Business Environment - Essay Example

Business Environment Introduction: The business environment deals with the entire business operations and the background of the business which shapes them directly and indirectly. Various factors shaping the business environment are the macro and the micro factors in the organization. The macro and the micro factors are those that deal with the external and the internal factors of the firm. The main constraints of the business environment are the government policies, principles, national rights and the constitutional laws. The business environment is a dynamic and a dominant influence where the organizations cannot influence and operate at an ease. There are various policies, norms and procedures that the organization should face before resuming the operations in the environment. The firm to be analysed in this context is the fashion fabrics manufacturing unit in UK, the organisation is in the fifth year of its successful operation. P1) Mission: It is the elementary and unique approaches which positions the organization from others and make them identical. It indicates the nature of what the business is into and the scope of the business in terms of the productivity, profitability and the technology. . Mission is the universal, stable statement of the company purpose. It includes the business philosophy in the strategic decisions and entails the company to the indication of the products and the services according to the needs and wants of the customer and the level of the satisfaction of the customers. The conceptualization process of the organization is a complex process, where the mission describes the product, market and the technological areas of emphasis for the business in the kind of the reflection in the priorities in the strategic decision making. Key Objective: The key objectives of the fashion fabric organizations are the purpose of the business and the reason why the business are set up, to analyze the enduring aims and the objectives of the business which involve in the areas like the productivity, profitability, ROI, competitive advantages, technological factors, public development and the social responsibility. Identifying the objectives should be of much specific, reliable and measurable. The identification of the objective should be like the statement of what is expected from the setting up of the business and how the earning of the shares can be increased yearly. The comprehensive decisions which take up the long terms objectives of the firms are known as strategies which deal with the functionality of the firm. The main objectives of the stake holders in the firm are to improvise and customise the product as the product of choice. To make the product innovative and to have key emphasis on the quality, durability and highly reputed. To expand the business in other countries also apart from UK. Responsibility: The operating business firm has much of the responsibilities to the people, the general public, the employees, the shareholders and the stake holders. The responsibilities of the business differ from persons to person in the organization, who is directly and indirectly dealing with the organizational goals and activities. The responsibilities of the organization towards the general public who are the customers of the fabric manufacturing organizations are in terms of quality and the availability of products and the pricing of the products. The responsibility towards the employees deals with the fair working conditions and the good remunerations for the services exhibited. The share holders are the main backbone who contribute much to the investment and have the liability in receiving the profitability in the firm. The organizations are indebted to paying the EPS and the ROI to the shareholders subjected to the revenue generations. The grant strategy and the functional strategy are mainly used in dealing with the responsibility and in achieving the target and the goal in the organization. The grand strategy is the package of the long term strategies which deals with the entire resource allocation in carrying out the objectives. The functional strategies are also employed to carry out the decisive plans and the strategies in the organization. P2) Explain How the Economic System Attempt to Allocate and Make Effective Use of Resources: The business is performed in the UK market which functions in the mixed economy with the extended differences in the degree of free market and the planned economy. The economic planning is very essential in the requirements of planning of a business. The economic system makes use of various policies like the minimum growth where the firm initially sets the targets for the short and the long term in the operations. The ability to grow in the economic is performance and the economic results. “Economic systems have developed over time for the express purpose of allocating resources. Techniques for allocating resources have emerged like a process of natural selection, with those that work becoming incorporated into the economic system and those that fail being eventually rejected. Nowadays, the most highly developed nations enjoy material standards inconceivable to their forebears at the turn of the century, and still well beyond much of the rest of the world. Much of this is not simply to greater exploitation of resources, it leads to better allocation of resources.” (Environmental research management: Theory of research management, n.d.). Discuss the Impact of Social Welfare and Industrial Policy Initiatives on Organizations and Wider Community: The social welfare and the industrial policy take much importance in the development of the business. The social responsibilities are: “the government intends that its Code of Social Responsibility be fully debated before its principles are written into government polices. It hopes the code will influence the behaviour of parents, neighbours and beneficiaries and make it clear to them what is expected in order "to meet their responsibilities." (Shipley et al 1998). Industry Policy: The industry policy deals with the amount of the competition prevailing in the industry and the five forces which shape the industry. The five