Business Environment

INTRODUCTION

Every business is trying to fulfill their business objectives. There are both direct and indirect influences towards businesses. They are called as forces, because they have favorable and unfavorable influences. And also they are called as variables because they are always changing.

Every force and variable which effects on businesses favorably and unfavorably when the business objectives are fulfilled are known as business environment. It consists with people, institutions, employees, suppliers, government, etc.

In this report the essential criteria which should be known and practiced when starting up a new business and the methods and techniques which should be followed in the business expansion is mentioned.

Contents

1.a) Business organizations.        6

1.a.1) Vision.        6

1.a.2) Mission.        6

1.b) Mas Holdings and Their Stakeholder Analysis.        6

1.b.1) Stakeholders.        6

1.c) Organizational Responsibilities of MAS Holdings.        8

1.c.1) Responsibilities towards the employees.        8

1.c.2) Responsibilities towards the community.        8

1.c.3) Responsibilities towards the customers.        9

1.c.4) Responsibilities towards the competitors.        9

1.c.5) Responsibilities towards the environment.        9

2.a) Economic Systems.        9

2.a.1)Free Market Economy.        10

2.a.2) Command Economy.        11

2.a.3) Mixed Economy        11

2.b) Impact of fiscal and monitory policies on business organizations        11

2.b.1)Fiscal Policy        11

2.b.2) Monetary Policy        12

2.c) Competition        12

2.c.1) Government rules and regulations for fair competitions.        13

3.a) Market Structures        13

3.a.1) Perfect Competition        14

3.a.2) Monopoly        15

3.a.3) Oligopoly        16

3.a.4) Monopolistic competition        17

3.b) How Market Forces shape organizational responses.        17

3.c) How external environment influence the behavior of an organization.        19

4.a) Significance of international trade to UK business organizations        20

4.a.1) Positive effects        21

4.a.2) Negative effects        21

4.b) Impact of global and political factors on business organizations        21

4.c) The impact of policies of the Europe Union on UK business organizations.        22

Conclusion        24

References        25

Task 01 (LO1, M1, M3)

1.a) Business organizations.

An organization is a group of people who are working towards a common aim or to achieve a specific task. Organizations achieve their goals and objectives by satisfying the unlimited wants of people by providing goods and services.If Jason and I are to open up the garment factory, we will initially start off with a partnership business. The reason behind this decision is:

1. A large capital can be gained when Jason’s investment along with mine.
2. More knowledge and ideas can be exchanged.
3. Exceptions from business taxes.
4. Higher possibility of business expansion.

Every organization has its own purpose which is explained through vision and mission statements. Same as that, this organization too has its own statements which are mentioned below.

1.a.1) Vision.

Be the leader in the apparel industry by providing the best quality products of all time.

1.a.2) Mission.

Our goal is to provide wide range of high quality products and helping the local economy by providing range of employment opportunities and to shine among other nations ensuring the continues growth of the company.

1.b) Mas Holdings and Their Stakeholder Analysis.

MAS holding are a profit oriented South Asian Apparel Manufacturing company which supplies apparels to many leading companies in the world today (Nike, Addidas, Victoria’s secret, Reebok, Speedo and M&S). The Annual turnover of this organization is surpassing USD 1bn. And also it exists in 10 countries where more than 55,000 employees are hired.

1.b.1) Stakeholders.

'People or small groups with the power to respond to, negotiate with, and change the strategic future of the organization' (Eden and Ackermann 1998: 117).

Stakeholders are the individuals or the group of people who are interested in the performance of the organization. The stakeholders can be identified as internal, external or connected according to the role they perform but all of them are interested towards the organization. The interest to which different stakeholders expect from the organization can be explained using the stakeholder’s mapping as follows (Figure 1.b).

Interest/Aspiration

                                        Low                                                High

Low

Power

High

Figure 1.b: Stakeholder Map.

In the above diagram (Figure 1.b) we can see that to which extend the stakeholders are interested and their power towards the organization.

Minimum Effort:These stakeholders are the groups which have the least interest and power on the organization. Therefore, least attention is paid to them from the organization.