Business Environment and its Impact on Organizational Behaviour

This presentation discusses the impact of business environment on organizational behaviour. It covers topics such as market structures, organizational responses to market forces, cultural and economic environments, and the significance of international trade. The presentation also explores the global factors that affect the operations of UK-based companies such as Millie's Cookies and Southern Fried Chicken.

Business Environment

Introduction
Business environment of an organization consist of internal as well as external
factors that significantly affect its operations
External factors are those events that are difficult to predict and are out of
companies control.
Internal factors re those vents that take place within an organization and largely
affects its business.

3.1
Market structures play very vital role in determining the pricing as well
as production decisions of organizations in UK. There are different
markets structures that affect the operations of new business of
Global Tech in various markets. These include monopoly and other is
oligopoly. In monopoly markets the number of firms is higher and all
these organizations share small proportion of market share. For
example the new fast-food company of Global Tech need to share its
market share with other established fast-food restaurants such as KFC,
Burger King, McDonald's.

Contd...
In oligopolistic market structures the number of firms are less who together decide the prices of
products and services to be delivered in a market. These companies together control the supply of
their products. In addition to this in oligopolistic markets the sellers are more and end users are less.
Thus, the sellers try to keep the prices low to attract large number of customers and to increase the
sales of their product and services.

Contd...
Market forces play important role in displaying link between demand and supply within UK markets.
Organizational responses can be referred to reaction given by an organization to different economic
and market situations. Market forces play very crucial role in shaping organizational responses which
can be explained by using the illustration of McDonald's. The popular fast-food company carry out
proper market research to understand important market forces and then formulate sound strategies
to reduce the gap between demand and supply. The company accurately assess market demand for
its products and services in UK markets.

3.2
This helps the company in meeting the expectations of its valuable customers by making products in
a timely manner and in correct amount. Producing food in right quantity and in stipulated time has
some financial gains as the company can save pounds by reducing food wastage. It can be
observed that McDonald's is making profits by correctly assessing its margin. This is very beneficial
in reducing stocking of food and generating revenue for its business. Another illustration can be
stated to show the relationship between market forces and organizational responses in different
economic scenario. The profitability of KFC was negatively impacted in Indian markets as the
company before entering into the market did not effectively carried out market research. This costed
huge sum of money and legal implications to KFC.

3.3
 McDonald's operates its operations in two different environments. One is
economic and other is cultural environment. Both these environments
significantly affect the organizational behaviour of McDonald's The fast-food
company operates in more than 119 countries of the world and its operations
are greatly impacted by economic as well as cultural environments which
prevail in these nations.
 The economic environment of nations consist of economic policies,
conditions and systems. On the contrary the cultural environment
encompasses social, demographic , culture, values, beliefs, traditions and
attitudes of people who belong to those nations.
 For instance: The per capita income of UK customers is higher as compared
to Indian customers. Thus, McDonald's need to keep the prices of its
products and services low in Indian markets to provide the value for money.
On the contrary the company will sell its products and services comparatively
at higher prices in UK markets. Besides this the company cannot include
beef in its food preparation in Indian markets as cow is considered as a
sacred animal in Indian mythologies.

4.1
International trade play important role in growing the potential of UK business organizations such as
Millie's Cookies and Southern Fried Chicken. Millies Cookies is UK based retail bakery chain which
specializes in cookies, muffins and hot drinks. The company has number of store in UK as well as in
other countries like France, Germany, Egypt and Hong Kong. The bakery retailer has to abide by
different regulations of international trade to run its operations in different economies. Similarly,
Southern Fried Chicken is UK based fast food chain which operates in UK as well as in 70 different
nations across globe. In order to discuss the significance of international trade on these two British
based companies following points can be referred:

Contd...
 Increased potential: Millie's Cookies and Southern Fried Chicken can increase their
potential by selling their products in global markets other than UK markets. More
sales ensur greater profitability for these companies.
 Production cost: It can be analysed that by trading in international markets the
companies can have better opportunities for lower production costs. For example by
trading in China both these companies can save millions as the labour and
production processes are available at very cheap rates.

4.2
There are several global factors which affects the overall business operations of both
retail chain Millie’s Cookies and fast food chain Southern Fried Chicken such as:
Political factors: Within the UK there are various policies framed by government
regarding consumer shopping as well as their health. Further, due to the changing
policies both the organization might leads to face several difficulties while serving their
consumer such as employment policy, health and safety etc. They must rely under these
policies in order to provide quality services to their customers. All the health and
hygiene related factors must be taken into consideration so that consumer trust can be
gained.
Economic factors: At the time of economic downturn as well as recession Southern
Fried Chicken fast food center can increase their prices within their menu. It can be
reduce their number of customers and also decrease their satisfaction level.

Contd...
 Social factors: It is considered as a most crucial factor as meet out the changing
needs of customers are becoming the most crucial task for companies these
days. Providing those services as per there are highly difficult.
 Technological: Due to the advancements in technology whole business operations of
both the cited firms can be affected. They are able to go through more advanced and
quick services as well as related to billing procedures as well as order tracking etc.
Further, it also helps them in developing better relations with customers by
connecting them through various social media sites.

4.3
Other than UK's legal policies, European Union (EU) also play important role in
influencing the operations of Millie's Cookies and Southern Fried Chicken.
After joining EU both these companies are required to follow policies and regulations
which are same for all EU countries.
Under EU relations all UK based companies including Millie's Cookies and Southern
Fried Chicken can trade its products with other EU nations without any barrier.
If these two companies have licences of trade that they can easily operate their
businesses in other EU countries.

References
 Kotler, P., Bowen, J. T. and Makens, J. C., 2006.Marketing for hospitality and
tourism. Upper Saddle River, NJ: Prentice hall.
 Pelissier, R., 2008. Business Research Made Easy. JUTA & CO.
 Lerche, I. and Paleologos, E., 2001. Environmental risk analysis. New York:
McGraw-Hill.
 Price, A. D. and Chahal, K., 2006. A strategic framework for change management.
Construction Management and Economics. 24(3). pp. 237-251

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