business environmemnt-3 (1)

7/23/2019 Business Environmemnt-3 (1)

http://slidepdf.com/reader/full/business-environmemnt-3-1 1/11

Environmental Forces and Business

1 | P a g e



Table of Contents

Task 2........................................................................................................................... 3

1.2 Meeting the objectives of different Stakeholders...............................................................3

1.3 Responsibilities of an Organisation...............................................................................3

Scenario 2......................................................................................................................5

Task 3........................................................................................................................... 5

2.1 Explain ho Econo!ic s"ste!s atte!pt to allocate reso#rces effectivel"................................5

2.2 $!pact of %iscal and Monetar" &olic" of Organisation.......................................................5

2.3 $!pact of 'o!petition &olic" and other reg#lator" !echanis!s on the activities of the organisation

................................................................................................................................ 6

3.1 Explain ho Market Str#ct#res deter!ine the &ricing and O#tp#t (ecisions for the b#siness.......6

3.2 Market %orces $nfl#encing Organisational Responses........................................................6

3.3 )#siness and '#lt#ral Environ!ents shape the )ehavio#r of the )#siness...............................7

Scenario 3......................................................................................................................8

Task *........................................................................................................................... 8

*.1 The Significance of $nternational Trade to +, )#siness Organisations...................................8

*.2 The i!pact of -lobal %actors on +, )#siness Organisations...............................................8

*.3 The i!pact of &olicies of the E#ropean +nion on +, )#siness Organisations..........................8

References................................................................................................................... 10

2 | P a g e



Task 2

1.2 Meeting the objectives of different Stakeholders

private b#siness organisation like )/( %oods is r#n and dependent on its stakeholders for its

effective orking. Stakeholders for a private organisation incl#de c#sto!ers0 e!plo"ees0

s#ppliers0 oners and also govern!ent (aniels et al.0 22. ll these stakeholders give

so!ething to the b#siness and in ret#rn re4#ire so!ething for! the b#siness. '#sto!ers re4#ire

good 4#alit" prod#cts and services0 e!plo"ees re4#ire good orking environ!ent ith good

pa"0 oners ant good profits0 s#ppliers or investors re4#ire good ret#rn on invest!ent and

govern!ent ants good service to the people and nation (aniels et al.0 22. Each of these

objectives of the different stakeholders needs to be !et b" )/( %oods in order for a s!ooth andstead" operation. Meeting all these objectives is the pri!ar" need for )/( %oods as it ill

define its position in the !arket0 gather s#fficient financial and !anpoer so#rces for operation

and ill also enable it to plan for the f#t#re of the co!pan". Meeting the objectives ill re4#ire

co!!it!ent and ill define the vision and !ission of the co!pan".

1. !es"onsibilities of an #rganisation

The responsibilities of )/( %oods range to its obligations to the vario#s stakeholders. So!e of

the responsibilities of )/( %oods are as follos5

• &roviding good 4#alit" prod#cts and services to its c#sto!ers

• &roviding stead" ret#rn to its vendors and looking after their interests

• Maintaining ind#str" standards and the standards as set b" the la of the land

• &roviding safe orking conditions to the e!plo"ees of the co!pan"

• 6ot to ind#lge in illegal or #ntoard activities incl#ding financial fra#d and #se of

#nethical !eans.

• 7orking toards elfare of the co!!#nit" and environ!ental s#stainabilit" -riffiths

and 7all0 211

ll the above !entioned responsibilities of )/( %oods ill re4#ire a stagnant and str#ct#red

strateg" to f#lfil. )/( %oods !#st follo the g#idelines of the 8ealth and Safet" at 7ork ct

19:* in f#lfilling its responsibilities toards its e!plo"ees Robertson0 21;. )/( %oods

!#st also i!prove its recr#it!ent process to recr#it the best fro! the crod for efficienc" in the

3 | P a g e



co!pan". )/( %oods !#st #se environ!ent friendl" !ethods of prod#ction and risk

!anage!ent skills to !ini!ise the har!f#l effects to the environ!ent -riffiths and 7all0 211.

ll these strategic options ill lead to an organisation hich looks of the elfare of the

stakeholders and the co!!#nit" as ell.

