Business Environment and Firm Performance

This assignment is about analyzing the business environment and its impact on firm performance. It involves studying various sources to understand how factors like ownership, exports, and technology influence business outcomes. Case studies of companies such as Emirates Airlines are provided to illustrate these concepts.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
P 3 Relationship between different organisational functions.................................................1
P 4 Positive and negative impacts the macro environment....................................................3
P 5 Internal or Swot analysis of Emirates.............................................................................5
P 6 How strengths and weaknesses associate with external macro factors...........................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment can be simply defined as a collection of all the factors that may or
may not be under control of corporation but can impacts on the performances of it. They also
influences on the turn over and even its expansion or survival (Aterido and et. al., 2011). Each
and every business of enterprise are operating in a distinctive surrounding as it cannot exist in
alienation. Such environment impacts positively as well as negatively the business and also gets
effected by its activities. It is classified into types namely internal business environment and
external business environment. The prior one explains the strength, weakness, threats and
opportunities of organisation while the latter one determines the impacts of political, legal,
technological, economical, social and environmental factor on the business of a corporate. The
present report is based on the business environment of Emirates and Virgin Atlantic. In this
project three different sectors namely private, public and voluntary of organisation are discussed
along with their size, functions and scope. The positive and negative impact of macro as well as
micro factors are also explained.
TASK 1
Covered in PPT
P 3 Relationship between different organisational functions
There are different organisational functions of all firm but have the common objectives to
gain profitability. The inter-relationships between Virgin Atlantic and Emirates are discussed
below:
 Production: Emirates aims to provide luxurious facilities to their patients like high
quality food, sleeping and sitting facility,etc. Because of this most of users gets attracted
towards their services (Aterido,Hallward-Driemeier and Pagés, 2011). Virgin Atlantic has
also the same motto to make happy or provide satisfaction to their users by providing
them best quality services. They also offer additional services to Islamic group of people
in the month of Ramadan such as providing different variety of foods and beverages
materials.
 Research and development: Emirates has been investing a large sum of money in
conducting surveys in order to identify the needs or demands of their users. After
conducting research, they manufacture their goods or services as per their wishes. So that
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most of travellers prefers them for the purpose of travelling. Virgin Atlantic also invest
their money in doing such kind of activities (Bharadwaj and et. al., 2013). They examine
carefully the living style of users, their society, religions, festivals, etc. After carrying out
research, they provide them services as per their need. For example, luxurious facilities
are made for rich section of society while satisfying services are provided to middle or
poor sector of people so that they afford that. They take care of all them. That is why
people prefer them as their first choice.
 Purchasing: Both of the companies tries to purchase good quality of raw materials. Such
as they buy aeroplanes or jets having high speed and best quality, food items to cook their
own tasty and spicy foods, etc. in low prices so that they provide these facilities to their
travellers at minimum prices. They also offer online booking of their tickets. This can be
done without visiting airports by home only. This aids in minimizing the traffic or crowd
at airports and also lowers the rate of road accidents.
 Human resource management: Both of the corporates are utilising the activities of
Human resource management. Like HRM aids in hiring skilled workers in their
company. Skilled workers are meant by those person who have good communication
skills, high personality, can speak different languages, have good interpersonal and intra
personal skills, can do day as well night shifts, etc. They have to recruit most talented
pilots as billions of lives depend on their performance (Blanchard, Tolbert and Mencken,
2011). So, they must hire experienced holder pilots or if they are hiring freshers then it is
their responsibility to provide them best training programs. This training programs should
be of minimum 6-8 months so that they learn all qualities to ride aeroplanes in different
situations. Air hostess should also have effective personality and speaking power. They
have a polite nature while treating the consumers and giving instructions before flying. In
order to hire the talented or skilled employees, companies have to carry survey in
different universities or colleges. This will take a large amount of money and time also
but give proper benefit to them. Company can also offer online interviews so that their
time can be saved.
 Accounting and Finance: It is a difficult or risky task to calculate all the expenditures
and profits. So, both corporations are carefully managing these tasks by using modern
technologies. The modern techniques provided special software like Spreadsheet, Ms-
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excel, power-point,Ubuntu, Ms-word, etc. The Spreadsheet and Ms-excel are used for the
purpose of calculation. They automatically gives calculation only by writing any formula.
This minimizes the errors that are occurring due to physical work and increases the
quality of work by reducing the time period (Boons and Lüdeke-Freund, 2013).
