Business & Society-Business Ecosystem

Business ecosystem

An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. The economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organisms also include suppliers, lead producers, competitors, and other stakeholders. Over time, they co evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles.

Firms that are embedded/entrenched in a business environment need to co evolve with other companies and that the particular niche a business occupies is challenged by newly arriving species. This meant that companies need to become proactive in developing mutually beneficial relationships with customers, suppliers, and even competitors. Using ecological metaphors to describe business structure and operations is increasingly common especially within the field of information technology. Business ecology is a more productive set of processes for developing and commercializing new technologies that are characterized by the rapid prototyping, short product-development cycles, early test marketing, options-based compensation, venture funding, early corporate independence and a more productive set of processes for rapidly developing and commercializing new technologies.

Biological ecosystems

Some environmentalists have used business ecosystems as a way to talk about environmental issues as they relate to business rather than as a metaphor to describe the increasing complexity of relationships among companies. Then, business ecology is the study of the reciprocal relationship between business and organisms and their environments. The goal of this business ecology is sustainability through the complete ecological synchronization and integration of a business with the sites that it inhabits, uses, and affects.

Business within ecological setting

Business ecology is a management imperative to optimize business operations and foster innovation. It views organizations as living organisms in which aspects of management, operations and processes interact and interrelate with the external environment and which also operate within a dynamic business ecosystem. Since the existence of business depends on society, the how of managing the business is the hidden of managing the business society relationship to ensure that it is as good and favorable as possible. This requires the business to analyses its environment and adjust to it accordingly. The business environment business environmental analysis has two major dimensions namely macro and micro. Environmental force interacting with business.

To achieve its objectives business interacts with macro or external environmental forces that effect its operations. External environmental forces may offer opportunities or pose problems for or business in attaining as objectives. External environmental of a business is very dynamic where it is changing continuously and rapidly. Forces within this is environmental are interrelated whereby a change in one kind of force affect and maybe affected by the other forces which makes it hard to do an analyses and trace the sources of changes in particular forces. A change in the external environment may require a business to re-adjust its business strategy in order to cope.

There are several elements that effect ecological business growth the business environment. These include;

1. The economic environment including taxes and regulation

2. The technological environment.

3. The competitive environment

4. The social cultural environment

5. The global business environment

6. Political legal environment

7. Demographic environment.

The management of a firm usually has limited control over the macro environmental forces.

The social cultural environment

Demography is the statistical study of the human population with regard of the sizes, density and other characteristics such as age, race, gender and income. Tremendous populations shifts are leading to new opportunities for some firms and to declining opportunities for others. Cultural factors like belief, customs, lifestyles, concept, values, strongly affect business operations culture will be reflected on how for example people carry out farming, entertainment, education, feeding and worship. Diversity and its advantages for business

The world population is just over 6 billion people as the populations grows today’s student will find an increased demand for a wide variety of goods and services. In business context the words diversity and multiculturalism are used interchangeably to refer to the proper of optimizing the contribution of people from different cultures. Having or multicultural populations provides an opportunity for all U.S citizens to learn to work with people of all nation and this should give Americans an advantage when it comes to negotiating and working with people in global markets.

Diverse populations can provide ideas, concept and cultural norms to enrich the business culture. A strong population just as a healthy forest is made up of different kinds of tree and other plants. A thriving business population is made up of people of all different ages, creed experiences and national origin. One of the reasons the U.S is prosperous is because of its diversity and openings to people from all countries as indicated below.

        The increase in the number of older Americans.

Different ages have different wants e.g. Americans aged 45 to 54 are currently the richest group in US society they spend more than others on everything except healthcare and thus represent a lucrative market /business for restaurants, transportation, entertainments, education e.t.c. What do demographics means for you and for business. Think of products and services the middle aged babies require. For example the elderly will need medicine, nursing homes, assisted living facilities, adult day care and recreation e.t.c. You will see opportunities and successful business due to demographics. Business that caters to the aging baby boomer will have more opportunities as more babies are born.

Two income families.

This has led to work place changes due to the rise of two income families which has led to creation of many job opportunities in day care and counseling. Many companies have increased the number of part time workers which enable mothers and fathers to stay at home with children and still earn an income. Many employees provides child care benefit of some type, other companies offer referral services that provides counseling to parents on child care all of which impact on business.

The rapid growth of single parent house hold has had major effect on businesses as well. It is a tremendous task to work full time and raise a family. New welfare rules force single parents to work after a certain period. Single parents have encouraged business to implement programs such as family leave where workers can take time off to attend to a sick child. Cultural factors like belief, customs, lifestyles, concept, values, strongly affect business operations culture will be reflected on how for example people carry out farming, entertainment, education, feeding and worship.

