Influences of Business Environment Essay
1347 Words6 Pages
The business environment is constantly changing as time goes by. There are several factors that affect the aspects of the business environment such as benefits, costs, and risks of conducting business. The type of business, economic, government, and legal influences are major contributors to the business environment, Riordan Manufacturing, Huffman Trucking, Kudler Fine Foods, McBride Financial Services, The Elias Group, and Smith Systems are business that are affecting by those influences. Types of business may include sole proprietorship, partnership, limited partnership, corporation, limited liability partnership, limited liability company, c-corporation, and s-corporation.
Riordan Manufacturing, Inc. is a global plastics manufacturer…show more content…
The legal influences are minimum wage, discrimination, union, local, and environmental protection laws. Minimum wage affects the company by determining the minimum amount that is allowed to pay an employee. Discrimination and union laws are laws that can have adverse affects when it comes to a lawsuit. Riordan has to make sure it’s following the environmental laws to ensure that regulation and standards are being followed.
Huffman Trucking is a sole proprietorship that was founded by K. Huffman in 1936. It has continued to grow since World War II and the increased demand for carrier services. It is a sole proprietorship that has unlimited liability to the owner. The profits or losses of a sole proprietorship are taxed as though they belong to the individual owner. (Foundations)
Its economic influences are inflation rates and unemployment rate. Unemployment plays a big part in business today. When unemployment rises, business and profits tend to drop. It’s important to stay ahead of the game and be prepared for the worse. History shows that the economy can decline at any moment.
Huffman Trucking’s government influences are export restrictions, regulation, budget deficit or surplus, and government debt. Export restrictions hurt the trucking industry when shipments are not in the U.S. Abiding by regulations will ensure that business continues and flourishes. Government debt may lead to increase in costs such as fuel. Fuel is a major asset in the
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Business environment is itself a very dynamic term which consist of various terminologies and management practices as well as various participants. The business environment is full of uncertainties but still some aspects of business and its fundamental principles can allow businesses to sustain within the competitive business environment (Burdekin and et.al., 2011). Here in current scenario the study of business environment from various perspectives has taken place. The major consideration has been given to understand the political, social environment through diverse scenarios. The policies framed at national level as well as international level has been catered which lie within the category of legal environment. Thus various components of business environment have been investigated in current report.
1.2: Meeting the objectives of different stakeholders:
Every organization needs to fulfill the demand of the stakeholders or the objectives related to the business. Without focusing on the objectives of stakeholders it is impossible to sustain and building long term relationship with them. Being a start up organization the needs of meeting out stakeholder’s objectives increases at very large scale. Here in current scenario the bank is one of the major stakeholders who have interest into the possible financial position of the business. They really want to know the strategies that have been made by new businessmen to ensure the long term sustainability of business. Thus in order to meet out bank’s objectives the professional report has been prepared so that strategies of company regarding the generation of finance could be shown in an appropriate and convinced manner. Further the banks could get all the transparency in current financial decisions which can also help in fulfilling their objectives. At the same juncture the business has followed all the legal policies and procedures so that the objectives of government (also a stakeholder) could be meet out in an appropriate manner. The details or information have been provided in an authentic way and requirements of local bodies and incumbency authorities have also fulfilled effectively (Campbell and Craig, 2008).
Further to meet out the customer’s objectives the special consideration has been given to deliver quality products so that the maximum customer value and satisfaction could be provided to them. Customers are very significant stakeholders for any organization. Without the satisfaction and fulfilling their objectives it is impossible to gain success within the market. Thus it has been planned to focus on customer centric approach while preparing the product portfolio. Other than customers, the employees are other stakeholders who have huge significance within the company’s business operations. The employees always have huge contribution in ensuring the success of an organization. To meet out their objectives the new start up business has planned to build some favorable policies which could be helpful for employees. The leave polices, performance terms, incentives and bonuses, working conditions, motivator factors, job security, internal promotions etc. these are certain elements that has been drawn in positive manner. Therefore the `employee centric approach has also taken into immense priority so that objectives of employees could be fulfilled up to highest extent (Chen and Mohamed, 2008). Hence these are certain planning’s to meet the objectives of different stakeholders.
1.3: Explain the responsibilities and strategies of organization to employ to meet them.
In order to meet out the above mentioned objectives the organization is required to focus on their research and investigation. Within the help of proper research or study of environment it could become possible to focus on the objectives of stakeholders. Here the research is related to investigate all the aspects related to particular business. Most importantly the organization is supposed to check all the policies and legal aspects before commencing their business. All the registrations and permissions are prior to take. It is their huge responsibility that the legality or the legal identity of business must be formed before commencing the official business transactions. In case of permissions it must be taken which could be the part of organizational strategies. Thus for the same purpose the study of legal environment is essential.
