Business Environment of British Airways

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Purposes of different types of organizations....................................................................1
1.2 Extent to which British Airways meet the objectives of different stakeholders..............2
1.3 Responsibilities and strategies made by British Airways.................................................3
TASK 2............................................................................................................................................3
2.1 Attempts made by economic systems to allocate resources effectively...........................3
2.2 Impact of fiscal and monitory policies on the activities of British Airways....................4
2.3 Impact of regulatory policies and other regulatory mechanisms of British Airways.......5
TASK 3............................................................................................................................................6
3.1 Impact of market structures in determining the pricing and output decision of BA........6
3.2 Ways in which market forces shape British Airways response........................................7
3.3 Impact of business and cultural environment over British Airways................................7
TASK 4............................................................................................................................................8
4.1 Significance of international trade to British Airways.....................................................8
4.2 Impact of global factors on British Airways....................................................................9
4.3 Impact of policies of European Union over British Airways...........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment refers to sum of internal as well as external factors which influence
the operations of business organizations. However, some external and internal factors can
influence each other which also affect the business (Evans, Stonehouse and Campbell, 2012). For
example, health and safety is an external factor which creates impact over the internal factors of
business firm.
British Airways (BA) is the largest airline based on fleet size in UK and it is second
largest in Britain when measured in terms of passengers. This report will explicate the
environment of British Airways and also the significance of global factors which shapes
activities of the said business concern. Moreover, the report will also justify the outcomes of
policies made by European Union over business organizations of UK.
TASK 1
1.1 Purposes of different types of organizations
Business organizations differ from each other according to their functions, aim and
objectives. It indicates that all business organizations operate their activities with different
purposes. Some of them have been mentioned below:
 Private sector enterprises: - Private limited companies tend to operate business by
increasing capital through issuing large number of shares. Another main purpose of
Private businesses is to operate the enterprise in such a way that competitors would not
be able to take over the firm easily (Kemp and Dwyer, 2003).
 Public sector enterprises: - Public limited companies are not owned privately as there is
big role played by government. In other words, influence of regulatory authorities is very
high in public limited enterprises. The main purpose of public limited business is to gain
capital through the capital market.
 Franchising businesses: - Franchising companies are most probably related with food
products and cloth market. For example, McDonalds and Primark are fast food and cloth
companies respectively. Dealers take franchise with these firms through standard
agreements and contract. However, the main purpose of franchising business is to
minimize the risks and to maintain the global cost.
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 Non-profit organizations: - These business firms are established for the purpose of
providing free services to customers. There are no rigorous rules and regulations which
are to be followed in such organizations. For example, National Health Services (NHS) is
a non-profit making organization which intends to provide free services to people and
operated through government funds (Grugulis and Wilkinson, 2002).
1.2 Extent to which British Airways meet the objectives of different stakeholders
Those who are related with activities and operations of business are stakeholders of the
firm. However, different stakeholders have various kinds of needs and expectations towards the
firm up to a certain extent. Considering that extent, the said firm has to meet all the needs and
expectations of stakeholders. Some major extents which are considered by British Airways are as
follows: -
 Customers: - Customers are the key elements or stakeholders of British Airways who
always expect new and improved services from the firm. They must be provided with
adequate and reliable services at reasonable prices. Customer is the first extent which
should be considered by the firm before meeting the objectives of remaining
stakeholders.
 Employees: - Employees are other important stakeholders of British Airways who are
making their efforts in delivering outstanding services to customers by following the
rules and regulations of company (Kaplan and Norton, 2001). They should be provided
with good opportunities and remuneration from the firm.
 Shareholders: - Shareholders are the real owners of organization who always expect
good amount of return in the form of high dividend and growth in the values of shares.
Moreover, British Airways has to provide rational amount in return for the risk that they
are taking by investing their money in the firm.
 Suppliers: - British Airways deals with number of suppliers for the purpose of receiving
food products and other management facilities. Hence, they always require flexible terms
of credit and good payment system.
 Government: - There are number of rules and regulations regarding taxation policies,
licensing, standardizing and protection of customers from various hazards which must be
followed by British Airways in all conditions. Hence, it the responsibility of company to
meet the objectives of government (Fyall and Garrod, 2005).
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