4 | P a g e



Scenario 2

Task

2.1 E$"lain ho% Economic s&stems attem"t to allocate resources effectivel&

Reso#rces to satisf" needs of people are ver" li!ited and b#siness organisations all over the

orld strive toards effectivel" #sing these scarce reso#rces. $n this atte!pt0 the econo!ic

s"ste!s of the b#siness orld help categorising the areas to allocate reso#rces effectivel" 'apon

and 'apon0 29. The planned econo!" s"ste! is a s"ste! here the reso#rces are controlled

b" the govern!ent of that nation and #se of the reso#rces are li!ited to govern!ent<s sanction of

the 4#antit" and !ode of #se. &lanned s"ste! provides stabilit" to the b#siness p#rpose beca#seallocation of reso#rces is as per de!and b" cons#!ers Slo!an and =ones0 21*. $n a free

econo!ic s"ste!0 reso#rces are basicall" free fro! govern!ent control and private co!panies

have individ#al sa" in the decision !aking process of the #se of reso#rces. llocation of

reso#rces is based #pon !arket conditions and co!panies can also ac4#ire reso#rces for! i!port

Slo!an and =ones0 21*. 8oever0 in a !ix econo!ic s"ste!0 as is co!!on in !ost nations0

there is seg!entation of organisation based on private and p#blic control. The !ix of both

private and p#blic organisation is a !ix of planned s"ste! and free s"ste!. This allos effective

control of scarce reso#rces based #pon the de!and of cons#!ers #sing s!art techni4#es

provided b" private as ell as p#blic entities Slo!an and =ones0 21*.

2.2 'm"act of Fiscal and Monetar& (olic& of #rganisation

s an entreprene#r0 one of !" !ost i!portant responsibilities is to look after the i!pact of fiscal

and !onetar" polic" on the co!pan". %iscal polic" is a for! of econo!ic control b" the

govern!ent hich decides the a!o#nt of tax liabilit" for an organisation. The !ain p#rpose of

fiscal polic" is to stabilise the econo!" in to#gh ti!es thro#gh tax !eas#res in the p#rchase and

sale of goods and services hrend0 'atte and &rice0 2>. Monetar" polic" on the other hand0 is

a stabilisation s"ste! of the central bank of the co#ntr" hose sole ai! is to control the s#ppl"

of !one" in the econo!". Methods of !onetar" polic" incl#de changes in the interest rates and

other reserve re4#ire!ents0 p#rchase or sale of govern!ent sec#rities and bonds and other

instr#!ents to control the flo of !one" in the econo!" hrend0 'atte and &rice0 2>. These

5 | P a g e



policies effect the organisation in operational activities0 prod#ction processes0 availabilit" of

reso#rces0 credit facilities0 tax liabilities0 expansion strategies and !an" other activities that

depend on the econo!" of the co#ntr".

2. 'm"act of Com"etition (olic& and other regulator& mechanisms on the activities of the

organisation

O#r organisation is striving for !ajor expansion polic" in other parts of the orld b#t in it strive

there are vario#s reg#lator" !echanis! that so!eti!e beco!e a h#rdle. The retail b#siness is a

ver" co!petitive ind#str" re4#iring !ajor challenges toards prod#ction and expansion. To

strea!line this co!petitiveness0 co!petition polic" as enacted to look after establish!ent0

!ergers0 ac4#isitions and other activities of organisations in the +, 'lark0 2. $t ens#res

health" co!petition beteen organisations to look after the benefits of the cons#!er. There are

also vario#s reg#lator" bodies like the 'o!petition 'o!!ission 199?0 %air Trading ct 19:30

Enterprise and Reg#lator" Refor! ct 213 and also the 'o!petition #thorit" 21* hich

looks after the ethical activities of the organisation for the elfare of the p#blic interest

econo!icsonline0 21;.

.1 E$"lain ho% Market Structures determine the (ricing and #ut"ut )ecisions for the

business

Market str#ct#re is the vario#s factors that contrib#te toards effective interaction beteen

b#"ers and sellers. These i!pact the general pricing and o#tp#t decisions of a b#siness. The

vario#s !arket str#ct#res are !onopolistic !arket0 perfect co!petition !arket and oligopol"

!arket. $n a perfect co!petition !arket0 pricing and o#tp#t is deter!ined b" the !arket forces

beca#se there are !an" b#"ers and sellers and e4#ilibri#! is present in the !arket 'lark0 2.