On the other hand the strategies are required to form with respect to focus on the objectives of stakeholders. It is something that could allow organization to fulfill their responsibilities. Here the researcher for the customer’s demand and their requirement is required so that the product line could be developed accordingly. The knowledge industry standards and new equipments and machineries must be developed by the organization. It must be the part of organizational strategies as has potential to justify with customer centric approach. Ahead another responsibility of organization arises towards their employees. They can never neglect their efforts and seriousness towards the business operations (Jain, 2008). Thus it is their responsibility that human resource policies must be framed for the benefits of employees rather than over burdened them. The discrimination must be avoided and incentives must be provided in a sufficient amount so that employee satisfaction and employee motivation both could be ensured within the organization. The major responsibility is that job security, job opportunity and good working conditions must be provided to employees. Hence these are certain responsibilities and strategies which should become the part of company’s strategies aspects and should be followed in a stringent manner.
2.1: How different economic systems distribute the resources effectively?
There are three types of most popular economic systems in entire world. These are capitalist economy, socialist economy and mixed economy. All these economic systems have their characteristics and advantages which can affect the natural resources at very large scale. The impact of economic systems could be realized on the country’s political as well as legal structure. Further the resource allocation pattern is also different in these three economic systems.
The capitalist economy is the one in which whole control on the distribution and usage of resources remains into the hands of private sector. They can extract the natural resources as per the need and requirement. Profit is their main motive and this element goes against the usage of natural resources. They extract the resources for their own benefits and distribute it to the common people as per their convenience. Further the advantage of capitalist economy is that the wastage of resources is very low and most importantly the maximum utilization of natural resources could be ensured (Jeffs, 2008).
Afterwards the socialist economy is the one which the resources and its control related to production and distribution remains in the hand of government. The decision making related to the extraction of natural resources remain completely into the hand of government. The major aspect of socialist economy is that the common people can get the items and products at reasonable prices. But due to the high level of corruption the wastage of resources is the common scenario into the socialist economy. The profit is never the motive of the government as compare to the capitalist economy.
Mixed economy is third type of economic system which is adopted by various countries. However it has both the perspectives attached to it. It could be ideal as well as worst economic system with relevance to allocation of resources effectively. There is huge requirement of proper planning as the decision making remains partially in the hand of government and partially in the hands of private sector. Thus if the coordination is not proper then the distribution, allocation and product pattern could be disturbed. Therefore these are the advantages and disadvantages of every economic system. The impact of economic system could be realized immensely on the business environment of company.
2.2: Assess the impact of fiscal and monetary policies for your organization and its activities.
Before assessing the impact of fiscal and monetary policy there is huge requirement of gaining intellect about these two kind of significant policies. The fiscal policy is the one that has relevance with the overall budget of the country and caters the information like sectoral distribution of financial resources. Further the Monterey policy is the one where the bank determines the rate of interest and cash on reserve rations (Fernie, 2009).
The impact of fiscal policy is huge on the business operations. The major aspect is that the fiscal policy covers the whole industry rather than focusing on individual business organization. It also helps in determining the future of particular industry in upcoming years. The companies can take their decisions accordingly. Further the tax related aspects also cater into the fiscal policy which is applicable on companies. Higher tax rates can increase the cost of operations and profitability could be compromised by the organization.
On the contrary the monetary policies actually put its impact at the money lending capacity of the banks. Higher the interest rates, the interest on the bank loans could be high which can put its impact at the pricing decisions of the company. The business expansion, more investment etc. these are certain situations which are dependent on loans and borrowings so it could be affected hugely by change in interest rate or monetary policies. Therefore both policies have potential to put adverse or positive impact at the economic aspects of the country which indirectly affects the social environment as well.
2.3: Evaluate the impact of competition policy and other regulatory mechanisms on business activities.
The competition policy prevents organization and its business activities to create trouble for other small companies (Hamilton and Webster, 2012). Further the competition policy encourages business activities to take place within the boundary of healthy competition rather than being into certain kind of war. It can ultimately affect the common people and their right to get quality products. Thus the competition policy avoids the situation of illegal business activities just to win the competition war. Other regulatory mechanism includes the data protection act which has huge relevance to secure or protect the confidential data related to customers. Their transactions and personal information should remain confidential as mentioned in the data protection act. Fair trade policy promotes the ethical business practices. The business could not be involved into fraud activities. Transparency into business activities is the essential aspect mentioned in fair trade policy. Further the regulatory mechanism like working act, discrimination act etc. these acts promote the rights of employees and enable them to work under the positive and pleasant conditions. Therefore the business activities become fair, ethical, and legal if the regulatory mechanisms have been followed by them properly.
3.1: Explain the impact of market structures on the pricing and output decisions.
