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1 Identify the purposes of different types of organization

1.1.1 Vision, mission, values, goals, and objectives of GSK

GSKs vision: to improve the quality of human life by enabling people to do more, feel better, live longer.
Mission : Being a responsible business and ensuring their values are embedded in their culture and

decision-making helps them better meet the expectations of society.

Goal : focused the delivery of three strategic priorities which aim to increase growth, reduce risk and
improve long-term financial performance

Objectives :

Creating a more balanced business and product portfolio

Change R&D organization

Transform how they operate

Value : Transparency , Respect for people , Patient-focus , Integrity
1.1.2 Assess the vision, mission, values, goals, and objectives of GSK

Vision : With short and clear vision, GSK on the right way in business activities to build long-lasting

relationships with customers.

Mission : GSK mission focus on their image in people's eyes , they want to build a good image as a
responsible business and meet the expectations of society. To achieved their mission, GSK have provided 860 million

vaccine to 170 countries in 2013, 80% of which were to developing countries.

Goal : All goals that GSK set to achieve vision statement as soon as possible. Goals of GSK have set to
provide the best quality of life for human. This create opportunities for GSK to develop over the world as their
comment in GSK's website :"Operating responsibly and ensuring our values helps us better meet the expectations of

Objective : All objectives of an organization is evaluated by SMART technique
S Specific: achieved : GSK set very clear objective.
M Measurable: achieved
A Attainable: new disease found every year so the demand of medicine also increase.
R Realistic: achieved : More than 12,500 people work in R&D in GSKs search for new medicines,
vaccines and consumer healthcare products, invested 3.4 billion in 2013 in our search to develop new medicines,

vaccines and consumer products,

T Time bound: achieved
Value : In general, setting values for the Company play an important role in businesss success. When GSK
extend their business to meet global challenges, then the transparency is important to this. This will affects the way
they do business, work with external groups and interact with each other. With GSKs employees, building the belief
and behaving toward the companys standard are things they have to practice and improve every day in working.
Employees of GSK not only learn how to respect their customer but also respect their coworkers.

1.2 Describe the extent to which an organization meets the objectives of different stakeholders
1.2.1 GSKs stakeholder influence

Employee (keep informed) : Treating employees as the most valued assets, promoting a nondiscriminatory
and actively work environment , involving employees in important decisions are among the ways companies have
been influenced by employees as a stakeholder influence.

Manager (key player) : The decision of manager directly affects the performance of GSK, and management
must consider the financial effects of its activities on company. Poor decisions hurt profitability, which reduces an
owners interest, employees opportunities for raises, bonuses and increased resources, board members liability and
partners workloads.

Shareholder (key player) : They make decision to invest on GSK or not , that will directly affect the capital
of GSK . They have a big say in how the goal of GSK are decided

Customer (keep satisfied) : Customers have taken over as a central influence for many companies. This is
not because companies do not want to maximize profits. Instead, it is because they have generally recognized that
satisfied customers and long-term relationships are key to build sustainable success and profiting over time.

Government (keep satisfied) : Governments establish many rules and regulations that guide businesses.
GSK must obey the law and change the way they operate when government changes these rules and regulations.
Government economic policy and market regulations have an influence on the competitiveness and profitability of

Community (keep informed) : GSK help people to have a better life, create jobs and stable incomes for
workers. GSK has many activities to extensive active participation in social activities and charity. They have
committed : Rigorous patient and consumer safety, Minimizing animal testing, Promoting Human Rights,
Transparency in clinical trial data, Ensuring ethical stakeholder interactions
1.2.2 Evaluate the extent to which GSK Company achieves the objectives of three stakeholders
Employee high salary (achieved) : Research Scientist earns an average salary of 29,696 per year. GSK paid
24,416 - 49,330 per year for a research scientist, higher than their two competitors University College London and
King's College London at the same job (25,121 - 38,747 and 26,925 - 46,069). GSK was rated very satisfactorily
when compare with their competitor by users.
Manager high salary (achieved) : A Clinical Trial Manager in UK can earns an average salary of 35,480 per year
and in GSK , they pay 31,050 - 83,231 , higher than average rate salary.(payscale.com)
Shareholder high profit (not achieved) :They always care about they can earn money or not. If the share of GSK
get high price it means their shareholder can earn more money if not then they lose money. But shares of
GlaxoSmithKline (GSK) are down 6% after its profits were hit by a fall in sales and the strong pound. The company
reported a 23% fall in pre-tax profits to 986m from 1.29bn. A big investor concern is its reliance on the inhaled lung
drug Advair, which makes up nearly a fifth of sales. It already faces competition from copycat versions in Europe,
with generics in the United States perhaps a couple of years away.

