(P16) Business Environment

Business Management

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
1.1 Identification of various types of business and their objectives........................................................3
1.2 Description of the extent to which Primark meets the objectives of its different stakeholders........4
1.3 Explanation of the responsibilities of Primark as an organization and the strategies employed to
meet them...............................................................................................................................................5
TASK 2..........................................................................................................................................................6
2.1 Explanation about different economic system and their impact on the countries............................6
2.2Implication of fiscal and monetary policies on the different business................................................7
2.3Importance of competition policy and its types.................................................................................8
TASK 3..........................................................................................................................................................8
3.1Explaination of pricing and output decisions of business is determined in the following market......8
3.2Relationship among the demand and supply of product and services...............................................9
3.3Implication of culture in the business organisation............................................................................9
TASK 4........................................................................................................................................................10
4.1Explaination of international trade on the UK business organisation...............................................10
4.2Implication of global factors on UK business organization...............................................................10
4.3 Evaluation of the policy of EU in the UK..........................................................................................11
CONCLUSION.............................................................................................................................................11

INTRODUCTION
In order to survive in the competitive environment, every business organization have to
analyses various environmental components effectively. Business environment consist with two
major parts that is internal and external environment. These two part largely influence the
business activities and function of the corporation (Cai and Yang, 2014). In the external
environment, various components are consisted such as political, legal, social economical,
technological. On the other and in the internal environment, various internal components
includes such as employees, customer, suppliers, investors etc. It is very important for business
enterprise to analyze and assess the business environment because these mentioned factors
largely affects the organization practices and function. In this project report, influence of various
environmental components on the business has been critically discussed. Beside this, impact of
fiscal and monetary policy with context of Primark has also studied in this report. Primark is a
famous cloth retail corporation based in Ireland with most of the operation in UK. This company
is a subsidiary of Associated British Foods and has its manufacturing sources from different
countries. Various economic system and its importance in the various countries has addressed in
the following report. The major objective of this project is to understand the impact of business
environment on the organizational function and activities.
TASK 1
1.1 Identification of various types of business and their objectives
Primark- Primark is a famous subsidiary corporation of the associated British foods group.
Organization was launched in 1969 in Ireland trading as penny’s. by 2000, there were over 100
stores across Britain and Ireland. By 2012 Primark had 238 branches across the UK, Ireland and
Europe. Primark has become distinctive for offering unbeatable value whilst never losing its
innovative, fashion-driven edge. Primark is world famous brand because of its innovative
product and reasonable prices (TEbert and et.al., 2014). The leading products of this cloth retail
corporation are clothes, shoes and home ware products. In order to produce innovative products
and services, Primark uses resources from India, china, Bangladesh and Turkey and by this it
provides employment opportunities to other countries. In addition to this, company effectively
fulfills its responsibility toward society and impressive contribution toward corporate social
responsibility. Cited venture have more than 68000 employees who are continuously providing
their best efforts to attain the company objective and satisfying the needs of customers. The
company sells clothes at the low cost end of the market below average prices. Along with
retailers such as Zara and H&M, Primark contributes to the contemporary fast fashion trend.

