1.1 Identify four different types of organization in UK

A business will always be owned by someone, it may be an individual a group of

people or a body who owns it. A business can have a number of different types of

ownerships depending on the aims and objectives of its owner. The main aim of the

business is to make profit for its owners. At times profit may not be the main

objective for the owners mainly when it comes to organizations like NGO’s or any

social body which is formed for the benefit of the society; however even these

organizations would need profit in order to survive in the longer run. There are

various types of business organizations in the United Kingdom. The four main types

of business organizations are stated below.

1. Sole Traders

2. Partnership

3. Companies

4. Franchises

Partnership: Any organization involved in partnership can have minimum two and

maximum 20 partners. The UK partnership act of 2002 has made most of the forms

of partnership legal for e.g. big law firms can have more partners so that all the

partners can have flexibility and have limited liability. Partnership firms are mainly

formed so that the partners can share respective skills and also workload to a certain

extent. This makes operations easy and may be easier to raise the capital funds. For

e.g. A firm which is engaged in developing and selling software. One or more

partners can get involve in finding new business in the market in order to expand the

business, while others can get involved in developing the software and others can be

involved in selling the software. Since there is a backup for every partner with the

help of cross functioning the business can survive even if one of the partners is

unavailable due to some reason. The partnership firm usually is set up by having a

deed of partnership amongst all the partners involved in the business. The

partnership deed has important details of the firm such as profit and loss sharing

ratio of each partner. Partnership is a common practise normally in professions such

as accountants, law firms, builders and constructors.

Companies: A company is mainly owned by shareholders who appoint Directors in

order to give direction and guidance to the business. The CEO of the company is the

one who is responsible for making any sorts of decisions. The board of directors will

appoint managers with a particular skill set in order to run the company. A company

itself is a legal body and has its own rights and has its own laws. Shareholders put

funds into the company by buying shares, new shares of a firm are usually sold at a

face value of £1 per share. Limited Liability is a form of business type which protects

the company’s shareholders and some limited partners. For the business owners the

maximum amount that they can lose if the company goes bust is only the amount

that they had invested in the company. Private companies have ltd after their name,

share in a private company can only be bought and sold with the permission of the

Board of Directors. Shareholders in a private limited company have limited liability. A

public limited company such as BT can sell its shares to the public and to any other

organization or institute and have their shares traded on the stock exchange. Public

limited companies mainly offer their shares through IPO’s. The benefit of having a

public limited company is that funds can be raised rapidly in a quick succession. The

disadvantage of a public limited company is that the ownership might be lost if more

shares are sold or taken over bid to the normal public having no other involvement in

the organization. In order to create a public limited company the directors have to

make an application to the Stock Exchange and Council which carefully checks their

accounts. Every company above has to be registered under the companies act and

needs to have an official address.

Identification of the selected organization: British Telecom is widely known as the

first telecommunication company in the world. British telecom was formed; when

Electric Telegraph which was incorporated in 1846 the separation of two of its

departments lead to the formation of British Telecom in 1977. British telecom has

many stakeholders currently who are important to them. BT maintains very good

relationship with all their stake holders and always aims to meet their needs and

requirements. When we talk about BT’s stakeholder they can be their own

employees, suppliers or customers, as BT offers its employees good communication

and feedback and also offers them an opportunity for them to express their views

and opinions on company levels in order to make the changes in the organization,

have smooth operations and also to meet the employee satisfaction criteria.

1.2 Describe the extent to which this organisation meets the objectives of its stakeholders.

British Telecom is widely known as the first telecommunication company in the

world. British telecom was formed; when Electric Telegraph which was incorporated

in 1846 the separation of two of its departments lead to the formation of British