The global Ecological environment

The global ecological environment of business is very important as it surrounds all other environmental influences. Perhaps the number one global environment change has been the growth of

International competition and the increase of free trade among nation e.g. Japanese manufactures

like Mitsubishi, Sony won much of the market for automobile, videocassette, TV set, by offering

global consumers better quality product than those of the us manufactures through innovation and technology. This competition hurts many US industries and many jobs are lost. Productivity is the total output of goods and services in a given period of time divided by work hours (output per work hours). Better technology, machinery, tools, education and training enable each worker to be more productive.US companies such as Disney, FedEx as well as many smaller companies are as good as or better than competing organization anywhere in the world. But some business have gone beyond competing with organizations in other countries by learning to cooperate with internal firms because cooperation among business has the potential to create rapid growth that can generate prosperity beyond people’s expectations. As businesses expand to serve global markets new jobs will be created in both manufacturing and services industries.

Technological environment

Technology is point and parcel of culture e.g. the tool and equipment used by people in farming is part of the people cultures life in farming. We live in a time of technological change. Many businesses firm use information as a competitive advantaged. They also use information system to stay ahead of their competitors many business firm that adapt to major technological advances have a competitive edge than those that do not. Many business firms are using intranet for helping employees do their work effectively and efficiently. These technological advancements mean faster and better decision making capacity in the entire society. Technology affects such major business functions as production, marketing, personnel and finance whereby each of these activities or function is carried out will depend on available technology.

Information technology will have implications in that employees job skill requirement will increase workers will needs the ability to read and comprehend software and hardware manual, technical journal and details report I.T provides business firms ( no matter their size or management power) with the ability to innovate, bring produce to market rapidly, respond quickly to customer request in the society.

Demographic environment

This is closely related to the social environment and may be considered as part of it. Demographics refers to the characteristics of a population such as size of the population, age distribution, income and its distribution, size of families, ,distribution of religion, and distribution of profession. Change in demographic factors may favor or disfavor a business in its endeavors to achieve its objectives.

Physical environment

Although looking at societal dimension it may also be considered among the most important macro environment forces that affect business. The physical environment includes such factors such as; topography or relief, climate and infrastructure roads, water supply, electricity, telephone, security, banks and insurance.

Competitive environment

Any business enterprise faces two types of competition, namely;

i. Enterprise competition, which refers to competition from firms whose products are similar to that of the other firm.

ii. Generic competition, which refers to competition from firms whose products although different from the firm’s products are however, used for the same purpose as that of the firm and this highly affect business. For e.g. cinema firms in Kenya are in generic competition with bars and night clubs, newspapers and magazine firms, cultural centers and drama theatres. Although the products of these firms are different they serve the users in information and entertainment needs.

Micro -internal environment

The internal environment is composed of a firm’s resources and factors which a firm can effectively use in adapting to the changing external environment.

Unlike external environment, the internal environment factors are largely within control of the management of a business enterprise.

The factors include;

1. The resources that are mainly tangible, such as production/operations factors e.g. plant, equipment, machinery and tools; marketing factors e.g. sales force, channels of distribution and existing advertisement; personnel/labor relation factors e.g. employees and relations with trade unions and financial/ accounting factors e.g. funds available and available sources of credit/ loans.

2. The resources that are mainly intangible, such as location factor e.g. suitability of present location and possibility of moving into other locations if necessary, public images or reputation, research and development and time.

However, just like the macro factors, micro-environment factors are also inter-related and interacting. For example, the marketing factors may be affected by the personnel and financial factors. A decision for example to aggressively sell in a region must also take into account the personnel and financial abilities of the firms. A business firm’s resources represent for the firm the strength and weaknesses with which it faces the challenges of the external environment.

Resources determines the firm’s ability to cope with the changes in the external environment for example; if a major competitor for a firm closes up business, the ability of the firm to take over the competitors market share will depend on the firm’s marketing, personnel and financial resources available. These resources may favor or disfavor the business firm in this pursuit.

The strength in a firm’s resources will enable it to exploit environmental opportunities or to overcome the problems therein. Weaknesses in the resources in any business make it difficult if not impossible for a business to exploit an opportunity or overcome a problem.

Ecological Community

In ecology, a community Is an assemblage or associations of populations of two or more different species occupying the same geographical area. The term community has a variety of uses. In its simplest form it refers to groups of organisms in a specific place or time, for example, the fish community of Lake Ontario before industrialization.

An ecological community is also defined as a group of actually or potentially interacting species living in the same place. A community is bound together by the network of influences that species have on one another. Inherent in this view is the notion that whatever affects one species also affects many others, the balance of nature.  Community ecologists study the interactions between species in communities on many spatial and temporal scales, including the distribution, structure, abundance, demography, and interactions between coexisting populations. The primary focus of community ecology is on the interactions between populations as determined by specific genotype and phenotype characteristics. Community ecology has its origin in European plant sociology. Modern community ecology examines patterns such as variation in species richness, equability, productivity and food web structure, it also examines processes such as predator-prey population dynamics, succession, and community assembly. On a deeper level the meaning and value of the community concept in ecology is up for debate. Communities have traditionally been understood on a fine scale in terms of local processes constructing or destructing an assemblage of species, such as the way climate change is likely to affect the make-up of grass communities.

