Introduction to the Business Environment

Introduction to the Business Environmental

Table of Contents
INTRODUCTION..........................................................................................3
ASSESSING THE IMPACT OF FISCAL AND MONETARY
POLICY.........................................................................................................4
ASSESSING THE IMPACT OF FISCAL AND MONETARY POLICY ON THE SOCIAL
MEDIA SECTOR.............................................................................................5
CORPORATE SOCIAL RESPONSIBILITY, ETHICS, GLOBAL AND REGIONAL
FACTORS......................................................................................................6
CORPORATE SOCIAL RESPONSIBILITY AND ETHICS WORK IN GLOBAL AND
REGIONAL FACTORS IN THE SOCIAL MEDIA SECTOR................................................7
CONCLUSION...............................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The business environment is a combination of all the internal and external factors related to
business. It involves all factors which may or may not be under the authority of the organization,
but can influence the performance, profitability, and growth of the organization. (What is
Business Environment? 2019.) Next plc is a British multinational company founded in 1864 in
England. Its includes clothing, footwear, and other home retail product. The assignment will
explain fiscal and monetary policies and evaluate their impact on social media. It will also show
the effect of the social media sector on corporate social responsibility and ethics.
Assessing the impact of fiscal and monetary policy
Understanding fiscal and monetary policy and impact on social media sector
Fiscal and monetary policy are tools of government and the Federal Reserve which are
used to regulate the economy in the right direction. (Sims, 2016.) Monetary policy revolves
around the management of the supply of fund and rates of interest by central banks. While Fiscal
policy manages the fund spending on the economy. When the economy is growing at a very fast
rate, the government increases the interest rate and reduces the flotation of money. Fiscal policy
also decides the way the central government can earn with tax. When support the economy
government will reduce tax rates which will increase the flow of money in the market.
Both fiscal and monetary policy impact the business organization. The most impact of both
the policies is on the demand and supply of products of the organization. The effect is on
customers using their money spending on goods and services, contribution of fund on capital
products of business, government spending on products and services and money used in export
and import of various products. Fiscal policy and monetary policy impact the money supply in
the economy, which creates a big impact on interest rates and the inflation rate. (Bonam and
Lukkezen , 2019.) The growth of the business is also influenced by the increase and decrease in
the interest rate and changing the tax policy. For a retail business like Next, fiscal policy and

monetary policy broadly impact the demand of consumer, business related cost and expenses,
investment planning of business and to stand in the competition.
Customer Demand
Monetary policy tools are interest rate and money supply which are set by the central
government. They target directly of inflation. Fiscal policy tools are tax and government
spending prepared by the government. It targets healthy economic growth. When the interest rate
changes it reduces the flow of money in the market, which lowers the spending of customers.
When customers will spend less, demand will also decline. A fall in customer demand means
less production in any organization. The cost of credit and loans also reduces as customers more
focus on saving.
Cost of Doing Business
When interest rates get higher through fiscal policy, retailers prefer to spend more on
loan. An increase in interest rate brings more foreign investors, which gives more purchasing
power to retailers. As they can buy stock from foreign suppliers in local currency.
Investment Decisions
Fiscal policy decides how much risk a retailer can afford. Tax credits can be used in funding
business and tax incentives can be used to help in recruitment for the company. So, the company
can spend on new store or branch.
Competitiveness
Every retailer is cautious about changes in fiscal policy and monetary policy. As to
remain competitive in the market, a retailer has to lower the prices of its goods by cutting costs
or lowering the number of employees.