Business Environment Management System
Though business is founded and run on its strengths and financial aids, it still has few things which are dependent on the external factors. The environment is one such important issue which plays its role in founding and running of the business. The land and the other resources which are gifts of nature are utilized by the enterprise for its growth and expansion. Hence, it is the also the duty of the businesses to give back something to the environment in return
The company chosen for this assignment is Nestle. Though formed as a result of a merger in 1905 Nestle have designed its Nestle Environment Management System or NEMS to looks after its responsibilities towards the environment. NEMS works systematically to ensure the company’s compliance with the environmental policies
Different organisations come with various business objectives. There are a partnership, sole trading, co-operatives, etc. In the case of sole trading, the entire responsibility is laid on one single person who sets or starts the business. At the given company in hand, decision making puts in the hands of the only person itself
There are various stakeholders associated with Nestle and its business. This section will discuss how Nestle caters to the stakeholders and fulfils their requirements. These stakeholders are essential for the company, its business and survival for the long race.
Employees: The most important stakeholders of Nestle are the employees. They are given the motivation and proper recognition to keep their morale high. The company keeps the employees and directs them in a proper manner to develop the sustainable workforce
Customers: Besides being stakeholders, customers are very life-blood of the company. Nestle is a commodity producing company and highly dependent on its esteemed customers for profit making and survival in the competition market
Government: They are the one’s which lays down the rules and regulations which guide the movement of the business and enterprises
Suppliers: This group forms the backbone of the company. It is the raw material of the suppliers, and their inputs help the company with their productions. The company of Nestle maintain a good relation with providers by establishing a long term relationship, good purchase rate and timely payment
Shareholders: the people buy the share of the companypeople, and they become the shareholders. It depends on the expectation of high or lower rate of surplus return from the shares of the company. Nestlé needs to provide the shareholders with a high bonus so that the shareholders continue to invest in the company shares
Any companies like Nestle have a set of duties and management which the company requires to adopt and maintain strictly. Nestle has to make sure that the team working within is happy and satisfied which in turn will help them to maintain the competitive advantage
A dynamic economic system meets the both end. Both ends mean the end of the customer as well as the end of the company. The production system has got its limitations due to lack of labour, raw materials, resources and the capital investment involved. The resource allotment is done after making sure all the resources are sufficiently acquired to start and complete the production procedure
Nestle, just like other enterprises have to depend on the monetary and the fiscal policies. The government owns the monetary policy and also controls the money supply within the country. The supply can be monitored with the help of inflation, through an increase in the rate of interest
There are various laws about competition policies:
Fair Trade Act 1973: It emphasises on operations as a business, merging and acquisitions.
Restrictive trade practice 1976: This act restricts the companies to mentioned trade practice. Hence, Nestle won’t be able to produce anything which it did not declare as its production.
The Competition Act of 1980: The act of 1980 prevents companies from malpractices which lead to disruption of the fair competition in the market. For example, Nestle cannot make any understanding with rivals to make stop any other company.
It is the duty of the government to monitor and ensure that the company abide by the practices and rules laid down. In this way, Nestle must maintain healthy and fair practice environment with the consumers as well as the competitors who will help them to increase the market share and the productivity level
There are various types of markets for different products and services, according to which the output and pricing decisions are taken. In most of the cases except the perfect market, the output and pricing decisions are interdependent. In the case of the perfect market, the firms cannot compete with the competitor's price because it's a single small sized firm
3.2 Illustrate the way in which market forces shape organisational responses using a range of examples
The demand of the commodity, its supply, advertisement, promotion strategies all these market forces affect the organisation in various ways. Supply of the product is the amount of product available on the market for sale and demand is some goods of services required or desired by the consumers in the market
The business and the culture environment have a significant influence on the organisation. There is two types of business environment namely, economic and noneconomic environment. The economic environment of the place consists of the economic system, policies, and conditions, whereas the noneconomic environment includes the natural, technological, social, legal and political environment
The political environment consists of the government policies and their behaviour towards the business sector. Legal environment refers to the rules and regulations which can affect the working system of the organisation. Nestle has to work within the framework set by the law of that particular country. Thirdly the technological factors like the manifesting technique, method, used for the product which may vary from country to country
Let’s take the example of Nestle which is a Swiss-based company which deals with the production of food and beverages all over the world. This multinational company was blamed for selling horse meat in the name of beef, because of which the European Union imposed restrictions on their meat products. Along with this they also asked Nestle to seek forgiveness from the consumers
The exchange of products and services for monetary gains across the country is known as International trade. International trade leads to better utilisation of resources, the products that cannot be produced by the organisation locally they can be easily imported from another country; also the customers get good variety and choice of products. But with advantages, there are a few disadvantages also like there is a possibility of loss of local jobs, and the dependency on the foreign market also increases
Any business can be affected by its internal as well as external environment. The Global factors which include political, social, economic, legal, technological, and environmental impact the organisations in the UK.
