Business Environment In A Global Context Pdf Editor
Detail - Business Environment in a Global Context offers, in a readily accessible way, an in-depth analysis of the business environment at regional, national, and international levels. Incorporating case studies throughout, the key issues, concepts, and theories are supported by practical examples from the business world. Overview of Software Development Environments Susan A. Dart, Robert J. Ellison, Peter H. Feiler, and A. Nico Habermann Edited by Peter Fritzson Overview 1 Introduction Environment refers to the collection of hardware and software tools a system developer uses to build software systems. As technology improves.
Business environment is composed of two words‘Business’ and ‘Environment’. In economic sense ‘Business’ means humanactivities like production, purchase or extraction or sales of products orservices that are performed to earn money.
Meanwhile ‘Environment’ means the aspectof surroundings. Business environment is the set of conditions institutional,political, economical, legal or social that is uncontrollable and affects thefunctions of the organization.Business environment consists of two components:external environment and internal environment.Internal environment includes of 5 M’s like management, money,machinery, material and man. On the other hand, External environment consistsof demo-graphical factors, socio-cultural factors, political factors,geo-physical factors, government and legal factors. Thereare different types of organizations and mainly all kinds of organizations aredivided in three sectors: public sectors, private sectors and voluntary sectororganizations.
Global Context Meaning
The purposes of those organizations are not same. Public sectoris owned and run by the government for the people. People pay taxes to thegovernment and this money is used to finance most of the public sectors.
Themain purposes of public sectors organizations are to provide essential publicservices and to use resources well for the benefit of the community. Privatesector businesses are owned and run by private individuals. Examples of privatesector businesses are franchises, companies (private and public), partnershipand sole traders. Purposes of private sector organizations are making profit,growing their business, increasing market share and maximize sales. Voluntarygroups are not owned by any individual people.
However, some will beresponsible for ensuring that it sets targets and budgets and does what it isset up to do. In most instances they try to help particular types of peoplelike guide dogs for the blind or Oxfam etc. In order to survive they normallymust at least break-even (for an example spend no more than they take inthrough fundraising, grants and donations etc). Thereare many fast food restaurants and among them some are famous and they areoperating in most of the countries of the world like McDonald’s, Burger King,Pizza Hut, KFC, and Subway and so on.
Normally there are three kinds oforganizations like Public, Private and Voluntary organizations. The objectivesof those organizations are different. For example, public organizations aremore likely to serve people with low cost while private organizations want todo more profit, extend their business, and increase their sales and so on.McDonald’s is a private company and their objectives are: to become the world’slargest ad best quick service restaurant. They want to provide outstandingquality, service, cleanliness and value, so that they can make every customerin every restaurant smile. The objectives of McDonald’s are. Strategiesfollow by McDonald’s: it provides franchising opportunities to other to expandtheir business all over the world.
It allows franchisee shareholders, managementand members to share their risks and rewards. This model is working very well;now they has less risk but they are gaining the revenue by rent and profitshare. Rest of the organizations is adopting this model. They invest huge moneyon product development and innovation to produce goods which customers want.They develop their products on basis of economics, demography and localfactors.
Thereare different economic systems and those economic systems are implemented indifferent countries according to their demand. There are free market economy,centrally planned economy and mixed economy. In free market economy governmenthas fewest or no intervention on supply and demand and decision making.Decisions are made on basis of market mechanism.
In free market ConditionCompany can easily export or import products from other countries. Heregovernment doesn’t take decision but most of the organizations take decisionand government has very little intervention.
In a command economy, governmentis responsible for making decisions and distributing resources. Normallysocialist countries have fully command economy. Here government distributes allthe resources according to the people demand and demography.
Most of thecountries in the world follow mix economy which is the combination of commandand free market economy. Here organizations are run either by government orprivate organizations. Public organizations are owned by the government and ittakes the decision of those organizations.
Private organizations run theiroperation independently but under government supervision. Government monitorsthe activities of those organizations. Fiscal and monetary policies have great impact onbusiness organizations and their activities.
