Important Aspects of Business Operation and Management - Essay Example

WEEKLY REFLECTION By Location Weekly Reflection Introduction Business and business related activities form anintegral part of the lives of British people. Business is not only important to British people, but people from various parts of the world. At the moment it can be said that business activities involves almost the whole population of the world. Therefore, business is an activity that can be said to be touching on almost all the careers available globally. Studying business should be viewed not only as a way through which people can have a chance having employment opportunities, but also a way through which graduates can also become employers by starting their own businesses. Therefore, the goals of anyone who is studying business will be to be able to make viable decisions either as an employee, employer, or a manager in a business organization. Studying business enables someone to be of contribution to the economic growth and development of a country. Expectations My expectations at the beginning of this unit were that I would be able to understand the most important aspects of business operation and management. However, after going through this subject I am surprised that I was able to know more than I ever expected. Initially I used to imagine that business was all about the process of selling and buying. I never paid much attention to the external factors that might be of effect to the buying and selling processes. I was surprised to come to the realization that there are some underlying factors that influence day-to-day business activities. During the lectures I was able to develop some level of appreciation towards my lecturer and classmates. The lecturer would come and make sure that he explained every detail of the week’s coverage frequently giving us a chance to seek clarification. I would have trouble understanding some of the terms at the beginning, but was able to get conversant with them as time went by. The modules were of high help because they helped me in understanding some of the concepts that I might have not been able to understand in class. The modules sourced from MyBecket also proved to be high importance in understanding the subject. Week 1 Business can be described as a way of dealing with scarcity. Given the fact that scarcity is a common problem, societies have to find ways through which they can deal with the problem. Business as a process involves inputs being transformed into outputs that are capable of satisfying the wants and needs of consumers. Inputs include things such as land, labour, materials, technology, finance, managerial skills, and many others. Outputs include services, information, goods, and ideas. The business environment can be categorized into private and public sectors. Competition and profit are the main driving forces in the private sector. However, government intervention and corporate social responsibility are some of the regulators in the private sector.Public and voluntary sectors provide goods and services with profits, not being a goal. Interaction between business organizations and the external environment in which they operate is inevitable. This interaction comes because they will need to procure materials and also supply their products to the final consumers. It is important for an organization to make decisions that helps them in getting the most from the external environment. One of the ways through which an organization can make the best decisions regarding their interaction with the external environment is through PEST analysis. PEST analysis enables business organizations to evaluate political, economic, social, and technological factors that affect their operations. Week 2 The inputs that an organization need in order to produce outputs are known as factors of production. The factors of production include: land, capital, entrepreneur, and labour. The scarcity of these factors leads to questions on what should be produced, how they should be produced, and to whom they should be produced. These economic problems are usually attended to differently by different economic systems. The two extremes of economic types are totally planned economy and totally free-market economy. In free-market economy pricing mechanism is used in resource allocation. Prices are used in determining whether a business organization will be able to produce a certain product or service and earn profit from the production. Willingness of customers to buy products or services at the prices they are being sold is also an important factor. In the free-market economy is usually observed that demand is directly proportional to price while supply is inversely proportional to price.Most producers avoid producing goods and services with characteristics that are similar to public goods because it is hard to get profits from them. Government involvement in business controls production. Market failure can occur because certain products or services are over produced and some will be under produced. Week 3 The benefits of technology are:enhance economic growth; enhance productivity; creates business opportunities; enhances living standards; and accelerates globalization. Technology can be said to include invention, product innovation, and service innovation.Competitive advantage refers to a situation where a business organization is able to make profits that exceed the average for its industry. Competitive advantage can be gained through the use of innovative technology. Despite the fact that technology is an important factor in national economies, the neo-classical growth model does not explain the relation between national economies and technology. However, under the New Growth theory, technology is one of the main drivers of national economies.Joseph Schumpeter asserted that the use of technology leads to a cycle of creative destruction, leading to the destruction or monopolies and creation of new competitions. The use of technology has been of significant influence to the growth in productivity in most industries. This has enabled business organizations to cope with the changes in the business environments such as: economic recessions, growth in demand, consumer bargaining power, the rise in competition, and globalization. Innovative use of technology has also led to the development and introduction of new products to the market. Week 4 Politics can be describes as the rules that govern the existence in a society. The state is divided into three main categories namely: Legislative, Executive, and Judicial. The UK does not have a written constitution while the US has a constitution. Political institutions that might be of influence to business operations can be categorized into: International (global) institutions and Regional co-operation agreements. There are also other groups such as Cause Groups that can be of influence in the manner in which business organizations operates. The channels of political influence include the executive, the legislature, political parties, political parties, the court, and the media. According to the neocorporatist model a tri-partite relationship exists between business, government, and trade unions. Therefore, business organizations and trade unions have the ability of influencing the policies made by the government. According to the business dominance model, business organizations are able to affect political decision because of the fact that they control important resources such as capital. Therefore, governments have the obligation of formulating and implementing policies that will encourage increased investment by business organizations. This is a way through governments can ensure economic growth and sustainability. Week 5 There are a number of social and cultural factors that have the ability of influencing business activities. One of the social-cultural factors that are believed to be of influence to business operations is the society’s perception of gender roles. Furthermore, there has been a significant increase in ethical consumerism thus an increase in sensitivity in ethical issues relating to production and consumption.Demographic factors such as population structure can also be of influence on the product or service that is likely to do well in a certain market. Age and gender are some of the factors that are mostly looked into when determining whether or not a product or service will do well in a certain market. Some organizations also prefer employees of certain age making employees