Companies can make presentation of their services or products as per their client demand
by using Power-point. Communication are effectively done by using several internet
based systems like via social media (Facebook, What's app, twitter, email, video
conferencing, etc.). Now workers can communicate or attend their meetings with seniors
by video conferencing without being physically present.
Emirates are using divisional organisational structures. This aids in expanding their
functions or services across different branches. Venture consist of several product lines and these
are divided into different regions like marketing, sales, accounting and finance departments,
research and development, etc. While there are some demerits of using this structure. Here, each
section of workers are doing same task which creates repetitiveness. On the contrary, Virgin
Atlantic are using matrix structure. This provides them flexibility regrading several functions of
business in comparison to hierarchical structure of firm. Each and every employee are working
in a project that is based on marketing, research and development, etc. The workers are
performing under the guidance of different managers because they are working with several
types of goods or services. This structure is working according to the function of enterprise as
demands of users changes on regular basis. The major disadvantage of this structure is that the
chain matrix made more indistinct or cloudy and ambivalent.
P 4 Positive and negative impacts the macro environment
Macro environment can be simple defined as external factors that impacts the
performance of the company. External factors includes political, economical, social,
technological, environmental and legal factors. The positive as well as negative impacts of such
factors on functioning of Emirates are explained below:
 Political factors: Airline industries are getting easily affected by the alternation in
political factors. This reflects sensitiveness of corporation. The political situations
includes wars and various technical conditions moving on in country. The economical
conditions as well as instability in governmental policies in Asia are giving them
opportunities to earn more benefits (Bryman and Bell, 2015). Populations commonly
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prefers Emirates in comparison to their own nation flights. Some of the political factors
which bounds the enterprise are listed below:
▪ Emirates airline have to work according to the norms of the Dubai government as
they are property of them.
▪ They generally signed agreements with other countries too. Because of this
reason, their routes are opened for all the nation.
▪ The rate of terrorism and wars are increasing day to day. This led a negative
impact on the working of Emirates (Cai and Yang, 2014). Hence, it corporation is
responsible for providing safe and secure rides or travelling to their users.
▪ Several government have have different policies regarding tax imposition. Some
of them impose less rate of tax while some others impose a higher rate of taxes.
This effects negatively for the enterprise as most of the money goes on only
paying these taxes.
▪ As Emirates perform their business in almost all over the globe. Due to this they
are affected by currency fluctuation rate of different countries. In several nation
like UK, the value of currency changes, sometimes it gets high while sometime it
falls down. As per this up and down nature, the company gets affected positively
or negatively respectively. Apart from these difficulties, Emirates are playing a
leading role in attaining aims and goals of promoting tourism sector.
 Economical factor: The economical situations of nation are affecting the profitability,
capitalism and demand for-costing (Cavalcante and Ulhøi, 2011). If there is minimum
cost capitalism and demand buyout, then this will ultimately draw in several
organisations to grow and do investment having the motto to gain their profitability.
 Social factor: This includes the needs and living style of people. Company is being
aware of various demographics modification and may be influenced by regions, age
factors, number of employees, etc. Culture also plays an important role in this regard. The
income gets increased in several months of festivals of various culture like Ramadan,
Christmas as large number of consumers used to travel their home town at such
occasions.
 Technological factors: The improvement done in the technology has greatly impacts the
working of firm. The existence of internet and information technology are making ways
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to entertain users during their flights hours. Some of the updated techniques increasing
the performance of corporate. For example by using several software like Spreadsheet,
Ms-excel, etc. company can effectively do their vast calculation works very easily in
short interval of time. Communication can also be effectively done by using social media
like Face book, What's app, twitter, video conferencing, etc. There are some new air
crafts introduced by company like Boeing and Airbus offers entertainment facilities to
their customers.
 Environmental factor: Environment led a positive as well as negative impacts on the
working of corporations. The random alteration in the weather affects the working of air
crafts directly (Cavusgil and 14). For example, due to foggy weather, pilots can see
clearly paths and due to this reason, delay occurs in arrival and departure of flights. Some
times the bad weather causes serious problem like crashing the flight.
 Legal factor: This also affects the turnover of enterprise. Many government are running
under paternalistic schemes in pacific areas. Some of the policies are preventing airlines
from exterior factors specifically environmental and political (Chow and et. al, 2011).
Alteration done in such factors will inevitably impact the yield revenue and honour of
company. The norms made by the government allowed airline enterprises to become
more careful in dealing via locally or globally. The overall action and operation of
Emirates are legal allowing travellers to enjoy harmless and secured travel.
