98 - Business Enviornment

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................................................2
TASK 1...........................................................................................................................................................................3
A. Identifying different types of organisation and its purposes................................................................................3
B. Extent to which Marks and Spencer meet the objectives of their shareholders along with the responsibilities of
organisational strategies for meeting the needs of stakeholders...............................................................................3
TASK 2...........................................................................................................................................................................5
A. Different types of economic system in following countries.................................................................................5
M1.............................................................................................................................................................................5
B. Assessing impact of fiscal and monetary policy ..................................................................................................5
C. Different competition policy and other regulatory mechanism in UK.................................................................6
D1..............................................................................................................................................................................7
TASK 3...........................................................................................................................................................................7
A. Impact of market structure on pricing .................................................................................................................7
M2.............................................................................................................................................................................8
B. The influence of market forces ............................................................................................................................8
C. Cultural environment of Marks and Spencer shapes the behaviour of organisation............................................8
D2..............................................................................................................................................................................9
TASK 4...........................................................................................................................................................................9
A. Importance of international trade on UK business organisation..........................................................................9
B. The impact of global factors in UK business organisation ................................................................................10
C. Impact of policies of European Union on UK business organisation.................................................................10
M3...........................................................................................................................................................................11
D3............................................................................................................................................................................11
CONCLUSION.............................................................................................................................................................12

INTRODUCTION
Business environment refers to internal and external factors which can affect the
functioning of organisation like employees, management and the customers. In order to achieve
success in business, it is important to have an interaction in the business environment which
provides different opportunities. There are various types of conditions in the environment of an
organisation which can affect the functioning of business at a high level. Present report is based
on Marks and Spencer which is a public limited company and a British multinational retailer
with having its headquartering in London (Apăvăloaie, 2014). Further, it is also listed on London
Stock Exchange and engaged in selling of home products and clothing along with the luxury
food products. At initial level, company was started by two partners and they made their
reputation in early 20th century with a policy of only selling British made products. Further, main
emphasis of organisation is to provide appropriate quality of products according to the
requirement of customers. This report covers the purpose of various types of organisation and the
way in which M&S meets objectives of their stakeholders. Further, with the help of this report, it
provides a clear understanding of impact of fiscal and monetary policy on different types of
activities of business. Moreover, it also includes influence of market forces and response of
organisation in that particular situation. Lastly, analysing the impact of EU on the business
organisation of UK.

TASK 1
A. Identifying different types of organisation and its purposes
There are different types of firms which are mentioned below as it will be easy to
evaluate the way of working and the purpose of business.
Public Limited Company- Marks and Spencer is a public limited company which is
owned and controlled by the government and their main focus is on fulfilling the requirement of
customers. The stated always try to provide best quality of services at appropriate prices. The
major objectives of the business to become best service provider for their target market. Thus,
they are mainly focusing on providing high quality of services in order to satisfy large number of
customers.
Charity- In context of charity, Cancer research UK as their main aim is to provide
services to public and create awareness of charity in UK. Furthermore, its objective is to make
reduction in the number of deaths from cancer. They are collecting donations by organising
different events and functions so that the fund can be utilised for cancer patients. Thus, main aim
of company is to make enhancement and to take initiatives in terms of innovation related to the
cancer treatment (Aterido, Hallward-Driemeier and Pagés, 2011).
Private Limited Company- Primark is a private limited company and their main aim is to
earn high level of profit. The organisation develops different strategies that help them in
competing with the trends of market. In private company, main concern is on the quality of
product for attracting a wide range of customers. In this sector, major focus in on understanding
the needs of customers and providing services as per the requirement.
Co-operative company- In context of Co-operative Company where the activities are
controlled by business person. For instance, Daily bread is falls under this category and their
main objective is to provide services at wholesale prices along with the reduction in exploitation
of the customers.
B. Extent to which Marks and Spencer meet the objectives of their shareholders along with the
responsibilities of organisational strategies for meeting the needs of stakeholders
Stakeholders are those people which are having direct and indirect share in the business
organisation. There are certain stakeholders of Marks and Spencer like customers, suppliers,
employees and government that play an important role in achieving the goals and objectives of