Customer high quality of product (achieved) : According to GSK's website , they committed to continue to ensure
the interests and safety of patients and consumers in the way they design and undertake their clinical trials. They
always strengthened resources to enhance their pharmacy vigilance operating model, expanded dedicated product
quality teams and maintained our robust policies and governance framework on patient safety.
Government paying tax (not achieved) : Major UK-based firms cut secret tax deals with authorities in
Luxembourg to avoid millions in corporation tax in Britain, the BBC's Panorama has found. GSK in the UK
potentially avoided up to 34m in UK corporation tax. (bbc.com)
Community create more job (achieved) : GSK also contributes their revenue more to the state budget every year
by paying tax and create more jobs for unemployed. It is a way of helping UK in developing the countrys economic.
As reported in ckscience.co.uk, GSK is planning on building its first new UK factory in 30 years. This will create
1,000 jobs.

1.3 Explain the responsibilities of an organization and strategies employed to meet them
Social responsibilities - Create social campaigns such as charity, promotion funds: In UK, GSK has launched a
Facebook campaign that will provide free support to people looking to live a healthier lifestyle in the New Year. They
will utilise the social media platform to provide daily tips and supportive messages via its page for Alli, GSK's overthe-counter drug to help support weight loss in people with obesity when used in combination with a healthy diet. Up
to now , more than 177,000 people have 'liked' Alli's Facebook page, with users interacting with one another and
with experts.( pmlive.com)
Environmental responsibilities - Managing and reducing the environmental impacts of GSK operations and
products across their lifecycle : According to GSK corporate responsibility report 2013, to ensure they can continue
to deliver high quality products to patients and consumers in the future, they must protect the natural resources. They
are committed to managing and reducing the environmental impacts of their operations and their products across their
lifecycle. "Across our manufacturing network we invested around 40 million in 2013 to reduce environmental
impacts. Many of these improvements are bringing additional business benefits by, for example, improving efficiency
and increasing manufacturing capacity. " (GSK Corporate Responsibility Report 2013)
Ethics and business - Contribute their revenue more to the state budget by paying of taxes every year : As
Andrew Witty, CEO of GSK explains, the plan of building new factory in UK comes are a result of tax breaks on
innovation introduced by Chancellor George Osbourne, Because of changes in the UK tax regime, it will be our
intention to bring more activity to Britain and take advantage of the situation here and increase our contribution to
Britain. If it [corporation tax] is going to come down over the next few years, it will attract us to pay more tax here.
(ckscience.co.uk). A spokesperson for GlaxoSmithKline said :"GSK is a global company with 95% of its sales outside
the UK however 20% of the companys tax bill is in the UK. In total, over the period covered in the broadcast, GSK
paid around 1billion in UK corporation and business taxes, plus an additional 1.3bn through income taxes of its
UK employees." (newstatesman.com)

Management responsibilities - GSK provide many training course and Future Leader Programs for their
employees and undergraduate students : One of the strategies for management responsibility is improve staff's
quality by opening training course for their employee. Therefore, GSK provides development opportunities for all of
them. In the UK,GSK offer R&D postdoctoral global training programme and Future Leaders Programme
Public relations and corporate image - Increase and invest more on advertising products both on TV and Internet :
Building the good image of the Company in the mind of the community is very important and long - term. To do this,
GSK use advertisement both television and internet to promote their product and service to customer.

