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Sample document on business environment instant assignment help

Business Environment

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TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................1

TASK 1............................................................................................................................................1

1.1 Purposes of different organization....................................................................................1

1.2 The extent to which it meets the objectives of its different stakeholders.........................2

1.3 Responsibilities of an organization and strategies employed to meet them.....................3

TASK 2.............................................................................................................................................5

2.1 economic systems attempt to allocate resources effectively............................................5

2.2 The impact of fiscal and monetary policy on business organizations and their activities6

2.3 The impact of competition policy and other regulatory mechanisms on the activities of a

selected organization..............................................................................................................6

TASK 3.............................................................................................................................................7

3.1 Market structures determine the pricing and output decisions of businesses...................7

3.2 The way in which market forces shape organizational responses using a range of examples

................................................................................................................................................8

3.3 Way in which the business and cultural environments shape the behavior of a selected

organization............................................................................................................................9

TASK 4...........................................................................................................................................10

4.1 The significance of international trade to UK business organizations...........................10

4.2 The impact of global factors on UK business organizations..........................................10

4.3 The impact of policies of the European Union on UK business organizations..............11

CONCLUSION..............................................................................................................................11

REFRENCES.................................................................................................................................13

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INTRODUCTION

Business environment refers to the sum total of all the factor that affects the functioning

and operations of organizations operating in a country. It inculcates all the factors under the

influence of which firm’s functions. In includes both internal and external factors. Latter are

those that impact organization on wide scale such as social, economic, technological, political

environmental and legal aspects prevailing in the country while prior are its components linked

directly to the strategic formulation and direction of working such as its shareholders, customers,

employees, suppliers and government organization. Report is prepared to elucidate the way in

which organization get affected by these factors. For the purpose, British supermarket chain,

Iceland supermarket is taken into account. With approximately, 1.8% share in UK food market,

Company sells wide range of frozen and non frozen items such as prepared meals and

vegetables; meat, dairy and dry goods.

TASK 1

1.1 Purposes of different organization

Iceland Supermarkets

Type of organization: Private

Purpose: With the significant share in the retail industry, Iceland supermarket is selling large

range of products in frozen and non frozen items. It aims to offer quality products without

compromising health and hygiene of customers. Private companies function to earn profitability

and have a strong hold in market. For that purpose, it adopts different measures such as

marketing, discounting, personal interactions with customers and others (Yu and Ramanathan,

2012).

KFC

Type of organization: Subsidiary

Purpose: Subsidiary of Yum brand, KFC is recognized as the leading fast food chain in the

world. It purposes of functioning is to comply with the laws, policies, regulations, objectives and

goals of parent firm. Along with this, it desires to establish its prominent position on its own.

Transport of London

Type of organization: Government organization

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Purpose: Government aims to stabilize the situation of country in different aspects. In that

regard, there are many organizations that function under its control (George and public relations.

2016). Their aim is to provide public services in different sections such as education, health,

transport and others. One such organization is transport of London that caters, monitor and

maintain the transport condition in UK. Transport of London is a public organization whose

primary function is to provide better traffic facilities to the countrymen with good infrastructure

and passage.

Cancer research

Type of organization: Charitable organization

Purpose: Charitable organization or other nonprofit organization functions with the sole aim to

bring improvement in the condition of country. Cancer research is the independent research

center in UK which conducts research to minimize the deaths of patient due to this terminal

illness (Moutinho, 2011). Research activities are carried out to introduce new methods of

prevention and cure of cancer.

1.2 The extent to which it meets the objectives of its different stakeholders.

No organization functions in isolation thereby its success and development depends upon

the efficiency of its operational management. Similarly, Iceland supermarket is the large family

of employees, suppliers, customers and other trading partners. There are many entities associated

with it. Entities that are directly or indirectly associated with the working of organization are

referred as stakeholders. Major of them are its owners, customers, Government agencies,

employees working in it, creditors and many regulatory agencies such as environmental groups.