Telecom in 1977. British telecom has many stakeholders currently who are important

to them. BT maintains very good relationship with all their stake holders and always

aims to meet their needs and requirements. When we talk about BT’s stakeholder

they can be their own employees, suppliers or customers, as BT offers its employees

good communication and feedback and also offers them an opportunity for them to

express their views and opinions on company levels in order to make the changes in

the organization, have smooth operations and also to meet the employee satisfaction

criteria. The company’s objectives are to achieve their vision, mission, aims, values

and general operational objectives in order to succeed and keep everyone involved

with the organization happy. BT has a very wide range of customers due to its

diverse operations and it uncompromisingly focuses equally on every customer in

order to satisfy their requirements. This practise on a large scale helps BT to retain

their old customers and attract the new ones. BT in the meanwhile also takes good

care of its suppliers and they have put in place a newly formed system called

supplier relationship management system. This new system has turned into a good

two way communication system with all its suppliers. BT also has to communicate

with the government on local as well as national level in order to provide the best

customer service and have strict system in order to follow the laws, rules and

regulations.

Stakeholders: An individual or an organization having interest in the project or the

entire organization and is ready to invest in terms of money or time is basically

known as a stakeholder. The most common stakeholders are investors, employees,

customers and suppliers. However these days the government bodies and trade

associations have also shown interest to become stakeholders of respective

organizations. When the number of stake holders increase in an organization equal

interest to all the stake holders may not be aligned. The primary goal of a corporate

enterprise is to maximise profits and increase the shareholders’ value.

Stakeholders of BT: BT’s main aim is to care about doing the right things the right

way, the passion of keeping the stakeholders happy runs throughout the

organization. This attitude of the organization keeps the stakeholders happy and

content. The main stakeholders of BT are their customers, employees, their

suppliers and the government. BT Group is mainly divided into four companies BT

retail, BT wholesale, BT global services and open reach. The aim is to be dedicated

to help its customers flourish in the ever changing world; BT aims to be the market

leader in delivering congregated network services. BT claims to be trustworthy and

deliver exactly the same product or service that the claim to provide; they aim to

work as a team in order to create new possibilities, while making things clear and

deliver what they say.

BT has certain long term objectives which are stated below.

Driving broadband based consumer services.

Being “The Brand of Business” for UK business and SME’s.

Ensure that BT is a global leader by 2020.

Being UK’s number one choice and being number one in terms of revenue by

2015.

Being the best network provider in terms of number of customers by 2015.

Being an accountable and supportable business leader.

BT has separate objectives when we talk about revenue.

To improve long term free cash flow, multiply the current cash flow three times

by 2020.

To reduce the current debt every year by 4%

Reduce the pension deficit to zero by 2017 by supporting the pension

scheme.

Pay liberal bonuses to shareholders.

Attempts to meet the objectives of its different stakeholders

Connect the customers anywhere at a reasonable rate: BT can use its

Hotspot technology to connect to gadgets and devises with superfast

broadband. BT also has come up with BT open space which allows their

customers to access internet using their BT accounts anywhere in the United

Kingdom. No competitor has the resources and the facilities to provide these

kinds of services at the moment.

Provide Broadband services anytime: BT uses its hub and the technology to

provide internet broadband services for 24 hours throughout the year. BT

aims to provide hassle free broadband services to its customers.

Influence the network for corporate clients: BT intents to align with other

organizations in order to be a global leader in the market; as BT aims to

Global Service leader. If BT successfully pushes their broadband services to

the corporate level they will dominate the UK market as well as line up to

dominate the European market.

Innovate to lead the market trends: BT has successfully sustained in the

market for the past 150 years. Being an experience campaigner by now BT

has understood the requirement of its customers in terms of technology and

price. BT focuses on innovation and implementation of new technology for its

customers at a moderate price. For example BT has transformed its

infrastructure to support fibre optic connection.

2.1 Understand the nature of the national environment in which the business is operating.

If you have a look at our world history the world capitalism has been closely

associated or linked with other related countries or states, this also included markets

and private enterprises. Capitalism transformed feudalism in western countries like

United Kingdom and started spreading into all the European countries. This mainly

led to political, cultural and economic development. Later on during the 18 th and the

19th century capitalism was transformed into industrialization.

