Impact of Economy on Business Organization

Economic and Financial
Management

Contents
Introduction...........................................................................................................................................3
Main Body.............................................................................................................................................3
Impact of economy on business organisation....................................................................................3
Economic theories applied to range of business context....................................................................4
Micro and macro forces on contemporary business...........................................................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................8

Introduction
A business is a decision-making producing network that develops capital into
products and services that customers subsequently purchase. The typical business, as per
traditional economic theory, has only one goal i.e. to boost profits. Modern theories of the
business, on the other hand, agree that companies can have other goals, such as maximising
sales-revenue or strategic value, and so on (Cohn and Hira, 2020). The present report will be
based on operational working of a government owned body in UK i.e. “Department of
Environment, Food and Rural Affairs”. It is a public oriented organisation which came into
existence 20 years ago in 2001, the service firm has various departments to govern the service
motive of the company. It is regulated by Ministry of Agriculture, Fisheries and Food
Department of the Environment, Transport and the Regions. The presented report will
highlight various economic factors through which operational working of the business
enterprise has deal while operating in London, UK, which is also firm’s headquarters.
Main Body
Impact of economy on business organisation
Business economics is a branch of applied economics that explores at the economical,
operational, market-related, and environmental problems that businesses face. Using
economic theory with quantitative approaches, business economics assesses various factors
affecting a corporation's business structure, management, growth, and strategy. How and why
companies grow, the influence of entrepreneurs, corporate interactions, and the function of
governments in legislation are all possible research subjects in the context of business
economics. In regards to chosen firm i.e. “Department of Environment, Food and Rural
Affairs”, managers of the firm have to deal with various impact on business organisation
which is caused by economy of the region in which firm is performing its operations (Coyle,
2017). Following are various impact of economy on chosen business organisation;
Profitability: Due to presence of various factors in economy, it makes it difficult to
managers of the firm to formulate a specific strategy or plan to regulate respective operational
activities of the firm. However, in case of chosen firm profit making is not the main objective
of the firm rather than respective firm works on providing services to various individuals
present in operational market environment of the business firm. But in light to the fact in
order to regulate respective activities of organisation some funds are required.