Fostering Favorable Economic Conditions through New Sponsored Employment Program

The assignment content highlights the favorable economic conditions that help British Airways (BA) expand its business and enhance profit margins. To reduce burdens and unnecessary costs, BA has framed a new regulatory fitness and performance program at its workplace. Additionally, European Union policies can be helpful in creating a positive image for BA among customers. The report concludes that despite various factors affecting the airline industry, including political, economic, social-cultural, and technological changes, BA can overcome issues by developing appropriate business strategies and considering environmental guidelines.

Business Environment

TABLE OF CONTENTS
INTRODUCTION ...............................................................................................4
TASK 1..............................................................................................................4
1.1 Exploring the purposes of different types of organizations ...................4
1.2 Relationship between organization objective and stakeholder...............5
1.3 Responsibilities of company and strategies employed to meet
objectives.....................................................................................................5
2.1 Role of economic system in resource allocation.....................................6
2.2 Impact of fiscal and monetary policies on business of BA......................7
2.3 Examining the impact of competition policy and other regulatory
mechanism...................................................................................................7
TASK 2..............................................................................................................8
3.1 Role of market structure in determining pricing and output decision of
company.......................................................................................................8
3.2 Ways through which market forces shape organizational responses .....8
3.3 Roles of business and cultural environments on behaviour of British
Airways.........................................................................................................9
4.1 Significance of international trade to UK business enterprise..............10
4.2 Impact of global factors on British Airways...........................................10
4.3 Impact of policies of European Union on UK Business Company..........11
CONCLUSION..................................................................................................12
REFERENCES..................................................................................................13

LIST OF FIGURESINTRODUCTION
Business environment contains information about all external and
internal factors that influence business decision of any enterprise in cut
throat competitive market. As per the given case scenario, British Airways
has been taken to better understand the impact of cultural, economic and
regulatory environment factors on company and members associated with it.
BA is well known firm of UK and it offers variety of services such as auxiliary
service and carriage of freight to their customers throughout the world. This
report provides detail about impact of fiscal, monetary and competitor’s
policies on performance of UK base enterprise.
TASK 1
1.1 Exploring the purposes of different types of organizations
Todays, different types of business organizations including non-profit
corporations, private sector organizations (sole traders, partnerships,
companies and franchises), governmental and non-governmental enterprises
are successfully running their business. Each type of enterprise has some
common objectives, vision and mission which they want to accomplish. The
main objective of public sector organizations is to perform national security
related works and providing employment opportunities to people of country
(GBP, 2013). On the other side, private sector companies’ main objectives
are to earn profit and achieve growth in the industry by effective utilization
of their resources with meet expectations of stakeholders. Partnership is
done between two or more parties for the purpose of enjoy limited liability
and share skills and the workload. Companies can be considered as a legal
entity and these are typically smaller than public limited companies. In
franchise, grants permission is given to company to sell a product and trade
under a certain name. Sole trader is most common form of business
ownership. In this kind of enterprise, decisions can be made quickly (Bamber,
2013). Earlier, BA was public sector company and but due to increasing
accumulated losses, enterprise was converted into private sector.
Mission: Mission of the company is to make product and services more
innovate and meet expectations of customers by following ethics in business
(British Airways Annual Reports, 2010).
Vision statement: Vision of the BA is to become the most responsible
airline across the world by providing cost relaxation to passengers with
following environment regulations.
Objectives: Short term objective of company is to penetrate new customers
towards products and reduce lost or misdirected bags related problem during
the journey (British Airways Annual Reports, 2010). Long term objective of
firm is to make it world's leading global premium airline in terms of
increasing customer satisfaction and providing benefits to its stakeholders.
Goal: Maintain its position as the frontrunner in the airline industry and
concentrates on effective delivery of their services to their customers on
time at affordable price.
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1.2 Relationship between organization objective and stakeholder
Contribution and support of stakeholders are required for management
of BA to get success. For example, if transparency is followed while sharing
between different departments then it will provide opportunity to firm to take
several advantages such as controlling cost, economy of scale and enhance
brand image and reputation etc. Internal stakeholders of company are
managers, employees and business owners (Hamilton and Webster, 2012).
Owner and manager are responsible for monitoring and running business
activities in a significant manner.
Figure 1: Internal stakeholders of BA
External stakeholders of BA can be understood as follow. Bank and other
financial institutions are the main creditors of company and they provide
loan to the firm for running their busienss.
Figure 2: External stakeholders of BA
Through giving higher dividends and involving shareholders in decision
making process, British Airways has maintained better relationship with their
shareholders and it motivates them to invest money in the growth of
company (Stengel, 2011). Besides that, enterprise also follows government
regulations in its business processes to effective handle environmental
related issues. Along with this, company also maintains good relationship
with Boeing and Airbus suppliers. Moreover, environment related issues
including unfavorable whether condition, wastage and noise, and reduction
of Co2 are also affecting performance of company (Dunwoody, 2007).
