BUSINESS ENVIRONMENT

The Business Environment in UK

The Business Environment in UK

Introduction

The key role of government policies is to manage and sustain the natural environment of the UK economy. The businesses need to follow the policy to secure the benefits of the society as they constrain well-being of the people and provide the quality of life. The environmental policy has a great impact on the organisations, their investments, productivity, innovation, competitiveness and above all their economic growth. As technology is progressing there is a need to adopt new development approaches in order to drive the economy, thus the government environmental policy incentives the innovation and progress of technology. The environmental policies help organizations to save money by reduction in the costs of technological and other resources; hence it impacts on the competitive environment of the UK business (Everett, 2010, p. 36).

Allocation of Resources

To allocate the scare resources effectively is the biggest challenge for the government. The economic system of UK government provides a mechanism of trading one resource for other to allocate the scarce resources amongst various parties. This mechanism provides the exchange of money for the new resources. The complex economic systems in the past facilitated the businesses to exchange resources and these systems were highly scalable, adaptive to change, and robust to crashes. They provided highly effective methods for the distribution of resources at large scale. Except for the government regulations these economic systems used the property of decentralization at base level, which can be presented by two ways. The economic system provides the individual trader, incentives to trade while they are self-interested in the trade.

The individual traders do not have mandate for cooperation, except to conform the common protocols for trade. The individual trader utilizes their own resources for participation in the trade, as they are master of their own business. The traders do not have the systems' complete picture. The traders only have the knowledge of their own resources and needs, whereas some traders may have indication about other trader's needs or resources, but these indications or knowledge is limited as the participants belong to a subset of the economic system's interaction. Despite of the limitations, the government regulations provide an interaction amongst the traders that give rise to the beneficial adaptively, robustness and scalability (Davy, 2008).

Impact of fiscal and monetary policy on organisations

The expansionary fiscal and monetary policies of the UK government have the undesirable side ...