Economic system and identification of at least two economic systems

An organized way in which a state or an organization assigns its resources and

distributes goods and services in the community is called the economic system. The

study of economic system explains how these agencies and institutes are inked to

each other, how the information floats amongst the entire network. There are

different types of economies; different countries use different types of economies.

The types of economies are mentioned below

Free Market Economy

Command Economy and

Mixed Economy

Free Market Economy: This approach is mainly known as capitalism, in free market

economy the demand and supply of all goods and services is determined by the

market values, the government generally doesn’t participate in this activity. However

in such type of economy the prices, supply and demands are partial due to the

governmental regulations.

Command Economy: Command economy is popularly known as controlled

economy. In this type of economy rather than the market force the supply and price

both are controlled by the government. The government decides the type and kind of

goods and services to be produced, in addition to that the quantity and the final

customer is also decided by the government.

Mixed Economy: The economy which is controlled partially by the government and

partially by the market forces is called mixed economy. Medical aid and hospitals are

controlled by the government where there is a social motive; however the industries

are controlled by the market forces. The main aim of the industries to earn profit and

excel; however this industrial sector is also monitored by the government.

Most of the developed or developing countries follow the mixed economy approach;

however China initially followed the Command Economy approach. In the 1990’s the

Chinese government released majority portion of the industrial sector and steadily it

got converted into a Free Market Economy. The consumers had a major role to play

in this kind of economy; the industries managed themselves to allocate the

resources and made an optimum usage of the allotted resources. The government

participated in this trade only to operate through the price mechanism of supply and

demand.

Resources in the context of economic System

Clients and producers take sums as a representation in a free market. When the

manufactured goods value rises as matched to additional product on the patron

behalf; the acquired products should be prorated by the consumer. In other words,

every creation should be treated greatly due to higher cost at which they are bought.

A great income opportunity is increased by the producers when the price of specific

products goes higher. By the government there is low involvement in the market in

the free market economic system which origins waste of market forces. China has

the world’s successful economy. In china distribution of resources is done mostly by

the sequestered sector, the manufacturer sets the price of their goods according to

the request of their product and the Chines government does not impose limitations

on the prices. In China resources are distributed according to the demand. In short,

the Free Market leads to an efficient allocation of resources because prices are

continually changing, representative scarceness and surplus through the actions of

millions of individuals.

Nonetheless, specifically the 18th century became critical in the underpinning of

entrepreneurship concept later the 1st economic school was established in the United

Kingdom. This school has shaped most of the essential contexts through its

assumed arena of conventional dogmatic economy reinforced by the priceless

assistances of Adam Smith, David Ricardo, Jean-Baptiste Say, John Stuart Mill and

others, who methodically investigated numerous ways how goods were produced,

distributed and swapped under the market conditions. Mainly the classical thoughts

have set the basics of the modern awareness of capitalism (J. Smith, 2007). During

the early part of the 19th century, John Keynes had a marvellous inspiration on the

idea of capitalism and the role of underwriting financial policies. The British

economist highlighted on the significant purposes of financial policies within

economic policy. Economic mode particular to the capitalist society could sustain its

indefinite equilibrium even in spite of high unemployment (Keynes, 1930). During the

1930s Keynesian approach to economics expected that noninterventionist

entrepreneurial economics was independent and did not want any interference from

a state to cut down redundancy or boost collective demand.

Economic System

Additionally, Keynes recommended ‘pump-priming’ method to save the economy

from stagnation in the old-fashioned economic down-turn; which complicated

upsurge in government plagiarising and expenditure as well as cutting-down taxes.

In such a way, Keynes put onward his idea of wounding real salaries over the

system of their regulator from the government and discouraging from land money

throughout inflation period. This specifies that Keynes much preferred state guideline

as an actual tool to eradicate financial slowdown. Actually, Keynesian policies

enabled the capitalism retrieval subsequently the state of the downheartedness

(Friedman, 1970). The modern theoretical investigation on the perception of

entrepreneurship is mainly beached on classical economics and the pertinent

approaches established by the Chicago School. The modern awareness of

entrepreneurship consequently favouritisms unbiased administration directive and

organisation of markets with the focus being positioned on property rights’ upkeep;

deregulation of labour markets; elevation of corporate ascendancy by private

landlords; growth of translucent monetary systems with capital market-based

bankrolling in their core.

