International Trade and Maliban Biscuits - Sri Lanka

Why countries must engage in international trade?

International trade can be termed as one of the most key foreign exchange attractor’s for an economy. It is understood that sooner or later a country need to expand its operations to a foreign country and reap the benefits.

International trade will lift the domestic standards of a country and thereby, would also lift the living standards of the citizens in a country because of the high level of domestic competitiveness international trade create. (Economy Watch, 2010)

Moving into international markets would lift the local entities as they will be able to utilize the developed technology and infrastructure which they would’ve not benefitted from if they didn’t move into and these improved technologies would also move into origin countries where the business is based. Moreover, there is also a win-win situation a company can move into by way of international trade as there is the possibility of sharing technical know-how as well. (Economy Watch, 2010)

International trade could also increase the sales and profit levels of local businesses which would in turn increase the benefits which leak into local economies.

At the same time there will be closer relations between nations as a result of engaging in international trade. (Paggu, 2009))

Engaging in international trade would also bring down the unemployment levels of a country as there will be newer industries established to cater to the demands of other countries.

Furthermore, international trade would enable a country to produce a product at a lower production cost than another country and gain cost advantages. That is if a country has high quality resources as well as equipment then this country can engage in production with at a lesser cost. This theory is referred to as theory of absolute advantage. (Economics Discussion, 2016)

Moreover, international trade would also ensure production at the lowest opportunity cost and a country could benefit from it even though it cannot produce the product at the lowest possible cost. This is where the opportunity cost between two product types are considered and resources are shifted to the product with the least opportunity cost. This is referred to as theory of comparative advantage. (International Econ, 2015)

The significance of doing international trade for Maliban Biscuits 

Maliban currently maintains its physical presence only within the Sri Lankan market and has identified the importance of expanding its operations to overseas markets. Though as at present Maliban also cater to overseas markets by selling its products to a range of countries across 5 continents. (Maliban Biscuit, 2016)

Engaging in international trade would first and foremost, enhance the profits as well as sales of Maliban.

Furthermore, Maliban currently maintains an extensive product portfolio and there will be larger demand for this product portfolio around the world. Moreover, a global presence would also ensure Maliban obtaining a larger market share in the global market and this would provide the platform for Maliban to compete globally (Economy Watch, 2010). 

Since, the current local market is already flooded with local manufacturers and front runners such as CBL, Maliban can enhance the potential of its business and reduce its dependency in the local market.

By expanding operations into foreign countries Maliban can also utilize the underutilized technologies, management expertise and knowledge as well as benefit from the lesser production costs in developing countries which in turn would enhance the value addition to its current product portfolio and thereby, improve its value proposition to customers (Economy Watch, 2010).

By engaging in foreign trade Maliban can attract a large sum of foreign revenue into the country and would thereby, result in developing the local economy and enhance the living standards and gain tax concessions and tax intervals from the government as Maliban will be considered to be a key revenue generator for the Sri Lankan economy.

Maliban could also utilize the multi-cultural aspects which exist in different economies and thereby cater to different seasonal market fluctuations which exist in different economies and thereby, increase the revenue and profitability of the organization.

Additionally, moving into overseas markets would enable Maliban to embrace ‘globalization’ and adopt global trends and technologies to its operations and thereby, ensure Maliban adopt to latest technologies (Economy Watch, 2010).

Human Resources Development / Human Resource Management - Full Assignment Free

Table of Contents

Introduction

Part 

1.1 Explain Guest’s model of HRM

1.2 Differences between Story’s definition of HRM, Personnel and IR practices

1.3 Implications for line managers and employees of developing a strategic approach

Part 2

2.1 How a model of flexibility might be applied in practice

2.2 Types of flexibility which may be developed by ABC Company

2.3 Use of flexible working practices from employee and employer perspectives

2.4 The impact that changes in the labour market have had on flexible working practice

M1 and M2

D1

Part 3

3.1 Forms of discrimination that can take place in the workplace

3.2 Practical implications of equal opportunities legislations for ABC Company

3.3 Compare the approaches to managing equal opportunities and managing diversity

Part 4

4.1 Compare the different methods of performance management

4.2 Approaches to the practice of managing employee welfare in the ABC Company

4.3 Implications of health and safety legislation on human resource practice

4.4 The impact of work life balance in ABC Company

M3

D2 and D3

Conclusion

References

Introduction

The assignment will focus on discussing the strategic human resource management process in an organisation and how different aspects of the human resource management can impact the organisation and its practices. The assignment will contain four main tasks and sub tasks will be included in each of the tasks. In the first task the use of Guest’s model of HRM in ABC Company, the development of strategic HRM systems and that’s impact of line managers and employees will be discussed. In the second part, the model of flexibility in the ABC Company and how a flexible working environment can be developed in the ABC Company will be discussed. And then in the third part, the forms of discrimination in different organisations and the practical implications of the equal opportunities legislation will be investigated. In the last part, the performance management systems and how the health and safety of the employees are important to the organisation will be presented.

Part 1

1.1 Explain Guest’s model of HRM

The Guest’s model of HRM was introduced in 1987 by David Guest was focused on differentiating between the traditional personnel management and the strategic HRM approach. The Guest’s model describes that the human resource management of the organisation should not be compliance based but should be commitment based. The Guest’s model focuses more on the personal development and singular concentration of the practices for getting the contribution of all the employees for meeting the objectives of the organisation (Raymond¸ 2004).

According to the Guest’s model of HRM, the ABC Company can apply the human resource management practices in different aspects of the organisation. The parts of the management according to the Guest’s model will be,

·         HRM practices

·         HR outcomes

·         Behavioural outcomes

·         Performance outcomes

·         Financial outcomes

The HRM practices of the ABC organisation will include hiring the employees to the organisation to match the demand of the employees. This will be done according to the standards HRM practices of recruitment and selection. And then providing training for the employees will be required. As the ABC Company is working IT sector, the training will be on IT. Then the employees will be compensated according to the results of their appraisals. The HR outcomes of the ABC will be commitment of the employees, quality and flexibility of working. The behavioural outcomes will include motivation among the employees and the cooperation for work. The performance outcomes will be productivity, innovation, quality and higher turnover. The financial outcomes caused by the HRM strategy will be profits and return on investment.

