Business Environment: Types of Organizations, Legal Structures, Competition Policy, and Globalization

This report provides an overview of different types of organizations in different sectors, explanation of different legal structures including their advantages and disadvantages, assessment of UK competition policy and legislative framework surrounding anti-competitive practices, understanding of objectives and fiscal and monetary policy instruments the government could use to regulate the economy during the recession and its impact, and understanding of globalization and how it affects business, competition, and the economy. The chosen organization for this report is Asda, a British supermarket chain.

Business
Environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
An overview of different types of organisation in different sectors.......................................2
Explanation of the different legal structure including their advantages and disadvantages...2
The difference between public and private ownership including the different forms of
financing used for both...........................................................................................................3
As assessment of the UK competition policy and the legislative framework surrounding anti-
competitive practices..............................................................................................................4
How the competition and Markets authority operates to review business practice and impact
on the consumer......................................................................................................................4
An understanding of the objectives & fiscal and monetary policy instruments the government
could use to regulate the economy during the recession and its impact.................................5
An understanding of globalisation & how it affects business, competition and the economy5
CONCLUSION ...............................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
The sum total of all those activities or forces which implies affect on the business
operations along with their results. To analyses all the factors of business environment is
necessary for all the business organizations of any sector. Several types of businesses are
arranged with the different legal identity with their own advantages and drawbacks. For the
smooth functioning of business operations, it is necessary for the firm to understand the
competitive market. The chosen organization for this report is Asda. It is a Brutish supermarket
chain having headquarter in Leeds, England, United Kingdom. This report covers the various
types of businesses with their legal structure. Involving the advantages and disadvantages of each
structure. Along with this, it also deals with the differentiation between the private and public
ownership in addition to the assessment over UK policies related to competition. At the end, it
covers the concept of globalization and its affect.
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MAIN BODY
An overview of different types of organisation in different sectors
Several kinds of organisations in several sectors are given below: Private: It refers to those business organisations which perform their operations without
any involvement of government authority. Private organisations generally include sole
proprietorship, partnership and private company. Such type of business organisations
arrange their funds from family & friends, private sectors or bank (Mrňová, Z. and
Roudná, V., 2020). It is necessary for th private companies to perform their business
operations by following the rules and regulations under the Company's Act. Examples of
private companies are Asda and Tesco. Public: It refers to those companies which are managed and operated by the government
authorities or the members who are being appointed by the ruling party. This could be
either at local, state or national level. Such type of organisations arrange their funds or
capital by the general public in the exchange of issuing shares, debentures and bonds to
them. More than 51% of share lies in the hand of government which leads to the majority
of decision making and voting rights in the organisation. The main focus of public
organisation is to provide social services to the people of a specific country. Example of
these organisations are British bank, national Nuclear Laboratory and many more.
 Voluntary: It refers to the business organisations which majorly focus on providing the
social help or support to the people but not on the generation of profits. Members of
voluntary organisation are known as volunteers or trusties (Jones, A., 2021). They receive
funds in the form of donation and charities in order to performing business operations in
an effective and efficient manner. The Charities Aid Foundation and Cancer Research
UK are the examples of Voluntary firms.
Explanation of the different legal structure including their advantages and disadvantages
Different legal structures along with their advantages and disadvantages are given below
within the context of private, public and voluntary company: Private Company: The legal structure of private company in United Kingdom inculcate
the involvement of more than one individual which can be in the form of owner or
employee. It is necessary for them to perform their business operations according to the
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Companies Act. It do not require any minimum capital but it is necessary to allot
minimum of one share to the board members at the time of incorporation of business. The
benefit of running a private company is that the profit is being distributed among the
owners of business organisation (Vasquez, E., 2019). Drawback of private company is
that they have right to set the prices of products and services according to their own wish
which can be much higher than the reasonable prices.
 Public Company: Separate legal entity is consider as the legal structure of Public
company like as public or private law entities. It implies that the administration
department have more decision making power. Public companies are required to have
minimum two board of directors with the involvement of capital which is more than
£50000. The advantage of public company is that it is established with the aim of social
benefit instead of maximising the profits (Hunter, J., 2017). On the other hand, it has
been found that there is lack of use of advance technology while performing business
operations. It result in the failure of organisation in providing updated products to the
society. It can be the biggest limitation of public company.
 Voluntary Business: The legal structure of voluntary business include trustees or
volunteers. The solo responsibility of volunteers is to do the development of society. The
major advantage of voluntary business is that they only focus on the growth and
development of society by working in such a way so that they can improve the living
standard of people. Many of times, the voluntary businesses face the problem of
availability of funds which implies failure of members in providing the benefits to the
society.
The difference between public and private ownership including the different forms of financing
used for both
Basis Private Public
Meaning This type of business have
right to allot the shares only to
their board of directors and
promoters privately.
Such type of business
organisations are listed under
the stock market and then
general public can buy its
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share.
Regulation If the capital of private
company is less than $10
million, it is not necessary to
follow much rules and
regulations.
They are restricted to follow
several rules and regulations
al9ng with the standards of
SEC (Hamilton 2018).
