An Assignment

On
Business Environment

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Table of Contents:
Contents
Introduction: .................................................................................................................................... 3
P1. Identify the purpose of different types of organizations:.......................................................... 3
P2. The extent to which an organization meets the objectives of different stakeholders: .............. 4
P3. Explain the responsibilities of an organization and strategies employed to meet them: .......... 5
P4. Explain how economic systems attempt to allocate resources effectively: .............................. 5
P5. Assess the impact of fiscal and monetary policy on business organizations and their
activities: ......................................................................................................................................... 6
P6. Evaluate the impact of competition policy and other regulatory mechanism: ......................... 6
P7. Evaluate the market structure determine the pricing and output decision of business: ............ 7
P8. Illustrate the way in which market forces shape organizational response: ............................... 8
P9. Business and cultural environment to shape the behavior of organization: ............................. 9
P10. The importance of international trade to UK business organization: ..................................... 9
P11. Analyze the impact of global factors can affect UK organizations: ..................................... 10
P12. Evaluate the impact of policies of the European Union on UK business organizations: ..... 10
Conclusion: ................................................................................................................................... 11
Reference: ..................................................................................................................................... 12

Introduction:
Business organization is differing by its nature. There are various organizations in business
world. The world is now the heaven for conducting business. The universe in present is full of
thousand types of business organization. All of these organizations have different types of
purpose. Some of them are profit oriented, some are customer oriented, and some of them are
service oriented. These businesses meet the objectives of the customers through following many
scientific approaches. Meeting these objectives the organizations means investing for future.
They run their business in the whole earth in the name of international trade by crossing the line
held between two countries. They continuously improve their position in the world market by
having a well assumption about the global factors that affect the international organization and
the impact in a country by that organization.

P1. Identify the purpose of different types of organizations:

An organization is a formal structure, which relates with the good relationship, responsibilities
and authorities that combined run for achieving a unique goal. There are various types of
organization like profit oriented, non-profit, commonweal organization, mutual benefit
organization etc. The purposes of these organizations are described in below:
Profit oriented: This type of organization like business organization runs for achieving profit by
providing products and services. Example airlines, drugs company etc.
Non- profit organization: Non-profit runs to help the people without achieving profit. Example
school, college, universities etc
Commonweal organization: This organization is govt. organization work for helping a group of
people. Example fire service, police, battalion, Army force etc
Mutual profit organization: Mutual benefit organization needs for the welfare of a group of
related people. Trade union, football club, cricket club, students association etc are the example
of mutual profit organization.

P2. The extent to which an organization meets the objectives of different

stakeholders:
Stakeholders are the business related people who spend money in the business for the
expectation of profit. In terms of business, stakeholders in relation of business invest their money
in the business and the business cannot be run without their money. We can find out stakeholders
very easily. The suppliers, customers, owners, Government, government agencies, trade unions,
employees, customers, various committees and many more do have a conspicuous interest to the
business are the stakeholders. When the net profit of a company may increase, the stakeholders
may courage to invest more money in the business. On the other hand, the value of share of
related company increase and the company pays more dividends to the stakeholders. However, if
the business may occur loss the stakeholders of the company are liable to receive the loss. The
way to meet the objectives of different stakeholders is given in below:
Owners of the organization: The owner of the company should be considered as the most
important stakeholders of organization because they invest their valuable money for the
expectation of profit. Owners want to more profit, dividends and overall progress of the
company.
Employee: The employee is one of the important stakeholders who run company effectively.
The success of the company depends on the employee. They want handsome salary, bonus,
supported work environment, security etc.
Suppliers: The suppliers of the organization supply various raw materials and other necessary
thing. They want exact commitment and just time payment.
Government: Govt. wants every company should obey the rule and regulations and pay income
tax regularly.
Trade union: There are various trade unions which work for the right relates to the workers.
Customers: Customers are the important stakeholders of the company want quality product in
reasonable price.

P3. Explain the responsibilities of an organization and strategies

employed to meet them:
The responsibilities of an organization are so much considerable topic essential for the company.
Every company has a unique plan. To evaluate the plan and achieve the expected profit there are
various responsibilities. There are different responsibilities for different parties related to the
business. For example to the suppliers must provide them just time payment. For the customers
company should produce quality product and ensure the reasonable price. The government wants
regular tax and company should maintain rule and regulation. Above all are the responsibilities
of the company.
CSR that means customer social responsibility is an essential moral responsibility of a company
that explain link between the society and the company.
HRM (Human resource management) is a vital part of company helps to develop a skilled
employee and runs company towards to the success. Company must have a strategy that can
meet the all responsibility of a company. In the starting month of the company the
administration, develop a strategic planning for this task. An organization can take some
strategies like profit segmentation, use technology, growth strategy, merger business,
partnership, globalization etc.

