Business Environment Issues - Case Study Example

Business Environment & Its Impact on International Business [Pick the date] 2015 Table of Contents Introduction 3 Organizational details 3 Stakeholders 4 Responsibilities of the Organization 5 Different Economic System 6 Impact of Fiscal & Monetary Policies 6 Impact of Competition Act & Enterprise Act 7 Different Type of Market Structure 8 Impact of different factorial changes 8 Culture within the Organization 12 Impact of International Trade on Business 12 Impact of global factor on UK business 12 Impact of European Policies on UK business 13 Conclusion 14 References 15 Introduction This report looks at evaluating the manner in which business environment has an impact on different organization working in UK. This will look at analyzing the same from different perspective like stakeholders, international norms, reforms, policies, union, and so on. This will thereby help to bring about a complete overview regarding the manner in which the overall working environment gets shaped due to changes in the business environment. Organizational details The details of the organization working in the public and private sector field are as Allianz Technology Trust Plc: works in the public sector of United Kingdom where its function is to invest in equity securities of quoted technologies all around the world so that long term capital growth can be witnessed. The vision of the organization is to invest in companies which will help to maximize the returns for the shareholders. The organization is a small player in the market but has been ethical as they look towards acting in an ethical manner so that the different functionalities can be looked at. Greenergy: is a private company which works as a distributor for petrol and diesel distribution for vehicles. The market share which the organization holds is around one-sixth of the total market share. The organization aims towards providing quality fuel and ensuring that the economy is supplied with a continuous flow of fuel at the most competitive rates. The company looks at being ethical by looking towards supplying good quality fuel and ensuring that the customers are neither cheated nor exploited. Stakeholders The different internal stakeholders who have an influence on business are as Owners: The owners have influential power and are able to bring changes in the manner different business decisions are taken. This will have an impact on the manner in which decisions are taken and will help to improve the overall performance of the business. Managers: They are people working in the actual field and provide useful information regarding the management of the business, customer needs and other business deals. They help to carry out the different business decisions and are able to transform the manner in which business decisions are taken The different internal stakeholders who have an influence on business are as Customers: Changes in customer preference, demand, purchasing power and others aspect has an impact on the performance of organizations as it becomes difficult to make strategies which will satisfy their different needs and demands Suppliers: Changes in prices, quality, availability of materials and other aspect has an impact on performance. Maintaining good relations with suppliers and fostering a culture through which better productivity can be ensured is a requirement which needs to be addressed Government Agencies: Changes in government policies, taxation, strategies and government has an impact on business performances. Organizations need to guard themselves from it and have to formulate strategies keeping those in mind. Responsibilities of the Organization The different legal responsibilities which the organization looks to fulfil while working are as Consumer Legislation: Both the organization has looked at protecting the interest of the consumers by providing quality product and ensuing that they are not cheated. In addition to it the organization has developed a consumer forum where they can put forward their issues and complaints and ensures that the problems get sorted out (Norton and More, 2002). Further, the different norms and rules which has been laid down are being abided and steps are being taken to ensure that consumers are provided their legal rights Environmental Legislation: The organization has looked at adopting stance which helps to protect the environment. The organization has reduce wastages and aims towards reducing the release of carbon in the environment so that the people and the society on the whole can be protected Health & Safety Legislation: The organization has developed the required safety and health legislation which employees need to perform. Employees are provided required training before work so that they can keep safe. Further, required safety instruments and other things are kept appropriately and if any untoward incident happens proper care is taken to protect people an its employees Employee Legislation: The organization has laid down the working time for employees, provides compensation more than the minimum level, avoids child employment, and provides required training to its employees. The organization has looked at ensuring that the employees are satisfied and ensures that the legislation is properly followed. Different Economic System The four different type of economic system are as Command Economic System: is a system where government controls the economy and decides the manner in which the different resources will