Business Environment Analysis: Legal Structures, Competition & Policy

This report provides a comprehensive analysis of the business environment, focusing on legal structures, competition policies, and the impact of globalization. It begins by presenting different types of legal structures for businesses, including sole proprietorships, general partnerships, and limited liability companies, outlining their advantages and disadvantages. The report then explains the differences between public and private sectors, highlighting their respective funding sources and the impact of events like COVID-19. It delves into UK competition policy, discussing various market structures such as perfect competition, monopolistic competition, and oligopoly, and examines the roles of the Competition and Markets Authority (CMA) in regulating business competition. Furthermore, the report explores macroeconomic objectives and the use of fiscal and monetary policy instruments by the government to influence employment, taxation, interest rates, balance of payments, and exchange rates. Finally, it defines globalization and analyzes its effects on business, competition, and the economy, including the impact of offshoring manufacturing on domestic policy.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Presenting types of legal structure.............................................................................................3
Explaining public and private sector ...........................................................................................4
Presenting UK competition policy..............................................................................................5
Presenting how the competition in the market operates..............................................................5
Macro-economic objectives and its difference with fiscal and monetary policy instruments.....6
Government intervention into the economy................................................................................6
Impact of government intervention on employment, taxation, interest rate, balance of
payments and exchange rates.......................................................................................................6
Definition of globalisation...........................................................................................................7
Presenting how the globalization process affects the business, competition and economy........7
Impact on off sharing manufacture on domestic policy...............................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment is basically a marketing term that refer to marketing terms that
refer to factors and force that can affect organization ability of maintaining profitability as
well as customer relationship. Along with this, the present report has discussed about types of
different market structure and the competition policy of company. Lastly, study will throw
light on objectives of fiscal and monetary policy instruments that government can make use
to regulate economy.
MAIN BODY
Presenting types of legal structure
Business is define as process of selling goods and services in order to customer in order to
earn profit. The main purpose of business is to provide quality services to their customer
and to increase profit (Radović-Marković, Salamzadeh and Vujičić, 2019). Although before
starting the business organization has to determine the correct legal structure of the company
in order to avoid intervention of government. There are three types of legal structure for
business that are mentioned in detail below:
Sole Proprietorship: This type of business is run by single owner and it aim at earning profit.
Along with this type of business usually have pass through taxation and does not have to file a
tax return. The tax has been included in owner own personnel income (Calabrese, Caputo and
Sarno, 2018). The liability of this type of business usually lies on the owner it can mitigate the
risk with the help of insurance and sound contracts. The advantage of this type of company is
that it is easy as well as cheap to establish. The owner has full control over the organization
like it can make their own decision. However, the disadvantage of having this type is owner has
to face the risk alone and it is liable for them as well as it is difficult to raise funding for this
firm.
General Partnership: It is known as collaboration of more than two partners that works
towards accomplishing common goals. Along with this, partners are liable for all loss jointly
and both have owner based on profit sharing percentage (Jevšenak, 2019). The advantage of
having this type is that it is contract between party as well as tax is shared by them. The
disadvantage of having partnership that there can be issue between partners and it can dissolve
the company.

