This assignment delves into the multifaceted factors shaping the business environment. It examines legal, environmental, and societal influences on businesses, emphasizing the significant impact of Brexit on EU markets. The analysis explores how these factors contribute to business success or failure in a dynamic global landscape.
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Introduction to Business Environment University Introduction to Business Environment By Date Name Lecturer’s name
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Introduction to Business Environment Contents The difference between the various types of businesses and their purposes................................................3 The extension where the objectives of the stakeholders are met..................................................................5 The impact of the business environment on the activities of the organization.............................................7 The impact of fiscal and monetary policy on the activities of business organizations.................................9 The global and the regional factors affecting the business activities.........................................................11 References.............................................................................................................................................18 Page2of19
Introduction to Business Environment The difference between the various types of businesses and their purposes The different businesses are just like different stages of the business. It means that there are many types of business that can be found in the market. The goals and the objectives of the business are different according to their needs. The different types of businesses are big business, entrepreneurial and the small business. The difference among the three businesses can be elaborated by the following. The big businesses have bigger dreams and the span of the business is large than the other two businesses. The trade is done across the countries and the turnover of the business is more than a hundred million per year(Bassi et al., 2010). The entrepreneurial is the type of business where the management of the business always look to increase the span of the business. Entrepreneurial is basically a small business but it has more turnover than the small businesses. The turnover for this kind of business is more than 50 million per year. The small business is the kind of business that is mainly focused on small objectives and targets. It is to be said that this kind business is happy with the way of progression of the business. The management doesn’t have the insight vision to enlarge the business span. The turnover of this business is less than 50 million per year. The large businesses have their own processes and methods to do the trades. The processes they follow to do the business in the field are often followed by the other two businesses. It means that the large businesses set the paths for the other two types of businesses as far as the strategies of the businesses are concerned. Page3of19
Introduction to Business Environment Entrepreneurial is more likely to find the ways to do the businesses that are technically minded. It is to be said that this type of the business believes in inventing the new processes to deal with the customers and the stakeholders in the market. Small businesses are more likely to follow the existing rules that are already in the market. It means that the small businesses lack in the stage of uniqueness. The large scale businesses are more likely to move on from the old situation as quick as possible in order to find the profit. Entrepreneurial is the kind of business that follows the strategies of the large business. It can also move on from the existing situation in order to find the profit from the market. It is so because entrepreneurial is a kind of business that always looks for the profit and growth. The small business doesn’t bother to leave the situation in order to find the profit in the business field. They take the business as the part of the community. The large businesses do things concerning the fact of profit only. The passion and the ethics are not the matters of concern for them The entrepreneurial also does thing to gain profit only. It does thing according to the principals to get the profit. The small businesses in this stage go for the passions and the ethics of the business and in the end of the day they find themselves in a position where they may not gain the profit out of the business. The large businesses have the intension to change the economic condition of the world with their products and servitude. It is their motive and target that can be achieved with huge organizational profit(D. A. Hadfield, 2013). Page4of19
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Introduction to Business Environment Entrepreneurial also looks to change the face of the world with their servitude but this business is not as much effective as the large scale businesses. This business certainly has the ability to change the face of the local community with their products and servitude. The small business whereas only works to serve the local community. It means that this type of business prefer the local community in order to serve their products and servitude. These are the basic facts of the three businesses that bring the difference among the three business approaches. The process they follow, the principals of their businesses and the ethics of their business approach can differentiate the three business styles. The extension where the objectives of the stakeholders are met The extension of the business can decide the objective of the stakeholders in the most effective way. The small businesses in UK have been meeting the objectives of the customers in the most effective way until the Brexit affected the market. It is to be said that in the year 2016 when the conflict among EU and UK hit the markets of the European countries that is the point where the markets were affected. There are many types of stake holders those are connected with business of a particular company. It can be said that depending on the type of the stakeholders the meeting points of the objectives can be considered. The different types of stake holders are, Direct stakeholders:These stake holders are directly connected with the profit or loss of the company. The objectives of the stakeholders are mainly met where the company gets the annual results. These stakeholders are related with the customers, employees, local communities and the trade unions. So there are situations where the employees of the organization may raise issues in order to gain their own safety. Anyhow these stakeholders are directly connected with the companies where the objectives of the stakeholders are met when the company gets their result Page5of19