forces that shape the fabric industry are the new entrants, substitute effect, suppliers and the buyers. The policies are directives which are designed to guide the decisions and actions of the managers in implementing the strategy. The industrial policy contributes in establishing and controlling the operational activities of the firm. The industrial policies are known as the standardized procedures in the successful implementation of strategies in business. Evaluate the Impact of Macro Economic Policy Measures and the Influence of the Global Economy in UK-based Organizations and Stakeholders: The macroeconomic policies are those that deal with the forces that affect the organizations from the external factors, the economic policy that are external to the firm are called the macro economic factors. The macroeconomic policies are the monetary policy and the fiscal policy. The monetary economic policy deals with various short term rates and the reserves that are to be managed in the short run of the business. The monetary policy can deal with boosting the economic level of the firm. They interrelate both the inflation and the economic growth. The fiscal policies are dealing with management of the budget, financial and the development of the expenditure which are specific to the government programs. The fiscal policy deals with the taxes and the deficit benefits in the organization. The global economic policy has the effect on the “economic developments such as recent turbulence in financial markets also have an important bearing on the decisions of the monetary policy committee, the main objective is to male the inflation low and stable and a close when a target level of 2% is achieved in the economy like UK.” (Sentence 2007, p.2). P3) Investigate the Behaviour of Organizations and the Market Environment: The market environment in which companies function will impact on the actions as well as behaviour of businesses (organization). This component necessitates observing various areas such as market category, market services and managerial reactions. This will include almost every areas of the market environment. Analysis of the fashion fabrics manufacturing unit in UK is a significant means for studying the situation of the business although it has got certain constraint. Various factors influence international business market environment of any corporation. Such factors comprises community, Political, civilizing, technical and monetary elements. The community or social aspects of the international business environment is linked with the traditions and faith of the market environment. Each and every demographic section has distinguishing social ethnicity. Each culture existing in the civilization has diverse trade transfer, decision-making principles and business –government relationships. Technological factors are concerned to the research and growth activity conducted in the business. All these factors affect the smooth functioning of the international trade. Explain How Market Structures in Practice Deviate from the Model of Perfect Competition: Assessment of the state of rivalry necessitates a thoughtfulness of how the appropriate marketplaces utility will perform. Market presentation is the result of the marketplace behaviour of the participating organization. In a perfect marketplace composition, there are an extremely huge number of suppliers producing a uniform product. The completely competitive marketplace is a monetary irregularity that does not survive in the genuine life for a reason of the unreal conditions that require taking place in completely competitive businesses. “Market is said to be perfectly competitive when firms perceive that they individually have no noticeable influence on market price. The outcome in such an Industry is efficient in the sense that the cost of the last unit of output (marginal cost) would just equal what consumers would be willing to pay for that unit2. Perfect Competition is a regarded as a benchmark market structure for evaluating other market structures.” (Ramaswamy n.d. p.2) Perfectly aggressive marketplaces have a lot of rival organizations that one organization cannot completely alter the marketplace price of high-quality that the organization is selling. In a completely competitive marketplace, there is a perfect financial competence for every firm. All these factors help in defining the model of a perfect competition. Use a Range of Examples to Illustrate the Relationship Between Market Forces and Organizational Responses: The relationship between marketplace and environment is only seen in the course of the lenses of ecological scrutiny. There have been a lot of efforts to demonstrate the meaning of environmental scanning for tactical function. All the market forces directly influences the over all functioning of the organization. Environment influences the organization pursued by the generation of a reaction from the business, thereby finishing the cycle. It means that the consequence of environment on the business cannot be completely recognized without assessing the organizational reaction. Also, better relationship of organization-environment contact resultant in enhanced managerial strategies to handle ecological alterations. One of the examples is that changes in the financial policy of the marketplace adversely affect the overall functioning of the organization. Explain the Behaviour and Competitive Strategies Employed by an Organization and Discuss the Role of the Competition Commission and Regulatory Bodies: It is predictable to be a significant instrument for assessing the accessible and prospective circumstances of the business. The alternative of competitive plan is one of the most significant results for business accomplishment. To accomplish the different aims, organizations must prefer a variety of plans (strategic) depending on their sources designs. The results of the strategies are decided by the uniqueness of the resources and the ways in which it shared. A firm’s viable performance is a significant topic for philosophers, practitioners, and policy creators. P4) Explore the Significance of International Trade and the European Dimension for the UK Business: The growing worldwide