Milton Friedman, known as a devoted follower of Adam Smith’s philosophy,

appealed that inside the outline of free rivalry, social accountability develops an

essential part of commercial activity. With this, Friedman presented that self-

centredness is able to give advantage to the modern society (Friedman, 1970).The

major distinguishing sceneries of entrepreneurial humanity were penetrating out over

the 20th century while authorities related and likened due construction with the

centrally deliberate economic system. In due respect, entrepreneurship has always

allowed customers with free choice, while manufacturers remained able to content a

customer request. By dissimilarity, in the prearranged economies the making was

completely measured and absorbed by a hierarchically-led public policy. Thus,

capitalism unaccompanied has attained adequate distribution of goods and services

through the transfer of before public-sector means of manufacture and infrastructural

substances. In calculation to this, the idea of entrepreneurship is thoroughly

connected with the abolishment of subventions and free trade where commercial

society is horizontal to accomplish both normal and illogical movements that are

often changeable. Specifically the last 25 years of the preceding century presented

the cumulative trend to overall enlistment of wealth and human resources.

Globalization unaccompanied has unlocked a new street for the expansion of both

industrial and non-capitalist representations. Today, free enterprise is viewed by

many as world scheme contained by all the idiosyncrasies of entrepreneurial trade.

Forecasters state that such awareness of private enterprise dates back to the early

20th century expansionism. Subsequently the same manner, imperialistic policies

highlighted on the elevation of capitalistic philosophies of free trade among

countries.

Taking the aforementioned topographies of the fashionable entrepreneurship into

account, it is remarkable that along with many constructive belongings global

entrepreneurship has caused the state of worldwide dissimilarity in revenue rates,

communal security, admission to strategic possessions, and redeployment of world

capital. In due respect, since the eras of the Industrial Revolution there have been

considerable differences improved by financial growth in such parts as life

expectation, charge to informative profits substantial declaration skills, literacy,

toddler impermanence, child labour etc. By and large, universal entrepreneurial

economy has been histrionically released by the conception and fast request of

infrastructures inside the last 30 years. Information and communication technologies

have allowed farthest occupational transactions in basically any part of the world

(Evans, 1997). Generally, entrepreneurship inspires economic development and

communal characteristic of living restful by GDP. According to Adam Smith, free

marketplace alone assigns essential capitals and panels manufacture and price,

which is specific to the modern world capitalist system.

2.2 Impact of Fiscal and Monitory policy on business and their activity.

The UK pledges to a self-governing, legislative system of governance known as the

Westminster system. The construction of the management safeguards that there is a

satisfactory parting of authorities amongst the managerial division, led by the prime

minister, the two-house parliament and the judiciary, and that there is a arrangement

of payments and balances in place. The current population of the UK is 61.1 million.

The UK was one of the largest macro economy’s in the world. It was seen to be one

of the sturdiest and most steady economies before 2007, however post 2008

economic braking began and the GDP development rate fell to 0.7%. In 2008, the

economy entered into a downturn, with a forecast undesirable growth rate of -4.5%

for the following year. The current conventional management’s main economic aims

are Economic growth with more goods and services produced in the economy,

together with low increase, little idleness with a reasonable circulation of income.

Taxation originates in two forms direct taxation (taxation on income and profits) and

indirect taxation this is taxation on spending (VAT, excise duty). The UK government

devotes in the area of £400bn a year. Over a t1/3rd of this money goes in welfare

assistances such as pensions, unemployment benefit and other forms of income

support. The rest is spent on wellbeing, schooling, defence, roads, law and order

and on supporting businesses and local communities.

