Unit 1 Business Environment Assignment – British Airways
|Program||BTEC Higher National Diploma in Business|
|Unit Number and Title||Unit 1 Business Environment – British Airways|
|QFC Level||Level 5|
British Airways is a leading player in airline industry. The organisation operates around 183 destinations in the year 2013. The Unit 1 Business Environment Assignment British Airways implicates the purpose of different organization and their objective for the different stake holders. The current study depicts the responsibilities of different type of organization. The report will throw the light on the allocation of resources through economic system. The study will assess the respond of competition, monetary and fiscal policy on the British Airways. The report describes the pricing and output decision and forces that shape the organizational responses. The study will implicate Different culture shapes the activities of British airways. The report indicates the significance of international trade in UK and impact of European polices in UK business Organization.
1.1 Purpose of different organizations
Every business has the responsibility to fulfil the demand and supply of the customer. Different organizations have different purpose in context of customer. Organizations are classified into two categories public and private organizations. Following are the purpose of different organizations:
- Public Organisation: Public companies are the ones which are owned and governed by the government in UK. This organisation had limited ACNB liability to its owners and managers. Public organisation has share of 51% and rest of 49% is in the hand of share holders (Mowday.et.al.2013). Public organisation has the responsibility to provide dividend on time to the shareholders. The examples of public organisation are national banks hospitals, schools etc.
- Private Organisation: These are the non-government organizations which are in the hand of private partners. The organisation is owned and managed by two or more than two directors. Organisation has to follow different regulations made by the government to operate the business in UK. In private organisation partners have unlimited liability (Beach, 2014). The main objective of private organization is to earn profit by having good knowledge about the needs and expectation of customers. Private organization aims to make optimum utilization of resources to improve efficiency. E.g. of private organisation include retail organisations like Tesco, Sainsbury etc.
- Charity: These are the non-profit organization which works for the welfare of the society. This kind of companies depends on the donations of public and the budget allocated by government. The main aim of this kind of companies is the welfare of the society (Eason and Waterson, 2013).Example of this type of organisation includes NHS.
1.2 Organization meet the objective of Stakeholders
Different stakeholders have different demands towards the organization. Customer, shareholders, managers, suppliers etc are the different stakeholders for the organization. Following are the objective of organization towards stake holders:
- Customers: Customers are most crucial part for the British airways which purchases products and services of the company.The first objective of the British Airwaysis to provide services on time to satisfy the demand of the customer (Mahoney, 2012). The organisation should assure customers to get the right product at the reasonable price.
- Shareholders: These are the people who invest in the organisation to earn profits. The first objective of British Airways is to pay the dividend to the share holders on time by which their trust on the organisation should be maintained (Wellens and Jegers, 2014).
- Suppliers: Raw material is most important part for the organisation which is supplied by the Suppliers. Organisation should assure the supplier for the payment according to the contract.
- Government: British Airways has the objective to fulfil the requirements of the government in context of regulations and laws (Zollo.et.al.2013). Organization should pay the tax on time with proper due amount. Organisation will follow customer protection act by which no customer can be cheated.
- Employees: British Airways assure the employee proper safe working conditions in the organization and assure the employee to provide salary on time by which employee can be retained in the organisation for longer period (Fassin, 2012).
1.3 Responsibilities of organization and strategies to meet them
Organisation has many responsibilities in context of customer, government, shareholders, suppliers etc. British Airways has the responsibility to provide quality product to its customer by which organisation can avoid the consumer dissatisfaction. According to health and safety work act 1974 management should ensure healthy and safe working environment to the employees by which staff members can give their best towards the organizational goals. Management should check the working facilities in the organization and assure the employees to work safely. British Airways assure the equal opportunities to the applicant (Imran.et.al.2014). According to the Equality act 2010 every individual has the right to get equal opportunities in the organisation.