Despite of that financial institution, employees, customers, local
communities and use of promotional media (for conveying mission) and
objectives to the whole community are the other factors which are affecting
the entire aviation industry.
1.3 Responsibilities of company and strategies employed to meet objectives
In order to maintain good relationship with its customers and save
data, management of company has used customer relationship management
software. The main aim of enterprise is to deliver innovative services to its
customers and increases their job satisfaction level through providing
services at minimum prices compares to their competitors (Kusluvan, 2003).
For the purpose of reducing carbon emission and other environment related
challenges that can harm the society, organization is using different new
emerging technologies and filters at workplace.
Table 1: Responsibilities of enterprise and strategies to achieve objectives
BA stakeholders Objectives Strategies
Business owner Increase profit Monitoring entire work
Lucrative marketing
campaign
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Mangers Delegate responsibility
Involve employees in
decision making process
Increasing managers'
contribution
Timely provides
promotion and
appraisals to employee
(Cheng and et .al.,
2007)
Shareholders Maintain transparency
in business processes
By providing dividend
and good returns at
right time.
Government
Suppliers
Customers
Pay taxes to
government on time
Maintain good
relationship with both
customers and
suppliers.
Through proper capital
management and
deliver quality of
services at compatible
price, better relationship
with them can be
maintained (Paul, 2006).
Along with this, for increasing retention of employees and meeting
their needs properly, HR department of firm created user friendly working
environment where equal opportunities are provided to an individual.
Moreover, through introducing rewarding polices and providing safety and
security to their staff-members, company can solve conflict arise between
them and encourage them to give their best at workplace (Richter, 2001).
Through increasing contribution of each and every person within enterprise,
HR manager can increase transparency in business processes and provides
promotion and appraisals strategies.
2.1 Role of economic system in resource allocation
Government and economic system play a crucial role in the context of
allocating organization resources including human capital, finance and
technology. Without taking prior permission to government, Aviation
Company cannot be able to enhance their production. Economic system can
be further classified into four parts including traditional, market, mixed and
command economic system. Historical success of social customs and norms
are considered for taking decision in traditional system. On the other side,
role of the government is almost negligible in capitalist economic system
(Wales, 2009). Government and private sector business is almost restricted
in the command economic system. However, the performance of this system
is very slow to adapt changes. Mixed economic system is a combination of
both market economic system and command economic system. British
Airways is private entity and all power in hand of single person (Richter,
2001). Furthermore, mixed economy system is employed in UK in which
equal opportunity is provided to both private and government sectors. Along
with this, management of company is also free from government restriction
so that company can develop policies to fulfill the demands of the customers
in a significant manner.
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2.2 Impact of fiscal and monetary policies on business of BA
In UK and other European countries, Federal Reserve’s and financial
instrument are responsible for increase or decrease supply of money in
economy. In order to enhance money contribution, government bonds and
treasury bills can also be helpful for market. The success of business mainly
depends on the money supply. For example, if money contribution is
decreased then unbalancing situation between supply and demand will arise.
It will demotivate investors to invest money in business (Doganis, 2005). In
order to improve market conditions and generate employment, government
of UK is focused in their recent policy. Government spending and taxes which
are the main part of fiscal policy and they can affect demand curve either in
upper direction or down direction. By providing tax and other kinds of
financial relaxations, government of country can improve airports and other
aviation services. When monetary policy will be favorable for aviation
industry then economy will come in harvest position and huge amount of
money will invest (Dettwiler, Lindelöf and Löfsten, 2005). It will provide
opportunity to company to upgraded new system and improve in business
processes through reducing carbon emission and other negative environment
related problems. Hence, it can be said that fiscal and monetary policies can
affect business of BA because if taxes will high then customers will de-
motivate to use services of firm which will also influence the operations of
enterprise in term of sales reduction.
2.3 Examining the impact of competition policy and other regulatory
mechanism
In order to provide quality of service to its customers at affordable
price, healthy competition in the market is essential for enterprise. Industrial
policies developed by government of UK encourage investor to invest money
in aviation sector (Wales, 2009). For the purpose of harmonizing the
corporation with EU competition policy, Competition act, 1998 has followed
by company. In the context of executing mergers and acquisition activities
effectively, Enterprise Act, 2002 can be applied (Nimwegen and et al., 2008).
Besides that, activities of the BA firm are also influenced by training and
skills policy and Equality and discrimination regulations developed by UK
government. EU regulations like International Regulations of Airline (ICAO)
can be beneficial for British Airways for the purpose of gaining high market
share and deliver quality of services to its customers within stipulated time.