Owners: Iceland operates with the number of shareholders who are the owners of the

organization. There is a board of directors who frame policies and strategies for the

success of organization and make them expand to the larger horizons. Iceland

supermarket realizes the importance of their need and always caters to provide the large

return on investments to them (Halbert and Ingulli, 2011).

Customers: Central part of the organizational working is their customers. Each operation

is done by keeping in consideration their choices and preferences. Iceland supermarket is

recognized for its outstanding service it extends to them. Management tends to offer the

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quality products to them as per their need and choices. There is a separate team made by

Iceland supermarket to seek customer's choice by maintaining personal interactions with

them via telephonic conversation or through using virtual platform that is internet and

social media.

Governmentagencies: Government and other legislative bodies function to regulate the

operations in the country. It has the significant impact on the strategies and policies

framed by the organization Iceland supermarkets. Government imposes many rules and

regulation with respect to the employee’s related issues, authenticity of its working,

quality of products and services offered by it, customer protection, environmental laws

and many (Aterido and et.al, 2011). To maintain the legality, Iceland supermarket abides

all the norms stated by these organizations.

Environmental Groups: Apart from Government and other regulatory bodies, there are

some organizations which work to monitor the specific regions and their operations. Few

such firms are environmental groups whose primary aim is to protect the environment

from any damage and it also takes steps for its preservation. In this regard, Iceland

supermarket is complying with its responsibility towards the environment and

understands the need of it (Aula, 2010). For the purpose, it supports these organizations

in their campaigns and programs. Further, in its practices, authenticity is maintained

along with sourcing of raw material from licensed suppliers.

1.3 Responsibilities of an organization and strategies employed to meet them

Iceland supermarket work on the base of providing safe and healthy products to the

customers with the outstanding services that are procured from the reliable places and sources.

Along with this, it also provides generous supports for the good cause in the society.

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Illustration 1: Influence matrix of stakeholders

(Source: George and Public relations, 2016)

On the basis of above grid, stakeholders of the organization are categorized on the basis

of four parts as per the degree of power of influence and interest:

 Customer: Customers falls in first quadrant and hence should be satisfied. It means that

organization Iceland supermarket consider their customers as a core of all the operations

undertaken by it. They always intend to provide the quality products and services. The

primary product sold by Iceland supermarket that is frozen food are sold with special care

in the process of freezing in which texture, taste and nutrition are retained. Organization

makes sincere efforts to keep them satisfied at optimum level (Budhwar and Debrah,

2013).

 Employees: Work force in an organization intends to give their services at healthy and

resourceful place. Realizing the importance of efficiency and their contribution in the

organization, Iceland supermarkets make the great place to work for the employees. They

provide resourceful environment of working and maintaining good communication level

with them. With good sense of team work, Iceland supermarket has efficient leaders who

supervise their employees to derive the best outcomes and results.

 Government agencies: Legislative bodies and other Government agencies cater to

stabilize the situation in country on different aspects such as economic, political,

environmental and social. Further, the policies framed by them affects the operations of

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organization such as on its profitability, revenue generation and customer base.

Regulations for capital and interest rates laid by it affect the investment structure of

Iceland supermarket (Cantwell and et.al, 2010).

 Suppliers: Engaged in number of services, Iceland supermarket is collaborated with many

suppliers who provide raw materials, semi-finished goods or prepared items to them. One

of the largest employees units of UK is work force in supply chain management. With the

efficiency and preciseness of their delivery, Iceland supermarket is able to provide their

customers with high degree of optimal level in their services. For the purpose, they are

kept informed about the changes and amendments occur in their goods and other related

aspects.

TASK 2

2.1 economic systems attempt to allocate resources effectively

There are different ways in which economic systems allocate resources in the economy.

On the basis of ways of allocation of resources, economic system is categorized as command

economy, free market economy and mixed economy (Craig and Campbell, 2012).

