BUSINESS ENVIRONMENT

CONTENTS
Introduction................................................................................................................ 2
Task 1:........................................................................................................................ 2
Explain how the government is attempting to allocate and make effective use of
resources within current economic system?............................................................2
Task 2:........................................................................................................................ 3
Discuss the current social, welfare, industrial and other fiscal and monetary
processes and their possible impact on the organizations and wider community?. 3
Task 3:........................................................................................................................ 3
Evaluate how competition policy and other regulatory mechanism impact the
activities of the selected organization?...................................................................3
Task 4:........................................................................................................................ 4
Discuss the significance of international trade to UK business?..............................4
Task 5:........................................................................................................................ 4
Analyze the impact of global factors on UK business organizations?......................4
Task 6:........................................................................................................................ 5
Evaluate the impact of European Union policies on UK business organization?......5
References.................................................................................................................. 6

INTRODUCTION
The organizational policies are determined in relation to the internal and external
factors. The global factors such as social, political, economical and technological factors
influence the organizational policies. In this report, the governments efforts to use the
resources in an efficient manner are elaborated effectively. In addition, the impact of EU
policies on the UK business environment has also been discussed.

TASK 1:
EXPLAIN HOW THE GOVERNMENT IS ATTEMPTING TO ALLOCATE AND
MAKE EFFECTIVE USE OF RESOURCES WITHIN CURRENT ECONOMIC
SYSTEM?
The economic system of every country is composed of several processes and
procedures that aim at organizing resources such as land, labor and capital for
producing and distributing goods and services, tools, machines and technology. The
role of government is very effective in every country for effective use of the resources in
the economic systems. If the policies of the government are not effective or positive, the
economic system may lead to the ineffective use of the economic resources. In the
United Kingdom, the policies of government are highly appreciating for the effective and
efficient use of organizational resources. The intervention of the government in the
economic system is at minimum level which makes it a free economy system. The free
economic system of United Kingdom ensures that the resources of country are used by
private sector and are influenced by the market forces. At the same time, the price
mechanisms are also determined on the basis of supply and demand without
intervention of government. The government has given the authority to the private
sector and market forces to take appropriate decisions in accordance with supply and
demand. Under this condition, the resources are efficiently allocated to different projects
in an economic system. Although the government does not intervene in the policies of

organization, however it ensures that the resources are allocated at appropriate projects
for the positive outcomes of the economic system.

TASK 2:
DISCUSS THE CURRENT SOCIAL, WELFARE, INDUSTRIAL AND OTHER
FISCAL AND MONETARY PROCESSES AND THEIR POSSIBLE IMPACT ON
THE ORGANIZATIONS AND WIDER COMMUNITY?
The social factors influence the policies of the organizations.

The changing

demographics (age, gender and lifestyles) influence the organizations to develop

products and services for meeting the needs of people in new social environment. In
addition, the social factors from religious perspectives also influence the organizations
to mold their practices in relations to the religious considerations. The organizations
need to be socially responsible towards respective communities in terms of employment
opportunities, social welfare contributions and helping the needy communities. The
monetary processes of the countries in turn, impact the organization policies in terms of
prices and cost structures.

TASK 3:
EVALUATE

HOW

MECHANISM

COMPETITION

IMPACT

THE

POLICY

AND

ACTIVITIES

OTHER
OF

THE

REGULATORY
SELECTED

ORGANIZATION?
The UK retail market is very competitive and also has a strong influence on the overall
industry. The liberalization of retail market of UK, competition policy and the regulatory
requirements of the UK market influence that the retailers must not manipulate the
prices of the products. The Tesco has adopted the competitive pricing strategies to
facilitate the customers and also to increase its market share (Lyons, 2009). In addition,

the regulations requirements also influence the Tesco to make its products in relation to
the Food Standards Agency.