1) Political factors: Political factors include the government policies, rules, regulations, which influence the operation of business. For example, if a UK based organisation is opened up in the European Union then it has to follow the rules and policies set by the European Union only. The Political factors can also affect the consumers spending habit
2) Economic factors: Economic factors like the interest rates, change in wage rates, inflation rate can influence the purchasing power of the consumers, decision-making and operation system of the organisation
3) Social factor: Factors like religion, values, customs, beliefs, lifestyle, gender, population, are all included in social factors
4) Technological factor: Technological factors help the business to adopt new strategies to grow and expand. With the help of technology, the business can reduce the cost of the product and also innovate their product and services. It has become very easy to share the data, easy to communicate, manufacture of the goods and services at a lower cost, new modes of distribution can be used, etc. Technology has helped the business to gain competitive advantage
5) Legal factors: Factors related to a government like a consumer protection rights, environmental legislation, health & safety laws, which the organisation has to follow and abide by are all under legal factors
6) Environmental factor: some basic environmental factors affect the business organisations. Those are- air emissions, sustainable development of water and raw materials and industrials wastes
There is some government policy that affects the business organisations of UK. The government policies are- taxation policy, inflation policy, employment policy, education policy, regional policy and international policy.
1) Taxation policy: Paying taxes is one of the key responsibilities of any business organisations. As a result of this, the government can help the organisation by improving the infrastructure like roads, air transport and any other infrastructure of the country
2) Inflation policy: By implementing the monetary policy, the government make it sure that there will be no rise in price or inflation that drives the interest rates. In the case of borrowing money, raising interest can be harmful to business.
3) Employment policy: The present government of UK plays a vital role in developing the structure of business. It helps to create more jobs. The people for whom finding job is difficult, government help them by providing them training
4) Education Policy: As per the previous point, training and education are crucial for the people who are not trained or capable of finding a job. By school education and vocational training, government help them to get the job.
5) Regional policy: In UK, to support the regions that are affected by social deprivation and high unemployment, the government made the fund available for them
6) International policy: The UK government can stimulate foreign trade to encourage the business organisations. By this process, they can also discourage import of the goods.
In this report, the business environment of UK is analysed here. To study the business organisation of UK the company Nestle have been chosen. From this report, it can be summarized some outcome of this study. From this study the researcher can figure out the purpose of the business of an organisation. It is also find the different types of organisation, objectives of the organisation and how to meet the objectives of the organisation. It is analysed that how fiscal policy and monetary policy effect the company and showed its activities. It is also shows how market policy effectively allocate the resource. It is found out the market structure of the Nestle Company and how it determines the output and the pricing of the product. The study explain that the effect of the cultural behaviour on the business. It is also discuss the significance of international trade to the UK business organisation environment. It is also define the UK business organisation is effected by the global factors. It is discussed about the effects of various policies of European Union on the UK business organisation such as political factor, social factor, economic factor, legal factor, technological factor. The competition policies of Nestle related with various act. Finally, in this study is explain that business environment of UK is related with global organisation.
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