Introduction to Business Environment

This presentation provides an introduction to the business environment, focusing on the UK and using Lotus cars as a case study. It covers topics such as monetary policy, fiscal policy, global factors, and regional factors.

Introduction to business environment

Table of content:
Introduction
Main body
 Monetary policy
 Fiscal policy
 Global factors
 Regional factors
Conclusion
References

INTRODUCTION
A business does not exits in a vacuum place but is surrounded by many external
factors that have a bearing and impact on its business operations and functions,
this surrounding is termed as business environment which is quite dynamic and
keeps on changing. The current presentation is focused on the business
environment of UK and the selected organisation from this PPT is Lotus cars.

Monetary Policy
Monetary policy is a basically a macroeconomic tool used by an central bank or
financial head of a state for management of money flow in nation through
adjudicating and modifying internet rate and other banking rates to achieve the
various macroeconomic objectives like control on inflation, consumption,
liquidity and stable growth.

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The monetary policy creates a
significant effect on business
operations as it is the one that
decides the much prices are
rising and set a level and
base for rate of inflation.

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Thus, the main aim of Monetary policy is to create and ensure a stable price
and built a confidence on currency and banking system and also facilitates
achievement of inflation target of companies thus, directly effects the
purchasing power and demand in the business environment.

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The monetary policy effects the buying habits of customers that lead to create
signifiant impact overall productivity and sales of business organisation like
Lotus car Ltd as change in Interest rate effects saving and buying habits of
consumers as if interest rate are high they like to save more to earn better
interest but if interest rates are low they started bending towards making
purchase.

Fiscal Policy
The fiscal policy is mainly related with use of government spending and tax
policies that creates significant influence over economic conditions including
overall impact over demand for goods and services, inflation rate, employment
opportunity and economic growth of the nation.

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Deflationary fiscal policy- use of this type of fiscal policy is made by
government of United kingdom at the time of high inflationary pressure in
business environment and overall economy. The main aim of deflationary
fiscal policy is to reduce the aggregate demand through adopting a policy of
lower government spending and higher taxes that also facilitates fall in
government borrowings.

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Thus, it can be evaluated that fiscal policy lead to a significant impact on various
factors like tax rates and other spending which decides the level of demand in
the business environment thus exert direct influence over productivity and
profits of an organisation.

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In 2009, the UK experienced a deeper
recession than in the 1930s, real GDP
fell 6%. In response, interest rates were
cut from 5% to 0.5% however, the
economy remained depressed.

Global factors
Global factors are those that are associated with international interactions and
uncontrollable components of global environment that significant influence
over activities and strategies of a business. Following are the global factors
that are creating impacts and shaping business activities of Lotus car Ltd:

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Economic factors- these factors are the reflection of changes going on in the
global economy and includes various factors like interest rate, wage rate,
inflation rate, level of demand, unemployment level, etc.

Regional factors
Regional factors are mainly associated with the local or domestic circumstances
that prevails in business environment of a nation. Regional factors mainly
emphasis on the capabilities and talents exits in business environment of a
organisation that facilitates its effective growth and development.

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Facility of industrial clusters- the other regional factors includes the availability
of industrial clusters and various industrial zones that offers various facilitates
for organisation at a single place.

Conclusion
From the above PPT it can be concluded that monetary policy are formulated by
central bank of a nation and mainly associated with modification in interest
rate to control the supply of money in business environment. Beside this, fiscal
policy are associated with tax rates and spendings of government and keeps a
check and control on inflation and economic growth rate.

REFERENCES
Lu, Y., Wang, H. and Xu, X., 2019. ManuService ontology: A product data model
for service-oriented business interactions in a cloud manufacturing
environment. Journal of Intelligent Manufacturing. 30(1). pp.317-334.
Urbach, N. and Röglinger, M., 2019. Introduction to Digitalization Cases: How
Organizations Rethink Their Business for the Digital Age. In Digitalization
Cases (pp. 1-12). Springer, Cham.

Online
UK Fiscal Policy. 2020. [Online] Available
Through:<https://www.economicshelp.org/macroeconomics/fiscal-policy/uk-
fiscal-policy/>.
Monetary policy. 2020. [Online] Available
Through:<https://www.bankofengland.co.uk/monetary-policy>.

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