The pricing and output decisions of the companies depend upon variety of elements and it has various dimensions which are required to be followed at very large scale. The impact of market structures is also very much huge on the pricing and output decisions (Kourteli, 2000). The monopoly market structure supports the environment of no competition as there is only one manufacturer or the producer or the service provider in such case the output quality is dependent on the single firm. They fix the price as per their convenience. The entire game of supply and demand is controlled by the company. Further it is to acknowledge that the perfect competition is most ideal market structure as per today’s business environment. In this type of market structure there are so many competitors who operate within the market and intense competition becomes the reason of price fluctuations and customer convince. The companies can never set the fix price as per their wish or strategies. Every fluctuation within the price is dependent upon the business environment and its need. The control of customers on the market is very huge. The demand and supply game is controlled by the customers in such kind of market structures. The market situations play a vital role in determining the price. The output is also dependent upon variety of market stimuli. Further the oligopoly market has less number of suppliers or manufacturers but the number of customers is very high. Thus at the same juncture it could be stated that in oligopoly market the customers may find trouble in getting the items on time due to high demand and less supply ratio. The oligopoly market seems to have such kind of operational issues. Hence these are certain impacts of various market structures on the pricing and output decisions (Minniti, Zacharakis and Spinelli, 2006).
3.2: Illustrate the way in which the market forces shape organizational responses
The list of market forces is very huge that affects the organizational responses. One of the major market forces are the buying behavior of the customer. If the buying behavior of the customer is favorable then the customers can focus on their existing marketing strategies else they need to change their marketing strategies. The mood and perception level of customers plays an important role into the designing of organizational strategies. Other than this the pricing is another element that could also be affected by the company or can put its impact at the organizational responses. If the pricing is not appropriate then customers automatically feel so many troubles and in result company can lose their customers. Thus adopting the competitive pricing strategy is something that has huge level of relevance with the appropriate operational decisions. The technology is another market force which is responsible for so many innovations and uniqueness within the product and services. The organizations are adopting the new technologies and it has definitely changed the responses in very transformative manner
manner (Montoro‐Sánchez And Soriano, 2011).
3.3: How the business and cultural environment shape the behavior of organization.
The cultural environment needs to be assessed properly so that the decision making related to the product design and development could become clear. The impact of culture is huge on the acceptance of particular product within any country. The local residents have their own cultural values which must be fulfilled by the companies. Failure to such aspects can definitely minimize the sales of the company. While commencing business into any other country it is essential to gain knowledge about the local culture and social environment. It helps in developing the more customer centric approach. The company can avoid such business practices which are against the local cultural values. For retail sector organization the cultural aspects are changing very rapidly. People are accepting the culture of retail stores and it could go into favor of investing into the retail sector. Therefore in this way the cultural environment has potential to change the mindset and beliefs of customers. It reflects the values and accordingly the organization can shape their organizational behavior (Ratnam and Chandra, 1996).
4.1: Discuss the significance of international trade to UK business organizations.
The set up of business at the international level is something that can definitely affect the growth of business or organization. If any organization has international presence then it can definitely help in increasing the profitability of the organization. They can target more number of customers and it can increase the sales for the company. The UK’s organization should go for global expansion as it gives strong base to the companies. Other than profitability, the sustainability is something that could also be gained or could become advantage for the UK business organization. They could do the international trade in so many countries and it can build their international reputation. It is to acknowledge that the brand image could become stronger if the global expansion has done in an appropriate manner. The growth opportunities are higher in the international trade. The market is very wide and customers could be targeted in an easiest way. It is also clear that the revenue generation capacity of company could be increased and they can contribute more into the national income. Through this element the organization can enjoy the status of most reputed organization within the home country (Stokes and et.,al. 2010). So the international trade could be helpful for the organization in various ways.
4.2: Analyze the impact of global factors for the organization.
Mainly three major impacts of global factors could be realized on the organization. One is that the technology has become very much improved within the organizations. In order to improve the competency the companies are focusing upon improving their technical infrastructure that allows them to improve their product quality as well. Another very significant aspect is the innovation in all the areas of management. It is clear that without innovation none of the organization can survive into the global environment. Thus the impact of global factors could be experienced into the innovation and uniqueness. Immense competition is another criterion which increases due to the global factors. The impact is that companies are becoming more focused towards their services and internal working environment. Building the reputation at world level has become main agenda for the companies (Connor and Dovers, 2004). Thus these three major impacts could be faced due to globalization.
4.3: Evaluate the impact of European Union policies
The major impact is that the employee retention has become possible. The companies are able to retain their employees as they are following the discrimination avoidance policies mentioned by the European Union. It is to acknowledge that the employees are now working within the secured environment and working conditions have also improved. The industry standards have been followed by the companies as European Union is highly strict towards the legal compliance. Thus the safety and security for customers and employees could be treated as major impact of EU policies (Dale and Beyeler, 2001).