Business Environment


Business environment refers to the context in which a business operates. The business environment therefore refers to the totality of the business structure, legal, social, economic, technological and environmental factors that influence a business entity. The purpose of a business in meeting the objectives of its stakeholders dictate the type of market structure that the business has to take. This paper aims to discuss the business environment in various contexts with specific references to McDonalds and BT. 

Task one:

The organizational purposes of a business in meeting the stakeholder’s objectives.

Many types of organizations are structured in relation to the purposes of their creation .This takes account of the set objectives and the interests of the company. Majority of organizations usually are created for the sole purpose of profit making otherwise referred to as the for- profit businesses. On the other hand, some are instituted to create jobs that support human kinds while other for the non-profit organizations that are aimed at providing charitable services such as the Non-governmental organizations. This essay is an exercise that aims to address how the British Telecom (BT) use its organizational structure to fulfill its purpose of satisfying the needs and the expectations of the stakeholders (Khabuliani, 2012).


The stakeholders are partners of the organization or a business organization that play significant roles to for the organization. Stakeholders get into partnership or become part of an organization only to which they have interest in. These interests therefore have to be met by the company in order to meet the objectives that stakeholders opt to achieve with the company. Unfortunately, situations do present themselves that make it impractical to achieve the set objectives to the satisfaction of the stake holders. For a company to be sustainable and remain at the top of its competitors, it there for shows that it has some strategies put in place to meet the set objectives of the stakeholders .The extent to which a company is able to achieve such objectives thus pointer and an indicator of the proper use of the available resources for the performance of the company (Khabuliani, 2012).

British Telecom is a prosperous company that has several stakeholders who are very significant to the management, growth and sustainability of the company. It has maintained very nice relationship with the stake holders and has managed to stay at the top of its service delivery because it is able to achieve and meet the set objective of the stakeholders. The stakeholders comprise the BT employees, the supplier to the company, the customers of the company, the local communities that neighbor the community, financiers, the government, the pressure groups, competitors and finally the shareholders (Khabuliani, 2012).

The employees

The BT Company has the responsibility to meeting its employees needs and set goals. To fulfill these, the company has established better communication organization schemes that enables the employees to have good communication and feedback channels. The employees have the opportunity to address matters that could be affecting them, to air various issues that range from local, divisional and the company level that is put into account through the employ satisfaction surveys (Khabuliani, 2012).

The customers

The BT Company is recognized to be having a wide range of customers in the market. It would then be an issue of interest to find out how it has managed to keep them while at the same time work on the expansion. As such, the company is noticed to have relentlessly focused on the on their customers in by finding out what they feel about their services, what they would to be improved and their future expectations. The company, therefore uses the information that is gathered to improve and do what needs to be done. This is how the company has managed to retain and maintain its wider customer base while at the same time attracting some (Khabuliani, 2012).

The suppliers

The suppliers are another stakeholders to the company. They are the third party that have access to the company’s direct information. They are responsible for bringing the inputs that the company uses to produce high returns. The BT Company in fulfilling its responsibility to the suppliers has put in place a relationship management system that ensures that the suppliers receive good and effective two way communication system with the company. This has become a fundamental aid in time management by reducing time wasted in consultation meetings and agreement processes thereby hence their policies influence the suppliers (Khabuliani, 2012).

The Government

In many situations, the political waves have an effect to the operations and the management of organizations. Any company that needs to prosper thus have to be aware and cautious of the contributions of such forces.BT, therefore, in efforts to ensure that it fulfills the government objectives, it has maintained strict communication with the government that is both maintained at local levels and nationally in directions and hopes of providing quality and better customer services to all interested parties.BT further maintains a good and effective strict relationship with the government by ensuring that is follows the legally set regulations governing its operations and modes in which its services are of be rendered to the esteemed customers (Khabuliani, 2012).

The shareholders

These are the company owners whose objectives have to and must be met. They are the key figures that contribute to the company’s investment portfolios thereby possessing majority of the shares to the company. They facilitate the company’s projects that have been speculated to bring income to the company at some investment risks thus are pertinent to the growth of the company. The British Telecom company thus in fulfilling the set goals of the owners has put in place effective communication systems among the shareholders and owner that has proven to be very essential in the operations of the business. The relationship has thus granted a more healthy, positive and beneficial contribution to the growth, sustainability hence the success of the business (Khabuliani, 2012).