Introduction to Business Environment (Demirtaş, Özdemir and Küçük, 2016). The profits and the losses of the company control the profit and loss of the stakeholders. When the fact of Brexit hit the European market the small companies were affected in the worst way. It is so because the import and the export of goods among the countries of Europe were affected. UK has been the main centre of many businesses across the continent and when the conflict between UK and EU started to increase the small businesses were affected in the worst way. The direct stakeholders were the one who faced huge loss at that time. Indirect stakeholders:Indirect stakeholders are the ones those are not connected with company and that is why they cannot express themselves even if they face any loss. The indirect stake holders may include the suppliers from other countries, creditors, the landlords of the employees. In this case if the companies cannot make any profit out of the business then the stakeholders will get affected in the enormous way. It can be said that this type of stakeholders were affected the most when Brexit hit the entire market of EU. The effect of Brexit affects many small businesses in the states of UK as well as the other countries of EU. The stakeholders from different country were not able to gain the profit at all and these were the worst situations as far as the stakeholders are concerned. Rank stakeholders:These stakeholders are very crucial according to the point of views of the organizations. The investments these stakeholders invest are very beneficial for the companies as far as the companies are concerned. These stakeholders play crucial role in the field of the business’s success. When the fact of Brexit came in the market it can be said that these stakeholders were affected the most. The small businesses in UK were affected in this situation and the rank stakeholders faced a very complicated situation and eventually they ended with huge loss. Page6of19
Introduction to Business Environment After everything it can be said that the stakeholders of the companies can reach their objective sat the time when the company get their desired results. Moreover the objectives of the stakeholders depend on the types of the stakeholders. If the stakeholders are directly connected with the company then the objectives can be met according to the performance of the company. The other types of stakeholders may get different objective meeting times depending on their positions. If there is any conflict among the countries or among the states of a particular country then the stakeholders get affected and their objective meeting line can be delayed. This is so because the outcomes of the companies get effected due to the conflic(DeNisco and Barker, 2013)t. The impact of the business environment on the activities of the organization The activities of the organization play a vital role in the organizational structure. The process of work, the decision making processes, and the strategies that the organization takes can affect the organization structure directly or indirectly. Moreover there are situations where the market faces conflict situations. In this case the organizations often take the decisions that were not listed previously. In this scenario Brexit had played an effective role where the companies, especially the small businesses got affected. Here are the elaborations of the different situations where the companies may get affected due to some organizational activities. External Impacts:These impacts can harm the organizational environment in the most effective way. It can be said that the impacts mainly depend on the market condition. The economy of the country may harm the small businesses in an enormous way. Furthermore there may occur some sorts of conflict among the countries. In this scenario the import and the export function of different goods of different business may be harmed. Moreover the market condition can get worse if the conflict is not solved at once. In the year 2016 same sorts of situation occurred when Page7of19
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Introduction to Business Environment the conflict among UK and EU hit the market. In the initial stages UK did not want to leave EU. But as time went by the situation got worse, that is why David Cameron announced his resignation at that point of time. Standing in this situation the markets of EU and UK huge problematic situations and the businesses especially the small businesses got effected. The organizational structure of the company broke down. The managers of the company tried their level best to sort the situations but the effects were already on the organizational structure (Elssamadisy, 2009). However many small businesses managed to survive the situation but the organizations got effected as the management of the company changed their strategies in order to make a continue run in the business field. Internal Impact:The internal structure of the organization includes the employees and the mangers of the company and the other stakeholders those are the parts of the company. It can be said that the conflict situation can harm the internal environment of the business in the most effective way. The Brexit did this to many organizations of UK and EU. The businesses were getting affected and the management department of the department had no clue about the situation. The employees of the organization couldn’t continue their work just because of the conflict. The leaders of the organizations could not play their role properly and as a result the whole internal structures of many businesses were broken down. The changing in the planning team:The conflict among UK and EU forced many companies to change their strategies and the plans as far as their business ideas are concerned. The organizational structure and the processes, through which the employees of the companies work, may change while the conflict in the market arises. The management of the company is forced to change their strategic plan depending on which the business progresses. The employees and the workers get affected and are forced to change the way they have been work for the organization. Page8of19
