Impact of Economy on Business Organization and Economic Theories Applied to Contemporary Business Context

This report explains the impact of economy on business organization and economic theories applied to a range of contemporary business context. It also highlights the survival techniques for maintaining sustainability and competitive image in the market.

Business Report

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
1. Explain the impact of economy on business organisation..................................................3
2. Explain economic theories applied to a range of contemporary business context.............7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The report prepared helps to give an overview to have a better understanding of the
working in a company. It explains functions of organisation carried out in operation and finance
department as well. It addresses problems blocking useful opportunities in the pathway towards
success of the company. It helps to understand working of SWOT and PESTLE which would
assist company in finding useful solutions. Report also highlights company's survival and what
techniques can be used for maintaining sustainability and competitive image in the market.
(Athanasopoulou and et.al., 2018).
TASK
1. Explain the impact of economy on business organisation.
Coronavirus has been an unpredictable situation which affected each country's companies
drastically. It has affected business growth, expansion and operational activities too. Renewable
energy can be explained as energy stored from renewable resources that can be plenished on a
timescale for example : Wind, rainfall, sunlight etc. British gas company has come across many
issues and challenges due to pandemic. Fluctuations, hurdles and unforeseen faced by company
during pandemic condition is explained below :
Company's working during pandemic :
1. Fluctuation in demand by customer's : During pandemic a decline in demand of
energy could be observed in commercial areas which had been a difficult situation to
tackle for British gas company. Company tried to overcome such situation by shifting the
demand from commercial areas towards household areas and generate new demand
opportunities from other areas.
2. Faced hurdles in supply chain management : It was observed that managing supply
chain and fulfilling the demand of customer's had been a tough task to deal with because
of imposed lock down by government across the globe. It had also been quite difficult
situation to manage supply and serve customer expectations on time.
3. Use of latest technology : British Gas company had developed a company app named
The Stand out app. This app helps customer's in easy management of demand, supply and
serve their expectations right. It helps customer's to get details of any new product or
service launched/offered in market. It provides facility to customer's for giving

feedbacks, suggestions if any. And helps how a company can improvise its working
according to them.
Outcomes after pandemic :
Corona virus has resulted in various issues and problems in case of energy industry too.
These can be explained as shortfall in demand on customer end and not able to serve
expectations related to supply on time. It has also resulted shortage in availability of funds and
the reason being no demand no supply. Company has worked on maintaining its sustainability in
environment & economy. British gas company has focused in carrying out operations on time
with less costs while keeping protocols in mind (Cunningham and et.al., 2020). British gas
company has faced certain issues even after pandemic which are described below :
1. Adapt changes in technology and promote innovation : COVID-19 has resulted in less
supplies through traditional methods and has increased the need to improve technology
for reaching customer's on a larger scale. Keeping in mind less costs to incur and more
demand to generate through customer's. British gas company must adopt new and
advanced technologies to adapt the speed of competition prevailing in market. Company
must prioritize new ways to place their products and services in market which would
serve as a competitive advantage for long life cycle of business.
2. Falling demand and supply curve & rising cost of products : After pandemic a fall in
demand and supply curve has been recorded by British company. The reason being
shortfall in dispensable income available with customer's. Pandemic has increased cost of
raw material from suppliers and transportation costs as well which resulted in high prices
for end consumer.
Micro Factors : British gas explains factors that affect the working of company on small scale .
It describes how to have a proper control on business activities and operations as well. It helps
the organisation to manage day to day activities in a business with the help of strengths,
weakness, opportunities and threats it possess. Micro factors also help company to choose their
supply chains wisely, hire efficient and effective employees according to the requirements of the
business. It helps to serve customer's according to their taste and preferences with qualitative
products. Micro factors explain internal factors which can be controlled easily.
Macro Factors : Macro factors include aspects which affect it on large scale as compared to
micro factors. It takes in account all the factors that explains activities as an aggregate and helps

to manage operations of a business on annual basis. It helps to have precise understanding of a
company and to take preventive measures facilitating proper control on quantitative areas too
(Gill and et.al., 2018).
PESTLE analysis of company :
Political factors : British gas company's operations can be hindered by government so it
has to consider the products and services allowed by them. There are many deals and contracts
government signs which directly or indirectly affect company and its working. Political
conditions also have direct impact on working of gas industries. Imposition of altered interest
rates, tax rates, tariff plans which would affect growth and expansion of business.
Economic factors : These Factors affect operational activities of business in negative
and positive aspects in case of British gas company. These are the factors which affect quantity
by taking in account rates such as inflation rate, deflation rate, tax rate, interest rates, demand
and supply chains, salaries of employees. It helps the company to predict whether it would be
able to carry out its operations well on time and achieve their desired goals(Mishra, 2018).
Social factors : This factor can not be controlled easily and affects the company directly.
It can be explained as a factor that explains buying habits of consumer, size of the family, taste
and preferences, religion, caste, beliefs of customer's. British gas has taken a step forward to
serve these social factors by helping poor people in finding a medium which would help them to
pay their energy bills, make them debt free and contribute in development of society.
Technological factors : Such factors are kept at utmost priority by British gas company
which improves performance of business operations with the help of technology advancement. It
also serves as a guide for business to have an idea of how to improve and contribute in research
and development as well. Technology plays an very important role in reducing cost and
improving quality of product and services in company.
Legal factors : Rules and regulations formulated for Gas companies are more rigid and
strict in comparison to any other industries. Such laws are kept at priority to be followed by
British gas company for management of demand and supply. The national and international rules
formed for the gas companies if not abided properly can show an adverse effect on operations of
the company. These are the factors which cannot be controlled easily and affect business
drastically. Thus organisation has to work according to rules and regulations laid by government.