P4. Explain how economic systems attempt to allocate resources

effectively:
Economics is social science that is related with human behavior as a relationship between ends
and scarce. The main purpose of economics is the production of the product and services for the
consumers of the community to meet their need and by satisfying them increase their lifestyle.
There are mainly four types of economic system. They are traditional, mixed, command
economy and free market economy. Traditional economy simply produces products and service
for the customers and earns profit to distribute them. Free market economy is the system of
economic by which the company works by free price mechanism. Command economy is
associated with a communist economic system. Mixed economy runs by the help of the govt. and
the private sector.
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The allocation of resources is an essential task for a company for the improvement of the
business. There are some criteria to allocate resources in the business. First, the flexibility of
suppliers can easily move resources one place to another. A strategic planning for resources
allocation may fruitful. Prediction of allocation of resources makes easy this work.
By considering above criteria if a production manager allocates resources may success in his
job.

P5. Assess the impact of fiscal and monetary policy on business

organizations and their activities:
Fiscal policy and monetary policy influence the activities of the business at a great extent.
Government of the state issues fiscal policy in the national budget that includes important
provision about taxation, and other legislation and regulation about business. Credit rates and
mortgages are modified in every year fiscal policy on regular basis. Fiscal policy encourages
more investment and high disposable income for consumers by lowering the tax rates. This
policy helps business to produce more jobs in the market. On the other hand, monetary lower the
interest expense of the business by lowering the short-term interest rates. Monetary policies even
have a significant have an effect on on achieving the goal of a corporation. Changes in shortrun interest rates influence long-run interest rates, like mortgage rates.
In UK, the govt. of this country uses this two tools fiscal policy as like as monetary policy to
control the overall economy of the UK. The govt. uses fiscal policy to control the employment
system and the current market. On the other hand, the govt. uses monetary policy to control the
money supply in the UK market.

P6. Evaluate the impact of competition policy and other regulatory

mechanism:
Competition policy is better for both the business company and the customers too. In a
competition market, the producer of the product tries to produce more quality product rather than
the rivals. In this system, the consumers can buy their products by choice by paying lower price
than the monopoly business. Therefore, in this sense competition policy is very important for the
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market. The impact of the competition policy is every considerable in the European market. A
govt. can change the condition of the market by a famous policy. Because in this system the
businessman tries to produce more quality product and distributes them in a lower price than the
other. As a result, government intervenes and protects the interest of public. UK government has
adopted Competition Act 1998 to bring the UK in line with EU competition policy. This Act
empowers regulatory body to investigate the suspected abuses of monopoly power. Regulatory
mechanism is the control system to make internal environment relatively stable.

P7. Evaluate the market structure determine the pricing and output
decision of business:
The organization may operate their business within various markets structure. The behavior of
the organization depends on the market structure. Market structure also affects the profitability of
the business. Market structure refers to the number of competitors, their market share, and
behavior of competitive organizations and so on. Four types market structures are available
namely:
Perfectly competitive market,
Monopoly market,
Oligopoly
Monopolistic market
In the perfectly competitive market, pricing and output decision are independent. The firm must
accept the price and amount of output given by the market. In monopoly, the firm is the only
supplier of the specific goods of services. Therefore, the firm determines the price and amount of
output to be supplied. In the oligopoly market, the pricing and output decision depends on the
interaction among all the firms of the market. In monopolistic market, there are many competing
firms of a specific products market. Each firm has similar product with little differentiation.
Therefore, the firm cannot take the pricing and output decision because that would be determined
by market sources.

P8. Illustrate the way in which market forces shape organizational

response:
Market forces are the factors that influence the market condition as well as production and the
distribution process of the company. Market forces are the combination of mutual demand,
distribution channel, market condition, market in sequence, periodic production, quality of the
product, overall condition of business, nature of the product, level of customers satisfaction, the
living standard of the people in the market region etc. A business should have research the
market when he wants to produce product and service for the targeted customer. Because of
current market condition, company should estimate the next steps of the business. The
production level of the company should be based on the demand of the customer. The
distribution channel of the company must strong because of just time distribution of the product
in the market. When the market researcher researches on market he can able to find out the needs
and the expectation of the customer and then he can suggest the production manager to produce
the product. The quality of the product is an essential market force that must be considerable.
When the customer gets quality product from the company then he wants to buy the product next
time and would like to suggest other people to buy product. Customers satisfaction is important
to increase the production level and can change the overall condition of the market. Company
should stock product for the unwanted demand from the customer. Michael E. Porter has
proposed five forces that shape organizational responses namely supplier power, buyer power,
competitive rivalry, threat of substitute and threat of new entry. E. Porter Professor at Harvard
University has illustrates 5 forces that shape the organizational responses of an organization. The
5 forces are as follows:

Likelihood of new entry

Powers of customers

Power of suppliers

Degree of rivalry

Substitute threat

Therefore, company should consider these factors for the betterment of the business and growth
profit.