Civil Aviation Authority (CAA) also affects management and operation
activities of the BA in term of managing air traffic (Strategic Direction, 2014).
By following EU Competition Commission polices, management of British
Airways would be able to better perform outside the country against global
competitors and fulfill current as well as future needs in a significant manner.
These policies eventually make impact on BA plans as with the
implementation of these policies, organization starts getting stiff competition
from their major competitors namely Deutsche Lufthansa AG, Japan Airlines
Co. Ltd, etc. Further, many airline's organization use different types of
unethical practices in order to increase their ticket sales, as well as the
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market share (Nimwegen and et. al., 2008). By seeing that, government of
UK has imposed restrictions for competition policy which now need to be
followed by each and every airline industry. Being a global airline, BA has a
large base of loyal customers because they provide best of the services to
the individuals at an cheap and affordable price.
TASK 2
3.1 Role of market structure in determining pricing and output decision of
company
In aviation industry, enterprises like BA can maximize the profit and
minimize the cost through adopting new emerging technologies and make
balance between quality and prices of products. Perfect competition,
Imperfect competition, Monopolistic, Monopoly and Oligopoly structure are
the main types of market structures. The nature of market structure affects
pricing strategy of enterprises in aviation sector (Buhalis, 2004). UK aviation
sector is Oligopoly nature in which few sellers and more buyers are present.
It encourages British Airways to enhance satisfaction level of them and
enhance profits and sales. It can be said that there is direct relationship
between market structure and pricing decision take by company (Berman
and et.al., 2009). For example, due to oligopoly market structure of aviation
sector, when one enterprise is increased prices of aviation services then
other companies also encourages to enhance prices of their products
(Kusluvan, 2003). Less competition among competitors and availability of
small number of airline services providers are the major factor motivates
enterprise to execute its managerial utility function properly.
3.2 Ways through which market forces shape organizational responses
In modern era, customers are so smart and they demand high quality
of products and services in low price. They create challenges for aviation
enterprise to maintain balance between supply and demand of products
(Bamber, 2013). The elasticity of the goods is influenced by presence of
substitutes in the marketplace. Elasticity of demand is enhanced with
increasing number of substitutes in market. From the porter five forces
model, it is cleared that buyers, suppliers, substitutes, new rivalry and new
entrants can affect business functions of BA.
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Figure 3: Market forces shape enterprise
(Source: Dunwoody, 2007)
Through offering unique services at affordable price to their customers such
as entertainment and various discount offers, BA can be able to increase the
demand of their products in cut throat competitive market. Any changes
come in the market highly affects organization and its policies. For example,
due to changes arise in government regulation in UK such as plan route,
connecting services and plan route related affects strategies of company and
their decision at workplace (Nimwegen and et. al., 2008). However,
enterprise can response to market forces by changing in their strategies such
as adopt new technology, up-gradation technology and introduces flights in
new routes, design lucrative aircrafts and invest money in market research
and R&D to better understand the perceptions of customers toward brand
etc.
3.3 Roles of business and cultural environments on behaviour of British
Airways
Culture follows in BA is dominant kind. Good leadership qualities,
employee’s diversity in different operations and ethics follow in business are
the major characteristics of organization culture. Pricing strategy of company
is developed by considering political and other external factors including tax
structure, custom and tariff etc. However, sluggish economic condition and
unfavorable market situations are creating hurdle in success path of
organization (Economy watch, 2010). Along with this, in UK diverse
background people are stayed and they use services of company such as
race, values, nationality and language etc. By recruiting employees from
various backgrounds, enterprise can be able to handle to diverse workforce
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in a systematic manner. In addition, business ethics and corporate social
responsibility are the other major factors which influence strategies of British
Airways (OECD, 2000). Hence, it can be interpreted that good policies and
procedures framed by company and integration between management and
stakeholders are creating good image of firm in mind of stakeholders as well
as increase their profit margin also.
4.1 Significance of international trade to UK business enterprise
International trade provides opportunities to business enterprises to
exchange of capital, and deliver products and services across cross border
effectively. Greater utilization of resources, variety of choice to consumers
and generates substantial parts of its revenues from international sales are
the positive impact of expanding trade at international level for organizations
in UK. However, some negative points such as increases dependency on
foreign markets and loss of local jobs are also associated with the expansion
of international trade (Budd, Griggs and Howarth, 2013). Political factors
including rigid regulatory regulation applied by governments of other
countries can reflect business plan and operations of BA. When it will operate
its business functions in cross nations the availability of labour and other
issues also raised (Berman and et.al., 2009.). Tax relaxations and less tariff
barrier on import and export are the favorable economic conditions for the
airline enterprise to expand its business at international level. Along with
this, supportive nature of the UK government also encourages investors
throughout the world to invest money in this sector. However, commodities
and oil price hike and fluctuation come in currency can affect sales of
company (Kusluvan, 2003). Social-cultural factors such as changing lifestyle
of people, increase price-sensitivity and high spending on travel & tourism
etc. helps British Airways to flourish its business at global level. In order to
control traffic control and reduce negative impact of environment factors,
new emerging technologies used by BA can be beneficial in terms of gaining
business advantages. In order to reduce cost of production, firm can
establish its factories and outsourcing of work in developing countries.