Public sector company- The public sector company concerned with rendering diverse range of
governmental services. These types of corporations are generally controlled by the government
and works for the society. The organization of the public sector can take several forms including
direct administration funded through taxation and complete outsourcing with a privately owned
corporation delivering the entire service on behalf of government. National health service is the
best example of public sector company that is offer medical services to society and administrated
by government.
Charity- A charitable organization I a kind of nonprofit organization which differs from other
types of NPO’s. This type of organization is working for the common welfare of the society.
1.2 Description of the extent to which Primark meets the objectives of its different stakeholders
For every business organization, Stakeholders play a very crucial role in order to attain
desired objective. In the absence of stakeholders company cannot survive its business activities
and function. They are those individuals who have interest in the business and they are always
wanted to connect with company. Any changes in the policies, practices, strategies, action may
largely affects the activities of stakeholder. In order to meet the objection, company has
responsibility to share each information related to business share with stakeholder and maintain
an effective relationship with them. In the context of Primark, there are various stakeholders such
as employees, government, investors, suppliers and customers. Following are major obligation of
Primark towards its stakeholders-
 Employees-Employees are most important stakeholder for Primark because in the
absence of them company cannot survive its business activities and functions. In every
field of corporation like production, operation, marketing requires an skilled and talented
personnel’s (Chow and et.al.,2012). In order to make business effective and successful,
corporation requires to maintain an effective and healthy relationship with personnel’s.
Primark have 68000 employees so it have responsibility to provide better working
condition, develop effective policies and practices, pay salary and effective incentives
and provide better welfare schemes so as they can motivate and encourage for higher
performance and productivity. By this, employees may retain in the company for long
time.
 Customers-Customer are another important stakeholder for the Primark. Cited venture is
a retail outlets so its success is largely depends upon the customer satisfaction. Customer
requires an effective and high quality products from company so it is major responsibility
of Primark is to deliver expected product and services to them. They also wants an
innovative and creative products in a reasonable prices. Therefore, Primark have
responsibility to develop such innovative product which can meet the need of customers.
 Suppliers- Primark is a retail outlet which deals with consumer products like clothes,
shoes, fashionable accessories etc (Waithaka and Ngugi, 2013). In order to produce such
products and services, company requires an effective quality of raw material and semi

finished goods. Suppliers are those people who supply raw material and semi finished
good to corporation. They want timely payments and regular order from company.
Primark have responsibility to maintain an effective and healthy relationship with them
by make effective order and regular or timely payment. Besides this, in Bangladesh
which is a supplier country for corporation, the company has launched a project
according to which it attempts to pass positive changes in lives of human resources
specially for women workers
 Government- Government is another important and major stakeholder for the Primark.
Company have to follow all rules, regulation, code of conducts, and legislation which
have made by government in order to operate its business in the country. Primark have
responsibility to fulfill all legal requirements and perform fair trade practices, fair
competition in the country.
1.3 Explanation of the responsibilities of Primark as an organization
As per the above discussion it has been ascertained that there are various stakeholders
and their important contribution toward business success. Each stakeholder are affected by the
business decision and activities because all have interest towards business growth and outcomes.
In order to gain effective success and result, Primark have responsibility to maintain healthy
relationship with them and meet their expectations. There are various ways through which cited
venture can meet its responsibility towards stakeholders. These ways are as follows-
 Keep informed-This is the best way through which Primark can meet the expectation of
government and customers. Primark have responsibility to always keep inform to
government about company’s financial position and profitability. According to company
revenue and turn over, it have to pay the tax to government (Grigor'ev and Suslova,2014).
So corporation should always inform the fair and true information about the financial
condition. Furthermore, company can maintain healthy relationship with government by
fulfill all legal requirement and follows legislation. On the other hand, company requires
to mountain healthy relationship with customer by provide accurate and relevant
information about product prices, features and quality. Customer wants regular updates
about the products and services so form should keep inform about the product prices,
discount, offers, quality changes, distribution and features.
 Manage closely- In this manner, company have responsibility to manage personnel’s by
provide accurate information about company policies, practices, strategies and activities.
Corporation should take participation of human resources in the business decision
making process so as they can touch with the management and aware about the changes
in the policies and practices (Asghar, 2013). In addition to this, company requires to
develop such policies and practices which is suitable and favorable for personnel’s.
Furthermore, by providing effective and attractive incentive policies, welfare schemes,
company can able to encourage and motivate employees for higher productivity and
performance.

