Business Environment of Lloyd - Report
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Added on 2020-01-21
Business Environment of Lloyd - Report
Added on 2020-01-21
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Business Environment
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 The purposes of different types of organizations.................................................................11.2 The extent to which LLOYD’S as an organization meets the objectives of differentstakeholders.................................................................................................................................31.3 The responsibilities of LLOYD’S and the strategies employed to meet the expectations ofdifferent stakeholder groups........................................................................................................4TASK 2............................................................................................................................................62.1 Economic systems attempt to allocate resources effectively...............................................62.2 The impact of fiscal and monetary policy of UK on LLOYD’S and its activities................72.3 The impact of competition policy and other regulatory mechanisms on the activities ofLLOYD’S....................................................................................................................................8M1 Strategies employed to meet responsibilities........................................................................9D1 Critical reflection...................................................................................................................9M2 Factors impact economy of UK ...........................................................................................9D3 Economic indicators of UK.................................................................................................10TASK 3..........................................................................................................................................103.1 Market structures and market conditions determining the pricing strategies of LLOYD’Sbusiness.....................................................................................................................................103.2 The way in which market forces shape organizational responses in setting prices withinoperating environment..............................................................................................................123.3 The business and cultural environment in the UK can shape the behavior of LLOYD’S asan organization..........................................................................................................................12TASK 4..........................................................................................................................................144.1 The significance of international trade to LLOYD’S business...........................................144.2 Impact of global factors on LLOYD’S business.................................................................154.3 European Union policies and the impact of these policies on LLOYD’S business............16D3 criticisms of getting involved in international trade in the context of LLOYD’S business....................................................................................................................................................16
CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18
INTRODUCTIONBusiness environment is the sum total of all the factors influencing activities undertakenby the organizations operating in it including both external and internal factors. External factorsrefers to the major determinants such as political influences, economic situation prevailing,technological advancement that directly affects the efficiency of the organization, impact of legalaspects, social factors that is people's choices and preferences and also the environmental factorsthat have significant impact on organizations (Cantwell, Dunning and Lundan, 2010). On theother hand, internal factors are the those who are directly linked to the concerned organizationsuch as its customers employees, efficiency of strategy formulation, operational management,research and development conducted and others related. Present report is prepared to elucidatedifferent components of business environment with respect to the selected organization Lloyd'sof London. It is the insurance market located in London. It is the place where financial brokerscome to pool and spread their risk. This report throws light on the impact of BusinessEnvironment on Lloyd's from different dimensions such as analyzing the influence of its keystakeholders, the way in which different economic system imparts affects Lloyd's working andrelevance of fiscal and monetary policy in its decision making. Further, decreased boundariesbetween business entities due to the spread of globalization has the considerable effect onLloyd's working domain. Report outlines the significance of international trade and impact ofglobal factors on Lloyd's.TASK 11.1 The purposes of different types of organizationsLegal entity is categorized in different ways on the basis of the ownership of the factorsof production and other characteristics (Teece, 2010). Fundamentally there are four types oforganization function in an economy.Sole proprietorshipA form of organization which is controlled by the single person. Whole working ismanaged by the owner with the support and assistance of its subordinates. Along with beingresponsible for the operation of organization, he is entitled for all the profits and losses incurred.There are some specific features which differentiate it from other forms of organization.Control and management: Sole proprietor is responsible for all the functions undertakenin the organization.1
Government regulations: There is minimum interference of Government in this form oforganization. Sole proprietor has the right and power to undertake all the decisions alongwith abiding with certain laws and regulations laid down by Government.Entitlement to profit: Sole proprietor is the sole beneficiary of all the profits earned bythe organization.Risk bearing: Along with the entitlement to all the profits, owner is responsible for all thelosses faced by the organization in all respect (Welford, 2013).Secrecy: There is high degree of secrecy maintained here.PartnershipsWith the combination of both the managerial abilities and all the resources endowed bythem, it is the association of two or more than two people aiming to expand their ventures andear profitability.CharacteristicsFormal agreement is the prerequisite fr any partnership between two or more persons toconduct any business.Profits and losses are shared among all the partners as decided in the agreement with themutual consent.There is the existence of unlimited liabilities among all the partners in the partnershipsVoluntary organizationsAim accomplished through mutual benefits and self help, it is the organization thatfunction for the upliftment of different sections of the society with the specific targets and goals.CharacteristicsVoluntary organization as based on the service motive objectives not maximizing profits.Its profits and dividend are distributed among its members in-spite of its concentrationtowards a particular person or group (Carroll and Shabana, 2010).Management of organization is democratic in nature.Statutory organizationalOrganizations that are formed under the act of parliament are referred as the statutoryorganizations. These organizations run under the ownership of and control Government. Thementioned organization Lloyd's insurance market falls in the category of statutory organizationgoverned by the act of Lloyd's act of 1871.2
There are certain features that describes statutory organization in the very specific manner.Statutory organization are established under the special act laid by the parliament of thecountry or state legislature.Administration of the organization is undertaken by the board of directors which isdecided or nominated by the controlling body (Nickels, McHugh and McHugh, 2010).Objective of the organization is to earn maximum profits in the field it is engaged.Lloyd's insurance market's objective is to expand the working.Capital of the organization is owned by the government itself.With respect to the administrative decisions and other policy making procedures,autonomy of decision making lies in the hands of organization itself.1.2 The extent to which LLOYD’S as an organization meets the objectives of differentstakeholdersStakeholders of the organization are the entities that directly affects the policies, strategyformulations and actions taken in that regard. They are crucial part of the organizations whosefunctioning decides the growth and development of the organization. In general context keystakeholders of the organization are their customers, employees, creditors, directors, governmentagencies, shareholders and suppliers who in different ways affects the working of concernedorganization. These elements are directly or indirectly linked to the working of organization. Keystakeholder's of the mentioned organization Lloyd's insurance market are sponsoring broker,direct dealing management agents, Lloyd's delegated authority team and overseasrepresentatives.Customers: Customers are the central part of the insurance market in which clientsdiscuss their risk needs (Wild, Wild and Han, 2014). They are interested to seekinsurance cover for their company. There are many organizations associated with thegroup sue to its first class security level. With the high track of payment of valid claimsstrong groups are affiliated to it including airlines, banking group ships and aircraftowners and many others.Employees: As mentioned above key stakeholders of the cited organization are brokers.Brokers are the person who facilitate their clients with the risk management and provideprecise and resourceful advice with respect to the safety and security of the finances.Next is the direct dealing management agent who is entitled to undertake dealings with3
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