4.2 Impact of global factors on British Airways
At global level, different factors such as, strategic alliance, overseas
competitive advantages, exports and trade associations etc. can affect
business of BA. Regulation & policies framed by UK government is favorable
to international companies to invest there. Along with this, government also
provides tax relaxations for different projects such as infrastructure
development airports and roads etc. to motivate entrepreneurs or investors
to spend money. Tight regulatory controls and infrastructure costs also affect
business decisions of BA because by considering these regulations enterprise
will develop polices and rules either it is profitable or not (Cheng and et.al.,
2007). Besides that, International Aviation Organization (ICAO) developed
strict safety regulations and it affects the entire airline business in term of
change services. Aviation industry is highly sensitive to any economic
downturn and if any changes are raised in this sector then growth and
customer’s base of company will directly affect from it (GBP, 2013).
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Increasing price sensitivity and customers need provides opportunity to
business travelers and individual passenger regarding to choose flights and
services. In addition, international trade policies are framed favorable for
companies of UK so that they can expand their business at global level in a
significant manner. Performance of plants affects by the availability of carbon
dioxide and ozone gas, oxidants and antioxidants factors (Stengel, 2011).
In dynamic change environment, cut throat competition in the market.
In such kind of circumstance, it is essential for company to grasp strong
competitive advantage. Along with this, infrastructure related issues such as
slot capacity and route flights etc. can also influence decision of company
(Paul, 2006). In addition, environment related issues such as noise, air
pollution and use of waste materials also affect performance of enterprise.
4.3 Impact of policies of European Union on UK Business Company
Policies framed by European Union such as Consumer protection act,
EU Emission Trading Scheme and Climate act are also affecting business
functions of the enterprise. European Union was developed several polices
including employment, taxation, regional, introduce new programs and
general rule for safety & security to increase transparency in business
operations of organizations. Favorable tax and trade polices helps company
to run its business operations and expand business cross country in a proper
manner (Dettwiler, Lindelöf and Löfsten, 2005). Besides that, Security
management systems (SEMS) used by BA to reduce chance of risk at
workplace and compulsion of wear seatbelts during journey are the major
results possible through considering Civil Aviation Bill and introduces New
regulatory fitness and performance program (REFIT) within organization in a
proper way. In order to restrict aviation companies to use of heavy
machineries that create noise and increase carbon emission, Climate act and
EU Emission Trading Scheme have been framed. Despite of that, new
sponsored employment program and funds provide to enhance employees
skills are the favorable economic conditions which helps company to expand
its business and enhance profit margin of company as well (Nimwegen and
et al., 2008). In addition, for reducing burdens on its business and diminish
unnecessary costs, new regulatory fitness and performance program framed
by company at workplace. In order to reduce harmful effect of external
factors, policies framed by European Union can be helpful for BA to create
positive image in the minds of customers. These policies not only affect
organization but also other elements such as government, and humilities etc.
CONCLUSION
From the research report, it is cleared that British Airways provides
quality of services to its customers at affordable price. Along with this, its
environment friendly services and pricing structure encourage to an
individual to use services of company. However, there are several factors
including political, economic, social-cultural and technology which affects
performance of company and force to change in polices. It has been
observed that technology up gradation and involving staff members in
decision making process are the main strategies used by firm to retain its
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existing and attract new customers toward brands. Through developing
appropriate business strategies and considering environment guidelines, BA
can be able to overcome issues and offer unique type of services to its
customers within stipulated time.
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REFERENCES
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Budd, L., Griggs, S., and Howarth, D., 2013. Sustainable Aviation Futures:
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Buhalis, D., 2004. eAirlines: strategic and tactical use of ICTs in the airline
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Cheng, P., and et .al., 2007. Organizational change in stakeholder business
systems: the role of institutions. Journal of Organizational Change
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Dettwiler, P., Lindelöf, P. and Löfsten, H., 2005. Business environment and
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Kusluvan, S., 2003. Managing employee attitudes and behaviours’ in the
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Richter, R., 2001. European Monetary and Fiscal Policy. Journal of Economic
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Stengel, N.D., 2011. Managerial Economics: Concepts and Principles.
Business Expert Press.
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Strategic Direction, 2014. Greener planes – but lots more of them: Aviation
industry flies in face of environment concerns. 24 (6).PP. 16 – 18.
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Online
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pdfs/Our_business.pdf>. [Access on 24 September2015].
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