business. The stakeholders of Marks and Spencer who help in achieving objectives in an
effective manner are as follows:
Employees- It is considered to be one of the most important stakeholders for Marks and
Spencer who provide appropriate services to the customers within stores. Main objective of
employees is to get appropriate environment of working along with the remuneration so that it
would help them in providing proper services (Balmer, Stuart and Greyser, 2009). Along with
this, in order to meet the objectives of employees, management of M&S is required to focus on
appropriate policies related to working environment along with the salaries which helps in
attaining the goals of staff.
Customers- These are another key stakeholders of M&S to whom the organisation is
rendering quality services of food along with clothing. Furthermore, it has been analysed that
customers have interest in the quality of services which are provided to them. Thus, in order to
fulfil the objectives of customers, stated business is required to focus on reducing expenses along
with the cost with the supplier which helps to make reduction in the prices.
Suppliers- The suppliers are also considered as an important stakeholders of the business from
whom Marks and Spencer purchases different types of products. Its suppliers helps in meeting
the needs and demands of the customers by offering appropriate products which assists to
increase in the volume of sales. Further, one of the main objective of M&S is to provide
appropriate payment to suppliers for providing proper quality of products (Bertillo and et. al.,
2013).
It has been identified that there are certain roles and responsibilities of Marks and
Spencer as a company which helps in developing appropriate plans along with the strategies for
accomplishing the objectives of the shareholders. Further, there are some of the key
responsibilities such as to focus on the customer legislation which offers ethical services as per
the requirement of customer. Along with this, the company also have to concentrate on the
introducing different strategies which are related to the prices of products which are to be
charged from customers and to satisfy them in an appropriate manner.
In addition to this, there is another responsibility of Marks and Spencer is to review the
employment legislation in order to provide appropriate environment of working as per the
requirement of employees and other staff members. For this, they are required to revise the

salary structure of employees for meeting the needs of employees. Moreover, the management of
Marks and Spencer is required to meet the needs of suppliers as they have to treat them in an
appropriate manner. Thus, for meeting the responsibilities of suppliers, M&S must formulate
some strategy related to the Ethical Trading Initiatives so that they can allow suppliers in order to
follow the different practices of ETI towards the organisation in an effective manner (Boons and
Lüdeke-Freund, 2013).
TASK 2
A. Different types of economic system in following countries
There are some of the different types of economic system which mainly focuses on the
various activities which are connected to the resource allocation within the nation and
appropriate distribution of services in the particular area. All of the countries have their own
different economic system which is mentioned below:
United Kingdom economic system- In UK, there is mixed economic system where the decisions
are taken by the people in market. For example, all of the people have their own choice in terms
of purchasing products. However, certain decisions are taken by the government such as supply
of medicine and road buildings. Furthermore, there are some of the decisions are developed by
the government for providing services as per the preferences of customers. For Marks and
Spencer, there are certain impact on the business which positively affects on the business as they
are free to offer different types of products and services according to the needs and requirement
of customers which is considered to be beneficial for the business (Botha, Kourie and Snyman,
2014).
M1
There are certain situations of UK economic system which creates problem due to the
nature of economy as it also affects the allocation of resources as they are providing chances to
all of the sectors to sell their products and services in marketplace.
B. Assessing impact of fiscal and monetary policy
There is an important role played by the bank of England and for effective regulation of
UK economy. These regulatory firms using various policies for the purpose of regulating the
economy which consists of fiscal and monetary policy. In case of fiscal policy, it can be termed
as a technique which focuses in order to assess the taxation and activities of spending of the

