The UK economy: structure, wealth and employment distribution
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Added on 2019-12-03
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EXTERNAL BUSINESS ENVIRONMENT TABLE OF CONTENTS 454 1 TASK 1: Assessing the UK economy’s structure and operations1 TASK 2: Analyzing the current government economic policy2 TASK 3 Discussing the income, wealth and employment distribution in relation to the provision of services4 TASK 4 Analyzing the demographic trends that influence the employment pattern 5 Task 5 Analyzing the social structure of people who are employed within service industry 5 TASK 6 Influence of local government on UK hotel6
The UK economy: structure, wealth and employment distribution
Added on 2019-12-03
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EXTERNAL BUSINESSENVIRONMENT
TABLE OF CONTENTSINTRODUCTION ..........................................................................................................................1TASK 1: Assessing the UK economy’s structure and operations .........................................1TASK 2: Analyzing the current government economic policy .............................................2TASK 3 Discussing the income, wealth and employment distribution in relation to theprovision of services ..............................................................................................................4TASK 4 Analyzing the demographic trends that influence the employment pattern.............5Task 5 Analyzing the social structure of people who are employed within service industry5TASK 6 Influence of local government on UK hotel ............................................................6Task 7 Evaluating the role of European Union along with its impact on business and serviceindustry ..................................................................................................................................7Task 8 Role of pressure groups..............................................................................................8Task 9 Difference between English and Scottish system ......................................................8Task 10 Evaluating the legislative process of UK and EU..................................................10Task 11 Assessing the type and characteristics of business ................................................11Task 12 Discussing the legal process which is necessary for the formation and dissolution ofregistered company...............................................................................................................12Task 13 Analyzing the structure and process of registered company .................................13CONCLUSION .............................................................................................................................13
INTRODUCTION External business environment consists of factors which cause major impact on the workof enterprise (Meaning of external business environment, 2015). This is because, these factorsare uncontrollable and it cannot be managed by the manager of corporation even afterimplementing the number of strategies. Thus, it is necessary for the manager that it mustconstantly gather the information regarding different external factors. It is due to the fact that, itis by complying with the given type of activity only, an effective decision can be taken by themanager of corporation. For the present report, famous hotel of UK named as Ritz Carlton is selected. It is aluxury hotel which was found in the year 1983. Furthermore, the hotel has its operations that arepresent in number of countries and thus, different external environmental factors of nation causesdirect impact upon the activities of cited firm. The present report will showcase the impact thateconomic policy has on the activities of organization. Furthermore, the report will also state theimpact that activities of European Union have on the operations of service firm. The report willalso evaluate the impact that legislative policies of United Kingdom and other nations have onthe selected hotel.TASK 1: Assessing the UK economy’s structure and operations There are number of factors analyzed which will help in determining the structure andoperations of United Kingdom’s economy. It consists of taxation, population, security measure,regulation and size of UK economy, etc. In accordance with the given context, on the basis ofanalysis, it has been identified that with specific reference to GDP (Gross Domestic Product) andmarket exchange rate, UK is being counted as the sixth largest economy. Furthermore, theUnited Kingdom’s agricultural sector gives 0.7% contribution in the nation's GDP. This nation ishaving the fastest growing economy (Brinkman, Navarro and Harper, 2014). United Kingdomresides at ninth position in the category of world’s largest exporters. In addition to this, the taxation policy of UK also depicts about the operations of nation.In accordance with the given context, it is analyzed that the nation’s taxation policy istransparent and simple. The government of country has framed its taxation policy in such amanner that will lead to provide significant support to the nation’s modern business practices.Furthermore, the taxation system of UK perfectly suits with the globalized trading world. The1
given information assessed is beneficial for the organization that is operating in the country. Thisis because; due to the presence of this system, it will become easier for the manager of enterpriseto take an appropriate decision (Chang, Hughes and Hotho, 2011). However, the government ofUK makes constant efforts with regard to perform changes in its existing taxation system. This isdone with an aim to ensure the compatibility of nation’s taxation policy with other externalfactors.In addition to this, United Kingdom is the 22nd largest country by population (UnitedKingdom population 2015, 2015). From the population statistics of 2015, it is identified that atpresent, UK’s population is around 64,454,853. Furthermore, it has also been analyzed thatmajority of United Kingdom’s population is aging. The current demographic of UK may createproblems for the firms which are operating its operation in the country. This is because; in thegiven circumstances, it will be difficult for the enterprise to fulfill their young employee’s relateddemand in an effective manner (Fernando, 2011). However, with an aim to meet the same,corporations will have to call employees from other nations. This will raise the cost of