from a certain age gap unsuitable. Organizations might also avoid hiring older employees because of the pension related issues. There is also the issue about gender inequality with men always getting better positions and salaries as compared to women with the same qualifications. There is also the issue of human resource diversity that is highly contributed to by globalization. This leads to a working environment having people with social and cultural beliefs. Week 6 Ethics in business organizations involve the consideration of what is right and wrong during decision making. Ethical reasoning has two approaches: Deontological, which is the duty of an organization to behave in a prescribed way; and utilitarian, which is the need for seeing the consequences of every decision that is made. Corporate Social Responsibility involves business organization showing consideration of social and environmental consequences of their activities. According to Milton Friedman corporate social responsibility can be used as a tool for increasing profitability of an organization.Corporate social responsibility can enhance consumer and employee satisfaction thus ease in the retention and attraction of new ones. Business organizations owe economic sustainability to: shareholders, who would love to earn interest; employees who would love job stability and better payment; and customers who would love quality products.Firms are also expected to make sure that any activities that they are involved in are in accordance to the law. They are also expected to be just and fair in any activity that they are involved. Philanthropy towards the society is always regarded as an added advantage to any business organization. This is not always an expectation, but something that businesses can voluntarilyinvolvethemselves in. Week 7 Development might not be important to a business if it is not sustainable. Sustainable development refers to the state of being able to meet the needs of the present without compromising the ability to do the same in future. This aspect of business operation has been receiving more attention due to the increase in global warming. Rio Declaration on Environment and Development 1992 and Kyoto protocol are some of the policies put in place to make sure that business organizations watch their carbon emission rates. Emission rates vary with the economic status of a country. If a company’s carbon emissions are below a set allowance, that company can sell the difference, to other companies that exceed their limits in the form of credits. At the moment Europe-wide limit is about 2bn units, each being equal to a tonne of CO². Clean Development Mechanism enables country with a with an emission-limitation, commitment or emission-reduction or under the Kyoto Protocol to undertake an emission-reduction project in developing countries thus earning emission reduction credits. These credits can be transferred or sold. The Copenhagen Accord 2009 brought together developed countries such as the US and China with the aim of making sure that they can reduce carbon emission within their territories and beyond. Week 8 There are always questions on how an economy can be stabilized. This can be attained through demand management policies and supply side policies. Demand management policies are categorized into either fiscal or monetary policy. Fiscal policy control government expenditure and taxation. Monetary policy controls Money supply, Interest rates, and Exchange rate. After World War 2 fiscal policy was used to boost aggregate demand. In 2009 the British government responded to the recession by cutting interest rates in order to encourage spending. The government also increased the supply of money by £75 billion in the same year. This was in the bid to make sure that there are in a position to have a positive influence on the economy by encouraging expenditure in the country. The supply side policies that are commonly used to have an effect on the economy include: Trade union reforms, Increased expenditure on training and education, Changes to the welfare system, Changes in taxation, deregulation, privatisation, Incentives for small businesses, and free trade. These policies are aimed at making sure that there is no shortage of supply in an economy. Week 9 The levels of economic integration are: Political Union, economic union, common market, custom market, and free trade. The European union has been of high significance because: promotes peace and security in the region, enhance economic development through common market, and restore European in influence globally. The The Single European Act (1986) has more than 1000 pieces of legislation that allows free movement of goods, capital, people, and services. The Schengen Agreement further strengthened the union removing police and custom checks across borders, encouraging cooperation between the different police forces, and encouraging free movement of goods. Maastricht Treaty (1992) also made it possible for citizens of EU member countries the right to live and vote in any country that they are. The five tests of UK government’s euro policy are cyclical convergence, flexibility, financial services, investment, and employment and growth. The Convergence criteria assert that a country’s budget must be less than 3% the value of the country’s GDP. Public debt should also be below 60% the value of the country’s GDP. Inflation rate was also expected to be within 1.5% of the three countries with the lowest rate in the EU. Long-term interest rates should be within 2% of the three countries with the lowest interest rates in the EU. Week 10 Globalization can be viewed in terms of six main aspects namely: international trade, global production and movement of capital globally, migration, global communication, cultural exchange, and technological flow. Global trade began in the 15th century. This is the period when countries started finding ways through which they can increase export volume while decreasing the volume of imports. The theory of absolute advantage states that globalization encourages specialization which means that a country can be able to focus on producing what they do best. The theory of comparative advantage also implies that globalization can enhance a situation where a country can focus on producing what they do better than the other countries and rely on the other countries for what they are not good in producing thus leading to the need of international trades. Global migration is encouraged by the search for better opportunities and escape from unsuitable living environments. Technologies are also moving from one part of the world to another through Financial Markets, standardization, imitation of product and process innovations, and software. However, globalization also means that some countries, organizations, individuals are supposed to be protected from the more influential ones so that fairness can be enhanced in the global business environment. Development plans for next years There are a number of things that I feel I should improve on next year. For instance, I have realized that my studying habits were not being of much help to my growth. It is good to read more than just what the lecturers avails during lectures. This is a way through which someone can be able to have a wider knowledge of a subject instead of narrowing it to whatever the lecturers avail during lecture. Furthermore, reading further is a way through which someone can be able to prepare themselves for the next lecture. Reading ahead mean that by the time someone is going for a lecture, they already have an idea of what will be taught during the lesson. This enhances proper understanding of the subject. It is also my personal resolution to cooperate more with my classmates. Cooperation with classmates makes learning easier because we can be able to help each other out. Conclusion From this subject I have learnt that business management is complex and is affected by many external factors. Globalization also makes the business environment more complex.However, I still feel that there are a number of things that am still to learn about business, especially in the global context. In my opinion, the knowledge that I have gained during the module has surpassed what I initially expected. The thought of having more to learn makes me look forward for next year because I am looking forward to learning more. Given the fact that this module has been a challenging yet enlightening one, I can only expect things to intensify next year. Read More