central government. On the other hand, monetary policy regarded as to manage the rate of
interest along with the supply of cash in the economy by the central government. This tools have
impact on the housing and farming sector. It can be analysed that both of the policies plays an
important role which are described below:
Farming- There is positive impact of the monetary policy on the farming sector as if there is
increase in the rate of interest which helps reserve bank to spend more on the farm. Along with
this, there is increase in providing subsidy to the different farmers by the government so that
they can easily harvest the crops in farm (Brannon, 2010). Therefore, it has been identified that
due to the increased rate of interest which helps government to provide more spending to the
people.
Housing- This is considered as another field which is housing that is affected by the fiscal and
monetary policy which are framed by the government. For example, in fiscal policy there are
certain spending are made by the government if there is increase in the growth rate of the
economy so that the government cut the taxes and make increment in the taxes. On the other
side, if there is increase in the rate of taxes due to the reduction in inflation of government which
reduces the spending. Thus, at the time of recession in government of UK which decreases the
rate of taxes and increase the power of spending on the different infrastructure which enhance
the standard of living (Doh, McGuire and Ozaki, 2015).
C. Different competition policy and other regulatory mechanism in UK
In order to maintain appropriate competition in the marketplace as there are certain
policies which are made for this purpose. Due to increase in the level of competition which
encourages and efficient for handling the different types of activities. There are some of the
policies are introduced by the UK government for the purpose of increase in competition. Some
of the policies and their influence on Marks and Spencer are mentioned below:
Competition Policy- For offering policies linked with the framework and some of the restrictions
can also be imposed on the practices of the organisation in market in order to develop the act.
Through this policy there is a fair competition policy and to create awareness regarding the
issues in the activities and the investigation made by the government.
Training and skills policy- This policy has been developed by the UK government for providing
advancement in services along with the increase in knowledge of the employees within the

organisation. Thus, it helps to make some of the changes in the different types of products to
support the work of employees effectively (Wild, Wild and Han, 2014).
Enterprise act 2002 – Through this act which puts different types of restrictions on the
companies which includes the anticompetitive activities. This helps the stated firm to get
maintain appropriate records of accounts and different documents in an effective manner.
Industrial policy- Through the policies of government as they ensure the growth and
development of the different sectors of the nation which is regulated by the government of UK.
Thus, it provides appropriate opportunities to the different sectors for growing in market.
D1
In order to evaluate the impact of different competition policy on Marks and Spencer
which shows that it has been developed in order to offer framework which is related to the
policies which are imposed on the organisation. Through this policy it helps in making fair
competition so that solve the issues at workplace.
TASK 3
A. Impact of market structure on pricing
Market structure can be termed as the feature or characteristic of a particular market
which affects operations and practices of businesses. It can be expressed that Marks & Spencer’s
decision related to price and output are directly affected by the market structure in which it is
carrying out its operations. For example: if the selected business enterprise operates in pure
competition market then its decision related to price and output is affected to a great extent. Main
feature of pure competition market is that it has many companies and buyers. Therefore, Marks
& Spencer will need to set prices of its products and services on the basis of pricing strategy
which has been adopted by competitors. On the other hand, if Marks & Spencer operates in
monopoly market, then it will have opportunity to make its own decision related to price and
output. The characteristic of monopoly market is that it has only one seller and therefore,
selected business can easily charge price as per its need (Xue, Shen and Ren, 2010). At present,
Marks & Spencer is operating in monopolistic competition market and the characteristic of this
market is that companies do not depend on its competitors in terms of taking price and output
related decision.

M2
In order to evaluate the relevant theories which determines the pricing decisions of Marks
and Spencer by operating in different types of markets which shows that all of the conditions are
different in the marketplace.
B. The influence of market forces
It can be evaluated that market forces has direct impact on the business practices and
operations of Marks & Spencer. At the time of carrying out its activities, the company is required
to consider market forces such as demand, supply and it is required to develop strategies
according to the same. In case of high demand and low supply, Marks & Spencer is required to
carry out certain changes in its strategy related to pricing and marketing. The brand is required to
lower down its marketing activities and increase the prices in order maintain demand and supply.
However, it can be critically argued that in situation where demand is low and supply is high, the
selected business enterprise which is Marks & Spencer is required to carry out more aggressive
marketing strategy in order to bring the equilibrium between demand and supply. Marketing will
assist in creating need among people in the market and attract them to buy the products and
services offered by Marks & Spencer (Apăvăloaie, 2014). Apart from this, market factors such as
changing customer demand, economic situations, and changes in technology also affect the
overall business practices of Marks & Spencer. For example changes in technology encourage
the brand to adapt new technology in order to sustain in the marketplace. Along with changes, it
can be expressed that changes in need of customer shapes organization response by encouraging
it to carry out certain changes in its products and services.
C. Cultural environment of Marks and Spencer shapes the behaviour of organisation
It has been analysed that cultural environment which is present in the external
environment which influence the retail industry directly and shapes the behaviour of of the
organisation. There are certain key business and cultural environment which includes :

