Business environment

The basic alma for this unit is to provide novices with a perfect understanding of how various organizations operate the powerful influence of stakeholders and the relationship between the business and its external forces which are local, national and global environment. 1. 1 Before I go straight Into answering this question I will Like to briefly explain what an organization is, An organization is a social entity that has a collective goal and is linked to an external environment. There are seven different type organizations in England.

Each of these organizations have their purpose which they serve. . Sole trader. This Is a business that Is owned by one person, and Is controlled by the same individual. Their purpose is to render special services to customers, as they are sensitive to customer’s needs since they are closer to them. 2. Partnership. This is a type of business that is owned by two or more people. They raise capital to form this kind of business. There Is Increased credibility among customers and supplier, the purpose for this kind of organization Is for the both of them to bring skills and employ workers to reduce unemployment 3.

Private limited company. This is a type of organization in which the business is owned by share holders, but cannot be sold to the public, and also, Its stock cannot be traded on the stock market. They have a duty to pay tax and all other revenue to the government. 4. Public limited company. This type of Organization is owned not by one individual but by the public, they sell shares to the public since they are quoted the stock market. They employ large number of employees; engage in international trade that earn the country foreign exchange and revenues. . Co-operatives. This Is the type of organization that the roofs or persons come together for the purpose of each member and the public. 6. Franchises. This is the type of organization that gives right to another company to use their name. Their rules, norms and style of franchiser are followed according to how I set out. The franchisee has to pay a certain amount. They pay tax and revenue to the Public sector. This type of organization is own and run by the government. 7. Government.

They are the local or federal investment. 8. Non profitable organization. This type of organization is set up not to make profit, they receive donations, to help the less privileged In the society. COMPANY PROFILE Marks and Spencer Is one of Auk’s leading retailers, which have over 21 million people visiting their stores every week. They offer high quality stylish, home product and great value clothing, and also quality foods, responsibly sourced from approximately 2,000 suppliers worldwide.

They provide work for over 78,000 people In the UK and abroad, and they have over 700 UK stores, plus an increasing worldwide business. They have specific values, goals, missions and visions. Their main vision is to have a specific standard compared to others. Their main mission is to give self-improving ‘OFF quality. Www. Merchandiser. Co. UK). 1. 2. Marks and Spencer as one of UK leading Retail Company have a large number of stakeholders both internal and external, so they will go to any length to meet the expectations of these stakeholders. Employees. He employee are those individual in the company that put their effort to make sure that Marks and Spencer are running from day to day, they are the internal stakeholders in the company, meeting their expectations is of most importance, these expectation may range from wage levels, working condition, personal growth and Job security, since they are humans and all Hess conditions are meant, their production level will increase greatly. Customers. The customer are the people that make Marks and Spencer who they are today, Marks and Spencer have to work so hard to met their expectation by producing reliable and affordable product at all times.

Shareholders. These people are the investors they are very much interested in the share and affair of the company. Marks and Spencer have to meet to their need by offering security to their investment, market value of investment, dividends and liquidity of investment. Suppliers. The suppliers are those people that Marks and Spencer depend on to apply their good to met their expectation, Marks and Spencer have to offer security of contract, ensure the growth of the organization and also met up to their regular payment. Society.

These group of people are those people around the environment they try to avoid discrimination and they make sure that Marks and Spencer produce safe product which will make the environment safe and healthy to live.. Government. The governments are the rule maker that governs every business in the I-J, to meet their expectation is the regular payment of taxes and following the rules set out by them. 1. . In a business organization, the manner of handling stakeholder is of most important and it is the responsibility of Marks and Spencer to ensure that is done because of its status. Reliability.

There should be reliability in the company, Marks and Spencer should earn the trust of their customer, in order for this to be done the production and quality of their goods should be at its best at all time. And it is essential to innovation new product. Responsiveness. Responsiveness is a law which is bound by every company in England which has been set out by the government as a center for very company to follow. In that way mark and Spence must also respond to those laws, this can increase the output of the goods because the quicker response to customers needs the better. Design with quality.

The goods and services offered to customers should be of good quality and latest design. There is nothing as constant as change in this world. Customers always forget about the price with the passage of time, but good quality remains as long as it does exist. It is essential that the goods should not be considered sold to the customers until the customer has used it and e/she is satisfied with the product. 2. 1 An Economic system is a well planned and organized way in which a nation’s resources are allocated in a national society. The following are ways in which a nation allocates its resources.

Command economic system: this is whereby the resources are allocated by the government through their planning system. They also decide government, employees and consumers. All system is owned by the government. Free Market economy system: This kind of economical system can also be called the price system simply put is a means of allocating resources in which the resources are even out by the “market mechanism” and the company have the power to decide what to produce and the most important economic problems are been resolved by private individuals in the company.

Mixed economic system: This is the kind of system that portrays the characteristics of both the market and command economy these resources are allocated by the government and the stakeholders as well and this system is owned by the two parties I. E. Government and the investors as well. Some of these resources are allocated through market system or price and other are allocated by the state. 2. 2 Fiscal Policy, has to do with how changes in the level and rules of taxation is carried out by the government, and also the how the government changes the spending in to influence the economy.