Another responsibility of the management is to provide the goods which are not harmful for the environment. Organisation has the social responsibility that is Corporate Social and the organization should perform activities for the welfare of the society and environment. For example British Airways should adopt the tree plantation concept in the areas where there is less rainfall, develop the gardens, less use of paper in the organization etc. This kind of initiative may create the positive brand image of the organisation in the market.Organisation has the responsibility to pay the dividend to the shareholders on time which maintains the trust on the organization (Biswas and Bhatnagar, 2013). Another duty of the organisation is to pay interest to the lenders that raise the goodwill in the market. Moreover, organization has responsibility towards the health and safety, consumer protection and ethical marketing and offering of goods and services. For example, British airways management is following the ethical rules and regulations for marketing planning and having concern over the health and safety of customers and staff members (Petrou.et.al.2016). This kind of approach is helping organization to meet the satisfaction level of existing customer.
3.1 Market Structure decide the Prices
Market structure helps in determining the prices of the goods and interacts with the companies. The market structure mainly consists of four kinds such as Monopoly, oligopoly, Monopolistic competition and Perfect competition. UK follows the oligopoly trend in the markets which helps the organisation to determine the prices. Oligopoly is a form of market where few sellers in the market (Ellison.et.al.2015). Under Oligopoly organisation is concerned with rivals because of high competition in the market. Following Factors organisation may consider while deciding the price:
- Competitor’s price: British Airways may set the price according to the prices of its rivalry. Organisation has to analyze the pricing strategy of the competitors to compete in the market. For example Rivalry Organisation offers discount on tickets on the occasion of Christmas which made British Airways offer 50% off on the booking of tickets in the same period.
- Raw material pricing: Another factor of deciding the price under oligopoly is pricing of raw material by the suppliers. For example if the prices of petrol increases then prices of products of the airways may also increase.
- Economy: British Airways decide the price according to the trends in the market like if market is facinginflation then prices of the product will be high and in case of deflation the price of the products will decrease (Moraga.et.al.2015). The buying power of the customer is also an important factor while deciding the price of the services.
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3.2 Market forces shape the organizational responses
Different aspect shape the activities of the organization like demand and supply of the product, Business environment etc. Competition in the market may also influence the price of the product. Requirement of the services in the market assists company to decide the price of the products.
- Supply: It means that quantity of goods demanded by the customer and organisation supply as per the quantity (Harper, 2015). For example: if customer wants to book 5 tickets for London the organisationwould book5 tickets for London.
- Demand: The term means the quantity demanded by the buyer in the market and organisation fulfills the demand of the customer by supplying the demanded products. For instance,if customer demands 5 pizzas and organisation delivers 5 pizzas to the customer then the demand in the market for the pizza is fulfilled.
Demand and Supply are crucial factors while deciding the price of the product. Supply and demand both are interrelated if supply is on peak then demand decreases and when demand is on peak then supply decreases. For instance raise in the price of petrol may directly affect the prices of air tickets and decrease in the price of petrol may decrease the price of air tickets (Fitzgerald and Haller, 2014).
3.3 Business and cultural environment shape the behaviour of organization
Business and cultural circumstances has impact on the organizational behaviour. The environment is of two kind economic and non-economic environments. The economic environment includes Different conditions of organization, procedures etc. Non-economic environment contains Rules, Regulation, Policies of government etc. British Airways covers around 183 destinations across the globe. Organisation’s activities depend on the rules and regulations set by the government of the destinations (Scott, 2013). The environment of the every country is different which affect the operations of the organisation. Economic policies of every country are different from each other. For example, policy of UK is different from the policy of India and dependsupon the culture of the country as well. Policies like monetary policy, export import policy, fiscal policy are different of every country which directly affect the behaviour of the organization. In this situation organisation has to work according to the policy of the government.
Demographic environment also impact the behaviour of the organization like density, size, distribution and growth rate of population.These factors may shape the behaviour of the organization. These points might be considered by the companies while entering into the new market with the products. Political environment may also shape the behaviour of the organization like government policies, attitude towards the organization (Ting-Toomey, 2012). This kind of policies affects the decision power of the organization.