1.2 Differences between Story’s definition of HRM, Personnel and IR practices

The Storey’s idea of HRM describes that the HRM activities of an organisation are strategic and coherent approaches that are taken to manage the people sources in the organisation in both individually and collectively. The objective of the strategy is to get the maximum contribution from the employees for growth of the organisation achieving the objectives. The Hard HRM has been described as managing the people in a way to gain the maximum commitment and achieve a competitive advantage. And the Soft HRM has been described as treating employees as values source for the organisation and getting a quality work outcome from them (Price, 2000).

HRM aspect	Personnel and IR	HRM
Rules	Clear rules devised	Rules are flexible and productivity concerned
Contract	Expressed contract with formal writing that include job description and boundaries	Going beyond the contractual responsibilities and commitment is concerned
Management	Employees are monitored and supervised	Less supervision and nurturing
Management actions	Procedure based	Business need based
Key relations	Labour management approach	Mutual relationships with flexibility
Leadership	Transactional leadership model	Transformational leadership used
Strategic plan	Marginal focused	Centrally focused
Communication	Hierarchical (indirect)	Direct

Figure 1: the differences between the Personnel and IR and the HRM approach of strategic management

Source: author created

With the HRM practices being integrated in the strategic plan of ABC Company, they will be able to increase the willingness of their employees to work towards the organisation and help the organisation to achieve the organisational objectives with higher efficiency.

1.3 Implications for line managers and employees of developing a strategic approach

There will be lots implications for both line managers and the employees when a strategic HRM approach is being developed in the ABC organisation. Out of those, the line managers will be having more responsibilities and added tasks for achieving the strategic development and the employees will need to prepare themselves and adapt to the HRM practices in ABC Company.

The liner managers of ABC will need to take responsibility of planning, resourcing and retaining the employees. They will need to assess the HRM requirement/ demand of the organisation and make arrangements to fill the organisation with skilful employees. And they will need to learn about the motivational theories and practice them in the organisation (Parker, 2010). The managers will also have to be flexible and arrange the HR needs of the organisation. The leadership styles of the managers will be impacted as they will need to adapt the suitable leadership models. And with the changes, the work done by the line managers will be increased.

For the employees, when the HRM practices are strategized, the job security will be increased, the remuneration will be increased and they will receive incentives and bonuses for their performance. Their performance will also be increased and they will be more effective and efficient in their jobs.

Part 2

2.1 How a model of flexibility might be applied in practice

The flexibility in organisations such as ABC Company is important for getting the contribution of the employees. The flexibility of work refers to the flexibleness of working times, working environment and how an employee is working. The common methods of flexible working include flexi hour’s concepts, work from home, and wok from distance locations (Thomson and Mabey, 2011).

These models of flexi working can easily be applied in the ABC Company. As the ABC Company is IT based organisation, when the employees are provided internet connections and computers, they can work from home or from another remote location. One method of developing the work from home concept is allocating a task or work to complete. In that way a manager of a supervisor will allocate a certain amount of work from a project to an employee and the employee will be able to work from home and complete the task. Another method is shift working where an employee can be allowed to work their shift from home using teleconferencing or internet (Beardwell and Gold, 2009).

2.2 Types of flexibility which may be developed by ABC Company

As the ABC Company is providing services to the banks worldwide which are in different time zones, their services will be required 24 hours a day. Therefore the employees will find it hard to come to the workplace in the odd working hours. In those cases, the ABC Company can allow the employees to work from home after providing the necessary equipment (Case study, 2015).

And when the employees have to travel to different locations may be some other countries for work purposes, the ABC Company can allow the employees to work from distance locations using mobile telecommunication, internet based working and using laptop computers to do the tasks they have been given. With that the employees will be able to work from any location and the flexibility will be higher as there are no uniforms and dress codes when working from distance locations. This will increase the convenience of the work and the employees will be satisfied with the ABC Company’s procedures.

Another flexible working method that can be developed in the ABC Company is the flexi hour working. With that application, the employees will not have a strict time to start work and a strict time to report work. They will be given a time period and within that time period they have to complete their shift or finish their tasks. For an example in the ABC Company the employees can be allowed to finish their 8 hours shift somewhere between 6am to 8pm.

2.3 Use of flexible working practices from employee and employer perspectives

From the perspectives of the employees, the employees always look forward for flexible working options when it is impossible for them to report to work or when it is impossible to arrive to the office at the right time. Therefore the benefits of the flexi hours are mostly taken by the employees. The flexible working opportunities increase the quality and human rights towards a working environment where the employees are values and treated as assets for the company. There are employees who are studying while working and those employees can receive part time working or irregular working shifts in the ABC Company (Torrington¸ 2008). This helps the employees to finish their education while getting a professional experience. And the employees who are going to college can receive unpaid holidays when there are exams and college terms. In that way, the employees are benefited and the organisational doesn’t incur costs from that.

From the perspectives of the employer, the flexible working has benefits for the employer. When all the employees have to report to work on time, the administration activity costs are higher and the employer has to bear the space costs for all the employees, but with concepts such as remote working, the administration, supervision and space costs are reduced. And when some employees are working irregular hours, the company can cover 24 hours a day operations without extra effort (Briscoe, 2009).

2.4 The impact that changes in the labour market have had on flexible working practice

The change in the labour markets is inevitable and those changes are required for the development of the workforce in the labour market. And these different types of changes and trends in the labour market have impacted the flexible working in different ways. The development of the technology and ICT systems and the increased number of graduates in the labour market has caused the major changes (Briscoe¸ 2009). One of the most common trends in the new labour market is that the undergraduates are working as interns and trainees while finishing their education. And as a result at the end of their education programme, they become graduates with several years of experience in the field. This is most widely seen in the ICT industry in which the ABC Company works. When there are many undergraduates working, they need to be offered flexi hour working, part time work and remote work. As they are studying, they may not be able work according to the regular working hours and may need unpaid leaves for exams etc. therefore they need to be offered the flexible working from the company. And as the mothers and father who have children are working, they also need time for their children’s activities such as school. For those, the flexi hour working and work from home are options that need to be offered (Elkins¸ 2007).