In England, it is expected of every business to pay 40 % higher rate and a 20% standard rate. On selected product there are some special taxes which is up to 16. 5% plus and other condition. Monetary Policy, The circulation of money and supply of money is determined by the rules made by the central bank, currency board or other regulatory committee, and this at the end affects the interest rates. Monetary policy is the act of determining the way banks store their money in their vaults or reserve. In March 2009, (MAC) Monetary Policy Committee declared it would be decreasing bank rate to 0. % and also stated that this current rate wouldn’t reduce below that current rate. But in order for stimulate the economy with monetary value series of purchase asset need to be done. 2. 3. Competition Act 1998. This act was made to stop practices that discourage competition and free trading between business organizations. The banning of abusive character by a company or anti-competitive practices can be spread in industry. The impact of this in Marks and Spencer is that the clothing aspect of M will get free trading and at the same time bringing out the best in M. Enterprise Act 2002.

The Enterprise Act 2002 is policy of the Parliament of the United Kingdom have made lot of changes to I-J competition law with respect to mergers and also changed the law governing liquidation bankruptcy. Free trading Act 1973. These deals with company that come together and the misuse the monopoly power in the market. This does not affect the clothing aspect of M since clothing industry is not monopoly and the law also abides with offenders who try to discourage free trading. 3. 1 Even though companies have the right to fix its price of goods this also depends on the market structure at that particular time.

Below are some of the factors that determine the output and pricing decision off business. (1) Supply and demand. Demand is how much in quantity the customer want the product while supply is the amount of quantity a company produce out to the market. For a company like marks and Spencer the higher the demand the higher the supply and also the price will increase because of the increase in demand. Same goes to decrease in demand the lower the supply. (2) Elasticity of Demand. This is whereby goods or service changes of some of their product there will be an increase in sales. (3) Elasticity of Supply.

This is whereby a company responds whereby there is a change in price of goods or services. So if the prices increase so will supply. (4) Economies of Scale. This is defines in how much quantity a company produces goods; because the more products you produce and the more the customers buy it in numbers will be cheaper, so this give competitive advantage to smaller company. 3. . Market forces A market force is the relationship and interaction between supply and demand in a market. The organizational response to market forces is very necessary for the company to stay important in the market. T will also have a direct contact to its profits and reputation. For example in England, in the real estate’s industry, the prices of selling house and the price of letting out houses has increased because everyone want to come and stay in England, this means that demand of home has increased and the same time the supply will increase at the same time. And also ring the summer season in England summer clothes such as sandals, bikini sleeveless etc are also high in demand, so with this the prices tend to increase with the demand its dealing with. . 3. The external factor which change the planned behavior production, these factor must be strictly monitored stay competitive and important in business For any company to be able to participate in the business industry the external factor must be put into effect below are the list of external factors that change the behavior of planned production. Political Forces: these are governmental rules which govern business activities in the United Kingdom.

We have various business rules and policies, which are: The law governing business, foreign policies, political stability all this rules and policies help to shaping productions with companies in the United Kingdom. Cultural Forces: this is the fundamental way people behave during production. Many companies in the I-J have started introducing this system into place because of the diverse culture here. That shows most company considers each individual. Economic Forces: this conceal of all the various forces which include economical impact of very business. This include supply, production, monetary policy etc. Al this form to make production a reality. Technological Environment: Technology has succeeded in bringing the world together, and thereby making the world a global village. In some ways technology has aided the restructuring of business positively, an instance is the online mode of selling goods, providing services to customers, and also the trade of ideas. Marks and Spencer in a good way is an example of a business organization that technology has made a huge impact on, more sales are being made online and he payments for these goods have also been made easier using the online mode.

Social and Global Environment: Education, corporate and globalization which is the agreement between foreign nations, WTFO principles, and other treaties and convention are treaties of social factor Foreign nations have come together to make changes on the social factor of education 4. 1 . International trade is buying and selling of goods and rendering of services services across national borders. It is of vast importance not Just for a single country but all the countries because without international trade the economy of a country and enable to display their manufactures to display at international level.

This has been very important in the continued existence of I-J businesses because the raw materials that are used to produce the final products are mainly imported from abroad. 4. 2. Impact of Global factors on Uk organization help in better business strategy, because it has created free trade among countries in the WTFO. Business are also affected by the external environment. World Trade Organization (WTFO). This is the organizational bodies that deal with rules that concern trade between nations. The major aim is to assist business and importers to attain their aim in conducting their business. Or example a company like Primary import clothing material from china, since the raw material is cheap and labor is quiet affordable to other most customer, there is totally no tariff or tax when Primary is trading within countries in the WTFO. Technological Factor. Technology is one the factor that help shape the economy since the world is speedily becoming a worldwide village, the social media has assist Marks and Spencer to promote their goods and services to the public and also sales are made online which aka sales faster. Economical Factor.

The economical factor involves the change in worldwide economy. A rise in the standard of living will apply to the increase in demand of the product. With the current worldwide recession that hit the I-J, marks and Spencer has impacted in a negative way. Government Factor. The governments are always a factor because they make a law that controls the country. 4. 3. EX. policy on Business. The impact of this policy on Primary is that to improve quality of Jobs, promote gender equality and pay the wage due across all employee and combat poverty and social exclusion. EX. policy on Competition.

This law ensures that there is free completion, rather than some cartels running the business and fixing price, the impact of this is that Primary can improve on their service and compete freely with other competitors. EX. Policy on agriculture (CAP). This law protects farmers by ensuring good standard of living. Provide stable and safe food products to its consumer, this is a very good impact on business because Primary will be relaxed because with this law it is sure it’s getting the standard raw material for the production of its finished products. EX. Policy on Science and Technology.