Sources of fund The owner of private company
can raise funds from their
family & friends, own capital ,
investors and bank loans.
Shares, debentures, bonds and
government treasury are the
several sources from where the
public company can raise
funds.
As assessment of the UK competition policy and the legislative framework surrounding anti-
competitive practices
The legislative framework of United Kingdom was established in 1998 under the
Competition Act and Enterprise Act 2002. Later on, it was amended by The Enterprise and
Regulatory Act, 2013 which result in the creation of Competition and Markets Authority (CMA).
The UK competition act majorly focus on the reduction of harmful and unethical activities
which also present restrictions on competition\ which works as the disadvantage to the customer.
The Competition Policy involve anti competitive agreements or a false mergers or acquisition.
The difference between the public and private ownership comprises various types of
financing used for both has been acquired by the dominance (Halbert, T. and Ingulli, E., 2020).
In the context of Asda, they are required to follow both The competition Act along with the
legislative framework for the purpose of performing their business operations in ethical or legal
manner.
How the competition and Markets authority operates to review business practice and impact on
the consumer
The major role or function of competition and market authority is to investigate the
corporate mergers which also present the restrictions to the market competition in United
Kingdom. It implies highly effect on the existence of business because it is well known if the
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business organisation does not follow the rules and regulations, it will create the situation of high
penalized. It may result in the shutting down of business operations. The way of operation or
reviewing business practices in UK comprises of deep investigation, undertaking market study or
the problem which a customer faces, investigating the point where the company for instance
Asda has breached the UK law, highlighting the concern or breach if found to the eyes of law,
enforcing consumer protection law and lastly providing co-operations for motivating companies
to utilize their competitive powers in ethical manner (Walsham, G., 2017).
An understanding of the objectives & fiscal and monetary policy instruments the government
could use to regulate the economy during the recession and its impact
For the purpose of regulating the recession in the country, the government of United
Kingdom use its monetary as well as fiscal policy. They works by manipulating the taxes along
with the governmental expenses which is bases on the levels and allocations. They have the
power to make an immediate control on the monetary and fiscal policy at the time of recession
which plays an important role in the contraction of expenses made by the government of United
Kingdom. On the other hand, increase in the tax rates also help the economy of nation to regulate
the recession.
Recession result in the less sales and less demand of products and services, which result
in the increment in the unemployment rate as the people loss their jobs. Increment in the tax
revenue to the government can also be analysed (Contractor and et. al., 2020). This revenue can
be used for the several operations in the country. Along with this, an unfavourable balance has
been analysed in the several rates such as interest rates, balance of payment, exchange rates and
many more. It result in not to get the support of government to the businesses like Asda.
An understanding of globalisation & how it affects business, competition and the economy
Globalisation can be defined as the process under which the knowledge, ideas,
information, goods and services are spread all over the world. In the context of business, it is
used in economic context for the purpose of explaining the integrated economics marked by the
flow of capital among countries, free trade labour markets and many more. It result in the earnin
of higher profit to the companies like Asda. Globalisation effect the business organisations in
positive as well as negative way. If the organisation get success in preforming the business
operations in other countries, it result in the higher revenue generation. Due to some political and
legal factors, the organisation can face some problems (Bernanke, B.S., 2020). It's impact on the
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competition is favourable as the globalisation makes the firm stronger to face the competition at
national and international level along with presenting the several opportunities to the
organisation. Improvement in the foreign exchange rate can also be found by the organisations
who are working globally which is beneficial for the economy of country as well.
CONCLUSION
It has been concluded from the above report that the business environment leads to
providing the several opportunities to the business organisation which could be either private or
public company. All these companies have their own legal structures which are discussed in the
above report. Furthermore, it has been analysed that the competition and market authority have a
great impact over the business operations. In order to generate higher revenue, organisations can
do globalisation which is beneficial for business management as well as the government of
country.
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REFERENCES
Books
Bernanke, B.S., 2020. The new tools of monetary policy. American Economic Review, 110(4),
pp.943-83.
Contractor and et. al., 2020. How do country regulations and business environment impact
foreign direct investment (FDI) inflows?. International Business Review, 29(2),
p.101640.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hunter, J., 2017. English Inns, taverns, alehouses and Brandy shops: The Legislative framework,
1495-1797. In The World of the Tavern (pp. 65-82). Routledge.
Jones, A., 2021. The Court of justice’s judgment in Generics (UK) v Competition and Markets
Authority and the object/effect dichotomy. Journal of Antitrust Enforcement.
Mrňová, Z. and Roudná, V., 2020. FORMS OF FACILITY MANAGEMENT PROVISION IN
DIFFERENT TYPES OF COMPANIES. International Multidisciplinary Scientific
GeoConference: SGEM, 20(6.2), pp.193-200.
Vasquez, E., 2019. Chile's Private and Public Sectors: Social Conflict and Economic
Development. 2000-2017. Available at SSRN 3443684.
Walsham, G., 2017. IT, globalisation and cultural diversity. In Information technology in
context (pp. 291-303). Routledge.
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