Business Environment Contents 1. Understand the organisational purposes of businesses3 11. Identify the purposes of different types of organisation. Define Anglo American’s purpose. 3 1. 2. Describe the extent to which Anglo American meets the objectives of different stakeholders3 1. 3. Highlight responsibilities and also explain strategies used to fulfil them at Anglo American. 4 3. Understand the behavior of organisations in their market environment5 3. 1.
Evaluate the impact of competition policy and other mechanisms of Anglo American’s activities5 3. 2 Define the various types of markets and explain how they determine the strategic decisions6 3. 4. Judge how the business and cultural environments shape the behaviour of a organization8 4. Assess the significance of the global factors that shape national business activities8 4. 1 Discuss the significance of international trade to UK based mining organisations8 4. Analyze the impact of global factors on UK business organisations9 4. 3 Evaluate the impact of policies of the European Union on UK business organisations. 10 Task-1 1. Understand the organisational purposes of businesses 1. 1Identify the purposes of different types of organisation. Define Anglo American in terms of organisational purpose. The purpose of an organization or a company can be multi facet. The purpose of all the organization is to satify the needs of the customers The goals of an organisation may be multi facet.
The similarity in goal of every organisation is to reach to the top by its brand name, goodwill, quality of product. No company should make a compromise when the question of goodwill of the organisation is concerned. It takes years together to establish a Brand Name of the product produced by the company. Apart from quality,the question of after sales service, availability, net work system play important role. An organisation of repute should strive for profit which is the essence of any organisation.
An organization is a social entity which pursues specified goals and controls its own performance. There are some boundaries which separate organization from its environment. There are various purposes of different organizations like profit-for and not-for-profit organizations operate for various purposes. The purpose of a not-for-profit organization is to bring social reforms like educational institutions etc. On the other hand, the purpose of a profit for organization is to offer products or valuable services to earn returns.
Therefore, the purpose of every organization differs and all employees are motivated to attain the goals set by the organization Rate This Answer The organizational purpose primarily defines the major reason of existence of an organization in the market. Generally, the sole purpose of any organization should be satisfying customers. For a manufacturing organization, which is into manufacturing of farming equipments, the purpose can be providing wide-range of innovative solutions to farmers so that the starvation and malnutrition can be eliminated.
For an organization, which is into providing educational services, the purpose can be providing quality education to people to enable people to be more efficient and to make people to achieve legitimate goals of their life. In the same way, the purpose of a non-profit organization is to provide services that benefit to public or in simple terms, to serve humanity. Likewise, every organization will have a purpose, which emphasizes on organizational growth as well as society growth.
Similarly, the purpose of Anglo American, a leading mining company in the world, is to deliver excellence in safe and responsible way by adding value to communities, people, organizations, governments and stakeholders in areas such as mining and exploration (AngloAmerican, 2011). With the help of sustainable policies and approaches such as integrated sustainable development, transparency, ethics, human rights and collaborations, Anglo American has been striving to stick to the basic purpose of the organization (AngloAmerican, 2011). . 2Describe the extent to which Anglo American meets the objectives of different stakeholders Stakeholder is a person or a group of people or organizations that directly or indirectly get affected due to the actions or activities of an organization. Organizations have to keep all stakeholders in mind while taking any decision that impacts internal and external organization. Employees, suppliers, creditors, debtors, investors and customers etc. , are considered some of the major stakeholders of any organization (James, 2002).
Different stakeholders of an organization will have different objectives. For example, the objective of an investor is to gain profits from the investment which he or she made in the organization. Similarly, the objective of employee to work in a safe working environment, learn work and grow in the corporate ladder etc. As a mining organization, Anglo American has to meet the objectives of primary stakeholders like investors, employees and creditors and secondary stakeholders like general public, communities, activist groups and media.
With the sustainable development approach, Anglo American has been reaching the objectives of all stakeholders for past few years. With the performance score card, which tracks the performance of organization against social and environmental indicators, Anglo American has been focusing on areas such as safety, health, social performance, socio-economic performance, rural health systems development and enterprise development (AngloAmerican, 2011).
As far as safety is concerned, the fatal injuries have reduced to 17 in 2011. The number of new cases of occupational disease has been significantly dropped to 190 in 2011 from 280 in 2007. Nearly 93% sites maintain OHSAS 18001 standards, which is a predominant achievement of Anglo American in the area of safety and health management. Overall, the organization has witnessed good growth rates in every area that affects stakeholders in 2011.
To comply the rules of environmental management systems standards, nearly 94% of all sites have undergone ISO 14001 certification; all infrastructure and equipments are purchased to make comply the rules of environmental standards (AngloAmerican, 2011). 1. 3. Highlight the responsibilities and also explain the strategies used in connection with fulfilling these responsibilities at Anglo American. As a mining organization, Anglo American has to fulfill economical, social and environmental responsibilities.
