on the product to check the product
• improving the equipment or product to meet the requirements.
• Lobbying cost for politicians

2.  Risks of losing consumers because of breaking the law and being sued.

 

(III) Responses:

1.  Shift to another country or market.

2.  Develop attractive features of the product.

3.  Employ experts to think out ways of eliminating legal liabilities.

4.  Lobbying.

5.  Act  according to the law.

(B)  Protecting Employees

(I)  Laws influencing business

Employment Ordinances  

regulates

• termination of contract of employment;
• wage periods;
• deduction from wage;  
• maternity leave and  severance pay;
• holidays;
• anti-union discrimination.

Employee Compensation Ordinance:

provides a system of compensation for workmen suffering a death or loss of earning capacity through injury at work.

Factories & Industrial Undertakings Regulations:

• safe working conditions and the welfare of workers in factories;

• employment of children

Industrial legislation on employment:

• anti-discrimination of sex , race , religion;

• must employ handicaps (not applicable in Hong Kong);

• protection of rights of trade union.

(II)  Effect on Business

1.  Costs of personnel management

2.  Productivity and efficiency;

3.  Time of personnel policy.

(III)  Responses

Budget for extra costs:

• provide training

• employ experts for personnel management

• lobbying

• move manufacturing base.

1. Air   e.g.   carbon monoxide from cars

2.  Water  e.g.  from domestic sewage,  infections substances.

3.  Noise  e.g.  factory machinery,  pile-driver  and traffic,  aircraft.

4.   Land depletion  e.g.   solid waste pollution,  strip mining of coal &  metal

                                               and commercial development of national forests.

     

 

1.  Production processes:  e.g. noise,  smoke,  wastes

2.  Consumption processes:  e.g.  packages.

3.  Disposal of rubbish.

(I)  Background

• Much concern centres on exhaust smoke from many diesel-engined vehicles on the land.

• Excessive noise from construction work , transportation and air-conditioning;

• Water pollution blackspots such as typhoon shelters;

• Swimming  beaches contaminated by sewage;

• Pollution of stream in the New Terrorities by pig and other  livestock wastes;

Therefore white paper “  Pollution in Hong Kong-  A Time to Act”  is establish in May  1989.

Work Area of Environmental Protection  Department  (E. P. D.)

• enforcement of environmental protection legislation;

• environmental protection monitoring

• strategic planning;

• policy  development.

(II) Content:

(a)  Legislation and pollution control

E.P. D. is responsible for the implementation of most of the measures contained in the main pollution control legislation

Air Pollution Control Ordinance  (APCO)  (1983):

• require industry to abate the emissions of all air pollutants that may give rise to nuisance and to seek prior approval from, the E.P. D. where fuel burning equipment is being newly installed or altered.

• air control zone, decrease in ambient sulphur dioxide and oxides of nitrogen.

• legislation requirement for unleaded petrol (ULP).

• Ozone Layer Protection (1980)
• prohibits the manufacture of chemicals that deplete the ozone layer and impose controls on the import and export of these substances.

Waste Disposal Ordinance (1980)

• 9 year phase programme;

• livestock keeping in prohibition areas which largely cover urban areas is now banned;

• collection, storage, treatment and disposal of livestock waste in Tolo Harbour and Tolo Channel is subject to control;

• also aim at improving control over standards of transportation treatment and disposal of certain difficult waste (chemical and clinical waste.)

Water Pollution Control Ordinance (1980)

• it is an offense to discharge any poisonous or noxious material into water anywhere in Hong Kong;

• it is an offense to discharge water into an area designated as a water control zone without having first obtained a licence from the E.P.D.;

• controls are fully in force in Tolo Harbour, Junk Bay (Tseung Kwan O) and Deep Bay, etc.;

• anybody wishes to dump waste of any kind at sea must first of all obtain a licence from the director of environment protection.

Noise Control Ordinance  (1988) 

• decrease annoyance caused by environmental noise;

• permit from E.P.D. to carry out general construction work at night (7pm-7am) and public holidays (Sunday);

• percussive piling is prohibited at night and on public holidays;

• control noise from industrial and commercial premises through the issue of abatement notices;

• protect against excessive traffic noise in new roads. Lays low noise surface on particularly noisy stretches of road (Island East Corridor)

(b) Improve Waste Collection

treatment and disposal facilities

e.g.   sewage,  harbour cleaning

 

(c)  Environmental Monitoring and Investigation

e.g.  Water quality monitoring;

        Air quality monitoring;

         Bi-annually survey of waste;

         Ad- Hoc basic specific investigation.

(d)   Environmental Education and Awareness

• educates and inform the public and promotes their awareness of environmental matters.

• incorporate environmental issues in part-time/full-time degree courses;

• established environmental campaign committeee to promote awareness.      

                   3   Rs    Reuse

                                Recycle

                                Reuse

• Environmental Protection Festival on November 1990.