Limited Liability company: This is a combination of partnership, sole proprietorship, and
corporation. The owner of LLC is knowing as member and it include corporation. The
members of corporation are protected from personal liability for business debts. The advantage
of having this is members have unlimited power as owner have limited liability. However, cons
of having this is it often subject to additional taxes as well as each member share profit is taxable
in nature.
Explaining public and private sector
The public company is owned by government and it aims at providing the quality service to
people. To become a public organization a company needs to offer an IPO to government and
their shareholders can sell their share on stock exchange (Gaganis, Pasiouras and Voulgari,
2019). On the other hand, private company cannot offer it share to general public as it is held by
private investor and members. This type of organization aims at fulfilling the needs of their
customer.
Moreover, the difference between public and private sector is ownership in public
company is owned and controlled by the government. Whereas in private sector it is owned and
managed by the individual companies (Bejtkovský, Rózsa and Mulyaningsih, 2018). Although
the purpose of public sector is to benefit public by providing services while private aims at
making profit. Furthermore, the similarity between public and private is its customer service
oriented and it open to change with technology.
Along with this, the private sector generates funding through personal saving, friends and
family, bank loan or through private equity. It can also make use of angel investor and venture
capitalist in order to get funds. On the other hand, source of funding for public sector are
government revenue, money creation and government borrowing.
Although the impact of Coved 19 was negative on public sector as the economy was down it
was not able to run the business effectively (Möller, Nenonen and Storbacka, 2020). Most of the
state born company has to develop their infrastructure in order to give quality service to their
customer and it has increase their operational cost.

Presenting UK competition policy
Market means the area where the firm sell their products and services in order to earn profit.
Along with this, market structure means the way organization differentiate it types of goods and
operation form others. Although there is various form of market types such as competition,
monopoly, and oligopoly.
The perfect competition market: The supply is determining by the number of goods and
services produce in the market as well as the price set by the companies. The product in the
market are homogeneous which means that they are completely identical. Along with this, the
aim of the company in this market structure is profit maximization.
Monopolistic competition: In this type of market there are large number of sellers and buyers
but it does not sell identical products (Díez-Martín, Blanco-González and Prado-Román, 2021).
In this consumer have a choice between the products and seller can also charge higher price as it
might have high power.
Oligopoly: In this type of market structure there are few firms in the market as well as their no
clarity about the number of firms. Along with this, the organization in this type do not
collaborate together and it use market to influence to set the prices and in turn maximize their
profit.
Moreover, the competition policy of EU encourages companies to sell their goods and service
on the most favourable terms. Although the policy encourages efficiency and innovation and
reduce prices (Rossetto, Borini and Gattaz, 2018). Along with this, to be effective competition
requires companies to act independently y of each other and it should take the pressure of the
competitors. Whereas, competition of UK seeks that company should not follow those practice
that will determent of consumers. There are five categories of power such as merger control that
aims at preventing firms to gain market power. In UK CMA has an ability to undertake market
investigation of sectors in order to analyse adverse effect on competitions arising out of market.
Presenting how the competition in the market operates
The competition and market authority is the competition regulator in UK and it is a non
ministerial government department in the UK responsible for strengthening business competition
and preventing as well as reducing anti competitive activities (Stverkova and Pohludka,2018). It
is basically an independent department with the responsibility of carrying out investigations in

market and mergers that regulated industries as well as enforce competition and consumer law.
Along with this, the CMA takes action against businesses and individual that takes part in anti
competitive behaviour. The community protect customer from unfair trading practices. Along
with this, it also encourages government to make use of competition effectively on the behalf of
consumer
Macro-economic objectives and its difference with fiscal and monetary policy instruments
Objectives of the macro-economic policy refers to the goals that persists within the
macro-economic policy. It includes stabilising the low inflation, focusing on the sustainable
growth, providing employment, stabilising the government finances and raising the living
standard of people that falls with poverty sector. Fiscal and monetary policies are instruments of
macro-economic policy (Stverkova, and Pohludka, 2018.). Monetary policy is used by the
government for the purpose of stabilising the aggregate demand in the economy by changing the
interest rate in an economy. On the contrary, fiscal policy makes changes in tax, expenditure and
debt of the government in order to influence the aggregate demand.
Government intervention into the economy
Government uses the fiscal policy in order to promote sustainable growth and reduce the poverty
within the country. For the same, the Government intervenes its own spending and taxation and
then impacts the economy. Similarly, in order to improve the employment rate, stabilize the
economic growth, and prices within a country, the government implements monetary policy by
manipulating the money supply and the credit by changing the interest rates. The government
also implement supply side policy in order to increase the productivity and enhancement of an
economy by trying to increase the supply.
Impact of government intervention on employment, taxation, interest rate, balance of payments
and exchange rates
United Kingdom follows a liberalization policy due to which companies from different
countries can run their business which generates employment for the company, the tax collected
on them helps in increasing the national income. Similarly, It helps in increasing the interest
income, and balance of payments of the country. The impact of government intervention on the
exchange rates depends on the economic situation of existing within the country.

