MAN1062 Business Environment : Integrated Approach to Business Studies
Scenario
information about two different businesses.
Task 1 (LO 1) P1
A description of the business
Size and scale of business
Business ownership type and
Information about liability for debts
To achieve the P1, learner has to produce a factsheet.
To achieve P2 & P3 learner will need to research the following for both companies (Report)
What do they sell (Product/ service) describe e.g. air travel / provide an education
Organisational structure e.g hierarchy structure / matrix/ flat. What are the advantages and disadvantages of these types of structures
Functional areas: list the key areas or departments they have in organisation. E.g. IT, marketing
Type of structure. E.g. function/geographical/product / types of customers
Communication: oprn / closed
Span of control: narrow or wide
Task 4 Explain how the style of organisation helps your tow businesses fulfil their purpose
The learner is required to explain how the organisational structure and strategic planning help the
businesses to achieve their purpose and aims
To achieve P4, the learner is required to research the following information in both organisatons:
? What is the purpose of the organistaion e.g. to create excellent shakes/ to provide good deals to
customers
? Research the company aims, these will be different for private and public organistaions. E.g breakeven, survival, profit, growth, etc
? What is their strategic planning process?
? What are the strategic aims and objectives?
? What are the mission statements and values of the company?
Explain the points of view of different stakeholders seeking to influence the aims and objectives of two
contrasting organisations.
You have to prepare a report that present differnet stakeholders viewpoints that are involved in the
business (Ryan air and Impact College). The report should include
a description of internal and external stakeholder
a brief description of business
viewpoints of internal and external stakeholders
say how their view influence the purpose of the business
Explain the points of view of each stakeholder
an explaination of different points of view of each stakeholder
state the aim of each stakeholder is trying to achieve e.g. to maximise profit, or to minimise carbon
footprint (refer to P4)
Task 9 (D1) Report
Evaluate the influence different stakeholder exert in one organisation
A priority ranking of the stakeholders eg. 1-important, 5 least important
A statement about the importance of each stakeholder and why you believe this to be the case.
P5- Describe the influence of two contrasting economic environments on business activities within a
selected organization.
P6- Describe how political, legal and social factors are impacting upon the business activities of the
selected organisations and their stakeholders
M2 - Compare the challenges to selected business activities within a selected organisation, in two different economic environments
M3 - Analyse how political, legal and social factors have impacted on the two contrasting organisations.
2. Research a range of topics (Political, legal, social) and their impact on business and its stakeholders
3. Say how these factors affect the business operating abroad in a different environment
Evaluate how future changes in economic political, legal and social factors, may impact on the
strategy of a specified organisation.
Using the information you gathered in Task 7, evaluate how future changes in political, legal and social
factors could impact on the strategy of each business you investigated. The evaluation should be presented as a formal document as it will accompany the report you produced in Task 10
Answer:
Task 1: Business description
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Impact College |
Ryanair |
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Business description |
It began the year 2014 in North Manchester with the aim offering quality education courses like BCA, B COM, BCA and masters. It helps Adults to acquire skills and strengthen opportunities for learning. Provides advice, guidance and information on which course and qualification. |
Started the year 1985 in Europe being the largest company with the aim of providing air travel at cheap fares and quick TAT. They have same planes to enable purchase parts in bulk. It is the busiest airline. The company grew rapidly due to deregulation. The airline’s website was launched in 2000. (Marcouse & Lines, 2002, p. 56) |
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Scale and size |
It targets eight urban wards and 33 spoken languages |
More passengers that are international were carried. It targets 384 fleet sizes, 192 destinations within 38 countries in the Middle East, Africa and Europe. It has 11458 employees as at 2016 (Kew & Stredwick , 2008, p. 73). |
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Ownership |
It is a joint business. |
It is a partnership of three people, i.e. Liam Lonergan, Tony Ryan and Christopher Ryan |
Task2: stakeholders
- The owner is one who possesses the entity with the aim of making a profit. The owners of business are asset to the firm. Since they develop and run the business, Ryan air and Impact College should lower cost of production to maximize profits(Dransfield, et al., 2009, p. 81).
