Business Environmemnt-4 (1)

7/23/2019 Business Environmemnt-4 (1)

http://slidepdf.com/reader/full/business-environmemnt-4-1 1/11

Environmental Forces and Business

1



Table of Contents

Introduction....................................................................................................................3

Scenario 1......................................................................................................................3

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

1.2 Extent of meeting the objectives of the stakeholders.......................................................3

1.3 The responsibilities of !S and strategies for meeting them.............................................3

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

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

2.1 Economic S"stems role in llocation of #esources........................................................5

2.2 The impact of $iscal and %onetar" &olic" on the organisation and its activities.....................5

2.3 The impact of !ompetition &olic" and other #egulator" %echanisms on the organisation'sactivit"...................................................................................................................5

3.1 %arket Structures Impact on the &ricing and (utput decisions of the )usiness......................6

3.2 Influence of %arket $orces on the (rganisational #esponse.............................................6

3.3 Impact of )usiness and !ultural Environments on the behaviour of the business....................6

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

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

*.1 The Significance of International Trade to +, )usiness (rganisations................................8

*.2 The Impact of -lobal $actors on +, )usiness (rganisations............................................8

*.3 The Impact of &olicies of the European +nion E+/ on +, )usiness (rganisations................8

!onclusion..................................................................................................................... 9

#eference 0ist............................................................................................................... 10

2



Introduction

The present assignment deals ith the topic of environment and business combined it is termed

as business environment. )usiness is a s"stem of different processes initiated b" man for the

purpose of production purchase sales and earning mone" !apon and !apon 24/.

Environment on the other hand is a more natural s"stem of our surroundings. )usiness

environment is the set of forces that impact the business in one a" or the other !apon and

!apon 24/. $orces hich are both external and internal exert pressure on the performance of

business activit".

Scenario 1

Task 2

1.2 Extent of meeting the obectives of the stakeholders

Stakeholders are the soul and heel of a business organisation. It is ith their contribution and

partnership that an organisation such as !S ill be able to establish produce sell and make

profit. 5o stakeholders for !S are emplo"ees customers suppliers or investors government

and also the communit" at large )bc.co.uk 216/. These stakeholders have var"ing degree of

objectives in !S and these needs to be met for groth and expansion of !S. %eeting the

objectives ill give !S sufficient ra material and capital for establishment partnerships for

expansion into international trade efficient manpoer for production and groth and also lo"al

customers to sale clothes too )bc.co.uk 216/. Effectivel" meeting these objectives using all

the resources of !S ill give confidence to the management and commitment to the

stakeholders eventuall" leading to a successful business.

1.! The res"onsibilities of #CS and strategies for meeting them

s a major retail chain !S has a ide range of responsibilities that it needs to meet for

effective business groth. The responsibilities of !S toards its various stakeholders and

strategies for meeting them are as follos7

3



!ustomers 8 !S' responsibilit" toards its customers are good 9ualit" clothes at reasonable

prices hich ill be met b" effective modes of production using advanced technolog" hich

ill reduce the cost of production and ultimatel" prices )arr" and &ogge 26/.

Emplo"ees 8 #esponsibilit" toards emplo"ees include safe orking conditions ith standard

living hich ill be met b" !S ith safe and sound ork condition polic" efficient and trained

emplo"ees use of modern technolog" and pa" according to ork mechanisms )arr" and &ogge

26/.

Investors 8 Sole responsibilit" toards investors relates to good rate of return on investment and

this ill be met b" effective sales planning model hich creates e9uilibrium beteen demands of

suppl" of !S clothes ultimatel" leading to profits %ullins 211/.

-overnment 8 -overnment's motive relates to in9uiring about !S tax liabilit" and legal:ethical

activities in the organisation. This responsibilit" ill be met b" indulging in good orking

practices and effecting polic" frameork that germinates good orking polic" in the

organisation %ullins 211/.

4



Scenario 2

Task !

2.1 Economic S$stems role in #llocation of %esources

business is a s"stem of various processes and efforts orking together using the available

resources. These resources to be used are allocated b" the economic s"stem the organisation

operates in. Economic s"stems differ from countr" to countr" but generall" are of three t"pes.

The" are planned free and mixed economic s"stem Economics(nline.co.uk 216/. &lanned

s"stem is in direct control of the government of the countr" and allocates resources based on the

demand of people and also availabilit". In a free s"stem control is in the hands of private entities

ith minor or no government control. llocation of resources is based upon market forces of

demand and suppl". mixed s"stem is a mix of both planned and free s"stem and allocation of

resources and its prices are controlled ver" smartl" Economics(nline.co.uk 216/. Thus

economic s"stems decide the level of 9uantit" and 9ualit" of resources for an organisation.