Cultural environment- It is considered to one of the most important factor for Marks and
Spencer which is to pay attention on customers for understanding their behaviour in order
attaining different goals and objectives in an effective manner.
Social environment- Appropriate cultural environment helps to provide shape the behaviour of
Marks and Spencer that covers changes in the taste and preferences of customers along with the
changes in income of people. Furthermore, it gives shape to the behaviour of Marks and Spencer
for providing services as per the needs and requirement of customers. According to the changes
in demand of customers it leads to earn high level of probability for the business (Balmer, Stuart
and Greyser, 2009).
Economic factors- There are certain issues are faced by the stated firm related to the financial
failure which puts pressure on the financial hub of London. Thus, it also helps people to take
back their investment which are made by them in company so that they can get out of the risk.
D2
For evaluating the activities of business which shapes the behaviour of organisation by
considering the different types of environment which affects the functioning of the stated
business to a greater extent.
TASK 4
A. Importance of international trade on UK business organisation
International trade refers to the exchange of services along with the goods within the
international territories. It also involves the different transaction of buying and selling of
products and services among the different countries for the purpose of developing the economy.
With the help of globalization, the international trade can be taken place without any
organisation where there are limited types of products and services are produced in a region.
Furthermore, it is also considered to be costly as compared to the domestic trade that covers the
legal taxes and cos of tariffs. It also includes the cost of labour along with the capital cost that is t
be high and it is affordable by the organisation (Boons and Lüdeke-Freund, 2013). There are
certain benefits of international trade to Marks and Spencer which are mentioned below:
Production cost- Through international trading there are less cost of production due to the
increase in volume of production. There are certain raw materials which are imported by the

stated firm by lowering down the prices and produce the finished products in the market.
Therefore, it requires huge cost for the small business for less finished products.
Broadens the market and horizons- The UK based organisation make production for using it for
domestic purpose which leads to decrease in the potentials. Through the international trading
they can export their services to the various areas for the purpose of generating revenue. Thus,it
will assists in order to gain appropriate reputation in the international market of the business
enterprise.
B. The impact of global factors in UK business organisation
There are some of the factors which are having an impact on the company which operates
in the country itself or internationally. Furthermore, there are certain concerns that impact the
UK business organisation in a different way which are as follows:
Taxes and Tariffs- The stated organisation are required to pay taxes along with the tariffs at the
time of entering in other different countries. As there are different types of problems are faced by
Marks and Spencer that is related to the taxes and tariffs which is considered to be higher.
Rate of exchange- There is an impact of rate of exchange in the company of UK which are
operated at high level. Furthermore, it also affects the final revenue due to the changes in the
value of rate of exchanges (Botha, Kourie and Snyman, 2014).
International competitiveness- The company have to operate In international business as if there
is high level of competition. Thus, it creates the problem for surviving in the market due to the
high level of competition.
Protectionism- It supports the policy of the economy while trading between two countries with
the help of methods for importing goods along with the different regulations of the government
which are introduced for fair competition.
C. Impact of policies of European Union on UK business organisation
There are different types of policies are there which are framed by the EU which applied
to the UK business organisation. The policies includes the taxation policy, employment policy
along with the regional policies. All of these have direct impact on the activities of business of
the different countries so that businesses are required to follow all rules and regulations at the
time of trading. Furthermore, they are required to understand the changes in climate at the time

of producing goods and services which helps to increase the level of profit as well as
enhancement in the economy. Policies of EU can influence the UK business by spending through
the law of taxation and support the subsidy. Therefore, the national authorities also monitor the
activities of the business for implementing the national legislation (Brannon, 2010).
M3
In order to find out the significance of international trade in UK business such as Marks
and Spencer as it is beneficial for the business due to the exploration of business to the different
countries outside UK.
D3
It can be analysed that there are some of the impact of EU on the UK business
organisation such as Marks and Spencer which influenced by the policies of EU in context of
taxation, inflation as well as employment.

CONCLUSION
From the above report it can be concluded that business environment consists of different
internal and external factors which affects the functioning of organisation. Further, in this report
the organisation is selected is Marks and Spencer and there are some of the factors are there
which are having impact on the activities. Along with this, there are some of the measures of the
economic system which helps in appropriate allocation of resources.

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