Task two:

The nature of the national environment in which businesses operate

Nature of the national environment in which the business operates dictates how the economic resources are allocated effectively by the economic systems. The price mechanism is significant to determining the commodities that are to be produced and to whom they should be produce for. It is a key indicator to production rates in which the suppliers produce goods that the customers are willing to buy at relatively higher prices .These, therefore, are the goods that would be produces and the expected selling prices stand at that of the equilibrium price.

The market economy and command economy (Oliver, 2012).

The market economies and the command economies are moreover in control of the two polar extreme in the organizations of the activities of the economy. The two are separable in terms of the labor and the factors of production that could be necessary for an operation of a business and the mechanisms in place determining the prices of commodities. As such, the activities that takes place with market environment are unplanned. The activities that therefore take place within a market are thus dictated by the market supply and demand of goods or services and is never subject to the control by any authority that could be considered central to the market activities. Interesting difference to not also lies in the fact that market command in many accessions is under the control of the government officials who are the owners and controllers of the factors of production (Oliver, 2012).

The market economy otherwise referred to as the free enterprise system is looked into in consideration of the private ownership of the means of production and the voluntary exchange. The business owners are, therefore, in free control of the ownership of resources and are free to mitigate the exchange of such resources without the involvement or control of any authorities. . The prices of the commodities thus arise based on the supply and demand of the goods .On the other hand, command economy is the central direction whereby the government is always in full control of the major factors of production including land, capital and skills. Such markets are characteristics of the communist’s economies (Oliver, 2012).

The assessment of the impacts of the fiscal and monetary policies organizational and their respective activities.

Fiscal policies are fundamental policies that the government institutes in pursuance of taxes and expenditure. These policies affect the businesses majorly in two distinct ways. There are the legislations that stimulates the overall economy and also legislations that target specific business organizations. Therefore, the government could stimulate the economy by either reducing the taxes on commodities or lag the economy by increasing the taxes. On the other hand, the monetary policies provide regulations that act as the watchdogs to the nation’s money supply. Therefore, the federal could and has the responsibility of creating an expansion to the money supply while at the same time keeping the inflation in checks (Langdana, 2009).

BAA according to the competition commission was ordered to sell two of its airports after it had sold Gatwick Airport. The company has been through a number of legal challenges in its intent to have and remain in control of the Stansted and its Scottish airports. The airports were offering services to a more number of the capacity of the passengers than it could accommodate. This is thus an example of a business that is faced in trials of trying to outdo the impacts of a command market in the nature of businesses that through the Supreme Court is still denied the opportunity to continue its operations and has to be shut down as ordered.

Task three: Understand the behavior of organizations in their market environment

The determination of the price of commodities within a market is dependent on the type of market structure that is used. There are three main types of market structures that help in the determination of the prices of various commodities. The three market structure includes perfect competition, monopoly and oligopoly. The most common type of market structure that is often used in various economies is the perfect competition.

Under the perfect competition market structure, the firms are allowed to determine the prices of good and commodities that they offers based on the prevailing market conditions. There is little role that the government and regulatory authorities play in determining the prices of various commodities that are viable in the market. The determination of the pricing output and the pricing decision is solely dependent on the demand and supply curves of the industry. In the perfect competition industry, the demand and supply curves are normal demand curves that resonate with the economic situation of the industry in which the firms operate (Kew & Stredwick, 2005). The demand curve often has a negative gradient and the supply curve has a positive gradient. The point at which the demand and the supply curve markets the output decision and the pricing of the commodities that the organizations operating under the perfect competition have to take. Producing the quantity of goods at the point of intersection of the two curves affirms that the firm is operating at its optimal level. The optimal profit that the firm gets to earn is enough to ensure its sustenance in the industry. 

The price determination in the monopolistic market structure is solely on the discretion of the firm. In the monopolistic market structure, only one firm takes control of the entire industry. As such, the consumers in the monopolistic market structure have to agree with the prices that are often set by the firm enjoying the monopoly. Besides, the determination of the pricing in the monopolistic market is the also at the discretion of the regulatory authorities who strive to ensure that the prices that are set by the industries are in tandem with the ability of the consumers to pay. The quantity that is set to produce and the output decisions are also found from the analysis on the ability of the consumers of the target product to buy off the product. Often, the monopolistic market serves in the industries that provide essential services such as water and electricity. The quantity that are set to be produced has to meet the demand of the all the consumers while the prices of the commodities are at the sole discretion of the firm acting as the sole player in the industry.

