Business_Environment

TASK 1 (Ac1.1) Identify the purposes of different types of organisation giving examples Proprietorship - Is a business owned and operated by one person, who is generally called the sole proprietor . The main idea of sole proprietorship is that the business is managed and owned by one person . This person can hire an employee to assist in the day to day operations, but the business is still managed by one sole decision maker. This form of business organisation is easy and inexpensive to form and operate, also there are some good benefits that goes with it, such as all the decisions regarding the business is made by one person , decisions such as naming the business , employing someone and deciding what services and products to offer to their customers, also in sole proprietorship there is incentive to earn more. The owner puts his best efforts in the business and reaps the appropriate rewards for his hard work. Secrecy of the affairs of the business are kept within, there is also the benefits of keeping all profits generated by the business. On the other hand there are few down sides as well , as a sole proprietor there can be difficulties in raising capital because there is limited methods of getting additional funds and may have to use their own personal assets because banks are not so keen to give loans ,also you are liable for all kinds of risks attached to the business and have to use personal assets to pay for any debt incurred while owning the business. As a result , the proprietorship may collapse. (Madura, 2007) Partnership - This type of organisation is formed when a business is owned and managed jointly by two or more people. This is usually done by mutual consent and agreement, there are unlimited liability having more than one person investing in the business. Being in partnership have some positive benefits such as other partners may bring new skills and ideas that benefits the growth of the business and also if the business is not being successful any debts incurred are shared. There are different types of partnership and this is determined by the role each member plays in the business, there are active partners these types of partners bring in capitals and share the work load of managing the business, then there are the sleeping partners who brings in capitals , share the profit gains but do not take active interest in the running of the business . In partnership there is bigger financial resources, more credit availability due to unlimited liabilities. On the other hand there can be downsides to this as well, such as partners can be at risk from dishonest co partners , the profits have to be shared , you don’t have full control of the business , a lot of issues may arise and disagreement which can be detrimental for any business and result in the business failing ( Barthwal, 2004) Co-operative - Are based upon and formed by members, they exist to serve the members whether they are the customers, the employees or the local community. The members are the owners with an equal say in what the co-operative does , these are an association of individuals or firms whose purpose is to perform some business functions for its members by acting in a way that give advantages to its members to perform their functions more effectively , than if each individual could if they were acting individually. Some of the functions of the co- operative is buying goods in bulk and distributing them to members , this makes the unit cost lower than it would have been if each member bought the goods in smaller quantity . The three main types of co-operative are Retail, Marketing or Trade and Workers co-operative , although co-operative are found in allot of segments in the economy it’s mostly widespread in agriculture . An example of this, farmers use co-operatives to purchase supplies, to purchase services such as trucking, storage, and to process and market their products. Co-operatives share their profits, this keeps things fair and makes it worthwhile. Every business organisation has its advantages and disadvantages in co-operative some advantages are that it allows for greater input policy dialogues due to their tendency to federate into larger bodies at international and national levels, lower input and distribution costs due to greater economies of scale. Some disadvantages can be possibility of conflict between members, longer decision making process and less incentive to invest (Pride,2009) Public sector - organisation are owned and controlled by the government, their aim is to provide public services of which cause problems for private sectors and so they are often better provided by the public sector. Types of public corporations are , public utilities which provide household services such as water and sewage, electricity and gas. The Bank of England who’s job is to carry out the governments monetary policy, the local authority services who have the responsibility for providing a range of public services such as education and recreation, public such as council housing, social services and the police . There are two main types of public sector organisation in the UK these are , public corporations, the businesses are owned by the public, the Government decides how these businesses are run on the behalf of the public and they are paid through taxes. On the other hand there is the municipal under takings these are run by the local government and are paid for by local taxes such as council tax and these usually provide services in a local area . In public corporation the government own all the shares , some advantages are that they provide services that are not profitable, the government can stop customers from being ripped off and they protect jobs and key industries such as the army, services are not duplicated and recourses are not wasted and any profits made could benefit taxpayers by reducing the level of taxation. On the other hand some disadvantages are , it is difficult to motivate employees in an impersonal organisation such as this , the tax payer has to meet higher tax payments if the corporation makes a loss and the running of the corporation could be politically influenced.(Klenowski,2002) (b) Describe the extent to which an organisation meets the objectives of different stakeholders AC1.2 Stake holders are groups of people who have an interest in a business organisation. They can be seen as internal or external, different stake holders have different objectives and needs , these needs includes the following, and organisations can meet these need by giving information which determine whether they should buy , hold or sell, employees Investors objectives can be met by providing information which allows them to know about the stability and profitability of their employers . Lenders objectives can be met by providing information which enables them to determine whether their loans and interest attaching to them will be paid when due. Suppliers and other trade creditors objectives can be met if they are provided with details which enables them to determine whether amount owing to them will be paid when due .Creditors are likely to be interested in an enterprise over a shorter period than lenders unless they are dependent upon the continuation of the enterprise as a major customer. Customers objectives can be met by, firms understanding and meeting the needs of their customers by providing them information about the continuance of an company especially when