Management and Operations: Factors in Business Environment - P6

This report examines the factors within the business environment that significantly impact operational management and decision-making processes. It focuses on how various elements, including political factors (government policies, trade restrictions), economic factors (exchange rates, inflation), social factors (population trends, consumer behavior), technological factors (innovation, automation), legal factors (laws, regulations), and environmental factors (climate, sustainability) affect a company's operational strategies and profitability. The report uses Amazon as a case study to illustrate how these factors influence managerial decisions related to planning, organization, and control of business activities. The analysis covers the implications of these factors on corporate social responsibility, ethical considerations, and overall business performance, with references to relevant literature and real-world examples to support the findings.

MANAGEMENT AND
OPERATIONS

TABEL OF CONTENT
P6- Factors within the business environment that impact upon operational management and
decision making by leader and manager......................................................................................1
REFERENCES................................................................................................................................4

P6- Factors within the business environment that impact upon operational management and
decision making by leader and manager
Amazon company factors like ethical,
corporate social responsibility and value
impact on operational management decision
making. manager and leader can prepare
strategies and take decision on the basis of
factors that impact on business activities.
manager and leaders planning, organisation
and controlling the business activities that
helps to achieve goals and objective of the
company that leads to enhance profits and
manage the operation of business. factors of
business environment also includes that
impact on business like political, economic,
social, technological, legal and environment
factors (Inyang, Agnihotri and Munoz,
2018).
Political: Amazon business affected by
political factor. This factor includes
government policy, foreign trade policy and
trade restriction, tax policy, labour law that
have to follow by the company. if any
changes done by government that will
impact on Amazon company's profitability
and growth. As the UK government made it
compulsory for all the companies and is
introducing policies to adopt corporate
social responsibility till year 2020 for
reducing carbon footprints by the company
can affect company's working operations
with profitability and can limit the working
of the company. Instability of the
government result in the changes of the
policies on a frequent basis which in turn
affects the operations of the company as it
has to adopt the new policies consistently
which is the complex process. This hinders
the smooth functioning of the organizations
and thus affects the efficiency of the
employees as they had to deal with new
policies and procedures. The decision
making also get affected because
appropriate decisions cannot be made
regarding the future needs of the company
as the different government poses different
regulations.
Economic Factors: This factor represents
the economy's performance. It directly and
indirectly impacts on business of the
company. This factors includes exchange
rate, inflation rate, interest rate,

unemployment rate that affect to business
profitability. Economic factor also affects
the price of the product that will be affection
purchasing power of customers. If person
earns high income it will increase the
purchasing power of customer. The value
and ethics of the company will be affected
by the new labour law of UK on minimum
wage. The UK government will make sure
that the labour are getting minimum wages
and are working for hours that are decided
by the government and with this rule
amazon will have to treat its workers with
ethics and by fair means and will have to
give them proper and just wages. Decline in
the disposable income and the exchange
rate impacts the operations of the
enterprise as the people will not purchase
and limit their buying power which
results in lower sales of the company and
thus leads to lower profitability. The
decisions relating to taking loans also gets
affected due to the high rate of interest.
Social Factor: This factors includes
population and growth rate, per capita
income, attitude towards work, educational
level and buying habit, attitude toward
customers, quality. This factor is essential to
those companies who set sales target and
customer target that helps to increase
product selling and generate profits.
Amazon company does its corporate
responsibility by adopting the way of
reducing carbon foot prints, and by doing
donation for cancer patients, education for
children etc. which affects the company's
sales and increase its customer base. (Kwok
and et.al., 2018). This factor affects the
operations of the company in case of
lower demand of its product. The decision
making of the managers also gets highly
influenced because of the changing trends
and the preferences of the customers in
the overall market.
Technological: Amazon company will
increase selling by launching new product in
the market. Manager and leaders of the
company prepare strategies to afford new
technology that helps to provide innovative
product. Advance technology that helps to
increase productivity so company able to
provide product to customer on the time of
demand. The government support on
artificial intelligence and cognitive
intelligence will serve the customer better
and will increase their profit and efficiency
of work (Heizer, 2016). Adopting the new
technologies involve a huge cost for an
entity relating to the training of the
employees and the handling cost. This
increases the cost of producing the product

and hence company ascertain lower profit
margin. Decisions regarding setting up the
best price also get affected because change
in the technology.
Environmental: This factor includes
environmental aspect like climate, weather
that impact on business activities. Amazon
company operate with the changes in
environmental changes. Leaders prepare
strategies according to climate and whether
and also estimate about the impact of
business. It also includes corporate social
responsibility company provide such
services that benefited to all communities’
members. As imposed by UK government
the amazon company for doing CSR will
ban use of plastic and will decrease the
carbon footprints which will decrease global
warming and pollution that ill affect
company's production decision and sales
decision. Adverse climatic conditions affects
the operations as it results in scarcity or
resources and this leads to lower production.
It also affects the decision making of the
managers in relation to the use of the
resources and management of organizational
functions.
Legal: This factor includes all laws and
legislature that impact on business activities
such as intellectual act, consumer protection
act , discrimination law and employment
law that impact on overall performance of
the company (Mahadevan, 2015). Amazon
company trades globally then they have to
aware about the law. As the government has
introduced minimum wage law it will affect
the profit of the company and also the
government has increased its import duties
which will affect the production and
importing decisions of the company. Impose
of various legislations like health and safety
law affects the operations and the decision
making of the company because it is
essential for the organization to follow all
the legal laws and legislations in order to
operate its business ethically and with

sustainability. These laws and regulations
impacts the decision making in context of
the safety measures and working with
compliance of these legislations.

REFERENCES
Books and Journals
Heizer, J., 2016. Operations management, 11/e. Pearson Education India.
Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.
Kwok, N., and et.al., 2018. How leader role identity influences the process of leader emergence:
A social network analysis. The Leadership Quarterly. 29(6). pp.648-662.

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