M1 and M2

The different perspectives and methods of human resource management are important for achieving the different purposes of the organisations. For example there are organisation established on a short term basis for doing projects which involves innovation and a large degree of flexibility and there are organisations which are doing long term processes which need to be done on structured procedures. Therefore the perspectives such as the personnel management are important for hierarchical and long term oriented projects while the flexible HRM is appropriate for innovative processes. The flexibility can be developed through the HRM perspectives. With the HRM approach over the personnel management, the employees are given the opportunities to work on flexible schedules and from different locations such as work sites and from home as applicable since the objective is to finish the projects within the deadlines.

D1

Within the organisation I work, there are different strategies of HRM are used and flexibility options have also been developed. For example in the organisation we have been given the opportunity to report work on flexi hours concept where we need to report to work anytime in between 7am to 8.30am and then finish the shift for 8 hours. This is very important for people who have transport issues and the home responsibilities. The different perspectives of the management have been useful in developing the flexible working strategies.

Part 3

3.1 Forms of discrimination that can take place in the workplace

Discrimination in workplaces or in any other public environments can have different types and forms and the discrimination will be based in different attributes of people (Simon¸ 2007).

Gender based discrimination is a common form of discrimination in the working environments. In that, the females or the males are treated in different manners and some rules are imposed on either male employees or female employees. For an example some organisations have made it mandatory for the female employees to wear make up all the time as a part of their dress code. Another ‘gender discrimination is offering different remuneration packages depending on their gender. For an example a male and a female who have same level of qualifications and skills may receive different packages because of their gender (Simon¸ 2007). And age discrimination is another form of discrimination that can occur in organisations. Some organisations do not like to recruit employees who are older than a certain age limit or younger than a certain age limit. And disability discrimination could occur when the organisation refuse to recruit disabled employees even if they are able to perform the jobs with disabilities.

3.2 Practical implications of equal opportunities legislations for ABC Company

The equal opportunities legislation can bring about both positive and negative implications to the organisations due to the regulations and rules it has provided. According to the equal opportunities legislation, the ABC Company needs to make sure that their strategic Human Resource Management policies and guidelines are created in ways that promote the rights of the disabled people for employment and has no opportunities of discriminations in the organisation. They need to audit the HRM policies and guidelines due to those requirements. This causes extra financial implications for them as they either have to recruit more HR employees for the purpose or have to consult an external agency. Either way it increases the costs of the HRM activities (Simon¸ 2007).

Another implication of the equal opportunities legislation on the recruitment process of the ABC Company is that the ABC Company has to recruit the employees regardless of their physical conditions, nationality, religion, age, or gender if they have required qualifications (Armstrong¸ 2003). And due to the equal opportunities legislation, the organisation should be ready for legal implications because if someone complains that they have not been treated fairly (e.g. in recruitment), they need to keep the documents and explanations why they have taken such steps. Therefore it again increases the administration costs and workload (Torrington, 2008).

3.3 Compare the approaches to managing equal opportunities and managing diversity

It is important to develop the approaches for managing equal opportunities and managing diversity in the organisation for better performance and ethical human resource management practices in the organisation. As a method of protecting diversity and equal opportunities in the recruitment process, the advertisements of the vacancies are published in different media types so that a large audience of employees is captured and a higher diversity can be expected in the pool of candidates. And in the recruitment procedure, the employees from different nationalities, religions, ages and genders are treated fairly and the recruitment decisions are purely based on the qualifications and the skills of the employees. This will help to increase the level of equality in the organisation (Elkins¸ 2007).

And when the employees are promoted to senior positions such as line managers and senior managers, it can be suggested to not discriminate and promote inequality by offering the opportunities for employees depending on their gender. In organisations male employees tend to get more promotion opportunities in the higher management levels, which is a promotion of inequality. Therefore equality should be reinforced using those approaches (Macey¸ 2008). The flexible working and the work home working opportunities can be another approach that can be taken to promote the level of equality among the employees in ABC Company.

Part 4

4.1 Compare the different methods of performance management

The performance management is an activity where the work performance of the employees are monitored, supervised, evaluated and then presented to them in order to identify the gaps of the performance and identify the training needs of the employees. And the performance evaluations are also used to determine the amount of the bonuses and incentives that will be received to an employee in the ABC Company (Gerhart¸ 2007). As the ABC Company is an ICT related working company and has most of its employees working in the ICT sector the talent spotting method will be one of the performance management methods that will be successful for the ABC Company. With the talent spotting technique, the exceptional talents of the employees, the significant contributions from the employees to the organisation are identified and then they are given encouragement and development opportunities (Thomson and Mabey, 2011).

Another performance management system will be the performance evaluations where the performance of an employee is measured by his line manager, the colleagues, a subordinate and a customer of the organisation. And then the feedback is received about the employee performance, those information are used to determine the training needs of the employee and given training. With that the employee will be able to increase his contribution as their skills and knowledge will be increased after the training programme and the performance gap will be reduced.

4.2 Approaches to the practice of managing employee welfare in the ABC Company

One of the most common approaches that are available in organisations and an approach that ABC Computers can take is forming an employee relationship team inside the HR department. The employee relationship management team will be responsible for making contacts with the employee and providing solutions for the welfare requests are complaints raised by the employees which are related to general working environment. For an example the problems in the working environment, high heat, too cold work stations, slow computers, the quality of washrooms are some of the general welfare needs that can be addressed by the HR employee relationship management team. They will help to provide a better working environment for the employees and hear to their complaints about the general work.

Another method of developing the employee welfare for the ABC Company is offering free medical insurance schemes for the employees of the organisation. The ABC Company will need to buy a corporate insurance package for the company and then the employees can be offered free medical insurance for themselves and the immediate family members. There will be an initial cost for this welfare programme and the outcomes of the programme will also be higher as the employees will be highly motivated. And the costs that could occur to the organisation due to an employee being sick, will be covered by the insurance which will be beneficial to the organisation as well.