they have a long term involvement with or are dependent on the company, otherwise they will fail to make a profit or fail to survive. Customers do not usually make purchases without thinking carefully about their requirements. Wherever there is choice, decisions are involved, and these may be influenced by regular changing motives. The organisation that can understand why customers make decisions such as who buys, what they buy and how they buy will, by catering more closely for customers needs, become potentially more successful. Customers will have different expectations, some customers just want to buy standard products at the lowest possible prices. They will therefore shop from organisations that offer the lowest prices and provide a reasonable range of goods, some shoppers are seeking such aspects as variety and quality. They will therefore choose to buy from an up-market organisation. As well as some customers will have special tastes such as wanting to buy FAIRTRADE products. It is clear therefore that to be successful a business has to have a clear understanding of their target customers and the expectations of such group. Most markets are made up of groups of customers with different sets of expectations about the products and services that they want to buy. Marketing oriented businesses will therefore need to carry out research into customer requirements to make sure that they provide those products and services which best meet customer expectations in the real market.(Greasley,1999) Government and their agencies objectives can be met by satisfying there needs of knowing, allocation of resources and the activities of the company, also by giving information so they can regulate the activities of the enterprise , determine taxation policies for the basis of national income and similar statistics. Organisations can achieve this in many way such as being responsible and paying their taxes, backing governments moves and regulations and doing their part in helping the population , for example Growth and low inflation have always been important. Without growth peoples' standard of living will not increase, and if inflation is too high then the value of money falls opposing any increase in living standards. Nowadays these are definitely the two most important objectives of UK macroeconomic policy. By doing their part to fulfil The goal of full employment , Healthy growth and the environment by recycling waste appropriately .(Dransfield,Needham,2005) (c)M1 Explain the responsibilities of an organisation and strategies employed to meet them AC1.3 Every organisation has a responsibility these responsibilities include matters such as , paying their taxes , responsibility to support the environment ,to follow health and safety, equal opportunity policy and employee legislation. health and safety- organisations responsibilities are management of health and safety at work regulations, these are taking precautions by doing regular risk assessment , organisations responsibilities are to follow the health and safety laws which covers a range of duties, some strategies organisations have used to help them meet up to these responsibilities are : providing protective equipment such as safety boots, safety glasses, have regular risk assessment checks making sure all signs are visible ,fire exits are clear at all times. these procedures help to make sure employees are safe at work ,it is the organisations responsibility to make sure all the policy are in place employees dealing with bulling at work ,moving and handling guidance ,fire safety and emergency procedures . Organisation also have a responsibility to support the environment , social responsibilities , every organisation irrespective of size, has a responsibility to the community and environment in which it does business . Organisations must exist in ethical balance with its surroundings, they can achieve this by putting time , talent and skills back into the environment , in order to achieve this they can , promote the conservation and sustainable use of natural resources and minimise environmental pollution and waste in all their activities, also treat staffs , customers , suppliers and all those in contacts in way of business fairly , equally and without discrimination and also, conduct their business in line with recognised ethical principles , and encourage and support charitable causes. Organisations can create opportunities for employment , operate an open system where as they broad cast information to society by disclosing its activities to the public , in the form of social audits . these should measure , monitor and evaluate the social objectives . organisations also has the responsibility to pay their taxes , this is as well a part of their social responsibility , strategies used to fulfil these are : filing their accounts to the relevant department , and making sure details of their financial affairs are correct and up to date in order to pay their corporation tax on its earnings (profits), regularly and honestly. Reference Aquinas .P.G (2003) Organisation Structure and Design / Application and Challenges, 1st edition, Excel Books, A-45 Naraina Phase 1 New Delhi 110028 Barthwal .R.R (2004) Industrial Economics , New age International, 4835/24, Ansari Road, Newdelhi Dransfield, Needham (2005) Applied Business Double Award for OCR, Hienemann Educational Publishers, Halley court, Jordon Hill, Oxford OX286J Greasley. A (1999), Operations Management in Business, Stanley Thornes Ltd, Delta place 27 Bath Road Cheltenham GL537TH United Kingdom Madura .J (2007) Introduction to Business, 4th edition , Melisa S. Acufia, Canada Pride. W (2010) , Business, 11th TASK 2 GROUP DISCUSSION (a) Explain how economic systems attempt to allocate resources effectively AC2.1 Every economic system should be able to cater for each individual well bieng , such as housing, healthcare poverty prevention(Government benefits). Providing economic security, economic freedom . Command verses exchange- Government should know what their population need . populization affects economic system , by knowing your population by means of statistics and surveys . through level of economic development , thats planning verses market focuses- governments needs to plan for short term , medium term and long term. (b) M1. Assess the impact of fiscal and monetary policy on business organisations and their activities AC2.2 This can impact composition of output it can affect all sectors of the economy when the economy is in recession monitory policy may become ineffective , taxation and work incentives because changes in income tax affect the incentive to work. Fiscal policy usually involves, changes in taxation and spending policies, lower taxes means more disposable income and more cash for businesses to invest in more jobs. Changes in short term interest rates influence long term interest rates lower interst rates are good for businesses because consumers have more disposable income to spend. (c) D1. Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation AC2.3 Bank of England have a responsibility to control the money in society , monitor inflation and make sure the economy is running smooth Competition policy for the bank of England , this is regulated by the government to ensure fare trade- transperancy Government intervention – office of fare trading monitoring and regulating prices to ensure companies do not exploit their monopoly power by charging high prices .