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Unit 1 Economic Systems in Business Environment Assignment
As an analyst and consultant of the educational sector business at Deloitte Consulting I’m analyzing BPP University. BPP University is a private sector University offering education in many fields such as law, finance, banking, accountancy, dentistry, psychology, health care and business. It was established in 1922 in London with the aim of providing professional education. Presently it imparts education to more than 9000 study at various study centers such as Liverpool, Bristol, London, Leeds, Cambridge, Manchester and Abingdon. The university got its power to award to a degree in 2007. At present, it is among the six private universities which have the power to award the degree. The university also received an award of the top educational provider of the year. In 2013, the BPP College got the status of a university.
The University has a rigorous study plan and at the same provide a lot of flexibility to the students. University has a well-established distant learning program led by experiences and qualified teachers. The college campus provides undergraduates and post graduate courses with well-established labs and library.
Understand the organisational purposes of business
1.1 Identify the purposes of different types of organizations
There are number of activities in an educational institute in order to deliver quality education to the students. It basically involves how education should be delivered on the basis of the area taught. In this type of process input and output are already defined in order to maintain the clarity. The value of an educational institute is determined by making a valuable output through the input. There are eight different type of business process identified which are required to run the business. Each process has a different function in an educational institute that determines its activity. All these eight processes are grouped into two main categories. One deals with core business processes and other deals with the supporting business processes. The different type of organizations in the education sectors are as follows:
- Sole proprietorship: These are the educational institute owned by a single person and he is responsible for the management and he himself enjoy the profit of the business.
- Partnership: In these type of the organization the partners share the workload and divide the profit equally. (Slide Share, 2007)
1.2 Describe the extent to which an organization needs the objective of different stakeholders
A stakeholder is any person or the organization that affect the action of the educational institute.
The objectives of different stakeholders are mentioned below:
- Owners: They are the prime stakeholders of the university as they are the ones who lay the very foundation of the business.
- Employees: They are the major assets of the company as they are responsible for running the college efficiently. They expect the job security and good pay from the university.
- Students: They are the ones for whom the college is running. They want regular classes and skilled faculty.
- Suppliers: They are the one from whom the university take their raw material. They want bulk order from the company on a regular basis and their payment on time.
- Government: The government want the universities to be flourishing in their country but also following all the laws and legislature. The university gives education to a lot of people and pays a huge amount of tax to the government. (Kessler, 2016)
1.3 Explain the responsibilities of an organization and strategies employed to meet them
Fulfilling all the responsibilities is of utmost importance in an educational institute. It is the responsibility of an organization to keep in touch with all the stakeholders and fulfill their needs. Being an education institute it becomes an obligation to work within business ethics and maintain business morality. The mangers of the organization must work in a way that satisfies all the norms laid down by the legislature. Stakeholders have a lot of expectation from the company they want the company to clarify all the dealing with them and take full responsibilities for their actions. Employees expect the company to give them good salary and flexible work timings. The customers want quality product for the money they pay. Shareholders want the company to make great profits. The economic condition of the country directly affect the activities of the business. (Reinhart, 2016)
Understand the nature of the national environment in which businesses operate:
2.1 Explain how economic systems attempt to allocate resources
Economic system is formulated when the legal and the social entity interacts with the individual or group for economy. The major role of any economic system is to solve the economic problems such as meeting the high demand with the scares resources. The major Economic system followed by the most organizations as well as the BPP University s the free market system. In this system the government plays an important role by taking the full responsibility of the economic system. The elements which are used for resource allocation vary. In this system the important decision is taken by the government while the remaining lesser important ones are taken by the people. The business plan include all the details of the resource allocation. (Mica, 2014)
2.2 Assess the impact of fiscal and monetary policy on business organizations and their activities
Fiscal and monetary policies determine the present and the future of the company. The company has to find all its probable competitors and its economic and geographic reach. The company adopts various strategies to manage its finance and marketing.
