Business Environment | Essay
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Added on 2019-12-28
Business Environment | Essay
Added on 2019-12-28
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Business Environment1
Table of ContentsINTRODUCTION...........................................................................................................................3ASSIGNMENT1: ESSAY...............................................................................................................32.1) Economic System Allocating Resources Effectively...........................................................3ASSIGNMENT2: CASE STUDY...................................................................................................51.1,1.2) Purpose of different type of organization and extent it meets objective of stakeholders.......................................................................................................................................................51.3) Responsibility of organization and strategies employed to meet them...............................62.2, 2.3) Assessing the impact of fiscal and monetary policy on business..................................73.1,3.2) Market structure determining pricing output and how market forces helps in shapingorganization..................................................................................................................................83.3) Ways in which business and cultural environments shape the behavior of organization.....84.1 Significance of International trade.........................................................................................94.2 Impact of global factors on Nestle ........................................................................................94.3 Impact of European Union on Nestle ..................................................................................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................122
INTRODUCTIONBusiness environment is the combination of all the internal and external factors whichcan influence each other and work together in the business operating situation. The organizationundertaken in this report is Nestle which is a Swiss multinational food and beverage companyand largest food company in the world in terms of revenue (Koller, 2005). Organization deals inbaby food, bottled water, dairy products, ice cream, snacks etc. This present report is based onunderstanding organizational purpose of business and understanding national environment inwhich business operates. Further it discusses behavior of business entity in market environment. ASSIGNMENT1: ESSAY2.1) Economic System Allocating Resources EffectivelyEconomic system is considered as a system of production and also exchange of goodsand services in order to allocate resources effectively in society. Economic system attempts toallocate and make effective use of scare resources effectively (What is Business Environment?Explain its types, 2013). Various points are given in order to elaborate and compare scareresources. Allocating resources defines properly design the structure of 5 major resources whichare Men, Machine, Material, Money and Methods.Command Economy- Command economy is a economy where what goods need to beproduced, how much need to be produced and at what price goods will be offered for saleare basically decided by the government (Berman, and et.al., 2009). Under thisgovernment decide all the basic requirements for consumers. For instance, governmentcommanding general public to pay taxes and in respect of that tax, making roads andhospitals for development of nation.Free Enterprise Economy- It is a market based economy in which prices for goods andservices are set freely by the force of demand and supply and consumers allow to reach toa point of equilibrium without any intervention of government. Under this, organizationproduce products according to the needs of consumers (Hofstede and Hofstede, 2005).Therefore, selection of raw materials, use of power, labor are made accordinglyconsidering the quantity of product by consumers.3
Mixed Economy- Mixed economy can be defined as an economy which featurescharacteristics of both capitalism and socialism. It usually allows private economicfreedom in use of capital but also allows government to interfere in economic activities toachieve social goals. Supply and demand forces sets prices in capitalism whereassocialism fix prices through central planning (Capon, 2009). Every country follows theconcept of mixed economy where means of production are shared between the privateand public sector. In private sector, market forces takes the major and most of thedecisions. On the other hand, resources of public sector are allocated by the government.Transitional Economies- These are the economies which are changing from centrallyplanned economy to market economy. This economy includes economic liberalizationwhere prices are set by market forces rather than by central planning organization. Onetransition in this economy is functional restructuring of state institutions from beingprovider of growth in private sector (Freeman and Whish, 2007). Another one is the waythat economy is growing and practicing mode. Transition period plays a crucial rolewhich generally defines the process of transition from capitalism to socialism. Thiseconomy helps in growing physical resource in order to gain an competitive advantage inmarket place.Public and Private Sector Initiatives- Public sector is considered as any municipal agencywhich is at the Central, State or City level. On the other hand, private sector comprises ofany industry or cooperation. Public private initiatives promote loss prevention and rapidrecovery. It generates effective communications between private and public sector whichupdates business impact to both public and private entity. It facilitates improvement inmachine and human resource with increase in production in collaboration with public andprivate organizations.Private finance initiatives- Private finance initiatives (PFI) is a way of developing andcreating public- private partnership by funding various infrastructure projects with privatecapital (Lang, M. Melz, P. and Ecker, 2009). It is considered as part of wider programconstituting privatisation and financialisation. Investment banker acts as an financialadvisers which helps both the parties to manage financial process, bidding andnegotiating. Capital is the scare resources which can be maintained by the use privatefinance intermediaries. As stated above, its a technique of providing fund for major4
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