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Environmental Forces and Business

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Table of Contents
Task 2........................................................................................................................... 3
1.2 Meeting the objectives of different Stakeholders...............................................................3
1.3 Responsibilities of an Organisation...............................................................................3
Scenario 2...................................................................................................................... 5
Task 3........................................................................................................................... 5
2.1 Explain how Economic systems attempt to allocate resources effectively................................5
2.2 Impact of Fiscal and Monetary Policy of Organisation.......................................................5
2.3 Impact of Competition Policy and other regulatory mechanisms on the activities of the organisation
................................................................................................................................ 6
3.1 Explain how Market Structures determine the Pricing and Output Decisions for the business.......6
3.2 Market Forces Influencing Organisational Responses........................................................6
3.3 Business and Cultural Environments shape the Behaviour of the Business...............................7
Scenario 3...................................................................................................................... 8
Task 4........................................................................................................................... 8
4.1 The Significance of International Trade to UK Business Organisations...................................8
4.2 The impact of Global Factors on UK Business Organisations...............................................8
4.3 The impact of Policies of the European Union on UK Business Organisations..........................8
References................................................................................................................... 10

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Task 2
1.2 Meeting the objectives of different Stakeholders
A private business organisation like BLD Foods is run and dependent on its stakeholders for its
effective working. Stakeholders for a private organisation include customers, employees,
suppliers, owners and also government (Daniels et al., 2002). All these stakeholders give
something to the business and in return require something form the business. Customers require
good quality products and services, employees require good working environment with good
pay, owners want good profits, suppliers or investors require good return on investment and
government wants good service to the people and nation (Daniels et al., 2002). Each of these
objectives of the different stakeholders needs to be met by BLD Foods in order for a smooth and
steady operation. Meeting all these objectives is the primary need for BLD Foods as it will
define its position in the market, gather sufficient financial and manpower sources for operation
and will also enable it to plan for the future of the company. Meeting the objectives will require
commitment and will define the vision and mission of the company.
1.3 Responsibilities of an Organisation
The responsibilities of BLD Foods range to its obligations to the various stakeholders. Some of
the responsibilities of BLD Foods are as follows:

Providing good quality products and services to its customers


Providing steady return to its vendors and looking after their interests
Maintaining industry standards and the standards as set by the law of the land
Providing safe working conditions to the employees of the company
Not to indulge in illegal or untoward activities including financial fraud and use of

unethical means.
Working towards welfare of the community and environmental sustainability (Griffiths
and Wall, 2011)

All the above mentioned responsibilities of BLD Foods will require a stagnant and structured
strategy to fulfil. BLD Foods must follow the guidelines of the Health and Safety at Work Act
(1974) in fulfilling its responsibilities towards its employees (Robertson, 2015). BLD Foods
must also improve its recruitment process to recruit the best from the crowd for efficiency in the
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company. BLD Foods must use environment friendly methods of production and risk
management skills to minimise the harmful effects to the environment (Griffiths and Wall, 2011).
All these strategic options will lead to an organisation which looks of the welfare of the
stakeholders and the community as well.

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Scenario 2

Task 3
2.1 Explain how Economic systems attempt to allocate resources effectively
Resources to satisfy needs of people are very limited and business organisations all over the
world strive towards effectively using these scarce resources. In this attempt, the economic
systems of the business world help categorising the areas to allocate resources effectively (Capon
and Capon, 2009). The planned economy system is a system where the resources are controlled
by the government of that nation and use of the resources are limited to governments sanction of
the quantity and mode of use. Planned system provides stability to the business purpose because
allocation of resources is as per demand by consumers (Sloman and Jones, 2014). In a free
economic system, resources are basically free from government control and private companies
have individual say in the decision making process of the use of resources. Allocation of
resources is based upon market conditions and companies can also acquire resources form import
(Sloman and Jones, 2014). However, in a mix economic system, as is common in most nations,
there is segmentation of organisation based on private and public control. The mix of both
private and public organisation is a mix of planned system and free system. This allows effective
control of scarce resources based upon the demand of consumers using smart techniques
provided by private as well as public entities (Sloman and Jones, 2014).
2.2 Impact of Fiscal and Monetary Policy of Organisation
As an entrepreneur, one of my most important responsibilities is to look after the impact of fiscal
and monetary policy on the company. Fiscal policy is a form of economic control by the
government which decides the amount of tax liability for an organisation. The main purpose of
fiscal policy is to stabilise the economy in tough times through tax measures in the purchase and
sale of goods and services (Ahrend, Catte and Price, 2006). Monetary policy on the other hand, is
a stabilisation system of the central bank of the country whose sole aim is to control the supply
of money in the economy. Methods of monetary policy include changes in the interest rates and
other reserve requirements, purchase or sale of government securities and bonds and other
instruments to control the flow of money in the economy (Ahrend, Catte and Price, 2006). These
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policies effect the organisation in operational activities, production processes, availability of