Some of the major responsibility of Anglo American is to implement best practices across all branch offices to avoid social and community issues; to build site level capacities to manage social issues; to contribute to societies by allocating funds to enrich poor communities, improve facilities at site level to avoid health and safety risks; to make a framework improves the engagement of all stakeholders; to develop sustainable environment. With the help of the Anglo American plc’s Socio-Economic Assessment Toolbox (SEAT), the organization has been effectively assessing the social and environmental responsibilities (AngloAmerican, 2011).
With the help of SEAT, Anglo American has been effectively identifying the local stakeholders, environmental risks, social and community issues, analyzing risks at shop floor facilities across all sites, developing a matrix to help communities and societies to address some major challenges etc. With the help of SEAT, Anglo American has been successfully fulfilling social and environmental responsibilities (AngloAmerican, 2011). Task-3 3. Understand the behavior of organisations in their market environment 3. 1.
Evaluate the impact of competition policy and other regulatory mechanisms of theUK government on Anglo American’s activities The major aim of the competitive policy and other regulatory mechanisms in UK is to make organizations work in a better environment and to let organizations contribute to effectiveness and competitiveness of UK economy. These regulatory policies have been impacting Anglo American organization both positively and negatively by eliminating anti-trust groups or cartels in the industry, liberalizing the market, implementing State Aid Control and involving in merger control.
Organizations like Anglo American, which strive for ethical values and transparency, have been losing their market share due to antitrust agreements and cartels in the market (Parkin, 2002). The first pillar of competition policy of UK works on eliminating antitrust agreements and fixed-price agreements that seek to restrict competition. By restricting the antitrust and fixed-price agreements in the market, Anglo American will get a chance to serve more customers in an ethical and transparent way.
The second pillar of the competition policy, which takes care of liberalized the market, may impact Anglo American in a negative way because the liberalization of the market is nothing but giving chance to fresh competitors. The increased competition may affect some business segments of Anglo American (AngloAmerican, 2011). The third pillar of competition strategy, which takes care of State Aid Control, may also impact Anglo American in a negative way because it will be very difficult for the organization to get grants or funds from government if the organization does not show any future prospects (AngloAmerican, 2011).
The fourth pillar of competition policy is merger control. This might affect Anglo American in positive and negative ways because Anglo American can take the help of government to successfully close a merger activity if everything is perfect but some times government will not approve for the merger activity if the merger between two companies spoils the competitive environment. 3. 2 Define the various types of markets and explain how two of these types of markets would determine the pricing and output decisions of a UK based organisation.
Perfect competition is nothing but a market, where all organizations will have equal strengths and weaknesses. In this type of market, it is very difficult to find organizations that have power to influence pricing structure. Monopoly is nothing but an organization which has power to the control of the market (Binger and Hoffman, 1998). Organizations will act as monopolies when there is no competition in the market. Monopolistic competition is nothing but a market which has numerous of competitors but they sell slightly differentiated products.
Monopolistic competitive market is an imperfect competitive market which give space for numerous of companies as long as the profits are attractive (Binger and Hoffman, 1998). Oligopoly is nothing but a market, which is dominated by a few numbers of organizations. The market form, oligopoly arises due to lack of competitors in the market. Similar to Monopoly, where only one major organization exists in the market, the duopoly is a market form, where only two organizations exist (Binger and Hoffman, 1998).
Source: Binger and Hoffman, 1998 Google is a perfect example of Monopoly, which commands nearly 70% of search engine traffic. As a monopoly in search engine market the pricing structure of Google will influence the way nascent search engines like gocomb. com, which is launched very recently. As a new search engine, to compete with big giants like Google and Yahoo, it has to offer advertising services at cheaper cost. When it comes to output decision, Gocomb. com has to offer high advertising space at marginal or no profit.
The perfect examples for perfect competition in UK are fruit vendors or vegetable vendors who sell products at almost same price. The pricing decisions and output decisions will not be influenced in perfect competitive market because of no entry/exist barriers and switching costs. 3. 3. Using a range of examples both from within and outside the context of a UK based company illustrate how market forces influence and dictate the responses of organisations. Market forces such as political, economical and social will influence the responses of organization (Dunnett, 1997).
Political forces are majorly related to government actions and law. The way recent London riots 2011 impacted the business activities of various organization can be considered as perfect example for political force. These riots demanded assets of numerous organizations pushing them to cost pressures. Economical forces that influence organizations are economic crisis, unemployment and poor economic climate. The recent economic crisis of 2008 is a perfect example for how poor economic climate or business environment influence organizations.