4.3 Implications of health and safety legislation on human resource practice

As an organisation being operated under the UK government, the health and safety regulation will be applied to the practices of the ABC Company and that will cause a range of implications to the organisation. And the implications will be positive from the employee perspective as well. As an organisation which has more than 15 employees, the ABC Company needs to develop their own risk assessment document for the organisation and it should be displayed at the organisation premise for reference of all the employees including new and old employees (Lepak et al, 2011). The risk assessment is a document which has identified all the risks and hazards that are available in the organisation premise are identified by a health and safety officer and then advices have been given to avoid the danger of the risks. For an example the electricity leakage problems and how to be safe from that, operating the large machines such as the AC and building lifts are hazardous, are mentioned in that risk assessment. This will help to increase the safety of the employee and the organisation (Elkins¸ 2007).

And according to the health and safety act of 1974, the employer is responsible for providing and a safe and healthy environment for the employees to work. If an employee gets in to an accident or an injury while performing his/ her job, the organisation will be responsible for the incident and they can be fined for violation of the rules. This will cause both financial and legal implications (Simon¸ 2007).

4.4 The impact of work life balance in ABC Company

The work life balance has been concept that was valued by many human resource management experts and most of the organisation gave consideration for. Balancing the work and personal life of the employees is important due to many reasons. The employees are doing their jobs to earn their living and spend for their families. When the work life balance is lost, the employees will most of the time be working more hours at the office and they will miss their responsibilities as a family members. For an example is a father is working long hours all day and has not time to spend time with his children, the work life balance is lost. The loss of wok life balance is one of the major reasons for demotivation and frustration of them. And when the work life is not balanced, the employees will fail perform their responsibilities both at their homes and at the office (Torrington¸ 2008).

Due to reasons such as high work load, job security, higher authority and responsibilities will make the employees work more hours at the office. As the work life unbalance causes bad performance, frustration about work, tardiness, and lack of motivation, the work life balance should be promoted at the workplace (Morrow and McElroy, 2003).

M3

The impacts of the equal opportunities have impacted on the organisation and the employees as well. With the equal opportunity strategies, the employees in the organisation have been able to perform and receive reward and recognition as their performance is the only measurement of evaluating them and other attributes such as gender, age and nationalities are not taken in to account. And the people from different backgrounds have been able to get employed in the organisation due to the equal opportunities.

D2 and D3

As an employee from the HRM department, there are different methods of approaches that can be taken to manage the equal opportunities. The employees can be evaluated using the different performance evaluating tools which do not consider other aspects of the employees than their work performance. And when recruiting the employees, the employees from different origins and cultures can be recruited to provide them equal opportunities. And then the people who have physical disabilities and still qualified and able for work in the organisation should not be eliminated due to their disabilities. Those employees will also be treated equally when they apply for the positions in the organisation. Allowing the internal employees to develop their career in the organisation will also be another practice that can be done in the organisation for showing the equal opportunity application. 

Conclusion

The Guest’s model of HRM has been applied to the ABC Company and the difference between the personnel management and HRM was identified. The flexible working, the importance, the concept of the flexible working and how the flexible working can be developed in the ABC Company has been stated. And the perspectives of flexible working from employee and employer vision has been analysed. The discrimination among the employees and among the employer employees has been analysed and different forms of discrimination was identified. The implications of the changing labour market on the flexible working have been identified. The impacts of the equal opportunities legislation were also identified. In the last part, the welfare of the employees and the impact of the health and safety of the employees in ABC Company were discussed.

References

Armstrong, M. (2003), A handbook of human resource management practice,9th ed.         USA: Kogan Page Publishers

Banfield, P (2008), Introduction to Human Resource Management, Oxford: University      Press

Beardwell, I., and Gold, J. (2009), Human Resource Development, Basingstoke:  Palgrave Macmillan

Briscoe, D. R. (2009), international human resource management, London: Routledge

Dale M (2004), Manager's guide to recruitment and selection, 2nd ed, USA: Kogan Page   Publishers

Elkins, T. J. (2007), New HR challenges in the dynamic environment of legal compliance.  In S. Werner (Ed.), London: Routledge

Gerhart, B. (2007). ‘Modeling HRM and Performance Linkages’. In P. Boxall, J.    Purcell,            and P. Wright (eds.), The Oxford Handbook of Human Resource   Management.  Oxford: Oxford Univ. Press.

Gunnigle, P (2006), Human Resource Management in Ireland, 3rd ed, Cork:          Gillmacmilian p109

Kouzes, J. M., and Posner, B. Z. (2002), The Leadership Challenge, Jossey-Bass

Lepak, D., Schuler R. S.m Jackson, S. E and Tarique, I.  (2011), HRM Practice and           scholarships: A North American Perspective, Cheltenham, UK: Elgar Publishing

Macey, W. H., & Schneider, B. (2008),The meaning of employee engagement. Industrial   and Organisational Psychology, 1: 3-30., London Routledge

Mathis, R L., and Jackson, J H. (2005) Human Resource Management, Thomson   South   Western

Morrow, P. C. and McElroy, J. C. (2003), Work commitment conceptual and          methodological developments for the management of human resources‖, Human           Resource Management Review

Parker, J. (2010), Effective Practice Learning in Social Work, 2nd ed. United Kingdom: Learning Matters Ltd

Perry-Smith, J. E. and T. C. Blum (2000), ‘Work-Family Human Resource Bundles and     Perceived Organizational Performance’, Academy of Management Journal

Price, A (2000), Principles of human resource management: an active learning approach.  London, Wiley-Blackwell, p152

Raymond, A. (2004), Fundamentals of human resource management. London: McGraw   Hill

Saton, D., and Network, W. (2000), Workplace Privacy: Real Answers and Practical         Solutions, Toronto: Thompson.