resources, credit facilities, tax liabilities, expansion strategies and many other activities that
depend on the economy of the country.
2.3 Impact of Competition Policy and other regulatory mechanisms on the activities of the
organisation
Our organisation is striving for major expansion policy in other parts of the world but in it strive
there are various regulatory mechanism that sometime become a hurdle. The retail business is a
very competitive industry requiring major challenges towards production and expansion. To
streamline this competitiveness, competition policy was enacted to look after establishment,
mergers, acquisitions and other activities of organisations in the UK (Clark, 2000). It ensures
healthy competition between organisations to look after the benefits of the consumer. There are
also various regulatory bodies like the Competition Commission (1998), Fair Trading Act (1973),
Enterprise and Regulatory Reform Act (2013) and also the Competition Authority (2014) which
looks after the ethical activities of the organisation for the welfare of the public interest
(economicsonline, 2015).
3.1 Explain how Market Structures determine the Pricing and Output Decisions for the
business
Market structure is the various factors that contribute towards effective interaction between
buyers and sellers. These impact the general pricing and output decisions of a business. The
various market structures are monopolistic market, perfect competition market and oligopoly
market. In a perfect competition market, pricing and output is determined by the market forces
because there are many buyers and sellers and equilibrium is present in the market (Clark, 2000).
In a monopoly market, pricing and output decisions are determined by one seller who has
exclusive rights over the market product. There is also strict entry and exit of firms which
enables the sole firm to decide on the price and quantity of products (Clark, 2000). In an
oligopoly market, there are few firms producing the products or services but this does not create
monopoly though prices may be high (Clark, 2000).
3.2 Market Forces Influencing Organisational Responses
Market forces are the several conditions that impact the supply and demand of products and
services in the market. Market forces influence the pricing, quantity, number of sellers and
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buyers and also production processes (Sloman and Sutcliffe, 2001). Organisational response on
the other hand is the reaction given to the impact of the market forces. Influence and response
between market forces and organisation will help decide the goodwill and profit for the
organisation. When Vodafone wants to enter a new market, it looks upon the availability of
resources, number of buyers, market structure, market policies and also profit opportunities
before establishing its business (Brand champion (Vodafone strategy), 2007). Effective
evaluation of market forces will lead to high productivity and good profits for the organisation.
Market forces of demand and supply can also deteriorate an organisations goodwill if the
organisation is not in a mutual relationship with market forces (Sloman and Sutcliffe, 2001).
Therefore, favourable market forces will create more places for an organisations product
eventually leading to effective use of resources, friendly competition and general price-level.
3.3 Business and Cultural Environments shape the Behaviour of the Business
Companies today rely not only on internal processes like employees and raw material for growth
but also external factors such as economic conditions, political scenario, cultural bounds and
environmental health. Business and cultural environments consists of such factors that
manipulate their choice of operation, products and services and also future strategies (Hamilton
and Webster, 2009). Organisations too need to maintain the efficacy of such business and cultural
environments to adapt itself of any market situation and lead towards growth. In a case of
cultural environment, McDonalds had to change its recipe of Big Mac for Indian customers
because it contained beef (McDonalds jumps on the CSR bandwagon, 2002). This shows the
relative importance of business and cultural factors in shaping the activities and performance of
business organisations.