4.1 The significance of international trade to UK business organizations
The transaction which takes place beyond the boundaries of the nation that is International trade. The trade involves importing and exporting products. Importing is essential because a nation cannot produce all kind of product and services locally, increasing products variety, utilization of resources, increase consumer’s choice and preferences (García-Pérez.et.al.2105). For UK economic development international trade also plays critical role as the interface of global trends and opportunities helps to implement the new technology and policies that improve the production and efficiency. On the other hand, international trade has another impact is that dependency on other nations, decrease in exports and increase in imports, less employment opportunity etc. International trade assists companies to raise the profits and expand their business at global level and create a strong customer base for the company.
It has been very important for the UK business economy to improve their market during the colonial period. The matter of globalization has produced apparent economic uncertainty and the clear understanding that the UK business economy is at risk to effects that are clearly exterior its empire of influence. For airline organization international trade has significant impact on the technical, legal and environmental activities that need to be considered by the British airways organisation to sustain the position in international market.The blooming economy of UK business economy during colonial rule was because of it is largest market (Van Bergeijk, 2014). UK producing raw material at the low rates and sale it in the form of finished goods with high prices. It is very important for the UK economy because that is maintained its economy forces, powers and improvement in more competitive global economy. This kind of process is more profitable for airline companies to encourage the business through offering the cargo services.
4.2 The impact of global factors on UK business organizations
British airways are affected with various factors that involve in health and social care economic, political and technological factors. Particularly, business wants to admittance to international markets, the capability to obtain and combine with multinational corporations and the costs of trading in different regions and countries. Global business increases the strength of business in UK and allows the companies to do trade outside boundaries of the country. (Benn.et.al.2014).
- The UK economy and International deals and trade: Global factors give the chance to create international trade which is increasing UK business and economy. Most UK organizations are functioning in other regions and countries where easily available raw material and cheapest labour for work.
- Global development: Global factors give chance to improve and increase business in all over world which is very benefit for the UK economy and business. The emerging market like Brazil, India, China and Russia can be the major opportunities for British airways for expanding business (Hamilton and Webster, 2015).
- Market conditions: Advance technology assists economy of UK to perform activities in all the parts of the world because UK has good status in all over market. However the environmental and legal competencies have significant impact on the business planning of British airways.
- World trade organization: All the nations follow the guidelines of world trade organization to perform the international trade.The important function is to make sure that trade run easily, as expected and freely as possible (Busse.et.al.2015).
- Management Impact: Government creates rules and regulations according to the global issues which will be suitable for UK organizations. Common market factors like advertisement and utilization of resources in global market is major issues for Airline Organisationis affecting the business outcome(Lasserre, 2012).
4.3 The impact of policies of the European Union on UK business organizations
Companies of UK have to follow the guidelines designed by the European Union. Nowadays it is rules are similar for all EU countries and it is required that all countries have to follow the European Union’s legislation. If countries of UK or European countries decided to establish new venture in this conditions countries have to take permission from European Union and have to perform all the transactions in Euro. European commission regulations are directly obligatory on all member nations and do not require national legislation to lay them in place. Rules and Strategies have big impact on UK business in the form of policies of European government, other expenses, subsidies etc (Glasson.et.al.2013). All UK companies have licenses for the export and import products and services from other countries and licenses issued by the European Union. National authorities can observe the performance of the business organizations locally.
- Competition Law: The competition law of EU provides fair opportunities to the businesses to perform in United Kingdom
- Fisheries Policy: The fisheries policy is located of rules and regulations for managing European fishing fleets and for preserving fish stocks (Wallace.et.al.2015).
As per the Unit 1 Business Environment Assignment British Airways it can be concluded that British Airways perform responsibilities in the effective way by which all the employees are satisfied. Organisation meets the objective of stakeholders in effective way by which organisation maintains the goodwill in the market. The study depicts that organisation effectively allocate the resources through economic system. The organization follows the oligopoly to decide the price of products. The study indicates the impact of competition policy on the organization. The study indicates the importance of international marketing trade in UK business organization and impact of European Union on British Airways.
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