Simon, D. Cambridge University, (2007), the legal framework of employment relations,     Centre for Business Research, University of Cambridge

Tan, C. L. and Nasurdin, A. M. (2010), Human resource management practices and          organizational innovation: An empirical study in Malaysia, Journal of Applied   Business Research

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Torrington, D (2008), Human Resource Management, 7th ed. London: Pearson Education

Business Environment Assignment

Qualification		Unit number - title - level
BTEC Level 5 HND in Business		Unit 1 – Business Environment - Level 4
Student name		Assessor name
		Susan Simei-Cunningham Berlin Asong
Internal Verifier		Alan Jeffery
Date issued	Completion date		Submitted on
Assignment title	Business Environment - Shaping Your Future – A Vocational Scenario

LO	Learning Outcome	AC	In this assessment you will have the opportunity to present evidence that shows you are able to:	Task no.	Evidence (Page no)
LO1	Understand the organisational purposes of businesses.	1.1	Identify the purposes of different types of organisation.	1
		1.2	Describe the extent to which an organisation meets the objectives of different stakeholders.
		1.3	Explain the responsibilities of an organisation and strategies employed to meet them.
LO2	Understand the nature of the national environment in which businesses operate.	2.1	Explain how economic systems attempt to allocate resources effectively.	2
		2.2	Assess the impact of fiscal and monetary policy on business organisations and their activities.
		2.3	Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation.
LO3	Understand the behaviour of organisations in their market environment.	3.1	Explain how market structures determine the pricing and output decisions of businesses.	3
		3.2	Illustrate the way in which market forces shape organisational responses using a range of examples.
		3.3	Judge how the business and cultural environments shape the behaviour of a selected organisation.
LO4	Be able to assess the significance of the global factors that shape national business activities.	4.1	Discuss the significance of international trade to UK business organisations.	4
		4.2	Analyse the impact of global factors on UK business organisations.
		4.3	Evaluate the impact of policies of the European Union on UK business organisations.
Sources of Information 1. Course notes 2. BPP Learning Media (2013) Business Environment, London BPP Learning Media 3. Tutor2u (n.d) Business Studies. Available at http://www.tutor2u.net/blog/index.php/business-studies 4. Times 100 Case Studies (1995-2013) The External Environment. Available at http://businesscasestudies.co.uk/business-theory/externalenvironment.html#axzz2MHgTLH7v (accessed on 1.3.13) 5. Wetherly P, Otter D (2008) The Business Environment, Oxford.  Oxford University Press

Task 1 – Understand the organisational purposes of businesses

This task offers you an opportunity to achieve LO: 1.1, 1.2, 1.3, M1, M3 and D1

Identify the purposes of different types of organisation.  In your answer, identify the type of the organisation outlined in the Shaping Your Future section (1.1)

Guidelines

In your answer, please;

1. Describe an organisation

2. Identify four different types of organisations in the UK and their purposes

3. Identify what type of organisation is the type of organisation outlined in the Shaping Your Future section

Describe the extent to which an organisation meets the objectives of different stakeholders. In your answer, describe the different stakeholders of the organisation outlined in the Shaping Your Future section and how you intend to meet their objectives. (1.2)

Guidelines

In your answer, please;

1. Identify different the stakeholders of the organisation outlined in the Shaping Your Future section

2. Describe how the organisation outlined in the Shaping Your Future section attempts to meet the objectives of its different stakeholders

Explain the responsibilities of the organisation outlined in the Shaping Your Future section and strategies employed to meet them.  (1.3)

Guidelines

In your answer, please;

1. Identify the various responsibilities organisations have to its stakeholders

2. Explain how the organisation outlined in the Shaping Your Future section meets these responsibilities.

Total task word count:     Minimum: 300

                                                Maximum: 450

M1: Effective approach to study and research has been applied. You will have supported your answers to 1.1, 1.2 and 1.3 with facts, and referenced your information sources.

M3:  Present the answer to questions 1.1 – 1.3 in a short report format.  The report will have the appropriate headings and sub heading to achieve merit 3.

D1: Conclusions have been arrived at through synthesis of ideas and have been justified. You will have demonstrated why you arrived at the judgement in answer to 1.2.

NB: When the question refers to an organisation, the learners will need to discuss their organisation as detailed in the Shaping Your Future section above OR the organisation from the designated list held and approved by Student Support

Task 2 – Understand the nature of the national environment in which businesses operate

This task offers you an opportunity to achieve LO: 2.1, 2.2, 2.3 and M2

Identify the economic system of the United Kingdom, and explain how it allocates resources. (2.1)

Guidelines

In your answer, please;

1. Explain what is meant by an economic system and identification of at three economic systems

2. Explain scarcity and resources in the context of economic systems

3. Select two economic systems and state how these economic systems attempt to allocate resources.

Analyse the current fiscal policy of the UK government and current monetary policy of the Bank of England. How do these policies impact the organisation identified in the Shaping Your Future section and ONE other organisation? (2.2)

Guidelines

In your answer, please;

1. Provide a brief background of the UK economy, in terms of size, GDP, GNP, growth etc.

2.  Explain fiscal and monetary policy in the UK

3. Choose at least two organisations to use as examples to support and reinforce your answer

4. Identify and explain how the UK’s fiscal and monetary policies could impact the organisation identified in the Shaping Your Future section and ONE other organisation its activities in the UK.

Outline and evaluate the impact of the UK Competition Act 1998 on UK businesses. Evaluate the impact of two other regulatory mechanisms on the organisation identified in the Shaping Your Future section. (2.3)

Guidelines

In your answer, please;

1. Explain competition policy and how this could impact on the organisation identified in the Shaping Your Future section and its activities.

2. Evaluate competition policy in terms of advantages and disadvantages, negative and positive impact the organisation identified in the Shaping Your Future section.

3. Identify and explain two other regulatory mechanisms within the UK and evaluate these mechanisms in the context of the organisation identified in the Shaping Your Future section. Evaluate the positive and any negative impact on your chosen organisation.

Total task work count:     Minimum: 300

                                                Maximum: 450

M2: Complex information/data has been synthesised and processed. You will have described the UK economy, using up-to-date economic indicators (e.g. GDP, unemployment rate, inflation rate, CPI, RPI, PMI, consumer spending, budget deficit, trade deficit, etc.).

NB: When the question refers to an organisation, the learners will need to discuss their organisation as detailed in the Shaping Your Future section above OR the organisation from the designated list held and approved by Student Support.