Fiscal policies are determined bythe government and it is the amount of tax organization has to pay togovernment. If government increases the tax level, firms have less money toinvest and recruit. Organization may charge more money to customers for theirproducts and services.
If government imposes low taxes, firms want to investfor many sectors which create job for people. Zero hour mashup best of bollywood mp3 song download free music downloads. Central bank controlled themonetary policy. Monetary policy has effect not only on the businessorganization but also the entire economy. It is the ability to obtain credit. Expansionarymonetary policy ensures low interest rates and availability of credit.Contractionary policy lessens the money supply and makes it tough to borrowmoney for organization. The activities of organizations largely depend on thosepolicies.
Expansionary policies reduces taxes, increases government expenditureand an augmentation of money supply and those things are opposite incontractionary policies. (Hall, S., 2012). McDonald’sis the top most fast-food restaurant in the world. Fast food industry is verychallenging and every company invests lot of money on product and servicedevelopment and they are competing with each other to get competitiveadvantage. Competition policy promotes competition and makes markets better andimproves the efficiency of various organizations.
It ensures wider customerchoice; technical innovation which promotes dynamic efficiency and effectiveprice competition between supplies. Competition policies are based on fourpolicies: antitrust & cartels, market liberalization, state aid control andmerger control.
All those policies restrict competition including price fixingand other abuses. Competition policy breaks the monopolistic market and ensureseasy entry on new competitors. On the other hand, regulations are enforced bygovernment to forecast how a market works and the outcomes which results forboth customers and manufacturers. Some regulations are fair trading, standardcustomer services, and environmental policies and so on. Regulatory committeemonitor prices, ensures standards customer services, surrogates competitors andopening up markets (Riley, G., 2012).McDonald’s are facing challenges from other competitors like BurgerKing, KFC and Subways for price, quality of food and services and so on. Allthe products price of those companies are almost same. Marketstructure plays an important role to determine price and production.
There arefew market structures like monopolistic competition or competitive market,oligopoly, monopsony, oligopsony, monopoly and perfect competition. Inmonopolistic competitive market, there are large numbers of firms and everyorganization has small portion of the market share. Those organizations don’thave that much impact on pricing and output. They normally constantly supplyproducts in the market.
In oligopoly market condition there are a small numberof firms which together control the most of the market share and they determinethe price and supply. In monopsony market there is only one buyer who solelydetermines the price and supply. If there is a great demand in the market,company increases the price but excess price can deter the demand of theproduct. In olgopsony market structure there are many sellers but only fewbuyers, so sellers try to keep price at low as much as they can.
In perfectcompletion market, there are unlimited number of buyers and consumers and priceare perfectly elastic. Market forces illustrate the relation between supply anddemand within a market.
Organizational response is the reaction given by abusiness or a company to a business or economical circumstances. Organizationalresponse to market forces has great impact on the company’s reputation andprofits. Most of the successful companies do proper market research andanalysis to ensure that they are able to provide service or products to theircustomers. McDonald’s able to judge the market demand for their productscorrectly which keeps their customers happy by supplying products in rightamount what customer ordered.
The profit of McDonald’s is increasing as theyjudge their margin correctly to be able to supply and sell as much of theirproducts as possible without over stocking, bringing added finance to thebusiness. Some of their brunches are facing loss as they judged very poorly. Asa result they are either leaving customers empty handed as not enough productshas been supplied or leave their business overstocked as customers don’t wantthe quantities supplied.
If the company is not able to satisfy its customersthe reputation may be tarnished. The relationship between market forces andorganisation response is therefore paramount in terms of business success andcustomer satisfaction.
For this reason, market research is key in orderto determine market forces so that an organisation can respond correctly to themarket they are operating in. It is also important to continue inmonitoring market forces to ensure that an organisation can respond to anychanges in market conditions. More or less product may be needed to matchcustomer demand during different market seasons (Philips, I.).