Introduction to Business Environment It can be said that in these kinds of situations the organization face all sorts of problems in order to make a continue run in the business field. When Brexit hit the market many small businesses were forced to change the strategies and that is where the employees and the management of the companies face problematic situation. So these are the facts through which the organizational structure gets affected in every possible way. Due to the conflicts of the market and the change in the economy may harm the organization in the most effective way. The management and the employees of the organization face all kinds of problematic situations as far as their process of works is concerned. The impact of fiscal and monetary policy on the activities of business organizations The most effective part of the business is the fiscal and the monetary sections. These are the stages on which the company’s success and the profits depend. The companies mainly set their businesses to get a positive outcome from the business. The employees of the organization get the motivation to work in the organization depending on the money and salary they in return of their servitude. If the problematic situation arrives in the market then the situation becomes bad for any kinds company, especially for the small businesses(Jovičić et al., 2011). The impacts are as follows, Fiscal Policy:The fiscal policy is mainly the policy that the federal government pursues is the spending and the taxing program of a particular organization. It is to be said that these affect the business sectors on two different levels. These levels are- legislation that simulates the overall economy and targeted legislation that is aimed at specific sectors. The taxing and the economic factors in the business environment can decide the profits and the outcomes of the business. These factors can get affected depending on many situations. In this scenario it is to be said that Page9of19
Introduction to Business Environment when the Brexit hits the markets of UK and EU the fiscal policy also got affected at that point of time. This policy is related with the financial states of the company and when the economy of entire EU got affected due to the Brexit fiscal policy also got affected. This affect the organizational work flow and the products those are produced by the companies were unable to capture the market as the import and the export function among the countries of EU were totally stopped. This made a huge impact upon the small companies of UK and EU. The companies were unable to get rid of the situation and as a result the economy of the company also broke down at that point of time. The monetary policy:This policy is just the policy through which the funding of the businesses is supplied. In order to get the proper funding the companies depend on the Federal Reserve. They have the responsibility to expand the money supply in order to maintain the work flows of the small businesses. The policy of Fed decides the impact that is mainly on the interests of the provided money for the businesses. When the Fed pursues an expansionary policy, the increased supply of money holds down the rates of interest. This makes the borrowing of money easier for the companies as far as the capital investments are concerned. This whole method broke down at the point of time when Brexit hit the entire market of UK and EU(Morris, 2010). The effect of this conflict was so enormous that the whole economy of the market got affected. At that point of time the businesses were unable to produce the product as they lack in having the capital investment. As the economy of the entire continent was affected the small businesses were also got affected in the financial field specially. There are many pros and cons of these policiesthat directly or indirectly affect the business environment in the most effective way. Fiscal policies involve time lags and in the time of the instable position of the economy this puts a negative effect in the organization. Moreover the Page10of19
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Introduction to Business Environment interest rate of this policy sometimes concerns the government and at the end the government ends up borrowing the money from the private sectors. In the other hand the fed is another channel through the money can be brought in the field of investments. In this cases the investments are made but the money that the Fed brings is managed. This can lead the situation to very uncomfortable situation for the organization as well as the government. These are the facts of pros and cons that have affected the business environment without even facing the conflicts. In the year 2016 when the conflict arrived and hit the EU market, the small business organizations face many troubles and the situation affect the faces of many businesses. The conflict changed entire face of the business industry in EU. It is so because UK has been the heart of every business in EU. Furthermore it can be added that the import and export functions of the products were mainly done through the channels of UK. When the conflict took its place the main advantages and the factors of the business started to loose and the whole financial market including the business environment got affected. Targeted programs:The fiscal policies have helped the small businesses in many ways. These policies have given the guarantee to every single small business company that they would make the investments for the businesses(Elssamadisy, 2009). Moreover they added that if the companies face any kinds of loss they would give the support to them. It means that they have guaranteed any kinds of business assistance to the small businesses. This sector actually helped the small businesses to get rid of the conflict situation while the Brexit affected all the businesses across the continent. The global and the regional factors affecting the business activities 2016 has been a challenging year for the world economy. It is to be said that the conflict among the countries EU and UK took place in the year 2016 and it had played a very significant role in Page11of19