2.2 The im"act of Fiscal and &onetar$ 'olic$ on the organisation and its activities

$iscal polic" is the use of various expenditure and tax control measures b" the government to

stabilise a nation's econom". In case of high taxes organisations ill limit an" investment and

expansion activities hereas during lo taxes organisations can increase emplo"ment make

investments and also expand business )arrell 2*/.

%onetar" polic" is the various control measures used b" the central bank to reduce the flo of

mone" in the econom". %easures include modification of the interest rates bu"ing and selling of

government securities and adjustment of reserves b" banks. favourable monetar" polic" ill

give organisations chances to ac9uire credit from the market at lo rates and an unfavourable

polic" ill do the opposite )arrell 2*/.

2.! The im"act of Com"etition 'olic$ and other %egulator$ &echanisms on the

organisation(s activit$

)usiness is a ver" competitive s"stem hich re9uires various measures and mechanisms to

function effectivel" )raithaite and ;rahos 2/. In +, !ompetition &olic" and other

regulator" mechanisms include !ompetition !ommission 144< and Enterprise and #egulator"

5



#eform ct 213 hich look after the activities of organisation in +,. These mechanisms

promote health" competition look after use of unfair or illegal methods promote innovation and

efficienc" restrict poer abuse forecast market conditions ensure customer satisfaction and also

open ne markets for doing business )raithaite and ;rahos 2/. ll these impact the

activities of an organisation in pro:acting and promoting good business activities.

!.1 &arket Structures Im"act on the 'ricing and )ut"ut decisions of the Business

business operates according to the forces of the market and this decides its output and pricing.

In this the market structure pla"s a ver" important role. In a monopol" market business is as per

the instructions of a sole compan" or producer of goods and services. There is ver" limited or no

entr" of other firms and customers pa" prices as decided b" that compan" )rooks =eatherston

and =ilkinson 2*/. In oligopol" there are a handful of firms producing the goods and services

but prices are decided among the firms hich ma" sometimes lead to higher prices )rooks

=eatherston and =ilkinson 2*/. Then there is perfect competition market here there are

abundant sellers and bu"ers and there is a s"stem for deciding output and pricing of

commodities. >ere no seller has strict control on prices and pricing and output is as per the

ishes of the consumers )rooks =eatherston and =ilkinson 2*/.

!.2 Influence of &arket Forces on the )rganisational %es"onse

business operates on the principle of demand and suppl" of its products or services in the

market. This demand and suppl" is affected b" various forces hich influence its choice of

product pricing place of business and various other strategies !lark 2/. These forces

demand some form of response from the organisation to minimise or maximise its effects. =hen

demands for a product increases organisation increase their production for meeting the demand

and this sometime also re9uires loering the prices ultimatel" leading to more profits. In the

presence of competitors this increase in demand is countered b" more differentiated products

and also a price ar !lark 2/. This causes various pricing strategies b" organisations and

sometimes leading to stagnation of suppl" in the market. Therefore market forces help decide

organisation the response to give to var"ing levels of demand and suppl".

!.! Im"act of Business and Cultural Environments on the behaviour of the business

business orks for providing goods and services to the people and this re9uires the help of

various business and cultural environments >adjikhani and -hauri 21/. )usiness

6



environment refers to the various political legal technological and economic factors that

influence the behaviour of a business. !ultural environment refers to the social and communit"

factors that impact a business organisation >adjikhani and -hauri 21/. )oth these factors

impact the choice of activit" of a business from choice of product to location and from investors

to environmental responsibilities. The" impact the business responsibilities aims and also

mission. The" force an organisation to operate ithin the limits of la and social constraints

>adjikhani and -hauri 21/. (rganisations must adapt to these environments for effective

business operation and substantial groth opportunities.

7



Scenario !

Task *

*.1 The Significance of International Trade to +, Business )rganisations

+, is one of the most developed nations of the orld specialising in doing business in a variet"

of goods and services. These goods and services ill get an opportunit" to taste unknon

grounds b" international trade. International trade ill link business organisations of +, to other

parts of the orld >amilton and =ebster 24/. International trade ill enable +, to sell

commodities it has abundant of and bu" commodities hich are scarce in +,. Therefore

international trade ill be the bridge on hich business organisations of +, can base their

relationship ith the orld and +, as a nation ill be able to contribute toards global

econom" development >amilton and =ebster 24/.