 Keep satisfy- In this manner, suppliers are important stakeholders who wants to satisfy
always. Company can make satisfy them by make regular payment and make effective
order to raw materials and semi finished goods. On the other hand Investor are that
person who invest their capital in order to get return. Primark have major responsibility is
to satisfy them by pay their return. Company can provide satisfaction to suppliers by
provide reliable and accurate information about profitability and revenue.
As per the above discussion it has been asceratined that company have various roles and
responsibility towrd various stakeholders.Porimark have also effective contribution towrd
corporate social responsibility.In this manner, pruimark have effectoive contribuition to
enhance the fenmale labour education.Company has made various arragenment to improve
the female labour condition in the UK.This is its ethical desuicion which support to the
economy in the UK.It organise training and development programns for female labour so as
they can get the employement opportunities.
TASK 2
2.1 Explanation about different economic system and their impact on the countries
An economic system is a system of production, allocation of resources, distribution of
goods and services within a society or a given geographical area. In other word it can be said that
economic system includes the combination of the various institutions, agencies, entities, decision
making processes and patterns of consumption that comprise the economic structure of a given
community. As such, an economic system is a types of social system which includes three
general questions that is what to produce, how to produce and in what quantities and who
receives the output of production (Schneider and Schmidpeter, 2012). The study of economic
system includes how these various agencies and institution is linked to one another, how
information flows between them and the social relations within the system. Every country have
their own economic system by which it sets its economic function and pricing policies. In the
simple word it can be said that economic system are the means by which countries and
government distributes resources and trade goods and services. They are used to control the fives
components that is labor, capital, entrepreneur, physical resources, information resources.
Generally, there are four type of economic system which is as follows-
 Traditional economic system-Vast [portion of the world still function under a traditional
economic system because under this produced products and service are direct result of
their beliefs, customs, tradition, religions etc. These are tends to be rural, second or third
word. In this economic system there have small populations of nomadic people and while
their economies are certainly traditional, they often interact with other economies in order
to sell, trade, barter etc (Kitzmueller and Shimshack, 2012). One of the most obvious

advantage is that tradition and custom is preserved while it is virtually nonexistent in
market. In the Cuba, there are traditional economic system through which each member
has a more specific and pronounced role and these societies are often very close and
socially satisfied.
 Command economic system-In this manner large part of the economic system is
controlled by a centralised power and often a federal government. This system develop
when a country finds itself in possession of very large amount of valuable resources. In
this system, government play a very crucial role because it have large interference in
order to regulate resources (Lee and Saez, 2012). The major advantage of this economic
system is that command economy is capable of creating a healthy supply of its own
resources and it generally rewards its own people with affordable prices because it
regulated by government. United kingdom have command economic system.
 Market economic system- A market economy is very similar to a free market. In this
economic system ,government have very less control over the economy or it can be said
that government does not control vital resources, valuable goods or any other major
segment of the economy.
 Mixed economic system-This economic system is also known as the dual economic
system because it is a combination of two economic system that is market and command
economy.
2.2Implication of fiscal and monetary policies on the different business
Fiscal policy is means of government tax related policies. In other word it can be said that
fiscal policy is that policy which is governed by the government in order to collect the
revenue by charge taxation rate. It can be said that fiscal policy is the means by which
government adjust its spending levels and tax rates to monitor and influence a nation’s
economy. (Lee and Saez, 2012). Fiscal policy is based on the theories of British economist
John Maynard Keynes. According to this stated that government can influence
macroeconomic productivity levels by increasing or decreasing tax levels and public
spending. At last it can be said that when government collects taxes from businesses and
individuals, it leaves less money in their pockets for saving, spending and investment. This
means that the more the government taxes, the more the economy must rely on government
spending to keep the economy functioning because the private sector has less money to do
so. This is the major negative aspect of an aggressive tax policy..
On the other hand monetary policy is related to the interest rate.This policy means how
central banks manage the liquidity to create economic growth. The major objective to change
the monetary policy is to manage the inflation. Second objective is to reduce unemployment.
In the simple word it can be said that monetary policy is the macroeconomic policy laid
down by the central bank and it involve management of money supply and interest rate. In
the housing types of business, monetary policies charged. Monetary policy is a method in
which central bank or currency board controls the deliver of cash, frequently targeting an