- Employees are workers of the company, and they need a job as well as income from the employer.
- Suppliers make products and services available to customers. Ryan air and Impact College need the right supplier of the parts and computer equipment respectively. Suppliers need business to buy regularly and therefore the need to produce quality goods(Fernando, 2012, p. 49).
- Unions ensure there is order in business as well as protect the interests of the employees.
Task 3: organization structure
Ryanair Company provides air travel at low prices while Impact College offers quality education courses. The organization structure (OS) is classified as Matrix OS is a permanent department of specialists created for specific purposes and functions. Decision-making is decentralized and using resources is flexible. However, the Administration is costly, confusion of responsibility and authority and conflicts in decision-making. Hierarchy OS Decision-making involves management control at higher levels within the organization. It ensures efficiency and stability in large organizations. However, there are communication problems between departments, interdepartmental conflict and lack coordination among departments (Asrar-ul-Haq & Kuchinkeb, 2016, p. 93).
While impact college uses Divisional structure involves People from the same locality are organized geographically. Allows quick response to issues and employees acquires management skills. There are reluctance and competition among divisions. Line structure involves a direct and vertical relationship between levels of the organization (Palmer, 2006, p. 111). There are an accountability relationship, responsibilities, and authority; Decision-making is fast. Planning process ignores specialists and lack of specialization
Task 4 functional areas
The operation is carried out under the following departments:
- IT support operation is made easy by use of computers.
- Marketing department involves product promotion to generate sales.
- Human resource deals with recruiting staff.
- Finance auditing, accountability, and planning of company’s finances.
- Operations involve controlling, designing and overseeing production process and legal departments oversee legal issues(Bevan, et al., 2009, p. 67).
Communication includes open where all employees can speak to one another and closed involves communication by one person only. Span of Control it is an effective and efficient management of subordinates. Narrow span where one supervisor is in charge of few subordinates. The possibility of expansion, employees are confident and motivated, however, it is expensive and the possibility of communication issues (Fernando, 2012, p. 213). Wide span where one supervisor is in charge of many subordinates. There is the closeness of staff. Employees are not motivated when a large group is involved.
The purpose of Ryan Air and Impact College is to provide air travel and offer quality education courses. Impact College aims at:
- Offering quality education courses like BCA, B COM, BCA and masters
- It helps Adults to acquire skills and strengthen opportunities for learning
- Provides ICT to learners
- Targets eight urban wards of 33 spoken languages
While Ryan air aims at:
- Becoming the largest air travel at cheap fares
- Booking online
- Reduction in cost
- Increase number of routes
- Carrying more international passengers
- Rapid expansion by creating new airports to Eastern Europe and Central(Bevan, et al., 2009, p. 76).
To achieve its goals, Ryan Air provides service at low cost, improve clients’ appeal customer service, offers incentives to employees, to improve TAT, delays, and congestion, restructuring itself to maximize profits and target large market (Marcouse & Lines, 2002, p. 98). Impact College will offer support to adults in accessing skills, strengthen learning and target a wide community. Ryan air has a mission of getting better always by lowering fare and making it simple while Impact College mission is to improve success and lives through learning and acquiring skills. Values include engagement, professionalism, supportive environment and knowledge application (Coupland-Smith & Mencattelli, 2009, p. 81).
Task 5 Stakeholders and its influence on business
A Stakeholder refers to a person, organization or group who influence or be influenced by the activities of the business. They can be internal stakeholders who are people from within the business and external stakeholders who are people not from within the business (Marcouse & Watson, 2008, p. 132).
- The owner is one who possesses the entity with the aim of making a profit. The owners of business are asset to the firm. Since they develop and run the business, Ryan air and Impact College should lower cost of production to maximize profits(Dransfield, et al., 2009, p. 81).
- Employees are workers of the company, and they need a job as well as income from the employer.
- Suppliers make products and services available to customers. Ryan air and Impact College need the right supplier of the parts and computer equipment respectively. Suppliers need business to buy regularly and therefore the need to produce quality goods(Fernando, 2012, p. 49).