In the oligopolistic market structure, the decision on pricing is dependent on the agreement that is forged between the major firms who are the main players in the industry. The determination of the quantities that are same as the making the decision in the monopolistic market structure (Halbert & Ingulli, 2014). 

How market forces shape organizational responses

The market forces are what dictate the operational decisions that a firm has to take. The market influences the pricing of the commodities and the optimal quantities of goods that various firms have to produce within the optimal levels. The understanding of the organizational responses to the market forces of that requires one to delve on the case of Macdonald. McDonalds has approximately 36000 chains that are in various countries and economies that document its prudence in the accomplishment of the market competition (Fernando, 2011). McDonalds operates in the perfect competition market industry. McDonalds is, therefore, a firm that operates in an industry having to make their operations to be in tandem with industry needs. The pricing of the products that McDonald’s offers to its target clientele are at par with the prices of the similar organization operating within the same industry. As such, in some countries, such as the United States of America, there are more McDonalds stores unlike the sub-Saharan African region owing to the low levels of demand that are available within the market. Besides, in the pricing of the McDonalds products are higher in the American market as opposed to the Asian market owing to the market condition in the two regions. 

Judgment on how the business and cultural environments shape the behavior of McDonalds as business

The success of a business is mainly dependent in the ability of the business to take relevance with the culture of the people who act as the main target market. The operations of MacDonalds are spread in four regions, notably, American, European, Asian and the sub-Saharan Africa. The four regions have distinct staff that ensures that the operation of the company is in line to the culture of the region. For example, in the regions that revere the Islamic culture, McDonalds ensure that the products that they offer to their target clientele have Halal certification. The Halal certification proves that the businesses of the McDonalds are in line with the provisions of the Islamic culture. 

The sensitivity of culture is also dependent on the practices of the people within a given period. The sensitivity of the culture is often tested in the ability of the business to take cognizance of the foods that the society accepts and the type of foods that they do not like. In the case of McDonalds, there are two main types of foods that they are sensitive not to offer amongst two different cultures. First, McDonalds does not offer any beef products to the Indian market owing to the culture of the Indian community. The Indian community views a cow as one of their gods. As such, they are not able to eat a meat product from one of their gods as it is a cultural taboo within the society. Furthermore, MacDonald’s in the Indian market has preference for the vegetarian diet since most of the Hindus have a likening for the vegetarian diets. Second, McDonalds is careful not to offer any pork product to the Islamic markets. 

Task four: Assessment of the significance of the global factors that shape national business activities.

Significance of international trade to UK business organizations

International trade in the UK has the sole objective of ensuring that the country benefits from the balance of payments. The balance of payments often is the difference of the values of imports and exports in a country. The case of the BT can be used to postulate the discussion on the significance of international trade to the UK business organizations. International trade enables the UK based countries to have fair competitive environments in other countries as well. Through international trade, the UK business organizations are able to find a wider market for the products that they intend to offer to their target market. 

An Analysis of the impact of global factors on UK business organizations

Global forces are what dictate the strategy that a business needs to employ to ensure that it has a fair competitive advantage over its peers in the industry. The global factors include political, environmental, social, technological, legal and economic. All the five aforementioned factors affect the UK business organization as they compel the American firms to oblige with the relevant legislation that dictate each of the aforementioned five factors. The environmental and social factors dictate makes the UK organization to invest money and resources in having the necessary certifications at the expense of the profits that the firms need to earn. Furthermore, the certifications that are often needed include ISO certification and compliance with the corporate social responsibilities.  

An evaluation of the impact of policies of the European Union on UK business organizations.

Policies are the legal requirements that a business has to oblige with to ensure that its operations are validities under the law. The European Union has stringent policies that all the business have to oblige with. The UK organization has to make subscription to the legislations that are set by the European Union. The legislations are related to the quality of goods that are accepted in the EU market, the environmental legislation and the subscription to the social policies that are evidenced through the corporate social responsibilities. The policies often demand that the UK business organization have to set up quality monitoring systems to ensure that their products are of the requisite quality and the business operation are sensitive to the business environment.


The operations of the business is dependent on several factors that have to be take care of. The fundamental concerns thus have to be in areas that pertains the interests of the stakeholders of the business. Other than having to deal with the organizations internal factors, there are other market externalities that the business has to take into account. These would be in the situations that the business has to deal with market competition issues and the modes of the operations.

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