Command economy: The economic system in which factors of productions are under the

control of Government. Organizations operating in it have minimum rights over the

processing and output decisions. All the decisions are taken by the Government of the

country and other legislative bodies. Iceland supermarkets operating in command

economy have no right to decide the process of the frozen and non-frozen items. Further,

the factors of production are under the management of Government.

Free market economy: In this economy all the process are held under the influence of

market forces that is the forces led by the demand and supply of products and services

provided by the organization (Gecevska and et.al, 2010). Operating in free market

economy, Iceland supermarkets work under the minimum influence of government on its

functions. Board of directors has full control over all the departments and operations.

Mixed economy: It is the combination of both the above mentioned economies that is free

market economy and command economy. In this type of economy, organization has

control over the pricing and output decision but under certain limitations and obligations

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by the government and other legislative bodies. Such as Iceland supermarkets provide

frozen and non frozen items. In that regard there are certain rules and norms laid by

legislative bodies about the hygiene and health perspective of products sold by it (Halbert

and Ingulli, 2011). In reality, Iceland supermarkets function in this type of structure

having rights and powers with some limitations.

2.2 The impact of fiscal and monetary policy on business organizations and their activities

In a country there are many organizations who function to stabilize the condition of

economy and operations in the country such as Government, central banks and many more. Two

such important tools that effectively manage the working in the organization are fiscal and

monetary policy. Fiscal policy is the steps adopted by Government in order to check the overall

implication in the economy. In fiscal policy government adjusts the level of taxation and

spending. Taxation refers to charging fees from the entities in various aspects, on the other hand

spending by the Government relaxes the economy with the increased flow of money. Taxation

reduces the profit level of the organization such as Iceland super markets (Hill and Hernández-

Requejo, 2011). When government increases taxes on their services, it directly affects the

financial position of mentioned supermarket. Inversely when Government take steps such as

increasing spending in the retail sector or attracting investments in the country, it helps the

organization to expand its venture.

Monetary policy refers to the steps adopted by central bank of the country to control and

check the money circulation. By adopting various methods such as changes in interest rates, bank

rates, open market operations and many more led to the change in Iceland supermarkets (skanius

and et.al, 2010). Changes in interest rates fluctuates the investment status on organization. When

interest rates are favorable in nature, investors and creditors has more faith in organization with

minimum risk and invest more in the expansion of Iceland supermarkets. Further, open market

operations that is selling and purchasing of government securities in market led to the changes in

money supply in economy that brings changes in inflation rate.

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2.3 The impact of competition policy and other regulatory mechanisms on the activities of a

selected organization

Along with the Government and other legislative bodies there are certain

organizations that check and monitor the activities of the trade entities working. They have the

significant impact on the working of the organization mentioned in different aspects. These

organizations make audit on frequent basis to maintain the authenticity and legality. Certain

organizations with respect to are office of fair trading, competition and monetary authority and

BIS. Office of fair trading functions to check the unfair trade practices by any organization

which holds the large share in market. With the imposition of certain rules and norms, it is

processed (Iyer and Henderson, 2012). Competition and monitory authority works to check the

legality of the mergers and acquisitions taken places by different trade entities. Further,

government and other legislative bodies cater to bring efficiency ion the operations undertaken in

the trade and business in the country. BIS is one such organization that encourages innovative

and creative methods by the businesses so that better methods to resolve the issues are inculcated

in the practices of the trade in economy.

TASK 3

3.1 Market structures determine the pricing and output decisions of businesses

On the basis of pricing and output decisions of the organizations, market structures are

categorized as monopoly, perfect competition, monopolistic competition and oligopolistic

market.

Perfect competition: The market structures where there are many sellers and buyers. In

this structure, prices and output decisions are taken as per the forces that are demand and

supply of the product and services offered by the organization (Laumer, Eckhardt and

Weitzel, 2010). In perfect competition Iceland supermarket has no right to decide their

process and charges of their products.

