Impact of Global Factors on UK Business Organizations

UK-based companies can operate globally, offering benefits such as reduced production costs, access to raw materials at lower prices, and a wider market scope. This can lead to increased profits and economic growth in the UK. Global factors like government policies, market opportunities, and technological advancements can also impact UK businesses, while EU policies on taxation, employment, and licensing/trading can influence their operations.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 .........................................................................................................................................3
1.1 Identifying the purposes of different types of organisation..............................................3
1.2 Describing different ways through which Nestle meets the objectives of stakeholders. .4
1.3 Responsibilities of Nestle and strategies employed to meet them...................................5
TASK 2............................................................................................................................................5
2.1 How economic systems attempt to allocate resources effectively...................................5
2.2 The impact of fiscal and monetary policy on business organisations..............................6
2.3 Impact of competition policy and other regulatory mechanisms on the organisation......7
TASK 3 ...........................................................................................................................................8
3.1 How market structures determine the pricing and output decisions of businesses..........8
3.2 The way in which market forces shape organisational responses....................................8
3.3 How the business and cultural environments shape the behaviour of organisation.........9
TASK 4 ........................................................................................................................................9
4.1 The significance of international trade to UK business organisations.............................9
4.2 The impact of global factors on UK business organisations..........................................10
4.3 The impact of policies of the European Union on UK business organisations..............11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
.......................................................................................................................................................13

INTRODUCTION
Business environment is the combination of internal and external factors which may
influence the functioning of the organization. It is dynamic in nature and it changes from time to
time so firm have to take care of these changes in order to improve their performance in the
market. It is difficult for the manager of enterprise to predict the nature of environment because
there are several factors that may changes or affect the operations of entity (Chavis, Klapper and
Love, 2011). Through an effective interaction between the business and environment, the
company can identify their strength and opportunities in order to improve their growth at the
marketplace. Present report is based on Nestle Company Ltd which perform their operations in
business environment so that they can offer quality services to their customers. Below mentioned
report explains the purposes and objectives of different business organizations. Along with this,
it also explains the impact of fiscal and monetary policies on the enterprise. Further, how global
factors affect the operations of the firm is explained in detail.
TASK 1
1.1 Identifying the purposes of different types of organisation
There are many organization in the market that perform their operations so that they can
fulfil demand of their customers. Different enterprises have their different objectives and they
perform activities in order to improve their growth. Some of these organisations are:
Private sector: These types of business organizations are owned by an individual or
group of people so that they can generate more revenues (Aterido, Hallward-Driemeier and
Pagés, 201). The main purpose of these enterprises are to maximise the profits, minimise the
cost, improve the market share and increasing the sales. Sole proprietorship, partnership and

franchising are some of the examples of private owned firm. The firm is run by an individual in
sole proprietorship and in case of partnership the business is performed by the group of people.
For example, Purina, Dreyer's Gerber are the private firm that buy products from Nestle
Company Ltd.
Public sector: These kinds of business organizations are run by the government bodies in
order to improve the welfare of the society. The main aim of these enterprises are to use the
resources in an efficient manner so that overall growth of the society can be enhanced. For
example, these government bodies collect the tax from the public and use that for the benefits of
people of the country.
Voluntary sector: These types of the organizations are run by the group of people and
they voluntary take participate in order to increase the welfare of the society. Some of these
firms are charity and social welfare companies.
Nestle Company Ltd is a private firm that offer their products to the customers so that
they can generate more profits.
1.2 Describing different ways through which Nestle meets the objectives of stakeholders
There are some stakeholders that are associated with Nestle Company Ltd. Different
stakeholders have their different objectives that should be fulfilled by the organization (Craig
and Campbell, 2012). In order to achieve their goals, the firm is taking care of their suppliers,
customers, employees so that their overall growth can be improved. Some of these stakeholders
are:
 Customers are vital factor of the business organisation that can help them in achieving the
competitiveness in the market. Nestle Company Ltd offer superior goods with the flexible
prices to their customers so that the level of satisfaction among all the consumers can be
increased.
 Employees are the one who perform their tasks in an efficient manner so that firm can
achieve their targets. It is the responsibility of manager to motivate their workers so that
their performance level can be enhanced (Commander and Svejnar, 2011). For this, the
food company offer some rewards and incentives to workforce so that their level of
satisfaction can be increased.
 Government made some policies and legislative laws that should be followed by all the
companies so that they can ensure the smooth functioning in the business environment.