Definition of globalisation
The process of availing a product, service, technology, information, jobs or any other
thing across the globe can be referred to as globalization. It involves transferring of products,
services or any other thing from one country to another.
Presenting how the globalization process affects the business, competition and economy
Globalization affects the competition within an industry and increase the level of
competitiveness in the market across the world. Globalization has made it easier for consumers
to approach products which are sold by international brands and the consumers can easily
purchase the products online. Consumers can easily compare and contrast between two brands on
the basis of the product quality and price range and then decide if they want to purchase the
product or not. This has increased the pressure on the businesses to provide the products at least
cost possible if they want to retain the customer or else the consumers have the option to
purchase from somewhere else.
Globalization has affected the businesses in a positive way. Now, it is easier for brands to
purchase the raw materials from countries where they are getting it for low prices and also
widens the customer segment.
The availability of free trade policy in few countries increases the opportunities for
international trade and adds to the economic growth of a country. However, globalization is not
so beneficial for the economy of developing countries as foreign companies which find it easy to
start their business in developing countries tries to attract the customers of that country which in
turn affects the businesses of their own country.
Impact on off sharing manufacture on domestic policy
Offshoring manufacture refers to conducting the process of manufacture in more than one
country across the world (Nenonen, and et.al 2020). This affects the domestic policy of a country
positively if it is a developed nation and negatively if it a developing nation. The developing
nations have been affected negatively as they have to import the material manufactured in
another country which affect the national income of that particular nation.

CONCLUSION
From the above report it has been concluded that business environment is collection of
external and internal factors that can affect overall growth of firm. Along with this, the study has
summarized about various type of business organization and their advantage and disadvantage.
Moreover, the study has also described about difference between public and private sector.

REFERENCES
Books and journals
Bejtkovský, J., Rózsa, Z. and Mulyaningsih, H.D., 2018. A phenomenon of digitalization and E-
recruitment in business environment. Polish Journal of Management Studies, 18.
Calabrese, M., Caputo, F. and Sarno, D., 2018. From mechanical to cognitive view: The changes
of decision making in business environment. In Social Dynamics in a Systems Perspective (pp.
223-240). Springer, Cham.
Díez-Martín, F., Blanco-González, A. and Prado-Román, C., 2021. The intellectual structure of
organizational legitimacy research: a co-citation analysis in business journals. Review of
Managerial Science, 15(4), pp.1007-1043.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling, 78, pp.275-292.
Jevšenak, S., 2019. The Millennials’ Effect: How Can Their Personal Values Shape the Future
Business Environment of Industry 4.0?. Naše gospodarstvo/Our economy, 65(1), pp.57-65.
Möller, K., Nenonen, S. and Storbacka, K., 2020. Networks, ecosystems, fields, market systems?
Making sense of the business environment. Industrial Marketing Management, 90, pp.380-399.
Radović-Marković, M., Salamzadeh, A. and Vujičić, S., 2019. Selection of organization models
and creation of competences of the employed people for the sake of competitiveness growth in
global business environment. International Review, (1-2), pp.64-71.
Rossetto, D.E, Borini, F.M. and Gattaz, C.C., 2018. Structure and evolution of innovation
research in the last 60 years: Review and future trends in the field of business through the
citations and co-citations analysis. Scientometrics, 115(3), pp.1329-1363.
Stverkova, H. and Pohludka, M., 2018. Business organisational structures of global companies:
Use of the territorial model to ensure long-term growth. Social Sciences. 7(6). p.98.
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