Task 3 – Understand the behaviour of organisations in their environment This task offers you an opportunity to achieve LO: 3.1, 3.2, 3.3 and M3 Explain the market structure of the sector of the organisation identified in the Shaping Your Future section. The explanation must describe how the market structure influences the pricing and sales volume of the relevant sector. (3.1) Guidelines In your answer, please; 1. Explain market structures; this should include examples of at least two types of market structure, one of which must be the market structure of the sector of the organisation identified in the Shaping Your Future section; 2. Explain how market structures could determine the pricing and output decisions of the organisation identified in the Shaping Your Future section. Demonstrate the influence (or possible influence) of three market forces and two cultural factors on the behaviour of the organisation identified in the Shaping Your Future section. (3.2 and 3.3) Guidelines In your answer, please; 1. Describe the term market forces 2. Demonstrate the influence of three named market forces on the behaviour of the organisation identified in the Shaping Your Future section 3. Describe culture and explain its impacts on the organisation identified in the Shaping Your Future section.  Include an identification of two components of culture. Total task word count:     Minimum: 300                                                 Maximum: 450 M3: Coherent, logical development of principles/concepts for the intended audience. You will have explained economics concepts and theories in 3.1, 3.2 and 3.3, clearly and coherently. NB: When the question refers to an organisation, the learners will need to discuss their organisation as detailed in the Shaping Your Future section above OR the organisation from the designated list held and approved by Student Support.

Task 4 – Be able to assess the significance of the global factors that shape national business activities. This task offers you an opportunity to achieve LO: 4.1, 4.2, 4.3, D2 and D3 Discuss the importance of trade between the UK and Europe to the UK sector that the organisation identified in the Shaping Your Future section falls within. (4.1) Guidelines In your answer, please; 1. Describe international trade: 2. Discussion of the significance of European trade to UK based organisations operating in the same sector as the organisation identified in the Shaping Your Future section. Your discussion should include the positive as well as negative impact to UK based businesses. Analyse three international factors that could affect organisations in 2015 in the same sector as the organisation identified in the Shaping Your Future section. (4.2) Guidelines In your answer, please; 1. Describe or define globalisation; 2. Identify and analyse drivers to globalisation; 3. Analyse at least three global factors which affect or could affect UK businesses Evaluate the impact of two EU policies on organisations in 2015 in the same sector as the organisation identified in the Shaping Your Future section. (4.3) Guidelines In your answer, please; 1.   Provide a brief description of the European Union; 2.   Identify and describe two European Union policies; 3.   Evaluate how these policies impact on the organisation identified in the Shaping Your Future section. This evaluation can cover positive as well as negative impacts to this organisation. Total task word count:     Minimum: 300                                                 Maximum: 450 D2: Substantial activities, projects or investigations have been planned, managed and organised. You will have provided answers to task 1, 2, 3 and 4, and submitted your work on time. D3: Effective thinking has taken place in unfamiliar contexts. You will have explained in 4.2 how the organisation identified in the Shaping Your Future section has confronted the three international factors. NB: When the question refers to an organisation, the learners will need to discuss their organisation as detailed in the Shaping Your Future section above OR the organisation from the designated list held and approved by Student Support.

Introduction

The organisation that has been selected to conduct the business environment assignment is the MULLAI cab service which will be an organisation that provides transportation services to the customers in the London. The organisation will have different types of vehicles and those vehicles will be providing services to the customers with the help of the driver teams. The assignment will include four parts and the parts will discuss about the business environment of the business in order to create the business strategies and business plans. In the first part, an understanding of the organisational purposes in different aspects will be taken and then in the second part, an understanding of the national environment which the business are operated will be taken. Then the nature of the international markets and behaviour of the markets will be discussed.

Task 1

Business report

From: MULLAI cab service

1.1 Identify the type of the organisation

An organisation has been defined by many people, groups and agencies as a group of people who have gathered for formed together with specific goal to achieve while having specific objectives. This can be profit making business, charity work, or non – profit work. They participants may or may not have benefits from the organisation but everyone will have goals to achieve as a group.

Business organisations can be seen as the most common type of organisation in the country. The ultimate purpose of the business organisations is to make profits by selling a product or a service. These organisations may have other purposes such as increasing market share and doing charity work while the main goals will be profit generation. The MULLAI cab service mentioned in the shaping your future will be one the business organisations (Brewster¸ 2008).

Non – profit organisations normally have the objective of doing community services or providing a support for a specific project. Example for non – profit organisations in UK are NHS, UN and universities. These organisations can be managed by the government or non – governmental (Garth¸ 2001).

Mutual benefit organisations are another type of organisations that has the objective of joining together to achieve something which is one of their common interests. This can be social service, individual benefits or profits. Good examples for mutual benefit organisations are trade unions and different clubs such as golf clubs, vehicle clubs etc.

Commonweal organisations are another organisation type which has the objectives of doing social work for selected group of people or for a community. Their service will most of the times, be free of charge while sometimes a charge will be made. Examples for these are fire brigade and police of country (Robin¸ 2001).

1.2 How MULLAI cabs will intend to meet objectives of the stakeholders

The MULLAI cab service will have both internal and external stakeholder who can impact the business operations and can be affected by the operations of the business.

Customers – will be the most important type of stakeholder as they will be mainly helping to achieve the main objective of profit generation. In order to meet the objectives of the customers, the MULLAI cabs will provide a reliable, efficient and effective service for the customers which will increase their customer satisfaction and meet the objectives.

Employees – after customers, employees will be most important party for achieving the goals of the business. The objectives of the employees working in the MULLAI cab service will be receiving a proper remuneration and compensation, having a friendly and professional working environment and career development opportunities. The employees will be provided industry standard salaries and development opportunities in the organisation to support their objectives from the organisation.

Suppliers – the suppliers of MULLAI cab will be given timely payments, consistent sales and recommendations in order to achieve the objectives of the suppliers who will be supplying goods to the organisation. Coming in to contracts with the suppliers will help to ensure the suppliers that MULLAI cab will be purchasing products from them.  