Nestle Company Ltd pays tax to the government so that nation economic level can be
improved so employment rate can be increased in the country.
 Suppliers are the one who provide raw material to Nestle Company Ltd. So, company pay
their suppliers on timely basis in order to increase their level of satisfaction.
1.3 Responsibilities of Nestle and strategies employed to meet them
Every business organization have some responsibility while they are performing their
operations in the environment (Halbert and Ingulli, 2011). They have to fulfil all the objectives
of stakeholders and for this they have to make some strategies so that overall objectives can be
accomplished. Some of the responsibilities of Nestle Company Ltd are: Environment concern: It is the responsibility of the business organization to make the
environment safe so that health of the people can be improved who are living in the
country. For this, Nestle Company Ltd have to follow some of the laws that are made by
the state government. Ethical consideration: When an enterprise perform their operations in the business
environment than they have to follow all the principles and values while performing the
activities. Through these values, they will be able to know that how they can perform
their task in an efficient manner. Stakeholders expectations: There are many people who are associated with the activities
of the business. Nestle Company Ltd have to fulfil all the needs of their employees,
suppliers, customers and so on (Cai and Yang, 2014). Through this, the overall
performance of the firm can be improved and they will be able to gain more profits.
 Heath and safety of workforce: It is the responsibility of the manager to create a healthy
and safe environment for their employees so that they feel comfortable while doing the
work. In order to ensure this, Nestle Company Ltd have to follow all the laws that are
made by the government.
These all are the responsibilities of food company and in order to perform these roles
they have to follow some strategies such as CSR. Through corporate social responsibility, Nestle
Company Ltd will be able to fulfil all the demands of the stakeholders and they can also make
the environment safe. Along with this, they will be able to improve their brand image at global
level.

TASK 2
2.1 How economic systems attempt to allocate resources effectively
There are different economic systems at the different places and this is depend upon the
demand of particular country. The main aim of these economic activities is to fulfil the needs of
the customers as per their expectations. On the other hand, this kind of system is used by the
organizations so that they can identify what and how to produce the products for the customers.
There are three types of economic system and these are: Free market economy: In this type of economic system, government is not taking the
decisions for the organization (Ullah and Lai, 2011). Companies make their own plan and
they can easily import and export their services from one country to another. This is a
kind of open market where customers are liable to set the prices for the goods. So,
through this the level of satisfaction among all the consumers can be enhanced. Further,
the firm can also fulfil the demand of their service users. Centrally planned economy: Here, in this system government is responsible for
distributing the resources and make the decisions. For example, Cuba is having this kind
of economic system in their country. When government made decisions regarding to the
resources then through this the employment rate is also get increased in the nation.
 Mixed economy: The last system is mixed economy where both private and public
organization are responsible for decision making. This is followed by many countries
such as France, Canada so that they cab fulfil the needs of their customers. Public sector
organization are owned by the government so that they can improve the welfare of
society. On the other hand, private sector organizations are performing their operations in
the business environment so that they can increase their profits (The Business
Environment. 2017).
2.2 The impact of fiscal and monetary policy on business organisations
The fiscal and monetary policies affect the policies and operations of the business
organizations. It is important for the firm to continuously monitor the changes that are made by
the government so that they can improve their overall performance (Strumickas and Valanciene,
2015). Through fiscal policy, government will be able to monitor the income of the people and
tax rates. Along with this, they will be able to adjust the nations economy so that living standard

of the people can be improved. When tax rate is get decreased than due to this the disposable
income of the customers is get increased and business organization will be able to generate more
revenues. On the other hand, when tax rate is get increased then companies have to pay more tax
to the government and due to this they increases the prices of their products. Through this, the
spending income of the consumers are get reduced.
Monetary policy is controlled by the central bank and this can influence the operations
and activities of the business organization. This is related to the money supply and interest rate in
particular country. When interest rate in low in the market then expenses of the firm are low and
due to this the spending level of the people is get increased (Boons and Lüdeke-Freund, 2013).
On the other hand, when there is higher interest rate then expenses of the companies are also
higher.
On the basis of these tools, the government will be able to know about the flow of
economy in the particular country.
2.3 Impact of competition policy and other regulatory mechanisms on the organisation
Competition policy is also used by business organizations so that their overall
performance can be improved in the market through fair trading. When companies compete with
each other in a fair manner then they will be able to sustain their competitiveness at the
marketplace than any other rival firm. Through this process, Nestle Company Ltd can improve
the quality of their products and customers will be able to get the quality services at the low
prices (Pirson and Malhotra, 2011). The purpose of this policy is to make the innovative products
by using the technological advancements and to make an effective pricing strategy as compare to
other competitors. The food company will be able to improve their growth and brand position at
the global level. Along with this, they can create a strong base of customers that will lead
towards the success.
There are some other regulatory mechanism that can affect the activities of the firm.
These mechanisms are made by the government so that overall performance of the enterprise can
be improved. These are: Fair trading: This law is based on the fair trading between the business organisations so
that overall rights of the consumers can be ensured. This law also prohibit the operations
of the industries that are performed on the basis of unethical practices.