Businessand cultural environment has great impact on organizational behavior. There aretwo kinds of business environment: economic environment and non-economicenvironment. The economic environment includes economic system, economicpolicies and economic condition. On the other hand non-economic environmentconsists of natural, demographic, technological, legal, political, socialenvironment.
McDonald’s is operating more than 119 countries in the world.Their operation largely depends on the business and cultural environment of thecountries where they operate. Economic environment is not same for allcountries. For example, per capita income of UK and India are not same. UK hashigher per capita income than India.
Product prices are higher in UK thanIndia. Economic policies like industrial policy, fiscal policy, monetarypolicy, foreign investment policy and export-import policy are not same forthose two countries which have great impact on the organizational behavior.Social environment of business includes social factors like life expectancyrate, literacy, poverty, beliefs, values, traditions and customs. In Indianculture beef is prohibited for Hindus, so most of the people don’t eat beef.McDonald’s does not sell beef in Hindu communities and pork in Muslimcommunities. Political environment includes the political system, thegovernment policies and attitude towards the business community and theunionism. All these aspects have a bearing on the strategies adopted by thebusiness firms. The stability of the government also influences business andrelated activities to a great extent.
Global Context Of Business
Legal environment refers to set of laws,regulations, which influence the business organisations and their operations.McDonald’s has to obey, and work within the framework of the law. Technologicalenvironment include the methods, techniques and approaches adopted for productionof goods and services and its distribution. The varying technologicalenvironments of different countries affect the designing of products.
Demographicenvironment refers to the size, density, distribution and growth rate ofpopulation. All these factors have a direct bearing on the demand for foods ofMcDonald’s. The natural environment includes geographical and ecologicalfactors that influence the organizational behavior. These factors include theavailability of natural resources, weather and climatic condition, locationaspect, topographical factors, etc. Materials: for many productions, UK largely depends on othercountries. Many raw materials are comes from other countries like banana andmango did not grow in the UK and for those products UK have to export fromhotter countries.
Similarly many countries need expensive and luxuriousmaterials like arms, cars, engines which they import from UK. It is quite toughto be self-dependent in all sectors. International trade gives the opportunityto exchange products otherwise there will be very scarce choice for each nation. After joining to the EU, UK businesseshave to maintain the all rules and regulations.
Global Context Definitions
Now EU laws are same for allEuropean Union’s countries. All countries have to follow the Union’slegislation. If any organization or EU countries want to do business, it needsto contact with European Money Union and it needs to transect in Euro. EUpolicies have immense influence on UK businesses through spending and taxationlaw, spending and directive, inspiring business activity through support andsubsidies. All UK companies can exchange their product with other EU countrieswithout any barrier.
There is no boarder barrier. If UK companies have licensesthey can easily export their products to other EU countries or import productsfrom other EU countries. National authorities can monitor the activities of thebusiness organizations locally. Directiveshave to be implemented in national legislation.
References: Hall, S., (2012), The Implications of Fiscal Policy and MonetaryPolicy to Business online, Available from:Accessed: Lasanthaw (2012), Objectives of Public and Private sector organizations– A comparison Online, August 3, 2012, Available from: Accessed: Philips, I. Available from:, Accessed: McDonaldUSA (2011), McDonald's 2010 Corporate Social Responsibility Report Online,March 03, 2011, Available from: Accessed: Peh, E.,(2009), Economic system online, June 20, 2009, Available from: Accessed:.
For over 20 years researchers have urged international managers to take culture into account. Focussing on culture raises the problem of using relevant units of analysis. This article advocates that national cultures should be considered even in the global economic context. First, analysis on the national scale makes sense when it is grounded in a political approach to culture. Second, the relevance of the national level is illustrated by the case of Switzerland. If at first sight, Switzerland is a country with multiple internal cultures and borders, a closer analysis shows that the Swiss people share a common political culture based upon attachment to local communities and institutions, to government through consensus and to conflict solving by resorting to arbitration and pragmatism.
In the Swiss case, the article shows that management practices are embedded in national political cultures. Validity of the national political culture approach beyond the Swiss case is examined and implications for managers working in cross-cultural environments are discussed.