Management and directors – as employees, the managers will also expect the objectives of the employees and in addition, they will expect proper financial support and guide from the owners. The management will be given sufficient resources and any other requirements for operating the business and for achieving the goals they have been given.

1.3 Responsibilities of MULLAI cab service to its stakeholders and how they are achieved

The main stakeholders of the MULLAI cab service was identified as the customers. The main responsibilities that the organisation has towards the customers are providing safe, secure, reliable and cost effective transportation service to the customers. The MULLAI cab will be meeting these responsibilities by providing the cab transportation service at the lowest price per kilometre possible for the customers. And the MULLAI cab service will make sure that all the customer orders are properly managed and they are provided the service according to the industry standards. And the drivers working for the MULLAI cabs will have valid licenses to ensure the safety and reliability of the service (Brown¸ 2001).

The employees of MULLAI cabs will expect a safe environment and fair compensation for them. In order to meet these responsibilities of the organisation, the MULLAI cabs will provide medical insurance for all the drivers and other employees who will be working in the organisation which will help to support the safety and part of the compensation for the employees. And the vehicles that will be hired or bought for the MULLAI cab service will be ensured to have safety features such as air bags and have insured so that it will increase the safety and assurance. And the employees will be given an industry on par salary so that their expectations are fulfilled (Harvey¸ 2005). The management of the cab service will be provided with SMART objectives to achieve on behalf of the organisation so that they are able to meet the objectives and develop the business.

Task 2

2.1 How the economic systems in UK help to allocate the resources of the business

An economic system in a country is a set of components that are related to production of goods, exchange of goods and services in the country among the producers and the consumers. The main economic systems can be seen as,

1.      Free market – in the free market system the resources are allocated according to the change of supply and demand. Therefore the owners of the business will be people who will allocate their resources in a way to produce the highly demanded products and services (Lipsey¸ 2009). When there is more demand for a certain product, the company owners will produce more of the product and wise versa.

2.      Planned economy system – in the planned unlike the free market, the organisations and companies are owned by the state. Therefore the market will not be opened to the foreign traders and the government will control the demand. Therefore the resource allocation for production will be done on the interest of the government. When there are low resources, the demand will be reduced by increasing the prices by the government and wise versa (Parkin¸ 2002).

3.      Mixed economy – the mixed economy will have characteristics of both planned and free markets in which the companies will be owned both by the government and people. Therefore the resource allocation will depend of the demand and the changes of prices in different industries.

2.2 The fiscal and monetary policies in UK and their impact

Fiscal policy of the country can be identified as the policies which the government has created to control the total spending of the country done by the government with the intention of monitoring and influencing the economy. And the monetary policy is used for influencing the money supply of the country done by the central bank. Both the fiscal and monetary policy will control the economy of the country.

The monetary policy controls the interest rates. When the interest rates are increased, the MULLAI cab service will have to pay more interest for the loans they have taken from banks. This will increase the spending of the company and reduce the profits. The monetary policy will control the inflation of the country which will help the cab service to operate their business without economic problems. This not only impact MULLAI cab service but other big organisations like Tesco will also be impacted in the same manner (Robin¸ 2001).

The fiscal policy will control the money supply of the country by increasing or decreasing the taxes charged by the government when goods or services are purchased. When the government has low supply of money and the economy is going to a recession, the taxes of goods and services will be increased to gain more tax money from the citizens. For MULLAI cabs and for Tesco, these policies will impact to increase the overall product prices and service prices as the taxes are increased. Therefore this will cause to increase the final prices of their products and service which will make it difficult to gain more sales (ONS¸ 2015).

2.3 How the business of MULLAI cab service is impacted by the competition policies and other regulations in the country

The competition policy in UK created by the competition act 1998 has been created to produce a healthy competition among the companies and bring the benefit of it to the customers. If an unhealthy competition is created in the country, it will impact on the fair trade businesses and impact the products and services. Therefore competition policy has prevented creating monopolies and mergers that will lead to monopolies. A monopoly will be a company that has acquired a large percentage of its industry’s market share and hasn’t let any other organisation compete with them. Therefore people will buy the particular product or service only from them and market entry is automatically prohibited for others. Therefore MULLAI cabs will not be allowed to become a monopoly company in the cab service industry. And will not be allowed to get merged with other large competitors (Economics Online¸ 2015).

Another regulation – according to the data protection act in UK, the MULLAI cabs will not be able to save the personal information of the customers and save them on any other purposes. For example, they will take the mobile numbers, emails addresses or addresses from customers when providing a service. However they aren’t allowed to use this information unnecessarily for marketing activities or to sell them to others. According to the fair trade regulations, the cab service will need to display the charges they charge inside the car of vehicle of the cab services and the meters should be fixed to calculate the fare. These fares should be transparent and hidden charges shouldn’t be applied.

Task 3

3.1 The different market structures and their impact on the businesses

The market structures will a combination of factors that are related to interaction between the producers which will control pricing of products. The factors such as number of competitors in the market, the product or service types, entry possibility for new entrant to the industry, size of the customer market will be factors that are part of the market structure.

The unhealthiest type of market structure is the monopoly market. In the monopoly market there will be only one company that has taken over almost all of the market share and all the customers will buy the particular product or service from them. The monopoly company can control the price of the product since they control the market (David¸ 2001).

Oligopoly is a market structure where the pricing controlled by few number of large companies and they have owned the market share together. These oligopolistic companies will be the market leaders and new entrance for the market will not be possible. Oligopolistic market is also unhealthy market since there are few competitors who will control the prices and customers will have to buy from them for whatever the prices they offer. The airline industry in UK is an example for oligopoly market structure.

In the perfect competition market, all the producers will own a certain amount of the market share and none of them will be dominant to control the prices. The price of the goods will be set by industry standards, by the demand and supply of the goods. The cab service market can be seen as a perfect competition market where new entrance is also possible for a new company. Therefore it will help the new companies to grow and customers will be benefited (Harvey¸ 2005).

3.2 How the market forces influence the behaviour of the MULLAI Cab service organisation

The market forces will be factors that impact the prices and growth of the market and will influence the behaviour of customers, companies and the production.