Introduction to Business Environment order to affect the global economy in the most effective way. The factors can be divided that affected the business activities. The factors can be elaborated in this way. Global:The global factors are the factors that take place worldwide and affect the economy in the most effective way. It is to be said that the factors from all around the world causing the conflicts and the economic crisis are the ones affecting the business activities. The global factors are as follows, Political populism year:The year 2016 is considered to be the political populism year. It is so because the different kinds of political act took place in this year that changed the face of the economy throughout the world. The organizational productivity and the economy of the business are likely to be affected and there was no sign of recovery. A number of elements are stimulating populism and discontent. Employer stability is undermined by worldwide competition and digitalisation(Jovičić et al., 2011). New work open doors ahead will probably be here and now contracts, low maintenance occupations, independent work without full social advantages and full professional stability. The supposed "Uber" class of shaky labourers is another reality to be managed. The requests for training, master information and social aptitudes have taken a big jump upwards and expanded the limit for individuals trying to enter the work showcase. Expanded weakness in labour showcases, the weaker arrangement energy of the unions and low profitability are setting restricted constraints for salary transactions and genuine wages. There is a particular period when the government is trying to seek help from the people of the country and that is where the people wanted to make a simple solution. To regain the political trust the government need to deliver the best result. This can only happen when the growth will be reformed in order to increase the labour market flexibility and to Page12of19
Introduction to Business Environment improve the climate of the business. There is a risk factor in the political populism. The leaders of the many organizations and the political parties are dealing with the long term processes. It creates a vicious negative spiral where the fact of disappointment may further weaken the government. Global insecurity and refugee crisis:Europe needs to be step up its capacity to manage rising security issues, in spite of the fact that that is a fantastic result without administration from the USA. The regrettable occasions in Paris have made an energy for a union bringing the US, France, the United Kingdom and, out of the blue, likewise Russia together for a push-back of the Daesh desire of building up a Caliphate. It appears to be vital for the US and Europe to be prepared to effectively counter fanatic Islamic fear based oppression in the Middle East, North Africa and Afghanistan in the medium term and also over the long haul. To leave wide-ranging regions and areas under the control of Daesh, Boko Haram, Al-Shabaab or the Taliban is a worldwide security chance. The refugee crisis in EU was a major issue in the year 2016. UN have indicated that there were over one million people who have crossed the borders in order to find shelter in EU during 2015. This growth is 40% than that of the year 2014. Germany, Austria, Italy, Hungary and Sweden are the most affected countries in Europe. The fact is that the European Union has made a broader political agreement with Turkey and this can be a factor also(Paul, 2011). The Brexit factor:This has been one of the main factors that have affected the businesses of EU and UK. This is so because there are several reasons. UK has been the main centre of business in the whole EU. The political adjust in Europe would move from the possibility of a Europe open to unrestricted commerce and element markets, turning Page13of19
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Introduction to Business Environment the adjust towards a more interfering and bringing together point of view. Europe and the UK would both be in a much more awful position in the opposition with the United States, China, Japan and India. For the UK, the broad monetary results are probably going to be profoundly concerning. Without full support in the European Union, London's part as the money related focus of Europe would at some point or another is put into question. The populists are making the feeling that it is costless for the UK to move far from Europe, yet that is an unsafe dream. The Danish submission set off a flood of monetary disorder in 1992 and the Implication of Brexit would be broader. There is more to add that the Brexit has brought the situation where the small businesses in the UK and in the countries of EU will get suffered. As a result the business environments are harmed and affected in the most effectual way. The countries that were selling their products in the markets of UK will not be able to sell anything after the Brexit. The UK businesses that were exporting their products in the markets of Portugal, Germany, and Austria etc. will not be able to send them anymore. So this is a very controversial and complicated situation for all the businesses across the country. These are the global factors that affect the business environment and the economy status of the business in the most effective way(Tosti-Kharas, Lamm and Thomas, 2016). The structure of the business and all the people who are related with the business may face an uncertain future. Moreover there are regional factors that can affect the business in many ways. Regional Factors:Theregional factors are those that can affect the business in the most effective way but the factors are limited in the community. Mainly the small business that deals with the local community mainly gets affected by the regional factors. In order to find Page14of19