be allocated and used. The government regulates the entire system and regulates prices and wages in the economy Free Enterprise Economic System: is a form of economic system where individuals own and control the different resources Mixed Economic System: is one where there is a role of both government and individual bodies and the different resources are shared with one another so that better results can be achieved Transitional Economic System: This is an economic system which is undergoing changes and is moving from one economic system to another so that the usage of resources improves and the process is able to fetch better results for the people. Impact of Fiscal & Monetary Policies Fiscal policies and monetary policies have an impact on the manner in which organization works. Changes in taxation which is a fiscal policy can impact the bottom line for business. Increase in taxes would mean higher cost and would reduce the profits. In a similar manner if taxes on certain goods are increased it will impact the overall price and would eventually lead towards an increase in the price of the product. This might make certain section of the economy to refrain from purchasing those products thereby having an impact on the business decisions. In a similar manner changes in monetary policies impact the overall working of the organization. For example change in interest rate which is a monetary policy could make either borrowing costly or cheap. Considering a case where the interest rates have been increased would mean that borrowings have become costly. This will impact the overall cost as increased interest rates will be passed on to the customers which would mean higher prices and reduction in demand (Fiet, 2005). This will ultimately have an impact on business decisions and would make the entire process of carrying out different activities to be difficult. The process would thereby have an impact on business decisions and is an aspect which needs to be properly looked and analyzed at while framing different policies. Impact of Competition Act & Enterprise Act Competition Act 1999: has led towards opening up of economies and has intensified the degree of competition which the different players have to face. This has resulted in the reduction of protectionism and looks towards exposing the economies so that different decisions which helps to improve the performance and ensures better results for the customers can be ensured. Enterprise Act 2002: has aimed towards improving the condition of the different business entities by looking towards ensuring that they are not totally destroyed and protected to a certain limit. This has looked towards garnering a process through which the businesses are groomed and nurtured so that they are able to face competition and develop a momentum through which business performances is improved. Different Type of Market Structure The different type of market structure is as Perfect Competition: is one where there are many players both selling and purchasing goods. There are no barriers to entry or exit and the prices are determined by the demand and supply. The level of profit earned here is normal profits and businesses look at maximizing their returns through customer satisfaction. Oligopoly: is a form of market structure where there are few players selling goods to a large chunk of the people. There is barriers to entry and exit to a certain level and the prices is determined by the different players. The market is a price taker and sells products which is determined by the different players performing in the market Monopoly: is a form of market structure where there is a single player selling products. The market results in high pricing if not controlled and is a price setter as customers will have to pay the price which is being charged for. Monopsomy: is one where form of market structure where there is a single buyer and there are many sellers. The buyer determines the price which will be charged for the product and has a large bargaining power. Impact of different factorial changes The different factorial changes and their impact is as Supply & Demand: Changes in supply and demand has an impact on the equilibrium prices and quantity as shown below When the increase in supply is more than the decrease in demand the equilibrium quantity increases from Eq1 to Eq2 and equilibrium prices decreases from Ep1 to Ep2 Here the decrease in price is more than the increase in quantity. When the increase in supply is more than the decrease in demand then the equilibrium quantity increases from Eq1 to Eq2 and the equilibrium price decreases from Ep1 to Ep2 Here the decrease in price is less than the increase in quantity When the increase in supply matches the decrease in demand then the equilibrium quantity remains the same at Eq1 but the equilibrium price falls from Ep1 to Ep2. Here the price decrease whereas the quantity remains the same. Research & Development: results in a change in quantity demanded and supplied as shown below When the increase in supply is less than the increase in demand then the equilibrium quantity rises from Eq1 to Eq2 and the equilibrium price rises from Ep1 to Ep2 Here the price increases more in comparison to the increase in quantity Economies of Scale: results in a change in quantity demanded and supplied as shown below Labour Market Trends: results in a change in quantity demanded and supplied as shown below Culture within the Organization Culture has a role in shaping the performance of organization as the