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fifth edition

The Business Environment

Ian Worthington and Chris Britton

The Business Environment

A vibrant and contemporary introduction to the
business environment, Worthington and Britton
comprehensively examine how external influences affect
the decisions and operations of today’s organisations.

What roles do culture, diversity and ethics play in the dynamic world of business
today? How do unpredictable political and economic conditions affect an
organisation? What are the impacts of globalisation, social and technological change on
fifth edition
business decisions?

Using well-known examples and case studies from the public and private sectors, this fifth
edition of The Business Environment addresses these key questions and many more.
The Business Environment
Encouraging students to consider the challenges and opportunities that managers face in the Ian Worthington and Chris Britton
business environment, it provides a strong basis from which to build an overall understanding of
the context of business.

Key Features
 Learn about the latest issues in business: technology
and e-business, corporate responsibility, and socio-
cultural influences
 Apply theory to practice through diverse cases and
examples, such as Amazon, Toyota and the mobile fifth
phone market edition
 Study online! Test your knowledge through self-assessment
questions, and find useful weblinks at
www.pearsoned.co.uk/worthington.

and Britton
Worthington
Ian Worthington is a Reader and Chris Britton a Principal
Lecturer in the Department of Strategy and Management at
Leicester Business School, De Montfort University.
ISBN 0-273-70424-9

Additional student support at

www.pearsoned.co.uk/worthington
9 780273 704249

www.pearson-books.com Additional student support at

An imprint of www.pearsoned.co.uk/worthington
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The Business Environment

Visit the The Business Environment, fifth edition, Companion Website at

www.pearsoned.co.uk/worthington to find valuable student learning
material including:

 Self-test questions for every chapter

 Links to articles and resources on the Internet
 Searchable online glossary
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We work with leading authors to develop the

strongest educational materials in business,
bringing cutting-edge thinking and best learning
practice to a global market.
Under a range of well-known imprints, including
Financial Times Prentice Hall, we craft high quality
print and electronic publications which help readers
to understand and apply their content, whether
studying or at work.
To find out more about the complete range of our
publishing please visit us on the World Wide Web at:
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fifth edition

The Business Environment

Ian Worthington and Chris Britton
Leicester Business School, De Monfort University, Leicester
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Pearson Education Limited

Edinburgh Gate
Harlow
Essex CM20 2JE
United Kingdom

and Associated Companies around the world

Visit us on the World Wide Web at:

www.pearsoned.co.uk

First published in Great Britain in 1994

Second edition 1997
Third edition 2000
Fourth edition 2003
Fifth edition 2006

© Ian Worthington and Chris Britton 1994, 1997, 2000, 2003, 2006

The right of Ian Worthington and Chris Britton to be identified as authors of

this work has been asserted by them in accordance with the Copyright,
Designs, and Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in

a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise without either the prior
written permission of the Publishers or a licence permitting restricted copying
in the United Kingdom issued by the Copyright Licensing Agency Ltd,
90 Tottenham Court Road, London W1P 0LP.

ISBN-13: 978-0-273-70424-9
ISBN-10: 0-273-70424-9

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library.

Library of Congress Cataloguing-in-Publication Data

A catalogue record for this book is available from the Library of Congress.

10 9 8 7 6 5 4 3 2 1
10 09 08 07 06

Typeset in 9.5/13 pt Stone Serif by 30.

Printed and bound by Mateu Cromo Artes Graficas, Spain.

The publisher’s policy is to use paper manufactured from sustainable forests.

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For Lindsey, Tom and Georgina and for

Rachael, Philip, Nick and Megan, with our love
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Brief contents

Full contents ix
Contributors xviii
Preface to the first edition xix
Preface to the second edition xx
Preface to the third edition xxi
Preface to the fourth edition xxi
Preface to the fifth edition xxii
Guided tour xxiv

Part One INTRODUCTION 1

1 Business organisations: the external environment 3
2 Business organisations: the internal environment 18

Part Two CONTEXTS 39

3 The political environment 41
4 The macroeconomic environment 80
5 The demographic, social and cultural context of business 120
6 The resource context 145
7 The legal environment 171

Part Three FIRMS 197

8 Legal structures 199
9 Size structure of firms 231
10 Industrial structure 262
11 Government and business 289

Part Four MARKETS 313

12 The market system 315
13 Market structure 341
14 International markets and globalisation 367
15 Governments and markets 402

Part Five ISSUES 429

16 The technological environment: e-business 431
17 Corporate responsibility and the environment 447
18 Monitoring change 471

Glossary 496
Index 513
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Contents

Contributors xviii
Preface to the first edition xix
Preface to the second edition xx
Preface to the third edition xxi
Preface to the fourth edition xxi
Preface to the fifth edition xxii
Guided tour xxiv

Part One INTRODUCTION

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: A healthy business? 7
The immediate or operational environment 9
Analysing the business environment 10
Mini case: Levi Strauss: jean therapy? 10
Central themes 13
Synopsis 14
Summary of key points 14
Case study: A shock to the system 15
Review and discussion questions 16
Assignments 16
Further reading 17

2 Business organisations: the internal environment 18

Ian Worthington and Zena Cumberpatch
Learning outcomes and key terms 18
Introduction 19
Approaches to organisation and management 19
Organisation structures 23
Mini case: Change at Deutsche Bank? 23
Mini case: Royal Dutch Shell 28