Monopoly: Market structure in which there is only one seller and many consumers. Seller

has sole right to decide their prices and output quantum which enable it to make so much

of earnings. Though this kind of structure do not exist in reality, even if an organization

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such as Iceland supermarket shapes into Monopoly there large amount of earning to the

seller.

Monopolistic: In this type structure there are few sellers and many buyers with the high

degree of competition between them. To build a competitive edge in the market place,

Iceland supermarket provides distinguished services as per the choices and preferences of

their customers (Moutinho, 2011).

Monopolistic: In this market structure there are many buyers and few sellers which are

dependent on the decisions of their rivals for their prices and output. In this if a seller

make changes in his price or output structure, it directly reflects on the other. Iceland

supermarket operating in this market structure keeps the prices competitive nature.

3.2 The way in which market forces shape organizational responses using a range of examples

Market forces prevailing in the market shapes the organizational responses in the very

significant manners by bringing changes in the strategic formulation by the management of

Iceland supermarkets. This macro-economic forces bring changes in the profitability and

productivity of the organization in various aspects in different manner.

Demand and supply: The major factor that influences the organization's strategy is the

nature of demand and supply of products and services provided by it. When there are

changes in the demand ratio, alteration in the methods adopted by the organization also

came into force. Such as the time of high demand, organization increases its prices to

earn more profits on the other hand when demand is low at the time of financial crises,

Iceland supermarket lowers the rates of their products to retain the customer base and

prevent them to switch to other product (Nickels and et.al, 2011). It also brings changes

in supply trends as per the suitability with the situation.

Elasticity of demand: This is the major factor in deciding the revenue generation of

Iceland supermarkets. Iceland supermarket is operating of countries with different

segments with different elasticity of demand. Elasticity of demand refers to the degree of

changes in the demand occur with the fluctuation in prices of product and services

offered by the organization. As mentioned there is different elasticity of demand in

different segments of market, organization offer products at different prices (Oh, 2010).

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Market with low elasticity experience high price and on the other hand high elasticity

region has low prices.

Customer choices and preferences: Fundamental factor that affects the organization's

responses are the customer's choices and preferences with the changing scenario. Needs

and requirements of the customers are not static in nature, they change with the fast pace.

For instance, at present time people are very conscious about health and hygiene, keeping

that in consideration Iceland supermarket offers products with no preservatives and

artificial colors.

3.3 Way in which the business and cultural environments shape the behavior of a selected

organization

Organization working in country gets influenced by the number of factors prevailing in

outer environment. Business and cultural environment that surrounds Iceland supermarket affects

policies and decisions taken by it (Porter and Rivkin, 2012).

Political factors: Political situation prevailing in the country decides the degree of

smoothness of functioning undertaken by the organization. Iceland supermarket is

operating of countries with different political situation. Favorable and welcoming

political conditions have positive impact on the organization's establishment on the other

hand if there is unrest in the country it deviates the organization to operate in it or have

wrong impact on its operations. Government and other legislative bodies are also

involved in the upbringing of the industry such as its engagement in promotion and

relaxation in the taxes and tariffs in the concerned industry (Siewiorek and et.al, 201).

Economic factors: Economic situation of the country refers to the value of the currency

circulating in the economy, exchange rate, inflation rate, interest rates and other

economic determinants that decides the interest of organization to establish its stores in

that area. Such as Iceland supermarkets enters the market segment which is economically

profound and stable in nature. As it will give lucrative outcomes to it.

Technological factors: Technology is the central part of the operations run on any

organization. Such as if the country is technologically sound, operations will be easy in

nature. It leads to the better infrastructure facilities allotted such as communication,

transport and others (Smallbone and et.al, 2010). Advanced communication led to the

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good coordination between different stores and centers in the world. Managers of the

stores can help to meet on virtual platforms to discuss the issues and find relevant

measures to solve them.