$n a !onopol" !arket0 pricing and o#tp#t decisions are deter!ined b" one seller ho has

excl#sive rights over the !arket prod#ct. There is also strict entr" and exit of fir!s hich

enables the sole fir! to decide on the price and 4#antit" of prod#cts 'lark0 2. $n an

oligopol" !arket0 there are fe fir!s prod#cing the prod#cts or services b#t this does not create

!onopol" tho#gh prices !a" be high 'lark0 2.

.2 Market Forces 'nfluencing #rganisational !es"onses

Market forces are the several conditions that i!pact the s#ppl" and de!and of prod#cts and

services in the !arket. Market forces infl#ence the pricing0 4#antit"0 n#!ber of sellers and

6 | P a g e



b#"ers and also prod#ction processes Slo!an and S#tcliffe0 21. Organisational response on

the other hand is the reaction given to the i!pact of the !arket forces. $nfl#ence and response

beteen !arket forces and organisation ill help decide the goodill and profit for the

organisation. 7hen @odafone ants to enter a ne !arket0 it looks #pon the availabilit" of

reso#rces0 n#!ber of b#"ers0 !arket str#ct#re0 !arket policies and also profit opport#nities

before establishing its b#siness )rand cha!pion @odafone strateg"0 2:. Effective

eval#ation of !arket forces ill lead to high prod#ctivit" and good profits for the organisation.

Market forces of de!and and s#ppl" can also deteriorate an organisation<s goodill if the

organisation is not in a !#t#al relationship ith !arket forces Slo!an and S#tcliffe0 21.

Therefore0 favo#rable !arket forces ill create !ore places for an organisations prod#ct

event#all" leading to effective #se of reso#rces0 friendl" co!petition and general priceAlevel.

. Business and Cultural Environments sha"e the Behaviour of the Business

'o!panies toda" rel" not onl" on internal processes like e!plo"ees and ra !aterial for groth

b#t also external factors s#ch as econo!ic conditions0 political scenario0 c#lt#ral bo#nds and

environ!ental health. )#siness and c#lt#ral environ!ents consists of s#ch factors that

!anip#late their choice of operation0 prod#cts and services and also f#t#re strategies 8a!ilton

and 7ebster0 29. Organisations too need to !aintain the efficac" of s#ch b#siness and c#lt#ral

environ!ents to adapt itself of an" !arket sit#ation and lead toards groth. $n a case of

c#lt#ral environ!ent0 Mc(onalds had to change its recipe of )ig Mac for $ndian c#sto!ers

beca#se it contained beef Mc(onalds j#!ps on the 'SR bandagon0 22. This shos the

relative i!portance of b#siness and c#lt#ral factors in shaping the activities and perfor!ance of

b#siness organisations.

7 | P a g e



Scenario

Task *

*.1 The Significance of 'nternational Trade to +, Business #rganisations

$nternational Trade is a for! of trade beteen organisations of different nations. $nternational

trade leads to access and #se of goods and services that is not necessaril" prod#ced in the

i!porting co#ntr". $nternational trade allos b#siness organisations for f#t#re expansions and

reach of their specialised goods and services. $n case of organisation of +,0 international trade

ill expand the reach of their operation and !arket 7ille! te @elde and 'alB0 2>. $t ill also

lead to less cost of prod#ction beca#se of i!port channels of cheaper prod#cts fro! othernations. $nternational trade ill also give +, organisation access to better 4#alit" !aterial hich

has better 4#alit" prod#ction in other nations. 6onetheless0 $nternational trade ill increase flo

of goods0 services0 !one" and also infor!ation beteen +, organisation and others 7ille! te

@elde and 'alB0 2>.

*.2 The im"act of -lobal Factors on +, Business #rganisations

-lobal factors i!pact the organisations of +, s#bse4#entl" i!pacting the econo!" off +,

8adjikhani and -ha#ri0 21. -lobal factors relate to the external factors s#ch as political0

econo!ic and technological factors that affect the organisations. &olitical factors i!pact the

expansion polic"0 international trade0 tax polic" and exchange factors of organisations

8adjikhani and -ha#ri0 21. Econo!ic factors i!pact interest rates0 inflation0 exchange rates0

stock val#es and also #ne!plo"!ent. Technological factors i!pact !ethods of prod#ction0 cost

of prod#ction0 prod#ct develop!ent and innovation. There are also environ!ental factors hich

i!pact the orking conditions0 process of prod#ction and transport0 and other environ!ental

iss#es 8adjikhani and -ha#ri0 21.