- Unions ensure there is order in business as well as protect the interests of the employees.
- Government imposes rules and regulation by giving out licenses for operation. The government requires companies to comply with rules, pay taxes and financial reports. The community will benefit from tax paid(Worthington & Britton, 2009, p. 77).
- Customer is an organization or individual who buys products from the seller’s organization. They need quality goods and services readily available at a lower price.
Task 6: viewpoints of stakeholders
Customers
They need quality goods and services readily available at a lower price.
Owners
The owners of business are asset to the firm. Since they develop and run the business
Government
Government imposes rules and regulation by giving out licenses for operation. The government requires companies to comply with rules, pay taxes and financial reports.
Task7: influence of economic environment on business
There are two economic environments, which influences the activities of the organization. Economic recession slows economic activity, and economic growth is increased capacity to produce products and services affect TESCO by reducing or increasing their profits. Tesco is a big firm with a hierarchical structure where information passes down from one individual to another (Wetherly & Otter , 2014, p. 98). Features of Tesco includes flexible environment, friendly culture, and decentralizes structure. The following are the environmental factors that influence the activities of business.
Task 8: environmental factors
Political
This means the length at which the government is in power. Government is the decision maker in businesses. Therefore, changes in policies, taxation and regulation affect marketing of goods and services.
Legal
Protects rights of customers in the market and protect customers from fraudulent practices and firms. This makes business to be alert and makes information on products available to consumers.
Social
Different people believe in different religion. In case of a transaction, one may not understand another person’s religion and therefore offending the party. Therefore, respect and understanding of others, encourage a good relationship for the growth of business.
Task 9:The mind map of business environmental forces.
Task 10: how environmental factors impact business
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Political |
Legal |
Social |
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IMF This organization promotes member countries by availing funds. This will help promote international trade, cooperation, employment and stability in exchange rates |
Consumer protection. Protects rights of customers in the market and protect customers from fraudulent practices and firms. This makes business to be alert and makes information on products available to consumers.
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Education This is knowledge given to customers. When customers are more educated about a product and its uses they tend to purchase more of it thus ensuring growth of the business
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Political stability This means the length at which the government is in power. Government is the decision maker in businesses. Therefore, changes in policies, taxation and regulation affect marketing of goods and services. |
EU law All companies in the EU should follow the rules and regulations stipulated. They influence business. In case of regulated service and product purchasing power reduces. This happens with harmful in order to discourage their consumption.
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Religion Different people believe in different religion. In case of a transaction, one may not understand another person’s religion and therefore offending the party. Therefore, respect and understanding of others, encourage a good relationship for the growth of business.
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Taxation This is revenue raised by the government. Increase or reduction in tax affects business. Increased tax reduces customers for a particular product and vice versa. |
Employment law Stipulates how employees should be treated. It enables employees to access information about a firm or product. This will motivate employees and make them work with confidence. When employees are subjected to risks, e.g. strikes, it discourages employees performance
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Ethics The act of doing right or wrong, e.g. professionalism this will influence the way a person behaves in the business.
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Government initiatives Support given to businesses by government e.g. grants, subsidies and tax reduction. The government funds the business to boost its operations. |
Wage regulation Stipulates equal remuneration to workers. This will motivate workers to perform well and therefore the quality of work will be improved
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CSR This provides economic, social and environmental benefits to the society and the organization Discourage excessive regulation and this ensures Profit maximization and Improved relations with the investment community and better access to capital. |
Task 11: how future changes in Environmental factors influence business
Legal Influence
Legal influence there is continued changes in consumer protection, wage regulation, EU law, and employment law. ASDA should be aware of the changes as well as be ready to adjust to them and keep updated. It is forbidden to sell harmful products like tobacco and cigar rate to minors’ failure of which renders fines (Asrar-ul-Haq & Kuchinkeb, 2016, p. 73). Unawareness of this law increases cost and reduce profit. To avoid these costs employees and owners need to familiarize the changes in the law through meetings and training. The increase in wages decrease profits, and therefore employees should improve service for better pay. Reducing workers can also serve the purpose (Jewell, 2000, p. 125).