TASK 4:
DISCUSS

THE

SIGNIFICANCE

OF

INTERNATIONAL

TRADE

TO

UK

BUSINESS?
International trade is considered to be one of the most important factors for the
economic development of a country. International trade in UK economy has an essential
place and serves for the vitality of its economy.
The economy of the UK depends on the foreign trade. The role of government in
developing foreign trade is much appreciated (BIS Economics Paper, 2008). The
government supports the unrestricted trade with the other countries. The foreign trade
has remained very important for the businesses in UK because it provides them an
opportunity to expand their operations. The international trade in UK has been
contributing the current business of the country in terms of large output (Indira, 2005).
This is because with increasing volume of international trade, the existing organizations
of the country expand their volume of production which ultimately increases foreign
reserves of the country.

TASK 5:
ANALYZE

THE

IMPACT

OF

GLOBAL

FACTORS

ON

UK

BUSINESS

ORGANIZATIONS?
The organizations are influenced by several internal and external factors. The external
environment such as legal factors, competitors actions, political forces and social

factors influence the practices of businesses. With respect to Tesco (a leading retailer of
the United Kingdom), the influence of global factors has been explained:

Social Factors: These factors relate with the changing social structures. The
social factors are important for the companies like Tesco because these factors
determine the behaviors, taste and lifestyles of customers. On the global scale,
the social factors differ in different countries. The Tesco has been operating
internationally. Therefore, it needs to consider the changing social factors (age,

gender and lifestyles) before developing its practices.

Legal Factors: the legal factors also impact the business of the Tesco. In
countries other than UK, Tesco needs to adhere to the legal policies of the

respective governments.
Economic Factors: The economic factors such as tax system, allowances, prices
of products and services, monetary and fiscal policies, and foreign exchange
rates also influence the business strategies of Tesco. In case of high prices of

raw materials, Tesco has to increase the prices of end products.

Political Factors: the global political factors such as political uncertainty and
political instability also influence the business strategies of Tesco. The global
terrorism and war situation in several countries also restrict the companies like
Tesco to expand their business in those countries despite of availability of cheap

labor and resources in those countries.

Technological Factors: the changes in the technology in the global market have
strong influence on the business strategy of Tesco. The expansion of internet
technology has been influenced the Tesco to expand its internet stores.

TASK 6:
EVALUATE

THE

IMPACT

OF

EUROPEAN

UNION

POLICIES

ON

UK

BUSINESS ORGANIZATION?
The national government of United Kingdom and European Union policies has strong
influence on the business strategies of the companies (Bulmer and Burch, 2002). In the

following ways, the European Union polices impact the business organizations in United
Kingdom:

The taxation and spending policies

Through regulations, laws, and directives
By encouraging and motivating the business activities such as subsidies and

support
By providing the support and consulting services

The European Union policies impact the business strategies of organizations in the
United Kingdom in terms of employment and regional policies. The employment policies
are decided by the organizations in relation to the employment regulations of proposed
by the government. The European Union policies also impact the business efficiency by
engaging people in the business activities. The employment policies of the UK
government are developed in relation to the directive of European Union. At the EU
level, the funds are available in terms of different regions which have high
unemployment. For instance, in Scotland the focus of investment is high from EU
perspective. In this regard, the Tesco also have attractive opportunities of business
expansion in these areas.

CONCLUSION
The report covers that the organizational policies are influenced by several factors such
as social, political and economical. In addition, the report also covers that the Tesco has
developed its policies in relation to government regulations. The international trade
benefits the UK economy in positive way. At the same time, free economic state of UK
also supports it in an effective way.

REFERENCES

Lyons. (2009) Cases in European Competition Policy: The Economic Analysis.

Cambridge University Press

Indira, (2005). International Trade Law. Routledge
BIS Economics Paper No.8 (2010), UK trade performance: Patterns in UK and

global trade growth

Bulmer, S. and Burch, M. (2002) British Devolution and European Policy-Making:
A Step-Change Towards Multi-level Governance?, Politique Europenne, No. 6,
pp. 114-36.