*. The im"act of (olicies of the Euro"ean +nion on +, Business #rganisations

E#ropean +nion E+ is the reg#lator" bod" for!ed b" a gro#p of nations in the est. +, is an

active and i!portant !e!ber of the E+ -ov.#k0 21;. E+ reg#lates control ith the #se of

vario#s !eas#res on the taxations0 expendit#re0 b#siness activit" and also s#pport of

8 | P a g e



organisations. E+<s polic" on e!plo"!ent gives opport#nit" to people finding ork and i!parts

training and experience on govern!ent f#nds. E+ also gives e!plo"!ent to foreign nationals b"

its la on free !ove!ent of persons b" its polic" of C6e (eal< -ov.#k0 21;. %ro! inflation

rate to co!petition in !arket0 export and i!port attrib#tes and also financial aspects0 E+

g#idelines need to be folloed b" +,. E+<s Monetar" &olic" 'o!!ittee M&' decides the rise

and fall of the general price level Researchbriefings.parlia!ent.#k0 21;. Therefore0

legislations of E+ have to be i!plied b" the organisations of +, at national as ell as local

level.

9 | P a g e



!eferences

B##,S

hrend0 R.0 'atte0 &. and &rice0 R. 2>. Interactions Between Monetary and Fiscal Policy.

&aris5 OE'( &#blishing.

'a!pbell0 (. and 'raig0 T. 2;. Organisations and the business environment . !sterda!5

Elsevier )#tterorthA8eine!ann.

'apon0 '. and 'apon0 '. 29. Understanding the business environment . 8arlo0 England5

&rentice 8allD%inancial Ti!es.

'lark0 . 2. Organisations, competition and the business environment . 8arlo5 %inancial

Ti!es.

(aniels0 =.0 Radeba#gh0 /.0 S#llivan0 (. and (aniels0 =. 22. Globalization and business.

+pper Saddle River0 6.=.5 &rentice 8all.

-riffiths0 . and 7all0 S. 211. conomics !or business and management . 3rd ed. 8arlo0

England5 %inancial Ti!esD&rentice 8all.

8a!ilton0 /. and 7ebster0 &. 29. "he international business environment . 6e ork5 Oxford

+niversit" &ress.

Slo!an0 =. and =ones0 E. 21*. ssential economics !or business. *th ed.

Slo!an0 =. and S#tcliffe0 M. 21. conomics !or business. 8arlo0 England5 %inancial

Ti!esD&rentice 8all.

#+!/0S

)rand cha!pion @odafone strateg". 2:. #trategic $irection0 232.

10 | P a g e



8adjikhani0 . and -ha#ri0 &. 21. The behavio#r of international fir!s in socioApolitical

environ!ents in the E#ropean +nion. %ournal o! Business &esearch0 ;230 pp.2>3A2:;.

Mc(onalds j#!ps on the 'SR bandagon. 22. #trategic $irection0 1?90 pp.?A11.

Robertson0 8. 21;. The 8ealth and Safet" at 7ork ct t#rned *. Occupational Medicine0

>;30 pp.1:>A1:9.

EBS'TES

econo!icsonline0 21;. 'ompetition policy. FonlineG vailable at5

http5DD.econo!icsonline.co.#kD)#sinessHecono!icsDReg#lation.ht!l Fccessed 1? 6ov.

21;G.

-ov.#k0 21;. ()*) to ()*+ government policy business regulation - GO./U0 . FonlineG

vailable at5 https5DD.gov.#kDgovern!entDp#blicationsD21AtoA21;Agovern!entA

polic"Ab#sinessAreg#lationD21AtoA21;Agovern!entApolic"Ab#sinessAreg#lation Fccessed

1? 6ov. 21;G.

Researchbriefings.parlia!ent.#k0 21;. &esearch Brie!ings - "he economic impact o! U

membership on the U0 . FonlineG vailable at5http5DDresearchbriefings.parlia!ent.#kDResearch)riefingDS#!!ar"DS6>:3 Fccessed 1?

6ov. 21;G.

7ille! te @elde0 (. and 'alB0 M. 2>. 1 Political conomy Perspective o! U0 "rade Policy.

FonlineG odi.org. vailable at5 http5DD.odi.orgDsitesDodi.org.#kDfilesDodiA

assetsDp#blicationsAopinionAfilesD*>:;.pdf Fccessed 1? 6ov. 21;G.

11 | P a g e

business environmemnt-3 (1)

Documents