increase rate or interest rate to ensure price stability and general trust in the money. Farming
business is affercted by the monetary policy because when the farmer borrow raw material
like seed and other sources then they have to pay the tax.On the other hand houseing business
is affected by fiscal policy because when individual take loan for home then they have to pay
interest according to the term and condition of bank.
2.3Importance of competition policy and its types
In order to protect and secure the business activities and function from the unfair and
invalid competition, UK government has developed various competition policies. This policy is
very helpful and supportive in order to protect and secure company as well as customer. In the
market economy, competition is a process where by firm fight against each other for securing
customers for their products (Lakka and et.al.,2013). A competition policy should includes
economic policies adopted by government that enhance competition in local and national market.
In the context of Primark, it is very beneficial by use of competition policy because with
assistance of this policy, company can safe its business from unfair competition. There are four
key pillar of competition policies in the UK market and in the European union. These four pillar
are as follows-
Antitrust and cartels- This involves the elimination of agreement that restrict competition
including price fixing and other abuses by corporation who hold a dominant market position.
Market liberalization-In this policy, company can conduct competition with previously
monopolistic sector such as energy supply, retail banking, postal services, mobile
communication and air transport.
Office of fair trading-This is most effective and helpful; policy under which company can
protect its business activities and competition among the various trading corporations (Schneider
and Schmidpeter, 2012). The major objective of this trading policy is to conduct fair trading to
make market effective for customer and ensure that trading firms conduct their fair competition
and business operation in the market.
The competition commission was a non depoartmental public body responsible for investigating
mergers , marjket and other enquiries related to regulated industries under competition law in the
UK.It was a competition regular under the department for business, innovation and skills.It was a
tasked with ensuring healthy competition between companies in the UK for ultimate benefit of
customers and the economy.

TASK 3
3.1Explaination of pricing and output decisions of business is determined in the following
market
Perfect competition- In this market, there are large number of buyers and sellers and there are
identified products. In this market, Primark have never choice to charge the market price and it is
only price taker in the perfect competition market.
Monopoly- In the monopoly market, there is only single seller but there is large number of
buyers.In this market there is only single product but there is large numbers of barriers to entry
and exit. The major crisis of monopoly market structure is that company with monopoly power
can set higher prices than in a competitive market (Netzer, and et.al.,2012).
Oligopoly- In the oligopoly there are very large numbers of buyers and very few sellers. There is
large number of barriers to entry and exist in the market.
Duopoly-A duopoly is a form of oligopoly where only two seller exist in one market. In practice,
the term is also used where two firms have dominant control over a market.
3.2Relationship among the demand and supply of product and services
Supply and demand is perhaps one of the most fundamental concept of economics and it
is the backbone of the market economy. In these both term have inverse relationship and they are
largely affected by the price of product and services. The concept of demand and supply states
that for a market to function, producers must provide the goods and services that customer
need.Supply represents the amount of goodsa market can provide while demand stands for the
ampoiunt of goods customers are willing to buy.The quantity demanded is the amount of a
product people are willing to buy at a certain price. The relationship between the price and
quantity of demanded is known as the demand relationship. On the other hand supply refers to
amount of a certain good producer are willing to supply when receiving a certain price.
3.3Implication of culture in the business organisation
In every business organization culture play a very crucial role in order to show company
behavior and image in the market. In the manner of culture, employees and management have
crucial role because culture of the organization can develop only by effective contribution of
employees. In the simple word it can be said that culture refers to the cumulative deposit of
knowledge, experience, beliefs, attitudes, meaning, hierarchies, religion, notion of time, roles,
spatial relation, concepts of the universe and material objects and possessions acquired by a
group of people (Batlle, Pérez-Arriaga and Zambrano-Barragán,2012). In other word it can be said
that culture reflect by the employees interaction, their dressing sense, attitudes, performance,
company structure, management style and working environment. So this is very true that in order
to analyze the company behavior, culture play a very crucial role. In the context of Primark,

cultural environment of business are largely influence by the organization behavior. Employees
behavior, interaction, attitudes and performance shows the organization culture. There are
various concepts of culture such as person, task, role, power culture etc. These all have different
concept about the organization culture. All concept are related to managing, guiding and
coordinating personnel’s at workplace so as they can performance their job in an effective
manner. Primark can adopt person culture under which management more focus on the needs
and requirement of employees. Under this concept of organization culture, management believes
that employees are crucial part of the corporation so as higher authority takes the participation of
employees in the business decision making process (Cai and Yang, 2014). By this culture,
company wants to motivate and encourage personnel’s for higher productivity and performance.
Under this culture, management allows employees to share their personal view, suggestion and
conflicts with company. Primark workforce directly affect by the person culture because their
needs and wants related to business practices and activities are fulfilled by the management.
With assistance of this culture, Primark successfully maintain a healthy working environment at
workplace and generate coordination among the workforce so as they can effectively attain the
determined objective. As per the discussion it can be said that in order to shape the behavior of
the organization, culture play a very crucial role.
TASK 4
4.1Explaination of international trade on the UK business organisation
International trade is the exchange of capital, goods and services across international border
or territories. In a simple word it can be said that international trade is a process of exchanging
goods and services across the country (Carvalho, Marques and Berg, 2012). When home country
deal with the another country in order to gain the large number of market share and profitability
is known as international business. There are various advantage of this trading such as
opportunity to expand business, use foreign currency, gain advance technology etc.While
company operte its business in the international market then it have to consider the various
components of business environment like political, technological, social, environmental, legal
etc.According to the political envcvoronmt, company have to follow the policires and
legisklation of business.In addition to this, company have to face the high competition at the
global level.
United Kingdom is free to establish its own trade agreements. This kind of trade allows
for a greater competition and more competitive pricing in the market (Cai and Yang, 2014).
Primark can gain the opportunity to expand its business in the various countries and earn the
maximum profitability. By use of international trade, Primark can benefited to high level
transportation system, advanced technologies, production and manufacturing system etc. The
increase in the international trade is essential for the growth of globalization.