Introduction to Business Environment the factors a PESTEL analysis can be done. This analysis will give the best result about the factors and the exact reason of why the businesses are getting affected. The elaboration can be done in the following ways, Political:This factor mainly deals with all the rules and the regulations of the government that are set for any kinds of business or small business. It is to be said that the organization must follow all the rules and regulations of the government in the most effective way. The management committee of the business organization must take active part in order to do all kinds of inspection in order to see if there are any kinds of violence in the company or any kind of situations where the rules and the regulations of the government are broken. It can be seen in another way that the rules and the regulation may put some impact in the organizational behaviour. The strategies of the business might have to reset in order to make the effective in the field. Economic:The economic condition of the market plays a very crucial role as far as the business environments are concerned. It can be firmly said that the ups and downs in the economy of the country can affect the business and its stakeholders in every single way. The employees and the workers who are in association with the company mat get affected too. They work in the company in order to get proper rewards for their servitude. If the economy goes up and down then it will be impossible for any particular business to make profit and thus the employees will not get their desired rewards(Wright, 2015). The employee satisfaction level will be harmed. Social:The culture of the local people and the regional culture can affect the business and the products they make. It can be said that depending on the taste and demands of Page15of19
Introduction to Business Environment the local community the small businesses are set. If the business produces goods that are not accepted by the local community then it would be a very crucial situation for the business. It is so because the products of the business will not be able to make a continue run in the field and the business will face the loosing situation. The management committee of the business must go through entire local community in order to seek knowledge about their choices and tastes and depending on those facts the business ideas must be generated. Technological:This is another crucial factor that can affect the business in the most effective way. It is to be said that with advancement of technologies every company must upgrade their whole system in order to make comfortable run in this competitive market. The rivalries of the business may find them in a better position if the company doesn’t update the technology. It means that the company must use advanced technology in order to get the best result and to attract the customers towards the products of the business. The technological factor is one of the most crucial factors these days. The company with the most advanced technology are always in a better position in order to capture the market rather than any other companies in the market. Environmental:This is also crucial fact as it is related with environment of the community as well as the country. Businesses are mainly generated in order to serve the people with best quality product. Slowly but steadily there are many business that tries to be familiar with the customers in order to build a strong customer relationship. While doing that the companies try to serve the best product in the market to the customers. The company must not foprget about the environment while making the Page16of19
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Introduction to Business Environment products. The situation may not seem like the company has affected the environmental condition while producing the products for the customers. If it happens then the organization will get negative feedback from the customers and it will harm the reputation of the organization. Legal:The field of every business must be legal and the way the products in the business are being generated must also be legal. This is so because the society anhd the government will not accept illegal businesses. Moreover the demand in the market and the behaviour of the customers will get affected if any illegal things are found in the organizational environment. Everything must be done according to the rules and regulations that were set by the government of the country. If a business strictly follows all the rules and regulation in the most proper mannerism then the government is ready to help the organization with all sorts of findings. So these are the all factors that affect the business environment in every possible way. It is true that Brexit has hit all the markets in EU and have put a negative impact on the markets and the businesses of the continent. The businesses get their desired success depending on many conditions and if one of them get effected then it will be a problematic situation for all the businesses in the continent. Page17of19
Introduction to Business Environment References Bassi, A., Hafer, C., Tucker, J. and Frechette, G. (2010).Bidding for the formateur: A model of endogenous coalition formation in parliamentary democracies. 1st ed. D. A. Hadfield, (2013). Bringing About Change:.Shaw, 33(1), p.211. Demirtaş, Z., Özdemir, T. and Küçük, Ö. (2016). Relationships between Bureaucratic Structure of Schools, Organizational Silence and Organizational Cynicism.Educational Administration: Theory and Practice, 22(2). DeNisco, S. and Barker, A. (2013).Advanced practice nursing. 1st ed. Burlington, Mass.: Jones & Bartlett Learning. Elssamadisy, A. (2009).Agile adoption patterns. 1st ed. Upper Saddle River, NJ: Addison- Wesley. Jovičić, S., Ležaić, V., Simonović, R. and Djukanović, L. (2011). Beneficial effects of donor-specific transfusion on renal allograft outcome.Clinical Transplantation, 25(2), pp.317-324. Morris, J. (2010).Going for gold. 1st ed. Tuscaloosa: University of Alabama Press. Paul, C. (2011).Alert and ready. 1st ed. Santa Monica, Calif.: RAND Corp. Tosti-Kharas, J., Lamm, E. and Thomas, T. (2016). Organization OR Environment? Disentangling Employees Rationales Behind Organizational Citizenship Behavior for the Environment.Organization & Environment. Wright, C. (2015). Book Review: This changes everything: Capitalism vs. the climate.Organization, 23(1), pp.133-136. Page18of19