Interspecific interactions

Species interact in various ways: competition, predation, parasitism, mutualism, commensalism, etc. The organization of a biological community with respect to ecological interactions is referred to as community structure.

Competition

Species can compete with each other for finite resources. It is considered to be an important limiting factor of population size, biomass and species richness. Many types of competition have been described. Direct competition has been observed between individuals, populations and species, but there is little evidence that competition has been the driving force in the evolution of large groups.

1.Interference competition: occurs when an individual of one species directly interferes with an individual of another species. Examples include a lion chasing a hyena from a kill, or a plant releasing pathological chemicals to impede the growth of a competing species.

2.Exploitative competition: occurs via the consumption of resources. When an individual of one species consumes a resource e.g., food, shelter, sunlight, etc., that resource is no longer available to be consumed by a member of a second species. Exploitative competition is thought to be more common in nature, but care must be taken to distinguish it from apparent competition.

3.Apparent competition: occurs when two species share a predator. The populations of both species can be depressed by predation without direct exploitative competition.

Predation

Predation is hunting another species for food. This is a positive-negative (+ -) interaction in that the predator species benefits while the prey species is harmed. Some predators kill their prey before eating them e.g., a hawk killing a mouse. Other predators are parasites that feed on prey while alive (e.g., a vampire bat feeding on a cow). Herbivores feed on plants e.g., a cow grazing. Predation may affect the population size of predators and prey and the number of species coexisting in a community.

Mutualism

Mutualism is a symbiotic interaction between species in which both benefit. Examples include Rhizobium bacteria growing in nodules on the roots of legumes and insects pollinating the flowers of angiosperms.

Commensalism

Commensalism is a type of relationship among organisms in which one organism benefits while the other organism is neither benefited nor harmed. The organism that benefited is called the commensal while the other organism that is neither benefited nor harmed is called the host. For example, an epiphytic orchid attached to the tree for support benefits the orchid but neither harms nor benefits the tree. The opposite of commensalism is amensalism, an inter specific relationship in which a product of one organism has a negative effect on another organism.

Community structure

A major research theme among community ecology has been whether ecological communities have a nonrandom structure and, if so, how to characterize this structure.

type of interaction	sign	Effects
Mutualism	+/+	both species benefit from interaction
Commensalism	+/0	one species benefits, one unaffected
competition	-/-	each species affected negatively
predation, parasitism, herbivory	+/-	one species benefits, one is disadvantaged

Threatened ecological communities

An ecological community is a naturally occurring group of plants, animals and other organisms that are interacting in a unique habitat. Its structure, composition and distribution are determined by environmental factors such as soil type, position in the landscape, altitude, climate and water availability. Types of ecological communities listed under national environmental law include woodlands, grasslands, shrub lands, forests, wetlands, marine, ground springs and cave communities. The Australian Government is working in partnership with state, territory and local governments, non-government organizations, tertiary institutions and community groups to ensure the protection of our native species and ecological communities.

Business within a pluralistic society

What is a pluralistic society?

This is any society in which citizen can legally and publicly hold multiple competing ethical views and are allowed to choose for themselves what ethical beliefs if any they wish to hold. Our society’s pluralistic nature makes for business and society relationships that are more dynamic and

novel than those in some other societies. Pluralism refers to a diffusion of power among society’s many groups and organizations. A pluralistic society is one in which there is wide decentralization and diversity of power concentration. The key descriptive term in this definition is decentralization and diversity. In other words, power is disposed among many groups of people. It is not in the hands of any single institutions or a small number of groups.

Pluralism has strength of weakness:

A Pluralistic society prevents power from being concentrated in the hands of a few it also maximizes the freedom expression and action. Pluralistic provides a set of no single group domination. Weakness of Pluralism; is that it creates an environment in which diverse institutions pursue their own self -interest, Allegiance of individuals to groups is dispersed, Create a widely diversified set of loyalties to many organizations and minimizes the danger that a leader of any one organizations will be left uncontrolled.

Its Provides a built in set of checks and balances in that group can exert power over one another with no single organization (business) dominating and becoming overly influential. Another weakness is that groups and institution proliferate to the extent that their goals tend to overlap thus causing confusion as to which organization best serve which functions. Pluralistic forces conflict onto center stage because of its emphasis on autonomous group. Each pursuing its own objectives. A pluralism system does not appear to be very efficient. History of experience has demonstrated that most people in society prefer the situation that has resulted from pluralism. It has worked to achieve some equilibrium in the balance of power of the dominant institution that constitutes our society.

Multiple public systems and stockholders

When we speak of business and society relationships, we usually refer either to particular segments or subgroups of society (consumer, women, environmentalist, and senior citizens) or to business and some system in our society (politics, law, custom, religion, economies.) These groups of people of systems may also be referred to in that institutional form (business and the courts, business and common course, business and church, business and the federal trade commission.)

Fig 1-3 depicts in graphic form the point of interface between business and some of the multiple public system or stakeholders with which business interacts.