The company is required to compare its financial standing with all its potential competitors on the basis of the sales and profit. The finances of all the departments of the company are required to be analyzed. The major objective of the financial analysis is to find the position of the company in the market. The value of the company can also be assessed through it. The study of the stocks of the company helps in judging the performance of the company and its employees. Selling and purchasing of the goods from different countries is known as international trade. International trade forms the major basis of the commercial market across the globe. The companies take their business to other companies in order to extend it and to maximize the profit made. The business gets a global market. In developing nations the wages of the workers is low which help in increasing the profit as the manufacturing cost decreases. Company sells the product at the price lower than the competitors which lets them have a competitive advantage. International marketing helps the company to sustain in the international market. (Investopedia, 2014)
2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization
Different organization have different purpose to serve. The primary purpose that an organization has to fulfill is referred to as goal of the organization. The primary goal of an educational institute is to impart education to the students. Department of fair trading was set up by the government to UK to protect the rights of the employees and the customers. It also looks after the economic dealing of the organization. The major role played by the office of fair trading is to make the institute function in a proper way by the involvement of the Stakeholders, employees and the customers. It also keeps a check on the unfair trading taking place and take action against the guilty.
Center of innovation and skills keep a check on the employees and the customers. They patent the new services and products launched. There are many laws that keep a check on the competition in the country. They make sure that the company only indulge in the healthy competition among them. Government can interfere in the activities of the business when there is a question of national security and financial stability. (Choudhary, 2016)
Understand the behaviour of organization in their market environment
3.1 Explain how market structure determine the pricing and output decisions of business
The price of any product in the market is affected by the demand of the product in the market. The response of the product in the market is determined by the position of the company in the market. If the placement and the result of the educational institute is good then it receives a good response in the market. The market structures that are existing in the market enables the discrimination of the market such as monopoly. Oligopoly and duopoly. Oligopoly, monopoly and the result of the competition in the existing market determine the nature and the price of the product in the market. There are various element of the market that determine its nature and price. The people in the economic department assist in increasing the profit of the company. All the important decisions of the company relating to its position in the market are taken by the senior managers. The different types of the market structures are discussed below:
- Oligopoly: In this type of the market there are both large and small seller. The large sellers control the price of the commodity by proper advertising and distribution.
- Perfect competition: This is the price structure where there are many sellers and the price of the product is determined by the demand of the product in the market. In short it is the customer who determine the price of the commodity.
- Monopoly: It is the structure where there is a single large company and it solely determine the price of the commodity in the market. (Kangda, 2011)
3.2 Illustrate the way in which market forces shape organizational responses using a range of examples
There are a number of market forces that an educational institute is required to consider.
Some important ones are listed below:
- Involvement of the customers
- Making the information available
- Information system and the final cost
The above mentioned factors are among the most important. Many organization are mostly interested in the collection of the payment as soon as the product and the service is delivered. BPP University gives a lot of flexibility to the suppliers and the students. The student can withdraw their fee if they wish to take admission somewhere else. The return process sometimes may get very hectic resulting in a lot of paperwork. The acceptance of the refund also involves a long process. All the above mentioned forces gives a shape to the organization. All these important decisions taken by the developing manager of the company affect the performance of the company. All these forces increases the stability of the company in future. There is an added advantage to the business leaders who dominate the world commercial market. (Herring, 2016)
3.3 Judge how the business and cultural environment shape the behavior of selected organization
Cultural and the business environment shape the behavior of an educational institute. There are two types of the business environment prevalent. One is economic and other is non-economic. The economic business environment includes various economic systems, strategies and different policies concerning the economy. Social, demographic, geographical, political, technological, natural and regional factors come under the non-economic environment. BPP University also funds the other small educational institutes that have the vision to impart quality education. The educational institute are setting up in many remote areas of the country which do not have the enough economic growth. BPP University take care of all such organization which needs economic funding.
The fiscal, monetary and the economic policies of the different countries differ greatly. The criteria for the import and export of the different countries also differ to a great extent. There are different factors affecting the environment of the business such as customs, traditions and financial condition. The political environment of the government also affect the functioning of the country. The technology affect the design and the IT support of the company. Natural factors such as weather, climatic condition and location affect the day to day activities. (Hashmat, 2011)
Be able to assess the significance of the global factors that shape national business activities
4.1 Discuss the significance of international trade to UK business organization
International marketing is really important for the running of any country as no country can produce all the goods by itself. It has to import some goods while it also exports the goods required for the survival. This export and import is enabled through theinternational marketing. All the boundaries of the nations are dissolved and the world has become one local market. The importance of international trade is listed below:
- Expands the market: It is the policy of the government which lets the company expand its business into the other countries. Trade in the other countries is very profitable.
- Decrease the manufacturing coat: Through the international trading there would be a chance of reducing the manufacturing cost of the products. Big companies also purchase their raw materials from the developing countries where the products are available at lower prices. The company can sell the same product at higher price in UK. This lets the company have a huge profit.