In response to economic forces, organizations will face pressures from all stakeholders including employees. As social forces affect attitude, perception and interest of individuals, the result will obviously influence organizations (Hornby, 2001). The perfect example of social factors is the changing attitudes of UK people towards health and diet. To cater the increased demand, numerous of fitness centers and organic food centers have come up in UK. 3. 4.
Judge how the business and cultural environments shape the behaviour of a selected organization Business environments such as religious organizations, banking and financial institutions, and government agencies will shape the behavior of organizations like General Healthcare Group. Government agencies such as regulatory bodies and policy making institutions will shape the way GHS operates. Generally, most of the policies of UK healthcare system are made in favor government organizations.
Similarly, the interest rates offered by banking and financial institutions will influence the decisions of GHS in launching new services. Cultural environmental factors such as national cultures, traditions, individual behaviors, and green issues will also influence the way organizations operates. In this globalized environment, national culture, which is comprised of values, beliefs and tradition and religions of employees, will influence the organizations like Anglo American in a great way.
To manage diverse workforce, the top management of Anglo American or GHS has to implement wide-range of human resource and leadership strategies to create an all inclusive environment that facilitates growth of the organization. Individual behaviors such as attitudes, perceptions and personal characteristics of employees will also shape the behavior of Anglo American or GHS. 4. Assess the significance of the global factors that shape national business activities 4. 1 Discuss the significance of international trade to UK based mining organisations
International trade is nothing but exchange of goods and services across the international borders of various countries. While mining companies make a signification contribution to the economy of UK, and world economy, international trade is playing a significant role in this contribution. In fact, international trade is making UK’s mining companies to be in comfort zone. The major benefit of international trade to UK mining companies is to the opportunity to export construction equipments, and mining equipments to developing countries like India, China, Brazil, and Eastern Europe (Dawes, 1995).
The international trade has also been helping mining organizations of UK to effectively utilize existing natural resources to produce more goods and services that lift the world economy. As London is considered as a home for large scale metal producers, UK has become a dominant player to export mining goods to several other European Countries as well as the United Sates (Dawes, 1995). The international trade is also helping UK mining companies to important raw materials from other European countries and Asian Countries at cheaper cost. 4. Analyze the impact of global factors on UK business organisations In today’s competitive environment, numerous of global factors such as international markets, international competitiveness, export markets, trade blocs and international growth will impact the way UK business organizations operate. Based on these key factors, UK organizations should rework on their business strategies in regular in regular intervals. Global factors majorly influence strategic decisions related to access to new international markets, trade blocs and important acquisitions.
Trade Blocs will majorly impact UK organizations at the time of entering into new markets such as NAFTA. Some of the other factors that impact UK organizations are social, political, economical, technological and legal factors in various countries. Global factors majorly impact organizations that depend on imports and exports (Dicken,1998). If taxation policies in Asian Countries like India and China, from where most of the UK companies import raw materials, are changed, it will impact the cost structure of the UK organizations.
In the same way cultural factors like religious considerations, environmental considerations and ethical considerations in one country to where UK organizations export goods and services may impact sales. Similarly, economic policies such as fiscal policies, exchange rates and internal regulations will also impact the exports of UK companies (Dicken,1998). 4. 3 Evaluate the impact of policies of the European Union on UK business organisations. Some of the major policies that impact the UK business organizations are Agricultural Policy and Common Fisheries Policy and Healthcare Policy.
Mostly, European policies will impact organizations in both positive and negative way. It helps organizations to increase the productivity, ensure fair trade across all sectors, market stabilization, streamline supply markets, and provide goods and services at an affordable rate to customers. European policies will also help organizations work in a perfect competitive markets, facilitates acquisitions and mergers and work closely with related regulatory bodies etc. Moreover, policies of European Union will demand organizations in major sectors like healthcare sector to maintain good infrastructure to provide quality services.
The major policies of European Unions have majorly four mechanisms. The first mechanism demands organizations to produce quality products and take care of grading as well as packaging. The second mechanism helps organizations to protect themselves from market changes. The third mechanism asks organizations to set competitive prices. The fourth mechanism is set various standards for trade with non European Nations. References AngloAmerican, 2011. Anglo American Annual Report, 2011. Retrieved on 23rd November, 2012 from Binger, B. and Hoffman, E. , 1998. Microeconomics with Calculus, 2nd ed.
Addison-Wesley. Dawes, B. , 1995. International Business: A European Perspective. London: Nelson Thornes Publishers. Dicken, P. , 1998. Global Shift Transforming the World Economy. London: Paul Chapman Publishing. Dunnett, A. , 1997. The Macroeconomic Environment. New Jersey: Prentice Hall. Hornby, W. , 2001. Business Economics. New Jersey: Financial Times Prentice Hall. James, P. , 2002. Redefining the Corporation: Stakeholder Management and Organizational Wealth. Stanford University Press. Parkin, M. , 2002. European Economics. New Jersey: Pearson Education