Business Organisations Assignment Help
Assess the impact of fiscal and monetary policy on business organisations and their activities.
Fiscal Policy: It is a policy which the government has adopted to develop the economy of the country by implementing policies of spending as well as taxation. This helps the government of UK to keep the economy steady and to maintain a fair pricing policy and employment opportunities. The spending of the UK government which was around 747 billion pounds is likely to increase at the end of 2016. Billions of pounds are also collected by the government for using the money in various social welfare causes. With the increase in the expenditure of the government, it can be deduced that the daily lives of the common people will also witness a growth. It also provides proper training facilities to the workers so that they can meet the requirements of the people. However, it has been noticed that with an increase in the VAT rate, the sales of the company has reduced due to the high selling price of certain products.
Monetary Policy: It helps to govern the supply of money in the economy due to three operational functions of the Bank of England. These include the national buying and selling procedures, governing the limitations on the credit and changes that are made in the interest rates (Needham, 2014). The interest rates of country’s banks are generally set low so that more and more people can take loans. This would eventually increase the purchasing power of the consumers helping companies like Tesco to increase their sales.
The impacts of the fiscal and monetary policies on business organisations are:
- Employees: With an increase in the spending and flexibilities in the tax rates, companies are able to hire more employees for smooth functioning. Millions of people are employed in companies like Tesco. Since Tesco has to pay less amounts of tax to the government, it can use the surplus money for providing training facilities to the employees so that they can develop their work.
- Demand and Price: The company has witnessed a fall in the sales of its products due to the increase in the VAT rates. With an increase in the VAT rates, the company has been forced to increase the prices of its products which have made the customers o shift towards other companies.
- Investment: When there is a reduction in the tax rates, companies like Tesco can invest the surplus in employee development training and other services for the customers. Lower investment might lead to unemployment (FitzRoy and Papyrakis, 2010).
Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation.
It is the responsibility of the government to lay down certain policies and mechanisms to keep a check on the functioning of various organisations. These policies further help companies to develop a healthy competition among themselves. Policies like Companies Act of the year 2006 and Healthy and Safety Act of 1974 are present to enable this kind of development. The Competition Act 1998 is present to monitor the various kinds of business activities that have their own limitations. It takes care of the pricing of the products and also ensures supply of commodities in the market which have an increasing rate of demand. Other Acts are also present in order to safeguard the workers against exploitation which becomes prevalent during merging of two organisations and acquisitions of smaller companies. The Health and Safety Act aims at providing products to the customers which have not been damaged in any form and contain the list of ingredients on their covers (Gov.UK, 2014). Even there are Acts which prevent the display of any kind of advertisement that is derogatory in its nature.
It is evident from the study that the government of UK has come up with several policies that protect the consumers as well as the employees. Companies are bound to follow ethical ways in order to operate in the society. Rules and regulations are also present for foreign companies who are conducting business here. Reputed companies like Tesco PLC follow the policies that are framed by the government.
The government of UK has put forward a number of policies, monetary and fiscal, which helps in the better functioning of the companies and prevents exploitation of workers and consumers. Companies fall under various categories which help in the smooth functioning of the firms. Some of the sectors are governed by the government while some others are free from government interference. Tesco like many other UK companies follow these government rules and regulations in order to operate without any legal hazards. Moreover, the companies sales and revenue generation depends on the policies of the government.
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GOV.UK., 2014. Competition law compliance: guidance for businesses. [Available online at]: https://www.gov.uk/government/collections/competition-and-consumer-law-compliance-guidance-for-businesses . [Accessed on 5th October, 2016].
Greener, T., 2010. Understanding Organisations: Part I. Bookboon.
Halforn, R., 2013. Tesco’s treatment of its workers shows why we must stop subsidising it. [Available online at]: http://www.newstatesman.com/politics/2013/05/tescos-treatment-its-workers-shows-why-we-must-stop-subsidising-it . [Accessed on 5th September, 2016].
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