relation through FDI is an important feature of monetary globalization and lifts the important challenges for policy creators and statistician in manufacturing and developing country alike. International trade mainly includes an enormous number of trade as well as the small industries with the intention to comprehend the superiority. Its development is essential to choose the emerging tendency in accordance to the states .It is necessary to maintain the long-standing interactions and satisfaction of the international consumers that help to overcome the problems associated with the rivals. The Porter 5-Forces Model of Industry analysis comprises of 5 elements. These entire 5 element in the model helps to find out how the external things affect the nature of the industry in international market as well as how the factors within the organization influence the overall operation of the business. Rising economies lead to the international business enlargement and it with a very strong contact on the developed nations like the UK, the USA etc. Discuss the Importance of International Trade, Economic Integration and Global Markets to the UK Business Organizations: International trade, economic integration and global markets etc. played significant role in the overall functioning of the business environment in the U K. “The buying and selling of goods and services across national borders is known as international trade. International trade is the backbone of our modern, commercial world, as producers in various nations try to profit from an expanded market, rather than be limited to selling within their own borders.” (Discuss the importance of international trade? 2010). There are a lot of causes that trade crossways happens nationwide borders, comprising lower manufacture expenses in one county versus another. Dedicated industries are sometimes in short or excess in ordinary resources and customer tastes. One of the mainly controversial parts of the present worldwide trade is the inferior manufacturing expenses of “developing” countries. The most important aspect about global business markets as compared to local business is the degree of risk and responsibility that it entails. Global business is always a high risk venture since its ownership is not able to exercise due controls that could be possible in domestic business. Economic integration among two state helps enhances economic integrity. In oversees state, the marketplace is successful at the superior extent. Different types and the industrial base are flourishing at a greater amount. Analyze the Impact of Two Policies of the European Union on the UK Business Organizations: The two policies that are having ultimate impact on the Union of the UK business organizations are given below. Trade Restrictions and Quotas: The practical frameworks are accountable for diverse decisions in the retail industry and the expansion of the OECD Countries. The urbanized countries will have their own conclusion in their approach. The Asia Pacific Economic Co- operation (APEC) is mostly a significant collection, which is answerable for major trade in global arena. Singapore has faith in the development of the country by its relationship in WTO and the benefit of trading scheme with multilevel processes in the state. Free Trade Agreement: Singapore’s first FTA negotiations in the exterior of Asia require to be more detailed and must aid in liberalizing trade limitations within the state. The choices on Singapore are tactical and not instant as they are novel applicants to APEC. But, Singapore requirements show its obligations to the reasons of FTA and offer guidance whenever necessary. Explain the Economic Implications for the UK Entry into EMU: The fundamental aim of the UK administration is to attain high and steady stages of enlargement and service and the case for amalgamation financial and fiscal Union. It is termed as EMU, will be criticized against this criterion .It has been acknowledged on all areas that there is a legitimate in addition to the financial measurement to the discussion on the subject of a probable UK decision to link the third phase of Economic and Monetary Union and consequently accept Euro as the code money used in the United Kingdom. And also, the sectors in which foreign investments are concentrated are finance and insurance, restaurants and hotels, and manufacturing units. As employment opportunity of the people is more, investment made by them wills also increase. Conclusion: Fashion fabrics manufacturing unit in UK one of most important aspect about global business as compared to local business is the degree of risk and responsibility that it entails. Although the UK textiles industrialized segment has contracted more than the years. Global business is always a high risk venture since ownership are not able to exercise due controls that could be possible in the domestic business. The business environment deals with the whole business processes and the surroundings of the company which forms them straightly and indirectly. Also, there is a strong interrelationship between the organization and business. Appropriate strategic plan must be made on the basis of the current trends in the market to cope up with the environmental change. Reference List Discuss the importance of international trade? 2010. [Online] Yahoo Answers. Available at: http://uk.answers.yahoo.com/question/index?qid=20100128040244AAYytJF [Accessed 14 June 2010]. Environmental research management: Theory of research management, n.d. [Online] Available at: http://www.trp.dundee.ac.uk/courses/lecnotes/lecture1.html [Accessed 14 June 2010]. Ramaswamy, K. V., n.d. Market structure, competition and performance: The analytical background. [Online] p.2. Available at: http://www.cuts-international.org/pdf/appendix-funcomp.pdf [Accessed 14 June 2010]. Sentence, A., 2007. The global economy and UK inflation. [Online] Bank of England, p.2. Available at: http://www.bankofengland.co.uk/publications/speeches/2007/speech322.pdf [Accessed 14 June 2010]. Shipley, J., et al., 1998. Debate: Social responsibility- whose agenda? [Online] The Jobs Research Trust. Available at: http://www.jobsletter.org.nz/jbl07410.htm [Accessed 14 June 2010]. Read More