*.2 The Im"act of -lobal Factors on +, Business )rganisations

International trade ill lead to direct contact ith certain global factors hich impact the

business operations of an organisation. $or organisations of +, global factors ill motivate

international trade hich ill provide good 9ualit" products at cheaper prices -ov.uk 216/. It

ill give opportunities for innovation and technological advancement leading to development of

the region of business. -lobal factors ill also demoralise an" illegal activit" and encourage fair

trade b" the use of various inter:governmental measures. ll in all global factors for +, ill

lead to its economic groth and paving path for a globalised future of organisations -ov.uk

216/.

*.! The Im"act of 'olicies of the Euro"ean +nion E+/ on +, Business )rganisations

+, is a part of the E+ and accordingl" it has to maintain certain rules and regulations of the E+

in context of business operations. The first obligation of E+ is the use of euro exchange for terms

of trade -reenood 23/. E+ also controls the taxation liabilit" of +, and an" regulations

made b" E+ are immediatel" binding on the member nations ithout an" formal acceptance. E+

can also give time bound instructions to its members making it necessar" to follo and failure to

complete ill lead to termination of membership and also penalties 5es.cbi.org.uk 216/. E+

regulations can control export and import aspects of +, organisations. E+ legislations also

8



control various public funded activities of +, such as education transport and mining

-reenood 23/. Thus +, being a member of E+ must follo its each and ever" legislation

for groth and development purposes.

Conclusion

(rganisations all over the orld are operating for a purpose irrespective of the market stricture

and economic s"stems. These purposes can be for social elfare and monetar" benefits but there

effectiveness lies in proper regulations of business activities. s for organisations of +, an"

activit" must be in accordance to E+ policies hich ill make it an emerging trade destination

hich promotes integration of business and cultural environment.

9



%eference 0ist

B)),S

)arr" !. and &ogge T. 26/. Global institutions and responsibilities. %alden %7 )lackell.

)raithaite ?. and ;rahos &. 2/. Global business regulation. !ambridge @EnglandA7

!ambridge +niversit" &ress.

)rooks I. =eatherston ?. and =ilkinson -. 2*/. The international business environment .

>arlo7 $TB &rentice >all.

!apon !. and !apon !. 24/. Understanding the business environment . >arlo England7

&rentice >allB$inancial Times.

!lark . 2/. Organisations, competition and the business environment . >arlo7 $inancial

Times.

-reenood ?. 23/. The challenge of change in EU business associations. >oundmills

)asinstoke >ampshire7 &algrave %acmillan.

>amilton 0. and =ebster &. 24/. The international business environment . 5e Cork7 (xford

+niversit" &ress.

%ullins 0. 211/. Essentials of organisational behaviour . >arlo England7 $inancial Times

&rentice >allB&earson.

Sloman ?. and Sutcliffe %. 21/. Economics for business. >arlo England7 $inancial

TimesB&rentice >all.

)+%#0S

)arrell #. 2*/. The Impact of $iscal and %onetar" &olic" Imbalances on the +,

Econom". National Institute Economic Review 1<41/ pp.D1:D3.

10



>adjikhani . and -hauri &. 21/. The behaviour of international firms in socio:political

environments in the European +nion. Journal of usiness Research 623/ pp.2D3:26.

3EBSITES

5es.cbi.org.uk 216/. enefits ! "I . @onlineA vailable at7 http7BBnes.cbi.org.ukBbusiness:

issuesBuk:and:the:european:unionBchoosing:our:futureBbenefitsB @ccessed 1< 5ov. 216A.

-ov.uk 216/. #$%$ to #$%& government polic'( business regulation ! GO)*U+ . @onlineA

vailable at7 https7BB.gov.ukBgovernmentBpublicationsB21:to:216:government:

polic":business:regulationB21:to:216:government:polic":business:regulation @ccessed

1< 5ov. 216A.

Economics(nline.co.uk 216/. Economic s'stems. @onlineA vailable at7

http7BB.economicsonline.co.ukB!ompetitiveFmarketsBEconomicFs"stems.html

@ccessed 1< 5ov. 216A.

)bc.co.uk 216/. " ! G"E itesi-e( "onflicting sta.eholder ob/ectives. @onlineA vailable

at7 http7BB.bbc.co.ukBschoolsBgcsebitesiGeBbusinessBenvironmentBstakeholders*.shtml

@ccessed 1< 5ov. 216A.

11

Documents

Business Environmemnt-4 (1)