4.2Implication of global factors on UK business organization
As it has ascertained that international trade provides diverse range of benefit to the Primark.
In addition to this, company can largely affected by the global components. These global factors
are as follows-
Political factor- In the international market, political factor largely affect the business activities
and function. In this, government rules, regulation, policies, code of conduct and business
legislation are included (Carvalho, Marques and Berg, 2012). Any organization who wants to
operate its business in the international market then it have to analyze and follows all
governmental rules and regulation of that country. For example, Primark operated its business in
the India then it have to follow Indian business legislation and code of conduct.
Economical factor- In this factor address economic condition of the country. In this, interest
rates, inflation, recession of the country included. While company operate its business in the
international market then it have to analyze counties economic condition and according to that
the prices of product and service will be set.
Social and cultural factor-Primark is a retail outlet which is dealing with the consumer goods
like clothes, shoes etc. In order to sustain in the international market company have to analyze
customer taste, preferences, culture, region, life style, occupation etc (Manova, 2013). Changing
customer tastes and preference may create problem for company so firm should conduct market
research and according to customer requirement the product and services should deliver.
Technological factor- In the international market, technological component is major concern.
Primark have to adopt that technologies and equipments which are available in the international
market (Kitzmueller and Shimshack, 2012). Changing technology may generate the issue for
corporation so company should effectively analyze this component.
Environmental factor-In this factor natural resources are included such as air, water, gas, lights,
sunlight etc. In the international market, this factor may largely affect the business operation so
as company should effectively analyze this component. The rise in the international trade is
essential for the growth of globalization
Legal factor-In this includes consumer law, employment rights, business norms etc. Primark
have to follows all legal norms and customer rights in order to operate business in the
international market. According to the legal framework it have to provide and protect its
customer and employees.
4.3 Evaluation of the policy of EU in the UK
European union is very beneficial for employees as well as customer. It is an association
which works for protect the business and customers in the international market. With assistance
of this policy, customer and employees can protect their rights against the illegal action and

activities in the international market (Chor and Manova, 2012). The major objective of EU is to
provide protection to workforce and customer so as they cannot face any illegal action. Another
important attribute of EU policies have also usher a liberalization of policies and hence many
property which were illegal from being traded can now be missing restraint traded across a range
of EU state. The European union is a political economic union of 28 member states that are
located primarily in Europe. The EU has developed an internal single market through a
standardised system of laws that apply in all member states. The United Kingdom’s withdrawal
from the European Union is widely known as Brexit. While, UK withdrawal from the EU then
there has largely influenced the various countries which are dealing in the international trade.
CONCLUSION
Business environment of the organization largely influence the activities and function. In
order to gain the effective outcomes and maintain sustainability in the competitive market,
corporation has to analyze the various components of business environment. From this project
report, it has been concluded that stakeholder plays a crucial role in the Primark so cited venture
requires maintaining healthy relationship with them. In addition to this, culture reflects the
business environment and develop the shape of business. In order to provide effective shape of
business, company requires adopting effective culture. It has been also concluded from this
report is that Primark influenced by monetary and fiscal policy of country. Furthermore,
international trade is very beneficial for Primark through which it can gain effective profitability
and market share.

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