Environmental factors : British gas company must understand that Customer's give
preference to products which are environment friendly and does not affect environment in a
negative manner. Keeping such points in mind company has always come up with better
products after analysing climate, global changes, weather of the country.
SWOT(Strength , Weakness , Opportunity , Threat) of British gas :
These can be explained as factors which are complex in nature to be managed. British gas
company has to work according to applicable rules and regulations which would be fruitful for
smooth functioning of organisation.
It is used as a technique which helps business to analyse their growth over years and
where it stands in the market at present. It helps to plan policies and strategies which would help
in proper functioning of business. It simply explains strengths, weaknesses, opportunities and
threats which would affect working of business both positively as well as negatively. There are
internal factors which affect business and can be controlled by taking preventive measures such
as Strengths and weaknesses of a company. On the other hand Opportunities and threats can be
explained as external factors that affect business externally and are impossible to handle. It helps
to evaluate its performance with its competitors (Popescu & Warmenhoven 2018, July).
Strengths of British gas :
1. British gas company has taken the risk of taking the first step in introducing electric
boilers, heating devices which can be monitored through mobile phones. It has proved to
be the biggest competitive advantage and strength for company.
Weaknesses of British gas :
1. Raising prices during pandemic crisis has negatively impacted the brand image of the
company which resulted in fall in demand.
Opportunities of British gas :
1. At present company is solely dealing in wholesale market which can be expanded to
retailing sector as well. Grabbing a chance and turning it into an opportunity would
provide positive light to organisation in market. (Toniolo and et.al., 2020).
Threats in relation to British gas :
1. Rise in product rates of electricity and gas would result less consumption on part of
customers and this will lead to decline in profit margins too.

2. Explain economic theories applied to a range of contemporary business context.
There are certain theories which are applied for management and better functioning of
business. Two Economic theories which can explain it in a better way are : Keynesian economics
and Neoclassical economics.
1. Keynesian theory : It can be described as a theory that explains the working of British
gas company at macro level that explains its effects on employees, inflation situations
and on outputs as well. With the help of this theory it can be explained that taxes must be
decreased, having a proper control on increasing government expenditures and keep a
check on maintaining demand which as a result would help economy to come out of
depression.
2. Neoclassical theory : It can be explained as a method which helps to improve
production, increase consumption rate and value goods & services for better working of
an organisation i.e. British gas company(Duval & Partiti, 2018). It also highlights how
human decisions affect the performance, growth and expansion of a business. It also
helps to understand relations with client, manage organisation environment.
CONCLUSION
From the above prepared report it can be concluded that pandemic has affected growth of
the company adversely. It has helped the company to understand issues and address them on time
for taking out operations smoothly. SWOT and PESTLE analysis helps company to understand
internal and external factors affecting the business and how these factors can be managed. There
can be many ways in which a company can expand and grow its working for increasing profits.
Methods which could be used by the company could be innovation ideas, increased customer
base, improved technology, rise in demand and supply curve.

REFERENCES
Books and Journals
Athanasopoulou, and et.al., (2018). Designing digital tooling for business model exploration for
the Internet-of-Things. In DESRIST 2018-13th International Conference on Design
Science Research in Information Systems and Technology.
Cunningham, and et.al., (2020). Effective technology transfer offices: A business model
framework. Springer Nature.
Mishra, S. (2018). Financial management and forecasting using business intelligence and big
data analytic tools. International Journal of Financial Engineering. 5(02). 1850011.
Toniolo, and et.al., (2020). Sustainable business models and artificial intelligence: Opportunities
and challenges. Knowledge, People, and Digital Transformation. 103-117.
Duval, A., & Partiti, E. (2018). The UN guiding principles on business and human rights in
(national) action: The Dutch agreement on sustainable garment and textile.
In Netherlands Yearbook of International Law 2017 (pp. 381-409). TMC Asser Press,
The Hague.
Popescu, F., & Warmenhoven, R. (2018, July). Use of technology and virtual communication
via global virtual teams at Arnhem business school. In International Conference on
Applied Human Factors and Ergonomics (pp. 239-248). Springer, Cham.
Gill, and et.al., (2018). Financial risk management and financial performance of new small
business ventures: evidence from Indian survey data. Journal for International Business
and Entrepreneurship Development. 11(2). 75-95.