The supply in the market is one of most common forces. Supply refers to the available or on- going production of goods or services in the market. The supply will be a factor that defines the availability of products or services in the market. When there are a large number of cab service vehicles running in the streets of London and there are many organisations that provide transportation services, the supply will increased. Increased supply will influence to reduce the prices as the customers have more options.

Demand is another factor which refers to requirement of goods or services by the customers. If the customers are using a particular product in excess, the demand for that product will be increased. When there are more tourists coming to visit the London city and more customers who want transportation services are there, then the demand for cab service will be increased. Increased demand can cause to increment of the prices as the customers will buy the goods or services from any of the producers even if the prices are high (Entrepreneur.com¸ 2015).

Competition is another market force that impact of the businesses. A higher competition in the market will increase the competitive strategies employed by different companies in order to get the advantage for them. Therefore the prices will be reduced to the lowest amount by different producers to win the competition. When there is a higher competition in the cab service industry, MULLAI cabs will need to reduce the prices and get competitive advantage (Thomas¸ 2012).

3.3 How the cultural factors behaves in MULLAI cabs and impact the business of MULLAI

The culture in an organisation is a unique psychological atmosphere that is created in the organisation with the contribution from the owner, employees and with customers. The culture of the MULLAI cab service organisation will include the expectations, experiences, objectives, values, interactions among the stakeholders, attitudes, origins, beliefs and ideas. All these parts are small parts that have contributed to create the culture in the MULLAI cabs organisation.

The objectives of the employees are a major part of the culture in the organisation. The objectives of the employees provide motivation for the employees to work in the cab service organisation. And the objectives and goals that have been set by the organisation also motivate the employees to work. When there are achievable objectives and goals are given for the employees, it increases their motivation and helps to make the work in organisation more efficient and productive (French¸ 2009).

And the organisational culture will also help to keep the standards of the work and standards of the business conducted by MULLAI cab service. The drivers who working in the organisation will be adapted to the culture where road rules are followed and no ethics are violated while being on the road. These cultural behaviours will support to increase the quality of work conducted in MULLAI (David¸ 2001)

Task 4

4.1 The importance of international trade between UK and Europe to the businesses in UK

An international trade has been described as a contract which exchanges the goods and services between the different countries. The international trade opportunities and the trade contracts such as European Union allows the investors and manufactures in the UK to sell their products in the international markets which will not be necessary without the support of the trade. One of the main advantages that the businesses and people in the UK have received is the ability to buy products and services that were produced in other foreign countries. Therefore the businesses in UK have been able to import products from other countries and sell them inside the country due to the benefits of the trades (Dawes¸ 2005). 

The foreign investment opportunities, participation of the global economy and improved performance of the economy has been brought to UK as benefits of the international trades with the European countries. One of the examples for the trades is the World Trade Organisation which was created in 1995 and has developed the trade activity regulations and trade understandings among the countries. UK as a country has been able to participate and contribute to the global economy as the products manufactured in UK will be sold in the internal markets and the investors in UK have been able to directly invest in foreign investment opportunities (Goyal, 2009).

With the European trade agreements, UK has been able to become a supplier of services to the Europe and other international markets without being limited to the home country. These services include the service delivery sectors such as banking, insurance, and foreign money exchange services as the main services. The large service providers such as HSBC bank in UK provide banking facilities to companies in Europe which helps UK in development of the economy and to receive foreign money which will be beneficial for economic development.

4.2 International factors that can impact the organisations such as the MULLAI cab service

Inflation of the gas prices

The cab services are associated with large costs and most of the costs are incurred by the gas prices. All the vehicles that are running in the organisation require the use of petrol or diesel as the fuel for the vehicle engine. Therefore the inflation in the gas prices will impact the business operation in cab service organisations. The gas prices keep increasing in the global markets as fuel resources are deficient. Therefore the increase of gas prices will cause more costs for cab services.

Increased prices of vehicles trends in travel

Since the vehicles are mainly used for operations of the cab services business and therefore the prices of the vehicles and the taxes charged on the vehicles by the government is another factor that could impact the profit generation of the cab service businesses and also the sales of the services in the cab service industry. The governments in the countries tend to charge more taxes on motor vehicles with the intention to promote electric vehicles and hybrid models which are less harmful for environment (Bank of England¸ 2015).

Trends

The social trends among the people such as to use the public transportation when moving around small distances, use of the public transportation to save the environment pollution and also to promote public transportation as a cheap method of transportation has become the private transportation service such as cab services to be avoided by the customers. And the tourists are also check for public transportation service before they arrive to the country so that they will not need private cabs. These have reduced the demand for cab services (Thomas et al, 2012).

4.3 Impact of the EU policies in cab service organisation

According to the competition policies in the European Union policies, the cab servicing companies will not be able to control the markets by offering the lowest price compared to the other services and to gain a larger percentage of the market share in order to become a monopoly. Therefore the cab services that are running in the country at the present will not be able to develop monopoly characteristics in their business operations.

And the companies will not be able to get merged with other cab service companies if the merger will create a monopoly in the market. Therefore mergers in the market will be restricted by the EU policies (Brewster 2008).

According to the fair trade policies and the fair service policies, the cab services organisations will need to be fair and honest when their charges are displayed to the customers and services are provided to them. The cab fares should be fair from the view of the customers and there should not have any hidden charges and hidden fares charged from the customers (Parkin¸ 2002).

Conclusion

The different types of organisations that are operating in UK were identified and objectives of the different organisations that are available in UK discussed. How the selected organisation will be meeting the expectations of the stakeholders were identified with the expectations of the stakeholders and the responsibilities the organisation has in order to fulfil the requirements of the stakeholders were discussed. The different economic systems and how the economic systems allocate resources in different ways were discussed. The impact of the fiscal policy and the impact of the monetary policy for the selected organisation were discussed. The impact of the competition policies in the country and other regulations and their impact to the cab service was identified and then the market structure of the cab service industries how these different market structures can influence pricing structure of the products were discussed. The internal trading and impact of the international factors to the organisation were discussed.

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