P9. Business and cultural environment to shape the behavior of

organization:
Environment of organization is the combination of market and economic factors, technological,
social and cultural, political and ethical factors that influence the business and its overall
operation. These factors influence the business and impact on the overall condition of the
organization. Among all the factors, social and cultural environment is the most influential to a
person or a business that arise from peoples attitudes, desire, degree of intelligence and
education, belief and customs. The cultural environment is the overall movement of the
employee within the organization. The cultures of the country are different from each other.
Based on the cultural environment of the country organization should produce the product. The
cultural environment of the organization shapes the nature of the company. The product that is
very popular in the UK market may not be preferable in the market of USA. A
product might American state favorable to however to not the Asian individuals. Any rules of a
corporation could

also

be welcome by the

worker of

Associate

in

Nursing Asian

country however could also deny by the worker of the European country. A favorable product in
UK may not be profitable in USA because of different culture. Therefore, culture is an important
considerable issue that influences the nature of the organization.

P10. The importance of international trade to UK business organization:

International business is the sharing of products and services, currency, resources, human capital
and other resources as mutual benefit of two related countries. The importance of international
business is significant for the both countries that are related with the business.
The significance of international business to UK business organization is so much. The UK
company can produce more product and by selling them to the outside of the country. The UK
economy is getting stronger by increasing their business with the other countries in different
continent. Because of small size in domestic market, UK can sustain it-developed economy
through international trade. The economy of UK was flourished in the time of colonial rules. At
that time, they got raw material from one colony at very cheap rate but sold the finished products
at higher prices. Now their once popular brand such as Philips, BSA etc are not popular in the
market.
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P11. Analyze the impact of global factors can affect UK organizations:

Global factors affect the international business. There are various types of global factors. They
are political factors, technological factors, environmental factors, economical factors etc.
Political factors that are very significant consist of the political sustainability, stable condition of
country, govt. business policy, tax rate etc. These political factors affect the UK organization in
global business. Economic factors include the economy of the country, income rate of the
people. This issue influences lots within the operation of a business. Technological factors are
very essential and critical for the international organizations that run their business all over the
world. Because technology is so much needed and able to improve the condition of business and
make, sure more profit for the organization. New and updated technology comes day by day, so
company should use updated technology for the improvement of the organization. Technological
factors affects greatly in methods of the United Kingdom organizations to adopt a brand
new innovation or new invention. Environmental factors can increase or decrease the
performance of the organization. These factors give insights into behavior, tastes, and lifestyles
patterns of a population.

P12. Evaluate the impact of policies of the European Union on UK

business organizations:
Policy is a moral thing that helps to do business in a right way and control all the organization in
a level of standard. Policies that are developed by the European Union are very essential for the
organization of UK that can do business all over the European countries. The EU controls the
business organization of other countries including UK by formulating policies with which
business must comply. The European Money Union is the main regulatory body. The
employment policy is that ensures the training and coaching system of the new joiner in the
company. There are so many policy like regional policy, inflation policy, taxation policy,
education and training policy, monetary policy; investment policy, international business policy
etc affect the UK business organization significantly. The UK business organization created an
effect to increased ownership through policy. Policies effects the environments that policies seek
to affect governments, humanities, large companies is to making a policy change. Government is
to make a policy decision to increase taxes of increasing tax revenue. The policy making process

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includes a challenge to evaluate policy influence that policy is unexpected penalties (Richard
Welford, Andrew Gouldson, 2003)

Conclusion:
Business is the life of todays world. In addition, business organizations are the blood of life.
These organizations have to know purpose. . There are various types of organization like profit
oriented, non-profit, commonweal organization, mutual benefit organization etc. There are
various types of global factors. They are political factors, technological factors, environmental
factors, economical factors etc. Market forces are the factors that influence the market condition
as well as production and the distribution process of the company. International trade is one of
the most familiar and worldwide business policies. It helps to do business all over the world.

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Reference:
Daft, Richard L. Organization Theory and Design. 6th ed. Cincinnati: South-Western, 1997
Northcraft, Gregory B., and Margaret A. Neale. Organizational Behavior: A Management
Challenge. Chicago: The Dryden Press, 1990.
Hofstede, Geert. "Cultural Constraints in Management Theories." Academy of Management
Executive 7

(1993):

8194.

Morrison J International Business Environment: Global and Local Marketplaces in a Changing

World (Palgrave Macmillan, 2006) ISBN: 9781403936912
A & C Black Publishers Ltd Whitaker's Almanack 2010, 142nd Revised edition (A & C Black
Publishers Ltd, 2009) ISBN: 9781408113646
The Economist (The Economist Newspaper Ltd)
www.ac777.dial.pipex.com/bes/index.html online journal for British Economy Survey

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