Social factors: It led to the social condition of the economy. It creates the base of working

in the organization. It accounts into it different components such as customer's choices

and preferences, availability of work force and employees etc. If there is restricted labor

movement it will hinder the growth and development of organization, as due to this

mentioned organization Iceland supermarket has to undergo cost of training and

development of new appointed employees (Tayur and et.al, 2012).

TASK 4

4.1 The significance of international trade to UK business organizations

When an organization expands its venture to the other place it has the direct impact on the

profitability and revenue generation. Though organization expands with the fundamental

requirement of mentioned reasons, it avails other supplementary benefits to it.

Market expansion: When an organization expands its venture to the other country, it

increases its customer base. When customer base get widened, sales get maximized with

the multipliers effect. It enhances the brand awareness around the Globe.

Relationship and networking: With the establishment of venture and different stores in

other countries, Iceland supermarkets has made good relational constructs around the

globe with number of suppliers and trading partners (Ullah and Lai, 2011). With better

engagement, organization is enabled to inculcate different and resourceful methods in its

operations.

Low risk: Introducing products in different markets led to the minimization of risk for the

organization. With the large domain of working in different sectors, Iceland supermarkets

have availed the benefits of differentiation of products and product development.

Technological advancements: With the increased relational constructs and connectivity,

Iceland supermarkets have experienced technological advancements in their operations.

International events and trade fairs organized on global level bring together many

potential buyers and trades, connectivity with which enable Iceland supermarkets to

know about the innovative and advanced ways of working (Welford, 2013).

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4.2 The impact of global factors on UK business organizations

On business organizations there is the large impact of global factors if it is operating in different

countries. These factors affect the profitability and the revenue generation of the selected

organization Iceland supermarkets.

International organization: There are many organizations that run on international

grounds to keep a check on the working of trading entities and regulate all the operations.

Few such organizations are World Bank, World trade organization and others. World trade

organization runs to minimize the trade restrictions laid down by the states and countries

so that competitive environment can be maintained in world (Wetherly and Otter, 2014).

Emerging economies: Many economies such as India and china are growing with the very

fast pace. This growth and development threatens the organizations belonging to other

countries hence Iceland supermarket faces fierce competition from these countries.

Economic changes: Economic situations in different countries are different in nature.

Countries impose many obligations with respect to the entry and establishment of the

organization in any country such as tariffs, custom duties, formalities at the entry of

country etc.

4.3 The impact of policies of the European Union on UK business organizations.

European Union is the international organization that functions to improve the condition

of member countries in all the respect such as economic, social, political and environmental. UK

is the member country of EU. Further, UK is the home country of Iceland supermarkets with its

establishments in other countries as well. European Union has laid certain rules and regulations

to check the condition (Wild, Wild and Han, 2014).

Labor law: European Union has imposed law for the organization with respect to the

protection of employees working there. Iceland supermarket abides by the mentioned law

which states the minimum working hours, minimum wage, prescribes standard of work

culture and environment etc.

Food and drinks law: According to the law stated by European Union, organization

selling food products are required to maintain at-least the minimum level of nutritional

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value and essentials (Xue and et.al, 2010). Iceland supermarkets comply with the law and

seal required nutrition in frozen and non frozen items.

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CONCLUSION

Business entities function under the influence of several factors that is external factors

such as political, social, economic, technological, legal and environmental factors that affect

organization on wider scale. On the other hand internal factors are customers, employees,

suppliers, creditors who affect the decisions taken by the organizations such as Iceland

supermarkets in the considerable manner. From the above study it can be articulated that

organization faces impact from the market forces in the form of demand and supply changes,

national and international bodies whose rules and regulations are needed be followed by the

organization (Yu and Ramanathan, 2012). Further, it can be inferred that international trade

enables the Iceland supermarket to expand its venture in different countries.

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