2.1 Explain how economic systems attempt to allocate resources effectively

2.1.1 The economic system of UK
UK economic system is mixed economy. This usually means an economy that contains both privately-owned and
state-owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and
planned economy characteristics. This system overcomes the disadvantages of both the market and planned economic
2.1.2 The way UK allocates and make effective use of resources

Land resources: 243.610km2 (241.930km2 land area, beach area 1.680km2). UK located in northwest
Europe, bordering the Republic of Irland 360km, including England, Scotland, Northern Ireland and Wales. The
majority of the terrain is low-lying land interspersed with mountains. In addition, UK also includes a number of
islands and archipelagoes in many parts of the world. Town and country planning in the United Kingdom is the part of
English land law which concerns land use planning. Its goal is to ensure sustainable economic development and a
better environment. Each country of the United Kingdom has its own planning system that is responsible for town and

country planning devolved to the Northern Ireland Assembly, the Scottish Parliament and the Welsh Assembly.
Labor resource
According to the information of Department of Foreign Affairs of the Government of UK , UKs population is ranked
at 3rd of Europe in population with 61 million people including English : 83,6%, Scotland 8,6%; Wales 4,9%; North
Ireland 2,9%. There were 30.76 million people in work. In Q2 2014 the employment rate for those aged 16 to 64
increased by 0.3 percentage points to 73.0%. This is the fifth consecutive quarterly rise, resulting in the employment
rate being 1.5 percentage points higher than in the same period a year ago and equal to its Q1 2008 pre-downturn peak.
Similarly to GDP, while the total employment rate has now reached its pre-downturn peak, the composition of
employment offers an interesting insight into the UK labour market.
Looking at the gender split, it appears that male employment was more affected by the 2008/09 economic downturn,
with the male employment rate falling by 4.1 percentage points to a trough of 74.9% in Q1 2010.

Capital resources

Total investment of the UK in 2010 was about $ 300 billion (14% of GDP); 5th World on foreign investment,
accounting for 6.5% of total investment in the world and 2nd world on foreign investment, accounting for 11.5% of
total investment world. Currently the UK is the 6th largest economy in the world with a GDP of 2189 billion by 2010,
GDP per capita in 2010 was $ 35,100. UK is one of the globalized economy in the world, with a policy of free trade,
anti-protectionism (import-export turnover of the UK in 2010 more than 900 billion US dollars). UK is a valued
member of the economic organizations such as the OECD, the WTO.
2.1.3 Assess the effectiveness of the use of resources of UK
Over the years, the management, exploitation and use of resources contribute significantly to economic and society
growth of UK. Resource management is the management of the resources such as land, water, human labor and
capital. UK government has launched the plan, the specific strategic , planning and measures along with appropriate
sanctions, strictly to help the mining and resource use in a reasonable and proper to bring optimum benefits for the
country and the globe. The rational use of resources is particularly important role for the construction of infrastructure,
development of industrial, economic restructuring and labor structure; ensure development rapid and sustainable
economy, contributing positively to the socio - economic development of UK.
2.1.4 Assess the effectiveness of the use of resources of GSK
The main economic influences include factors such as interest rates, the phase of the economic cycle, the balance of
payments, fiscal policy and monetary. These factors are controlled by the government. These factors may affect GSK
extremely large. Such as interest rates and interest rate trends in the economy have affected the trend of savings,
consumption and investment, thus affecting the activity of GSK. Rising interest rates will limit demand for loans to
invest in expanding our business activities, affect GSK's profits. In addition to rising interest rates will also encourage
people to send more money to the banks, so also will make the demand for reduced consumption.
The trend of the exchange rate: The volatility of the exchange rate changing business conditions in general, creating
various opportunities threatening to GSK, particularly the impact it has adjusted production relations import.
The effective of the use of the resource of GSK is expressed clearly in using resources.

Saving water: GSK is striving to be as water efficient as possible to help meet its global target of reducing its

water impact chain by 20% by 2020.

Cutting carbon emissions were recognized by the CDP in 2013, a not-for-profit organization. During the year
they also received the Carbon Trusts Best in Continuing Carbon Reduction award for year-on-year reductions in

emissions associated with their operations.

