Business Environment Analysis: UK Organizations and Economic Factors

This report provides a comprehensive analysis of the UK business environment, examining the legal structures and purposes of various organizations like Virgin Group Limited, Thomas Cook Group, John Lewis Partnership, and British Airways. It delves into stakeholder analysis, outlining the objectives of internal and external parties such as shareholders, customers, and the government. The report further explores organizational responsibilities, including corporate social responsibilities and strategies for meeting these obligations. It also assesses the UK's economic system, resource allocation, and the impacts of fiscal and monetary policies. The report analyzes competition policy, international trade, global factors, and the impact of the European Union on UK businesses, providing a holistic view of the challenges and opportunities within the current business landscape.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
Introduction......................................................................................................................................3
LO1..................................................................................................................................................3
Q1. Identification and description of legal structure and purpose of different types of
organization..................................................................................................................................3
Q2. Stakeholders of the company................................................................................................5
Q3. Various responsibilities of an organization...........................................................................6
LO2..................................................................................................................................................7
Q4. Economic system of a country..............................................................................................7
Q5. Impact of fiscal and monetary policy....................................................................................8
Q6. Impact of competition policy................................................................................................9
LO3................................................................................................................................................10
Q7. Determination of pricing and output decision in different market structure.......................10
Q8. Market forces which shape short and long term organizational responses.........................12
Q9. Assessment of business and cultural environment which shapes the behavior of
organization................................................................................................................................13
LO4................................................................................................................................................13
Q10. Significance of international trade....................................................................................13
Q11. Impact of Global factor.....................................................................................................15
Q12. Evaluation of the impact of European Union on UK business.........................................16
Conclusion.....................................................................................................................................18
References......................................................................................................................................19
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ILLUSTRATION INDEX
Illustration 1: Carroll's Pyramid.......................................................................................................8
Illustration 2: Types of Market Structure.......................................................................................12
INDEX OF TABLES
Table 1: Legal Structure...................................................................................................................4
Table 2: Purpose of the Organization..............................................................................................4
Table 3: Stakeholder's Objectives....................................................................................................6
Table 4: Allocation of Resources.....................................................................................................8
Table 5: Fiscal and Monetary Policy.............................................................................................10
Table 6: Impact of Competition Policy..........................................................................................11
Table 7: Market Structure..............................................................................................................12
Table 8: Significance of International Trade.................................................................................15
Table 9: Impact of Global Factor...................................................................................................16
Table 10: Impact of EU..................................................................................................................18
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INTRODUCTION
The situation which is prevailing inside and outside the business organization are termed
as business environment. This environment affect the business activities in one or the other
manner and assessment of this environment is highly essential in order to ensure that any of the
activity is not getting hinder due to the influence of these factors. This also aids in identifying the
potential opportunities and prevent the potential threats (Allen and Raynor, 2011). This report is
mainly emphasized on the working of of different working organization. Moreover, this report
enables the reader to understand the reason for the existence of organization and the
characteristic of the country environment in which the business is carried out by a firm.
LO1
Q1. Identification and description of legal structure and purpose of different types of
organization
Four types of organization has been selected which operates its business in UK. The legal
structure of those organization are described below:
Table 1: Legal Structure
Organization's Name Legal Structure
Virgin Group Limited Public Limited Company
Thomas Cook Group Private Limited Company
John Lewis Partnership Partnership Firm
British Airways Public Limited Company
Table 2: Organizational Purpose
British Airways Responding the
stakeholders
Thomas Cook Responding the
stakeholders
Vision as well as
Mission
BA's vision is to
become the
world's favorite
airline and also to
The company
wants to provide
excellent services
to buyers at a
It mission is to
provide
exceptional
services to
This firm wants to
protect the
environment by
reducing wastage
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become the
Global Premium
Airline.
Moreover, British
Airways has
defined its
mission statement
as “one
destination which
seeks to ensure
their customer fly
confident that,
together, they act
responsibly in
order to take care
of the world
where all live in
(Halbert and
Ingulli, 2014).
Further, the
company wants
become the
undisputed leader
in a world up till
next millennium.
lower prices. At
the same time, it
wants to satisfy
their employees
by increasing
their pay
(Cherunilam,
2010).
customers by
employing
exceptional
people or
employees which
will aim to meet
the demands of
customers.
Moreover its
vision is that it
wanted to take
personal
responsibility in
order to achieve
the mission.
Further, it wants
to pursue
excellence they
do and display
honesty and trust
(Craig and
Campbell, 2012).
so that it can best
follow the laws
implemented by
the government.
Goals It wanted to
achieve the vision
of Global
Premium Airline.
By increasing
efficiency and
minimizing
wasteful practices
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they want to
become a leaner
and more
innovative
business.
Objectives To introduce this
new plan in 50%
countries till
December 2016.
To decrease the
waste up to 25%
by June 2016
(Commander and
Svejnar, 2011).
Q2. Organization's Stakeholders
British Airways
Table 3: Objectives of the Stakeholder
Internal &
External Parties
Associated with
Company
External or
Internal
Assumption Targets Accomplishment
of Aims
Government External They want to
increase tax
revenue.
To increase the
tax rate by 5%.
Firm pays the fair
taxes on time.
Shareholders Internal Large amount of
profit generation
and increase in
shareholder's
value (Didonet,
2012).
To increase the
growth of the
firm by 15% by
the end of June
2017.
Prices of the
airline seats have
been raised by
0.5% so that more
profit generation
can be done.
Customers External They want the To travel mostly BA attempts to
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excellent services
at lower cost.
by flights. make avail the
best quality
services to their
customers.
Q3. Various responsibilities of an organization
Thomas Cook and BA are highly responsible towards the society and other factors and
they perform their duty as per their expectations (Wetherly and Otter, 2014). As it is discussed
that company has been formed for several purposes and thus these purposes of organization are
discussed as follows:1. Purposes: BA and Thomas cook have been formed for the purpose of gaining more
profits and to satisfy their customers by providing good services. These purposes are
accomplished by fulfilling corporate social responsibilities so that society and
environment does not get harm.2. Responsibilities: As per the theory of Carroll's Pyramid, there are various responsibilities
of both the companies which they are require to fulfill. The firm aims to meet the legal
requirements of all the countries where it is carrying out its services such as health and
safety legislation, anti-discriminatory and environmental protection so that any legal
crime does not get happen by the firm (Halbert and Ingulli, 2014). The company must
provide risk-free services so that environment could be protected. Along with that, such
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Illustration 1: Carroll's Pyramid