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Scenario 3

Task 4
4.1 The Significance of International Trade to UK Business Organisations
International Trade is a form of trade between organisations of different nations. International
trade leads to access and use of goods and services that is not necessarily produced in the
importing country. International trade allows business organisations for future expansions and
reach of their specialised goods and services. In case of organisation of UK, international trade
will expand the reach of their operation and market (Willem te Velde and Cal, 2006). It will also
lead to less cost of production because of import channels of cheaper products from other
nations. International trade will also give UK organisation access to better quality material which
has better quality production in other nations. Nonetheless, International trade will increase flow
of goods, services, money and also information between UK organisation and others (Willem te
Velde and Cal, 2006).
4.2 The impact of Global Factors on UK Business Organisations
Global factors impact the organisations of UK subsequently impacting the economy off UK
(Hadjikhani and Ghauri, 2001). Global factors relate to the external factors such as political,
economic and technological factors that affect the organisations. Political factors impact the
expansion policy, international trade, tax policy and exchange factors of organisations
(Hadjikhani and Ghauri, 2001). Economic factors impact interest rates, inflation, exchange rates,
stock values and also unemployment. Technological factors impact methods of production, cost
of production, product development and innovation. There are also environmental factors which
impact the working conditions, process of production and transport, and other environmental
issues (Hadjikhani and Ghauri, 2001).
4.3 The impact of Policies of the European Union on UK Business Organisations
European Union (EU) is the regulatory body formed by a group of nations in the west. UK is an
active and important member of the EU (Gov.uk, 2015). EU regulates control with the use of
various measures on the taxations, expenditure, business activity and also support of
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organisations. EUs policy on employment gives opportunity to people finding work and imparts
training and experience on government funds. EU also gives employment to foreign nationals by
its law on free movement of persons by its policy of New Deal (Gov.uk, 2015). From inflation
rate to competition in market, export and import attributes and also financial aspects, EU
guidelines need to be followed by UK. EUs Monetary Policy Committee (MPC) decides the rise
and fall of the general price level (Researchbriefings.parliament.uk, 2015). Therefore,
legislations of EU have to be implied by the organisations of UK at national as well as local
level.

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References
BOOKS
Ahrend, R., Catte, P. and Price, R. (2006). Interactions Between Monetary and Fiscal Policy.
Paris: OECD Publishing.
Campbell, D. and Craig, T. (2005). Organisations and the business environment. Amsterdam:
Elsevier Butterworth-Heinemann.
Capon, C. and Capon, C. (2009). Understanding the business environment. Harlow, England:
Prentice Hall/Financial Times.
Clark, A. (2000). Organisations, competition and the business environment. Harlow: Financial
Times.
Daniels, J., Radebaugh, L., Sullivan, D. and Daniels, J. (2002). Globalization and business.
Upper Saddle River, N.J.: Prentice Hall.
Griffiths, A. and Wall, S. (2011). Economics for business and management. 3rd ed. Harlow,
England: Financial Times/Prentice Hall.
Hamilton, L. and Webster, P. (2009). The international business environment. New York: Oxford
University Press.
Sloman, J. and Jones, E. (2014). Essential economics for business. 4th ed.
Sloman, J. and Sutcliffe, M. (2001). Economics for business. Harlow, England: Financial
Times/Prentice Hall.
JOURNALS
Brand champion (Vodafone strategy). (2007). Strategic Direction, 23(2).

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Hadjikhani, A. and Ghauri, P. (2001). The behaviour of international firms in socio-political


environments in the European Union. Journal of Business Research, 52(3), pp.263-275.
McDonalds jumps on the CSR bandwagon. (2002). Strategic Direction, 18(9), pp.8-11.
Robertson, H. (2015). The Health and Safety at Work Act turned 40. Occupational Medicine,
65(3), pp.176-179.
WEBSITES
economicsonline, (2015). Competition policy. [online] Available at:
http://www.economicsonline.co.uk/Business_economics/Regulation.html [Accessed 18 Nov.
2015].
Gov.uk, (2015). 2010 to 2015 government policy: business regulation - GOV.UK. [online]
Available at: https://www.gov.uk/government/publications/2010-to-2015-governmentpolicy-business-regulation/2010-to-2015-government-policy-business-regulation [Accessed
18 Nov. 2015].
Researchbriefings.parliament.uk, (2015). Research Briefings - The economic impact of EU
membership on the UK. [online] Available at:
http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06730 [Accessed 18
Nov. 2015].
Willem te Velde, D. and Cal, M. (2006). A Political Economy Perspective of UK Trade Policy.
[online] odi.org. Available at: http://www.odi.org/sites/odi.org.uk/files/odiassets/publications-opinion-files/4675.pdf [Accessed 18 Nov. 2015].

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