Waste and other impacts: they are doing this by adopting four simple steps to eliminate, reuse, recycle and
generate energy from waste in that order of priority. Their goal is to halve operational waste by 2020
2.2. Assess the impact of fiscal and monetary policy on business organization and their activities.
2.2.1 Fiscal policy

According to Corporation Tax Act 2010 the corporation tax rate company pay depends on how much profit that
company makes. Company may be able to get deductions or claim tax credits on their Corporation Tax. Over the
years, corporate tax policy has been repeatedly amended and supplemented to create favorable conditions for
businesses. To remove difficulties for enterprises, UK's government always focus on the importance in general tax
policy, in particular corporate income tax; Accordingly, from 01.01.2014, the corporation tax rate reduced to 21%
(2008 is 28%). Decrease 7% is a significant capital for the activities of GSK. Take advantages from applying a new tax
policy, GSK has faster turnaround capital for reinvestment. Whenever tax will reduce the cost of drag reduced the
selling price will be reduced, as it will match the purchasing power, then GSK will expand the market because of
drugs and vaccines items always in demand, when prices decline, demand and supply will meet.
2.2.2 Monetary Policy
According to 2013 No. 721 Article 2 The Bank of England (Call Notice) (Benchmark Rate of Interest) Order 2013
The Bank of England has left interest rates unchanged at 0.5% and made no change to its program of quantitative
easing, as had been widely expected. The Bank of Englands balance sheet will probably continue to grow as it shores
up more banks and financial institutions with both capital injections and loans, and as it acquires government Treasury
bills to help finance the stimulus package will attempting to limit the crowding out of private borrowers. The
benchmark interest rate in the United Kingdom was last recorded at 0.50 percent.
The impact of monetary policy
For GSK, the interest rate forms the capital cost and the material costs of the production process. Therefore, any
variation in interest rates on the market are also directly affected the efficiency of production, business or directly
impact the profitability of GSK and change their economic behavior. When interest rates of Bank of England are rise,
it will make material costs and product price increases, as well as declining profitability and competitiveness of GSK,
causing losses. Increase bank interest rates will always be associated with the trend of cuts, shrinking the size and
scope of the production activities in the economy. Conversely, when interest rates are decrease, it will make good
condition for GSK to reduce costs, improve business efficiency and competitiveness. Low interest loans are always
encouraged, GSK expand investment, development and production activities and thereby stimulate growth in the
whole economy.
2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected
2.3.1 Competition policy:
According to 2013 No. 500 The National Health Service (Procurement, Patient Choice and Competition) (No. 2)
Regulations 2013. The Government is making regulations in order to maintain key existing requirements falling on
Primary Care Trusts (PCTs) which are to be abolished. This includes establishing good procurement practice,
protecting patient choice and addressing anti-competitive conduct where this acts against the interests of patients.

GSK has the right to freedom competition under UK government control. They must operate based on
principle of honesty, non-infringement upon the interests of public, legitimate rights and interests of enterprises. All is
fair competition; there is not any exception for any company. Therefore, in order to have strong position in UK market,
GSK must try more to create innovative products to compete with their direct competitors.
For example: Panadol Advance of GSK is 2.85 and another product with the same function Cuprofen Maximum
Strength Tabs is 3.09. It can be seen that GSK using Cost Leadership to create competitive advantage for their
product, cut unnecessary costs, save water, save electricity also help GSK to cut a lot of unnecessary expenses.
2.3.2 UKs social welfare policy
According to Health and Safety at Work etc. Act 1974 , the provisions of this policy shall have effect with a view to
securing the health, safety and welfare of persons at work; protecting persons other than persons at work against risks
to health or safety arising out of or in connection with the activities of persons at work; controlling the keeping and use
of explosive or highly flammable or otherwise dangerous substances, and generally preventing the unlawful
acquisition, possession and use of such substances; controlling the emission into the atmosphere of noxious or
offensive substances from premises of any class prescribed for the purposes of this paragraph.
Based on this policy, company needs to be ensuring the safety working environment for their workers, and protect
their health, working security as well. If their staffs get an accident while working at GSK, GSK must have the
responsibility for supporting money for them. Furthermore, the policies as a tool to encourage GSK focus more on the
community such as environment protection and charity.