practice should be adopted by the company which are ethical for example, respecting the
cultures and the traditions of customers, employees, etc.
(Source: Pyramid of Corporate Social Responsibility, 2010)3. Strategies for meeting out responsibilities: By making the policies of a company in such
a manner that it may not break any laws of the country. Along with that, a firm must
utilize the quality assurance mechanism in order to produce good quality products at
minimal cost of production. This way, customers can avail the products at lower prices.
LO2
Q4. Economic system of a nation
Table 4: Resource Allocation
Insufficient resource Command Economic
System (China)
Free Economic
System (Australia)
Mixed Economic
System (United
Kingdom)
Coal Government of China
has the total control of
coal in their hands in
order to prevent the
misuse of this scarce
resources.
At Australia, usage
and control of coal is
in the hands of private
sector. This is because,
government provide
complete liberalization
to the private sector
(Hamilton and
Webster, 2015).
Through this proper
utilization is done.
There is a equal
distribution of
resources between
both government and
private sector so that
harmony can be
maintained.
Land Complete control over
the land is in the hands
of government of
China. This is because,
better infrastructure
Land is in the hands of
private companies and
they build the
infrastructure
according to them in
Both government and
private sector have a
control over land in
UK so that optimum
utilization of land is
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can be built by the
government for the
growth of a country
(Cherunilam, 2010).
this nation. done.
Oil and Gas These resources are in
the hands of
authorities because
proper distribution of
the oil as per the
requirements can be
done.
Start from extraction
till production is in the
hands of private ltd. in
the country Australia
Private sector as well
as government
togetherly pull out and
produce so that correct
utilization can be
done.
Q5. Impact of fiscal and monetary policy
Table 5: Monetary and Fiscal Policy
Policy Types of Policy Merits Demerits Judgement
Exchange rates Monetary policy If the exchange
rates are down
than it is
beneficial for the
company because
they have to incur
less cost on the
import of
resources.
When the rates
goes high than it
causes low
economic growth
of a country like
UK (Ho, Wang
and Vitell, 2012).
It has less
flexibility.
Taxation Fiscal
policy
When the rate of
tax is low than
customer will buy
the products
Fluctuations in
rates affect the
UK economy as
company will
This has a greater
impact on the
working of a
company.
9

willingly which
led to the growth
of economy.
earn less profits.
Interest rates Monetary policy At times when
interest rates are
lower than
company can
acquire loan at
lower cost which
will help in
decreasing cost of
production which
will ultimately
grow the
economy
(Popescu, 2013).
High rates of
interest will leads
to increase in the
prices of the
products and thus,
there be less
inflow and more
outflow of cash.
Firm can take
great advantage
from the interest
rates as it favors
the UK economy.
Q6. Competition policy and their impacts
Table 6: Competition Policy's Impact
Concept Good Impact Bad Impact Conclusion
10

Competition Act 1980 The act has been
introduced in order to
reduce the power of
monopoly and also
because firms comes
out with unique
products which help in
the growth pf
economy.
This has led to the rise
of fierce competition
and in turn converted
into inter rivalry. Due
to such conflict
economy is getting
disturbed (Halbert and
Ingulli, 2014).
This is beneficial for
the company because
its allows them to be
more innovative.
Enterprise Act 2002 This has enabled the
enterprise to for the
adoption of fair
trading and helped in
raising the competition
policy in UK (Elliott
and et.al., 2010).
Create difficulty for
the company because
they have to follow
each and every policy
of this act and
sometimes hinder the
working of a company.
Overall impact of this
act is positive and
company should adopt
this.
Fair Trading Act 1973 This Act regulate the
firms and allows them
to work in a fair
manner. Through
trading process
become efficient
which help the
reduction of conflicts
and other unfair
means.
It cannot be assessed
that all the employees
are trading fairly and if
any of the employee
get caught by the law
than whole company
get impacted.
Through this, unfair
practices have been
removed (Trehan,
Trehan and Jain,
2013.).
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LO3
Q7. Determination of pricing and output decision in different market structure
It is known that there are four types of market structure which is prevailing in the
economy. The price determination and output decision are taken differently in different market.
The discussion has been done as follows:
(Source: MARKET STRUCTURES, 2015)
Table 7: Structure of Market
Structure of
different
Market
Key Traits Numb
er of
player
s
Illustration Output
decision
Determinatio
n of Price
Perfect
Competition
Buyer and sellers are in
large number and they
sell homogeneous good
and services.
Many Stock
exchange,
Agriculture
markets.
Firm can
produce any
number of
output because
whatever is
produce will
get sold.
Industry
determine the
prices and
firm takes the
prices.
Monopoly One seller but many One Gas, If firm wanted Prices are
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Illustration 2: Types of Market Structure