 Environmental policies: There are some environmental laws that are made by the
government so that health of the people can be ensured. Nestle Company Ltd should
follow all these laws.
TASK 3
3.1 How market structures determine the pricing and output decisions of businesses
Market structure play a vital in determining the prices of the products and the output of
the business organization. There are some market structures such as perfect competition,
oligopoly, monopoly. These are:
 Perfect competition market: In this kind of market there are large number of buyers and
sellers. Competition level is high at the marketplace and all the firms are providing
homogeneous products to their customers (Gonzalez-Zapata and Heeks, 2015). Nestle
Company Ltd offer variety of products to their consumers so they can attract number of
customers towards their services.
 Oligopoly market: In this market, few sellers are their who offer products to their
consumers so that their satisfaction can be improved. There are few companies who
dominate the market and they will be able to increase their market share. There are some
entry and exist barriers in the market so industries faces some challenge at the entry
phase.
 Monopoly market: In the monopoly market there is only one seller who offer their
products to the customers. There is no competition in market so these industries will be
able to generate more profits.
3.2 The way in which market forces shape organisational responses
There are many market forces which may shape the organisational responses in the
market. Supply and demands are the two market forces that can help the firm in generating more
revenues. There are some organization that do proper research in order to identify the needs and
wants of the consumers. On the basis of these needs of the customers, Nestle Company Ltd will
be able to supply the goods (Kropsu-Vehkapera and Haapasalo, 2011). Through this, the
manager will be able to strike a balance between supply and demand. The food company can
fulfil all the desires of their consumers by offering them quality services.

The organisations should manage their activities so that they can manufacture the goods
as per the demand of their service users. So, the relationship between supply and demand should
be their then only they can increase their profits. Along with this, the enterprise can attract
number of consumers by offering them products that they want so their level of satisfaction is get
increased (Pinho and de Sá, 2013). On the other hand, if any firm will not be able to satisfy the
expectations of their customers then due to this their brand image is get affected. So, in order to
improve their overall performance Nestle Company Ltd should balance the demand and supply.
3.3 How the business and cultural environments shape the behaviour of organisation
Business and cultural environment can shape the behaviour of the firm so that they can
accomplish their objectives. Nestle Company Ltd can use the PEST analysis in order to analyse
their performance in the market. Political: This is related to some of the factors such as trade barriers, foreign exchange
and so on. The firm have to follow all the regulations that are made by the government so
that they can improve their growth in the country (Bryson, Patton and Bowman, 2011).
For example, if political stability is their then Nestle Company Ltd will be able to achieve
their goals. Economical: These are related to the spending income of people, interest rate and so on.
For example, when recession had happened in the market then at that time the company
increases the prices of their goods. When prices are get increased then the disposable
income of the customers is get increased and the industry will not be able to generate
more profits (Business Environment. 2017). Social: These factors are related to the customers need, demographic variables and their
lifestyle. The taste and preferences of the consumers are changing from time to time so
manager of the organization should monitor their needs so that their overall satisfaction
can be increased. The industry have to offer quality services to their service users after
identifying their culture.
 Technological: The enterprise should use the technological advancements in order to
provide the innovative products to their customers. Along with this, Nestle Company Ltd
can offer quality services to their through online operations.

TASK 4
4.1 The significance of international trade to UK business organisations
International trade is very important for the business organization as through this they
will be able to offer their products throughout the world. Through this concept, all companies of
United Kingdom can perform their operations in other countries. The significance of the
international trade is: Production cost: When companies are offering their products and services in another
country then their production cost will be low than the local market. When cost is get
minimized then they will be able to increase their profits. Material: Companies sometimes prefer to purchase raw materials from the other country
because they will be able to get the products at low cost. After getting the material they
can convert them into finished goods (Merrilees, Miller and Herington, 2012). Wide scope of market: When an organization offer their products at global level then
through this they can get opportunity to spread their business in another countries.
 Economy: Through this the economy level of UK can be improved and the income of the
people can be increased. Along with this, the living standard of the people can be
enhanced.
4.2 The impact of global factors on UK business organisations
When business organization perform their operations at global level then they can
improve their economy level of the country. There are some factors that may influence the
performance of these enterprises. These are: Global growth: This gave an opportunity to the business organization to improve their
growth at the global level (Ackermann and Eden, 2011). Through this, Nestle Company
Ltd can generate more revenues than any other market players. Government impact: The state government made some rules and regulations so that
organization can perform their operations in an efficient manner. By following these
laws, companies can improve their growth and they will be able to accomplish their
objectives.

 Market opportunities: United Kingdom is good in technology field so they have an
opportunity to perform their operations in all over the world. Through this their brand
image is also get improved.
4.3 The impact of policies of the European Union on UK business organisations
EU have their own rules and regulations that should be followed by all the countries so
that their overall economy can be improved. There are some policies that have an impact on the
organizations of UK and these are: Taxation laws: These laws are made by the government of UK so that they can improve
the welfare of the society (Lozano, 2011). When customers are going to purchase
products and services then they have to pay some extra amount for their products.
Through this the overall price are get increased so they will not be able to attract number
of customers towards their services. Opportunity for employment: There are many small business enterprises that perform
their operations with the other countries of UK. So through this the employment rate is
get increased in the country and the total economy is also get improved.
 Licensing and trading: If UK have licensing then they can export and import their
products in another countries. Through this, they will be able to improve their growth and
brand position in the market.
CONCLUSION
From the above mentioned report it has been concluded that it is important for the
business organization to understand the environment in which they are performing their
operations. The food company fulfil all the expectations of their stakeholders in order to improve
their overall performance. Along with this, they offer the quality services to the customers so that
strong base of consumers can be created. In order to ensure the smooth functioning, the firm
have to follow all the legislative laws. Nestle Company Ltd will be able to identify their strength
and opportunities through an effective business environment.

REFERENCES
Books and Journal