The account of financial growth is an increase in Real GDP (gross domestic

product), which is usually calculated annually. Therefore in order to calculate

economic growth, GDP, which is the total value of production in an economy, needs

to be calculated. There are three ways of doing this, the expenditure method, the

income method and the output method. There are small discrepancies between the

values of GDP using each method, and so in the UK the official measurement used

by the government is an average of all three methods. However the government can

measure this differently via the GNP (Gross National Product). The GNP is

calculated by the country's total economic activity, or the wealth of the country. GNP

is usually assessed quarterly or yearly, and is defined as the total value of all goods

and services produced by firms owned by the country concerned. It is measured as

the GDP plus income earned by domestic residents from foreign investments, minus

income earned during the same period by foreign investors in the country's domestic

market. GNP does not allow for inflation or for the overall value of production. It is an

important indicator of an economy's strength. It can be argued that GNP is a better

guide to the welfare of British residents than GDP, but GDP is a better measure of

how well the economy is producing. At the moment of writing the UK’s GDP currently

is $35,400 per capita (PPP).

The last time the UK suffered from a recession was between 1991 and 1992, the

economy actually shrunk, and real GDP fell. This can be linked to other leading

indicators. However, since this time the UK has achieved steady and sustainable

economic growth, which has been one of the highest rates in Western Europe,

allowing the UK to be competitive. This economic growth has probably been aided

by an expansion in the labour market, due to the influx of migrants into the UK. The

government is expected to exceed its target of 2.75% growth this year, and this is

likely to continue for the foreseeable future. It would seem that this can only be

positive for the UK economy, improving individuals’ standards of living and helping to

increase confidence in the economy, increasing investment and therefore increasing

aggregate demand.

Aggregate demand is the total demand for goods and services produced in the

economy over a period of time. Defining Aggregate Demand is aggregate planned

expenditure for goods and services in the economy. It is made up of the expenditure

of four sectors; namely, households (consumer’s expenditure), government sector

(government expenditure) and the overseas sector (export minus imports).

Aggregate demand normally rises as the price level falls. This can be explained in

three main ways:

As the price level falls, the real value of money balances held increases. This

increases the real purchasing power of consumers. A lower price level increases the

real interest rate - there will be pressure on the monetary authorities to cut nominal

interest rates as the price level falls. Lower nominal interest rates should encourage

an increase in consumer demand and planned investment. If the UK price level is

lower than other countries (for a given exchange rate), UK goods and services will

become more competitive. A rise in exports adds to aggregate demand and

therefore boosts national output. For instance there could be an increase in export

demand causing an injection of foreign demand into the domestic economy. The

government may also increase its own expenditure and businesses may raise the

level of planned capital investment spending. If the aggregate supply does not

increase, then the inflation rate will rise, which can cause many problems for the

economy. The UK will need to be careful that this does not happen, as inflation has

been on the increase.

Inflation means a continued increase in the collective or overall price level in an

economy. Inflation means there is an upsurge in the cost of living. It is the Bank of

England’s job to uphold the worth of money by keeping the amount of inflation at a

low level. Inflation in the UK is honestly low, but it used to be much higher. In the

1970s, it be an average of 13% a year and touched a peak of 27% in August 1975.

The Government is likely to cut interest rates. Lower interest rates in philosophy,

would arouse economic movement. This is for the reason that subordinate interest

rates decrease plagiarizing costs. This upsurges the throwaway income of

customers with hypothecation attention expenditures and should inspire spending.

High increase is bad news for the budget as costs and prices keep increasing. And

transporting increase under regulator can be throbbing. Interest rates might have to

go up suggestively, foremost to feebler economic movement with business closures

and job losses. If the redundancy rate was to increase this would mean that people

would not be making as much money and they forcefully have to cut back on

luxuries. The steadiness of expenditures is a record of dealings between one country

and the rest of the world. In the UK it is divided into two foremost books, the current

account and the capital account.

