Impact of Business Environment on Operations Management

The assignment explores the influence of political, economic, social, technological, environmental, and legal factors on Unilever's operations management and decision-making processes. It also examines the application of operation management concepts such as control and distribution, capacity management, and their positive and negative impacts. The document highlights the importance of considering these factors to achieve future objectives and sustain business in a dynamic environment.

Management and Operations
1

Contents
P6. Factors within business environment
which impact upon operational
management and decision making by
leaders and managers..............................3
M4.Different factors affects business
environment and wider community........8
D1. Evaluation of applications of
operation management and factors which
impacts wider business environment......9
2

P6.Factors within business
environment which impact upon
operational management and
decision making by leaders and
managers.
Business environment includes certain
factors which impacts operations
management as well as decision-making. It
is an important task to identify such factors
in order to adopt appropriate strategies as
well as techniques to reduce the impact and
facilitate production procedures without any
issues. PESTEL analysis is used for
identification of such factors at Unilever. It
is as follows:
3

Political: Political factors includes political
conditions, corruption, trade restrictions,
foreign trade policy, government policies
and so on. Such factors have great impact
on operations as there are various policies
which hampers production as well as
operations of company. For example,
healthy intra governmental or political
relationships acts as sources of opportunity
for Unilever. They impact in improving
health of business and improving decision
making by leaders as well as managers.
Economic: Economic factors
includes inflation, business cycle, tax rates,
interest rates and so on. These factors
influences value of investment made by
business. Unilever has focused on
maintaining stability as well as on realm of
product demands. Performance of selected
business has direct relation with economic
stability. Changes in economic cycle, tax
rates impacts performance of operations as
4

well as decision making by leaders or
managers.
Social: Social factors encompasses
family history, social customs, beliefs,
regional culture, lifestyle, economic status
and many more. Modern population wants
to live their lifestyle with luxury products as
basic needs. Managers of Unilever plans all
operations as per customer preferences and
takes decisions accordingly. Social factors
impacts decision making in many ways
such as organisational internation with
5

external world, internal culture as well as
business policies ans so on.
Technological: Technological
advancements as well as innovations are
required for production of products as per
the increasing trends of market. Increasing
trend in automation impacts operations
management as well as decisions of
Unilever. Technological renaissance helps
in new avenues in goods manufactured by
firm. Adoption of automation trend results
improving productivity, reducing costs,
improving profit margin along with
expanding business at international level.
When the technology becomes obsolete, it
hampers quality as well as efficiency of
operations and impacts in decision making
at great extent.
Environmental: Such factor
encompasses expectations as well as
standards which are related to
organizational policies towards society. It
focuses on sustainability of company in
dynamic environment. Managers along with
6

leaders takes decisions and frame effective
strategies for achieving future objectives.
Wise planning as well as implementation
helps in grabbing environmental
opportunities to sustain business. But there
are various possible threats such as
competition or changes in global scenarios
in relation to legalities or organizational
practices impact son operational
management as well as decision making by
leaders and managers.
Legal: Legal factors involves laws
or legislation related to health, safety along
with welfare. In context to Unilever, it
performs its operations in food, beverages,
personal care, beauty and so on. Leaders
along with managers while taking decisions
7

have to consider all laws related to food,
welfare, safety, health and many more.
Changes in such laws impacts decision
making by organizational authorities as well
as operational management.
M4. Different factors affects business
environment and wider
community.
Business environment is affected by
various factors such as political, economic,
social, technological, environmental and
legal factors in many ways. Political factors
affects through changes in political
decisions, governmental policies or
instability of parties. Changes in economic
cycle or tax rates are some of the ways
through which business environment an
community gets affected. Perception of
customers, forces of society, attitude or
opinion of market towards organisational
product are also some of the ways which
impacts business environment.
Technological advancements, automation,
renaissance are some of the technological
8

factors which hampers working of business
as well as community. Expectations as
along with standards related to
organisational policies towards society
impacts environment of business. Changes
in laws or legislations related to safety,
food, welfare, health are some of the
manner which affects environment of
business along with community.
D1. Evaluation of applications of
operation management and
factors which impacts wider
business environment.
Application of operation management at
Unilever are evaluated as:
Control along with distribution: It
is related to controlling production
procedures along with distribution system in
order to provide organizational products to
end customers within described time period.
Positive impact:
 Such application results in smooth
performance of distribution systems.
9

 Reviewing all operations in
continuous manner.
Negative impact:
 Time consuming process.
 Operations may not be effectively
analysed.
Capacity management: It is a
systematic process which involves
information technology for ensuring
effectiveness of operations for achieving
end results.
Positive impact:
 Updating of technology.
 Achieving effectiveness in
operations.
Negative impact:
 Related to future activities or
operations.
 Restructuring of activities needs
more time and efforts
Factors impacting wider business
environment are Political factors related to
10

political decisions and healthy intra
political relationships impacts business
environment. Economic factors such as tax
rates, interest rates and inflation hampers
work structure of business. Perception of
customers, opinion of market, attitude of
society have great impact in environment of
Unilever. Technological advancements,
renaissance along with automation are
technological factors which impacts
working of business as well as environment.
Expectations or standards of enterprise
policies towards society impacts
environment of business. Changes in law or
legislations by government in relation to
welfare, safety, health and so on impacts at
great extent to wider business environment.
11