P 5 Internal or Swot analysis of Emirates
The Swot or internal analysis can be simply defined as the recognition of strength,
weaknesses, opportunities and threats of company. The internal analysis of Emirates are
explained below:
 Strength: One of the strength of the enterprise is that government of Dubai has been
supporting it by providing them subsidies in many services. Other strength is that this lies
in a nation which is very wealthy in terms of oil availability, this gives them additional
benefit. Hence, they purchase oils in very low price (Commander and Svejnar, 2011).
They have a powerful base in Dubai, whether they provide services internationally which
is based in UAE itself. A large number of travellers mostly choose Emirates which shows
that all of them are getting satisfied from their servicing. Total manpower of the
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enterprise is about 50,000 or more than this. This shows the powerfulness of company.
They are operating under seventy two nations in six continents.
 Weaknesses: They become little back-swept in certain prospect because they are more
dependable on world-wide forward moving traffic, so proved to be enervated when
enterprise is alone or self-directed. Due to the big competition in airline industries, there
is limited market sharing so they are working under concern of holding up benchmark
standards at higher cost.
 Opportunities: There are several opportunities for Emirates in future or in upcoming
days. Updated mechanical phenomenon can aid corporate in gaining the trust of
customers in their airline services. They can expand their business in all over the world as
their servicing demand is increasing day-to-day.
 Threats: The middle east has been enhancing or producing a hub of airline services that
brings the most competitive era. This is proved as a threat for organisation. The costs of
fuel are seemed to be rising in future. This also affects negatively the budget of
corporation. Additionally, there are some rules and regulations that are imposed by
government are proved to be as a hindrance for firm.
P 6 How strengths and weaknesses associate with external macro factors
The strength and weaknesses of Emirates are associated with the outside macro factors
such as political, legal, technological, environmental, economical, social, etc. The aliveness or
survival of business is depending on its strength and weaknesses as it provides them certain way
to make development in their business in a specific way (Cuervo‐Cazurra, 2011). The relation
between internal and external factors are discussed below:
 Strength: This helps the firm in growing their business. The strength of company are
recognized brand image, loyal relation among their users, international business
performance , etc. Impacts on macro factor on them are listed below:
▪ Political factor: The stability in political situations helps the enterprise in
gaining profits. On the contrary, tax imposition done by government influences
negatively the turn over. This reduces the overall turnover or income of business.
Certain rules and legislation like employment law, child labour, etc. also affects
the working of Emirates. This orders to maintain smooth and disciplined
environment in the business of airways.
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▪ Technological factors: The presentation of new or advanced technologies helps
effectively in enhancing the working of corporate. The internet based system
allows Emirates to offer online booking or cancelling the tickets. This increases
their selling rate (Granger and Schroeder, 2013). There are certain other software
like Ubuntu, Ms-excel, Spreadsheet, etc. that aids in doing rigid calculation very
easily. Additionally, social media like face book, What's app, twitter, video
conferencing, etc. that aids in doing communication in a effective way.
▪ Social factor: Society gives a positive impact on the working of Emirates. They
books tickets in large number at the time of festivals as they used to go their
home towns. This increases the turn over of company in certain months.
 Weaknesses : If corporation is failed to achieve their aims and objectives, this shows
that they are weak in some sectors. Weakness occurs due to the impact of some macro
factors that are discussed below:
▪ Environmental factor: This impacts negatively on the working of venture. The
sudden changes in weather causes delays in arrival as well as departure of flights.
Sometimes it causes a severe problem that may cause crashes of planes or death
of large number of passengers (Hamilton and Webster, 2015). Due to occurrence
of cyclone or foggy climate, pilots cannot see clearly. This may leads to
accidents. Flights gets cancelled due to bad weather. So, this gives a very bad
impact on working of corporations. Due to this travellers loose their trust from
them and do not prefer them for travelling.
▪ Legal factors: Different laws imposed by government impacts negatively the
Emirates airlines. These laws allow company to become more careful while
dealing with business locally or globally (Harrison, 2011). Such law decides the
amount of weight that can be travelled along with passengers. Extra weights can
cause additional charges.
CONCLUSION
From the above based report it has been concluded that business environment is an
important part of organisation that affects the performance of its business. The external factors
like Political, economical, social, technological, environmental, legal, etc. influences the working
of Emirates positively as well as negatively. The different sectors like private, public and
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voluntary are discussed in this report. Their size and scope are also shown. The relationship
between different organisational functions and its objectives are explained by defining their
organisational structure. The swot analysis is also performed showing the strength, weaknesses,
opportunities and threats. The relationship between external and internal factors are also
highlighted.
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