2.3 Evaluate the impact of competition policy and two other regulatory mechanisms on the activities.

Modern administrations particularly large multinational companies set their purposes

not only in economical viewpoint, but also distillate on social, ecological and

customer perspective & etc. (Carpenter, 2010) pointed out that it can be seen many

organizations progressively accept noneconomic aims and methods like tripartite

bottommost is acquisition so much courtesy in the businesses. Triple bottom line is a

standard for gauging administrative success in economical, ecological, and social

features. BT’s purposes too involve triple bottom line. BT has six guiding values and

SMART objectives which help them to achieve its business strategy which focuses of

sustainable development; therefore BT similar to any other multinational companies

in the modern world. Investors are the individuals or groups who have interest and/or

inspiration over the organization and its action. (Marquisette, 2009) points out that

“stakeholders have interests in what the organizations does but may or may not have

the power to effect the group to protect their interest. Investor’s interests are diverse.

However, and their interest may coincide on some issues & not others”. Therefore a

business should have dissimilar objectives in the direction of different stake holders.

Bondholders are one of the most important investors to a company. Shareholder’s

final objective is wealth expansion. BTs official website shows that its Functioning

profit for the year 2011 was $11.1 billion and had earnings of $6.1 billion which

demonstrations that the business has been able to deliver financial returns.

Staffs are another significant internal shareholder and have supported more than

5122 bursars, apprentices, graduates and other trainees. As talent management

methods, BT has instrumented People Development project in 2010 and a new

presentation management system in 2012.

In addition to these stakeholders BT have a duty towards customers, general public,

government and etc. aggressive against global poverty: Fanning the Flames report

points out that “BT conceits the aforementioned not only on its profits and ‘market

thrashing returns’ to stockholders but also on its corporate social responsibility

(CSR) high. To this end, BT has completed abundant of its ‘respectable nationality

commercial values ‘and its participation in numerous charitable CSR schemes”;

however in additional says that “For societies live with the influences of BT’s

activities, such charitable enterprises mean very little.

3.1 UNDERSTAND THE BEHAVIOUR OF ORGANISATIONS IN THEIR MARKET ENVIRONMENT

Price fortitude is one of the greatest vital features in micro-economics. Business

directors are predictable to make faultless conclusion grounded on their information

and decision. Since every financial movement in the marketplace is restrained as per

price, it is significant to know the ideas and philosophies related to evaluating.

The purpose of a marketplace is to allow a conversation of properties and amenities

to take place. A marketplace is that zone which brings purchasers and vendors into

contact with one another. According to Frederic Bentham, “A market is any area over

which buyers and sellers are in such close touch with one another, either directly or

through dealers that the prices obtainable in one part of the market affect the prices

paid in other parts.” Thus it is not essential that a arcade should be in a structure or

at a specific place; it is also not essential that buyers and sellers should be actually

close to each other. The main article of an arcade is that vendors and purchasers

should be able to get in close contact with each other—may be through telephonic

discussion or tele-printer or any such contemporary expedient. What is obligatory is

that that industry with each other (buying and selling) would be well knowledgeable

about prices predominant and other circumstances. Thus, a market is any

association whereby purchasers and vendors of a respectable talent are kept in

close touch with each other. It is exactly in this setting that a market has four basic

mechanisms: 1. consumers, 2. sellers, 3. a commodity, 4. a price.

By classifying markets in terms of their basic physiognomies, it may be possible to

identify a limited number of market constructions that can be used to analyse

executive. Although there are many possible ways of sorting market constructions,

the following physiognomies are regularly employed:

Classification by the area: When area is used as a foundation of market

organization, we classify markets into local marketplaces, provincial markets,

national bazaars and intercontinental markets. It depends on the way in which

the purchasers and vendors are situated in a specific place.

Classification by the nature of transactions: We can classify the market on

the basis of nature of transactions into two broad categories: The spot market

and the future market.

Classification by the volume of business: On the basis of the capacity of

business, the markets are roughly intimate into complete and retail markets.

Classification on the basis of time: Some time the time component is used

to classify the marketplace. The time is confidential as very short period, short

period and long period. Therefore we have very short period markets, short

period markets, and long period markets.

Classification by the status of sellers: On the basis of the status of vendors

the markets are approximately confidential into three categories: Primary,

Secondary and Terminal markets.