culture which the organization adopts gets reflected in the working environment. The employees need to understand the organizational culture so that they are able to transform and mould the manner in which different business decisions are taken. This will have a role in determining the manner in which the business will plan for its future. This process would also create the path for the future and will have a role in shaping the performance (Gabbot, 2004). Proper analysis and understanding of the organizational culture will reflect upon the manner in which the organizational decisions are taken and will thereby have a role in shaping the performance of the organization. This will also help to bring better control and will ensure that the employees understand their role and are able to create the required dimensions through which the business goals will be achieved. Impact of International Trade on Business International trade gets impacted by global factors which keep on changing. Businesses need to adapt and develop strategies based on the changing international factors so that they are able to create a path through which business can be carried out properly. Some international factors which impacts business on a global scale are changes in exchange rates, rules and regulations, tariffs, different protection laws and similar other laws (Schmitz, 2010). This factors have an impact on the local business as organizations which rely on international trade have to account for changes in those factors so that proper rules which helps to deal with the changing business environment is properly adhered to. Impact of global factor on UK business Some of the factors which have an impact on global business are as Movement of labour across borders: Movement of skilled and unskilled employees across the borders have an impact on business decisions. When employees move from one border to another it creates shortage of employees which makes the cost of labour to rise thereby having a negative impact on the performance. This results in hampering the progress of the business and needs to be accounted for while planning to carry out business on the international arena. Movement of capital across borders: Movement of capital across the borders have an impact on business decisions. When capital move from one border to another it creates shortage of capita which makes the cost of borrowings to rise thereby having a negative impact on the performance (Devereux and Sutherland, 2009). This results in hampering the progress of the business and needs to be accounted for while planning to carry out business on the international arena Protectionism: Polices which are directed towards protecting the domestic or weak industry has a negative impact on the overall performance as it results in impacting the manner in which business decisions are taken. This makes it difficult for economies to compete on price or quality and is an aspect which needs to be looked into while carrying out international business as it could lead towards impacting the flow of goods and services. Exchange Rates: Changes in exchange rates have an impact on the business performances as organizations thereby find it difficult to find a mechanism through which corrective pricing can be done. This could make products either dearer or cheaper which both have a negative impact and makes the international business to suffer. Impact of European Policies on UK business The impact of European policies on the business of UK is as Environment: Changes in policies pertaining to environment forces the organization to make changes in their policies. This could be either favourable or unfavourable and thereby results in impacting the business decisions which increases the degree of risk for the business. Economic: The economic condition of the domestic economy along with other economies impacts business performances as it determines the purchasing power and based on it the future performance is shaped up. Employment: Employment opportunities translates into one where the economy is growing and thereby trends to increase demand. This aspect needs to be included in the planning process so that business is able to plan its future needs and requirements accordingly Trade: Trade relations with other economies have an impact in international trade as it determines the manner in which business will be carried out and the different terms which will determine the business process and relations with one another Conclusion This report thereby evaluates the manner in which business environment has an impact on different organization working in UK. It analyzes the same from different perspective like stakeholders, international norms, reforms, policies, union, and so on. This helps to bring about a complete overview regarding the manner in which the overall working environment gets shaped due to changes in the business environment. References Devereux, B. and Sutherland, A. 2009. A portfolio model of capital ows to emerging markets, Journal of Development Economics, 89, 181-193 Fiet, J. 2005. Risk avoidance strategies in venture capital markets. Journal of Management Studies, 32(4), 290-313 Gabbot, M. 2004. Introduction to Marketing: A Value Exchange Approach. Pearson Education Australia, Frenchs Forest. Norton, W. and More, W. 2002. Entrepreneurial Risk: Have we Been Asking the Wrong Question? Small Business Economics, 18, 281-287 Schmitz, M. 2010. Financial markets and international risk sharing, Open Economies Review, 21, 413-431 Read More