respectiveenterprise. British Intelligence Authority has the authority to maintain the security of country. Thisagency handles covert activities, espionage and counterterrorism, etc. They also make sure thatthe nation will be protected from an ineffective circumstance such as terrorist attract. Throughthis way, only agency ensures the safety and security of citizens who are living in country. Inaddition to this, UK follows mixed economic system in which all major decisions about theallocation of scare resources are collectively taken by both government and private firms that arefunctioning within country (Fryans and Mellahi, 2015). This system is effective as it works forthe benefit of both nations’ citizens and for the private corporation that is prevailing withinUnited Kingdom. Besides this, different industries has also given immense contribution in theUnited Kingdom economy. For example, travel and tourism industry has played very importantrole in raising the economic condition of UK. In this context, on the basis of analysis it isidentified that as per the year 2011 travel and tourism contribution to the total GDP of UK was101 billion euro which is 6.7 percent of total GDP. In comparison to this, automotivemanufacturing contributes 2.3 percent of total GDP. However, chemical industry contributesaround 4.1 percent of total GDP. Thus, it can be said that among all travel and tourism sector is2
playing very important role in terms of improving the economic condition of nation in aneffective way. TASK 2: Analyzing the current government economic policy Economic policy is regarded as the action that government takes while making decisionin the economic field (Meaning of economic policy, 2015). It covers the areas such as setting thelevel of taxation, making the decision about government budget, deciding the interest rate andestablishing control over the supply of money, etc. In this regard, there are two different types ofeconomic policies assessed which have their impact on the business such as Ritz Carlton hotel. Itconsists of fiscal and monetary policy. The detailed explanation regarding the same is depictedas below:Fiscal policy: It is the mean with the help of which government adjusts its spending leveland tax rate. In simple words, it can be said that fiscal policy influences themacroeconomic condition of nation. For any country, the given policy plays a verycrucial role. This is because, with the help of this, government of nation controls inflationimproves unemployment rate as well as stabilizes the business cycle. Here, the economicscenario of nation is changed by performing some adjustment in the tax rates andgovernment spending (Carroll and Buchholtz, 2014). Thus, it can be stated that the fiscalpolicy of UK possess significant impact upon the activity of Ritz Carlton hotel. Forexample, the demand of hotel services will be decreased if UK will go through with thecondition like recession. It is the condition which causes direct impact on the purchasingpower of customers and due to this; they avoid using expensive goods and services. Here,with an aim to raise the demand of Ritz Carlton hotel services, fiscal policy plays animportant role. The demand of hotel can be increased if government of UK decreases therate of service tax. By complying with the given type of activity, government of UK canraise the demand of all luxury and five star hotels which are prevailing in the country.Through this way, Ritz Carlton hotel will be impacted in the form of increased profits andsales (Cong and Hongming, 2012). For example, the current interest rate on bank loan inUK is 6% which is less than the nation like India. The given thing will provideopportunity to the hotel with regard to get the higher loan from the UK market. However,the current corporate tax in UK is 20%. The given thing will lead to cause the significantimpact upon the profits of the firm. The thing will also force the enterprise with regard to3
charge the high prices upon the services as being given by corporation in an effectiveway. Monetary policy: It is the macroeconomic policy which is used by the monetary authorityof country with an aim to control the supply of money in an effective manner (Meaningof monetary policy, 2015). Main objective of monetary policy is to control or stabilize theprice level. The monetary policy of UK is maintained by performing varied types ofactions such as modification in interest rate, changing the bank amount and selling thebonds of government, etc. The activities of Ritz Carlton hotel is influenced through thedemand and supply of money. Customers will prefer to spend more money in thecircumstances when government increases the supply of money. In this situation, thesales and profitability condition of hotel can be improved. In the similar way, demand ofRitz Carlton hotel services will be decreased when government controls or decreases thesupply of money (Giechaskiel and et. al., 2012). Overall, it can be said that fiscal andmonetary policy of country plays an effective role in influencing the economic conditionof nation. TASK 3 Discussing the income, wealth and employment distribution in relation to the provisionof services The type of services as being given by the firm largely depends upon its customersincome and wealth. Income is the money received by the person on regular basis in return ofdoing some work. With the help of income, individual will be able to direct its efforts withregard to fulfill its needs and demands in an appropriate manner. Ritz Carlton hotel is theluxuries hotel which delivers its services at high prices. The services which firm give cannot beafford by all type of customers (Hamilton and Webster., 2015). Thus, the people who belongs tothe upper income class can be consider as the buyer of respective firm. In this context, it can besaid that the provision of Ritz Carlton hotel services thoroughly depends upon its upper incomeclass customer only. So, with an aim to maintain the satisfaction of these customers manager ofcited firm tend to direct its efforts with regard to enhance the quality of services which is beingdelivered by it. In this context, there are some facts and figures is being identified with specificreference to the Great Britain. The individual who resides in the upper income class category has44% of the total aggregate wealth. Likewise, 55% of the people who reside in the lower incomecategory had no wealth. The given thing will lead to cause necessary impact upon the provision4
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