According to the law of request the petition curve of a service normally grades

descending. In other words, with the fall in price, amount required rises and vice-

versa. In the theory of firm we deliberate that the source curvature of a product

typically slopes mounting. In other arguments, an industry will offer to sell more

quantity of a good at a developed price than at a inferior one. The equal price at

which petition and source curve cross each other will lastly come to stay in the

market; and at this price amount required generations amount supplied and it is

called symmetry price. Only at the evenness price, needs of both the purchasers and

vendors are content. If values were better or less than the symmetry price the

purchasers and seller’s needs would be unpredictable. If prices were better than the

evenness price, quantity supplied would surpass quantity demanded. It means some

of the vendors will not be able to sell the amount of the goods they desired to supply.

These vendors would try to arrange of the unsold goods by bidding low prices. The

price will go on deteriorating till the amount required contemporaries amount

provided. On the other hand, if values were inferior to the symmetry price, the

quantity required would surpass quantity provided. Some buyers would not be able

to obtain the quantity of the properties they desired to acquisitions at the usual price.

They will consequently bid price up in their effort to get all that they wanted to buy.

The price will go on rising till the amount demanded and number supplied is again

equal.

4.1 Analyse the impact of global factors on UK business organisations

Businesses are pretentious by an exterior environment as much as they are

exaggerated by the contestants. Global factors swaying business are legal, political,

social, technological and economic. Sympathetic factors are important while

emerging a business strategy.

Social factors - These issues are connected to vicissitudes in social structures.

These issues provide visions into performance, discriminations, and lifestyles

decorations of a populace. Buying designs are greatly prejudiced by the changes in

the structure of the populace, and in consumer existences. Age, gender, etc. all

control the procurement designs and sympathetic changes is dangerous for

emerging plans which are in line with the market situations. In a global environment it

is important that business strategies are intended possession in mind the social and

cultural changes that vary from country to country. Customer belief, language,

lifestyle designs are all vital information for fruitful business management.

Legal factors - These features influence business plans are related to changes in

government laws and guidelines. For a effective business procedure it is important

that the business consider the legal issues involved in a particular situation and

should have the capability to forestall ways in which vicissitudes in laws will affect

the way they must perform. Laws keep changing over a period of time. From the

opinion of view of business it is significant that they are conscious of these changes

in the areas of consumer shield legislation, environmental legislation, health & safety

and employment law, etc.

Economic factors - These features involve vicissitudes in the global economy. A

rise in living morals would eventually imply an increase in call for products thereby,

as long as greater chances for businesses to make profits. A cheap observer brings

variations in economic activities. This would imply that in case of a rise in economic

activity the demand of the invention will increase and hence the price wills growth. In

case of reduction in demand the prices will go down. Business strategies should be

developed keeping in mind these fluctuations. Other economic changes that affect

business include changes in the interest rate, wage rates, and the rate of inflation. In

case of low interest rates and increase in demand Businesses will be encouraged to

expand and take risks. Therefore, business strategies should have room for such

fluctuations.

Political factors - This refers to the changes in government and government

policies. Political factors greatly influence the operation of business. This has gained

significant importance off late. For example: companies operating in the European

Union have to adopt directives and regulations created by the EU. The political arena

has a huge influence upon the regulation of businesses, and the spending power of

consumers and other businesses. Business must consider the stability of the political

environment, government’s policy on the economy etc

Technological factors - These factors greatly influence business strategies as they

provide opportunities for businesses to adopt new innovations, and inventions. This

helps the business to reduce costs and develop new products. With the advent of

modern communication technologies, technological factors have gained great

impetus in the business arena. . Huge volumes of information can be securely

shared by means of databases thereby enabling vast cost reductions, and

improvements in service. Organisations need to consider the latest relevant

technological advancements for their business and to stay competitive. Technology

helps business to gain competitive advantage, and is a major driver of globalization.

While designing the business strategies firms must consider if use of technology will

allow the firm to manufacture products and services at a lower cost. Firms can select

new modes of distributions with the help of technology. It has become easier for

companies to communicate with their customer in any part of the world.

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