BUSINESS ENVIRONMENT

Business Environment

Introduction1

1. Organisational Purposes of Businesses1

1.1 Purposes of Different Types of Organisations1

1.2 Organisation and Objectives of Different Stakeholders2

1.3 Responsibilities of an Organization and Employed Strategies3

2. Nature of the National Environment in Which Businesses Operate4

2.1 Economic Systems and Allocation of Resources4

2.2 Impact of Fiscal and Monetary Policy5

2.3 Impact of Competition Policy and Other Regulatory Mechanisms6

3. Behaviour of Organisations in Their Market Environment7

3.1 Market Structures and Pricing and Output Decisions of Businesses7

3.2 How Market Forces Shape Organisational Responses7

3.3 Impact of Business and Cultural Environments on Organisation's Behaviour8

4. Significance of the Global Factors That Shape National Business Activities9

4.1 Significance of International Trade to UK Business Organizations9

4.2 The Impact of Global Factors on UK Business Organizations9

4.3 Impact of Policies of the European Union on UK Business Organizations10

Conclusion11

References12

Business Environment

Introduction

Business environment is composed of two words, business and environment. Business refers to an organization engaged in commercial, industrial or professional activities. Environment refers to the surroundings around any object. So, business environment can be defined as a set of political, social, legal and economical conditions that could affect the functioning of an organization.

The aim of this paper is to consider and elucidate different aspects of the business environment along with its impact on the business operations and decisions. The paper uses the example of Tesco to illustrate the points.

1. Organisational Purposes of Businesses

It is very important for an organisation to know about its purpose of existence. An organisation should have a clear set of goals and targets which they have to achieve. Often, organisations have their mission and vision to go through a clear path to achieve their targets. Overall, it is very important for organisations to understand their purpose of existence to successfully operate their business.

Purposes of Different Types of Organisations

Different organisations have different reasons for existence which are referred to as the purposes of the organisation. The legal structure and type of the organisation provides guidance for the fundamental role and purpose of that organisation. For instance a private company exists for generating profits for the private owners of that business by offering products and services to the consumers. A public company exists for the greater good of the public and the government. It contributes to the tasks and aims of the government and work for the betterment of public of a nation (Henry, 2002, pp. 10-13).

A voluntary organisation or association comprises of individuals and groups who work mutually in order to attain one or more common purposes such as voluntary environmental organisation or trade unions. It is unincorporated organisation. Similarly a charitable organisation works for charitable causes. Its purpose is to make significant contribution to a cause such as orphanage (Henry, 2002, pp. 10-13). The organisational purpose of Tesco being a private organisation is “to provide people with the ease of retail purchase, through providing every commodity, durable and luxury product under one roof”.

Organisation and Objectives of Different Stakeholders

According to the purpose of an organisation, it has a range of stakeholders which entail different ...