- Materials Availability: Many day to day products would not be available if the international marketing is not done. Many products have to be exported from the other countries such as raw materials and many building materials. Most of the big companies import their raw materials from the countries where they are available at cheaper prices. Many fruits that are extensively used such as mangoes and bananas are exported from the other countries. Without international trading there would be shortage of the food supplies. (Lesley, 2016)
4.2 Analyze the impact of global forces on UK business organizations
The business in the education sector I the UK market is affected by the global market trends.
The global factors are discussed as below:
- Legal: These are the regulation of the government on the educational institutes. For the sound running of any organization it is essential that the company follows all the legal proceedings binding on it.
- Economic: These are the trends of the global business market. Increase in the pay of the individuals increases their standard of living. Increase of the demand of the product increases its manufacturing. Interest rates and the inflation also affect the economic condition of the company.
- Political: These are the factors concerning the various political policies. It determines how the government affects the business in the country. The educational institute operating in UK will abide by all the rules imposed by European Union. The stable political system help the business to flourish.
- Social: These are the factors that determine the social framework of the company. Social factors determine the behavior and the lifestyle of the people in the country. Age and gender also affect the buying habits of the people.
- Technological: These factors affect the innovation brought into the business procedures. The new invention lets the company to have the competitive advantage over the others. Technology affect the use of manpower in the company. The business transactions can be easily made. In the present the major factor running the business is the technology. (Dudovskiy, 2013)
4.3 Evaluate the impact of policies of the European Union on UK business organization
The policies of the European Union that affect the business organizations in UK are as follows:
- Employment policies: It is the responsibility of the government to promote employment and education in the country. For this reason there must be easy going policies for the educational institute weather private of government. The government of UK is lying great emphasis on the development of new educational institutions and maintaining the already present ones. There is a stiff competition in the educational sector in the country. Educational institute not only provides education but also employment. The government is taking all the steps to reform the entire education system in the country. The government is provide training to the employees for improving the educational system in the country.
- Inflation policies: It is again the responsibility of the government to ensure that there is no unreasonable hike in the prices of the commodity. The bank of England also controls the monetary and the economic policies of the government. If the people of the country is spending too much then the government raises the prices of the commodity in the nation and the interest rate. When the interest rate is too high then it becomes difficult to borrow and take loans. The business spend the less money so the money can be invested in other purposes. (Nancy, 2013)
The activities of the companies proceed in accordance with the culture of an organization. Leadership style determine the management of the company. It is really essential to motivate the employee relationship as it increases the performance of the company. First task makes us familiar with the purpose of different organizations. Second task discusses the national and international market environment. Third task makes us familiar with the behavior and the organization of the market. The last task describes the significance of the global factors is shaping the domestic market.
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Dudovskiy, J., (2013), Impact of global forces on UK business organizations,[Article], Available: http://research-methodology.net/impact-of-global-forces-on-uk-business-organisations/ [Accessed 04 July 2016]
Herring, K., (2016), how do market forces shape organizational responses?,[Article], Available: https://www.quora.com/How-do-market-forces-shape-organisational-responses-Why-does-it-happen-so [Accessed 07 July 2016]
Hashmat, M., (2011), judge how cultural environment shape the behavior of organizations,[Article], Available: http://www.enotes.com/homework-help/judge-how-business-cultural-environments-shape-290189 [Accessed 03 July 2016]
Kangda, I., (2011), how market structure determine the pricing decisions of businesses,[Article], Available: http://www.enotes.com/homework-help/how-market-structures-determine-pricing-decisions-290148 [Accessed 03 July 2016]
Kessler, J., (2016), what are shareholder objectives?,[Article], Available: http://smallbusiness.chron.com/ethical-responsibilities-organization-15528.html [Accessed 07 July 2016]
Lesley, L., (2016), the importance of international trade,[Article], Available: http://business-finance.blurtit.com/3334699/1-the-importance-of-international-trade-economic-integration-and-global-markets-to-uk [Accessed 05 July 2016]
Mica, B., (2014), 5 ways top project managers allocate their resources,[Article], Available: https://blog.resourceguruapp.com/5-ways-top-project-managers-allocate-their-resources/ [Accessed 07 July 2016]
Nancy, W., (2013), global factors that shape national business activity,[Article], Available: https://prezi.com/wmblgssty0k1/global-factors-that-shape-national-business-activites/ [Accessed 06 July 2016]