Political Influence
Political factors include government policies. EU laws led to high competition that affects sales and cost. For ASDA to be competitive, advertisements are done to market products. These increases cost as well as lowering prices to retain customers. To curb competition ASDA requires good customer service and improve products (Delaney & Whittington, 2010, p. 91).
Social Influence
Social involves social structure and society changes. Change in lifestyle, fashion and population have impacts on production and sales increase in population increases demands of products and workers. On the other hand, it also increases the number of the worker available for work. ASDA should consider the population before producing products. According to report over 65people are expected to rise by 23%, due to improved living standards. The death rate among the age of 60’s has declined. This improves demand for goods and services and therefore more profit. Increased population means increased workers, shortage of resources and decrease supply. Introduce department to monitor population and supply (Palmer, 2006, p. 57).
Economic influence
UK economy observes the pattern of booms to slumps. During the boom, businesses improve and drop during the recession. Other changes in ASDA include wage rate, interest rate, and inflation rate. There is economic growth in the UK due to increased inflation. ASDA should purchase items in bulk when inflation is low and sell goods with a huge profit.
ASDA should increase the number of stores, increase product variety and expand the business to win competitive advantage (Dransfield, et al., 2009, p. 121).
Conclusion:
With more changes in external and internal factors, businesses should make plans by considering social, legal and political factors and their influence in business. Considering ASDA, it is a private organization in the UK. It focuses on making a profit. Customers daily need goods and services offered. They aim at generating revenue and making prices that customers can buy (GLEIM, 2013, p. 67). Therefore, a proper PESTLE analysis should provide a platform through which businesses should operate. Mind mapping tool will be used to put efforts on businesses to avoid issues from these factors.
References:
Asrar-ul-Haq, M. & Kuchinkeb, P. K., 2016. Impact of leadership styles on employees’ attitude towards their leader and performance: Empirical evidence from Pakistani banks. Future Business Journal, 2(1), p. 54–64.
Bevan, J., Goymer, J., Richards, C. & Richards, N., 2009. BTEC Level 3 National Business Student Book 2. 2 ed. London: Pearson.
Coupland-Smith & Mencattelli, C., 2009. BTEC Level 3 National Business Teaching Resource Pack. 3 ed. London: Pearson.
Delaney, P. R. & Whittington, R. O., 2010. Wiley CPA Exam Review 2011, Business Environment and Concepts. New Jersey: John Wiley & Sons.
Dransfield, R., Coupland-Smith, H., Goymer, J. R. & Bevan, J., 2009. BTEC Level 3 National Business Student Book 1. 1 ed. London, UK: Pearson.
Fernando, A., 2011. Business Environment. 1 ed. New Delhi: Pearson Education.
Fernando, A. C., 2012. Business Ethics and Corporate Governance. New Delhi: Pearson Education India.
GLEIM, 2013. CPA Review BEC: Business Environment and Concepts. 2 ed. New York: Gleim Publications.
Gleim, I. N., 2016. BEC Business Environment & Concepts. 2016 edition ed. New York: Gleim Publications;.
Jewell, B., 2000. An Integrated Approach to Business Studies. New York: Longman.
Kew, J. & Stredwick , J., 2008. Business Environment: Managing in a Strategic Context. 2 ed. New York: CIPD - Kogan Page.
Marcouse, I. & Lines, D., 2002. Business Case Studies, AS and A Level. 3rd ed. New York: Longman.
Marcouse, S. & Watson, S., 2008. Business Studies for A level. London: Hodder.
Palmer, H., 2006. The Business Environment. 2nd ed. New Jersey: McGraw-Hill.
Wetherly, P. & Otter , D., 2014. The Business Environment: Themes and Issues in a Globalizing World. 3 ed. Chicago: OUP Oxford.
Worthington, I. & Britton, C., 2009. The Business Environment. 6 ed. New Jersey: Financial Times/ Prentice Hall.
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