A business environment is an immediate that influences business procedures, such as opponents, the brokers, the customers the business serve, the investors and the economic aspect. The main intention of a business association is to undertake the objectives and goals as detailed by the organisation in the mission statement and to fulfil their clients wishes while generating income. The aim of the business environment is to stimulate the overall organisations activities and withstand a condition, under which staffs can work together in an agreement. As a result, companies would improve the economic situation and meet other requirements from within and outside the institution. The Sainsbury Company operates in the supermarket industry and works under an agreeable condition, which is favourable for the employees and facilitate quality business environment. As the result of this environment, the company was able to increase the returns and establish other branches.
The market surroundings, where the business is situated in, have an impact on the performance of the organisation. The company should analyse the business in regard to an appropriate surrounding, since the performance of the company is positively correlated with the number of customers and the growth of the organisation. A business, which is able to assess the value of general matters that summarises overall business activities, is capable of solving the problems as they occur. The businesses in the global arena undergo the same list of problems as the small local organisation do, but they are manipulated by the political aspects. As the businesses merge, they will be able to share knowledge of how to overcome the problems. As the firms join in partnerships, they are able to evaluate the technological and economic aspects, which would influence their work.
Different Categories of Organisations
There are different categories of business administrations. These categories include business corporation, partnership and sole proprietorship. Corporation is a type of business administration that has many owners and is controlled by investors. It is mostly applied while setting up large businesses, which are complicated and in need of many resources to run their organisation. It is intended as a separate approved unit beneath the system of law. In this category, the ownership is divided into shares of stock, which are issued to individuals of the business. Corporation business administration has advantages as compared to other organisation types, as the shareholders bring their finances, and the process of decision making is shared by the board of directors, who decide on the issuance of stock in order to increase the returns. The aim of corporation is to provide rules and strategies on how to conduct the business so it brings returns, and it is the commonly used type of organization by large firms.
The other type of business administration is known as partnership. This type is controlled by two or more persons, who run the business on discussed terms. It is more complicated and costly than the other categories of business administration in terms of forming. In partnership, the risks and obligations are shared by the individuals depending on the ratio agreed. The example of this type of business organisation is a small shop. The feature of partnership is that it is owned by more than one owner. The owners work together to meet the desires of the customers. The aim of this type of business organisations is to support the persons, who join in investment on ways of carrying out their work. Since this type of business comprise of several investors, the rules are required in order to govern it.
Place New Order
Sole proprietorship is also a type of business administration that is owned by a single individual. The person, who owns this type of business, is referred to as a sole proprietor. This is the most common type of business organisation, because it is easier and cheaper to establish as compared to a corporation and partnership. In this type of business administration, the resources are limited to the single person, who is the owner. In addition, the owner assumes all the risk, the liability and takes over the decision making in the business. This type is common for repair shops and restaurants. The owner gains all the profit, as well as endures losses. He or she also works hard to fulfil the desires of the clients. The objective of this type of business organization is to provide financial stability to the individual, who is operating a sole proprietorship.
Mission, Goals and Objectives of Sainsbury
In this course work the organisation of Sainsbury was selected. It is the successful second largest retail company with many stores in the United Kingdom. At first, this company used partnership category of business organisation, whereby Mr John James Sainsbury and his wife Mary Ann Sainsbury were the owners and run the company. After a period of time, the company got into a combined venture with other financiers and developed into a corporation, which led to their income increase. The mission of the Sainsbury Company is to be the customers first choice for shopping for food. The company also wants to supply products of great quality at a reasonable cost by operating faster and more efficiently. The goal of the Sainsbury is to make the clients live comfortable by providing unlimited satisfaction in the way of selling goods and services at a reasonable price. The strategic objective of the Sainsbury Company is to cooperate with other business and offer healthy food at a fair price.
Stakeholders Concept and their Influence
The concept of stakeholders in administrative matters is defined as the people, who have influence on a company, and the business depends in one way or another on them. Together they generate economic value for the company. The intended participation of unlike people and organisation permits all contributors to enhance their economic well-being and overall conditions. In the case of Sainsbury, stakeholders include immediate investors, who finance the company through shares, customers, who give revenue, employees, governmental institutions, distribution channel members, etc. These categories of stakeholders influence the policies of the company. All of the stakeholders have significant influence on the organisation, as they all participate in the successful running of the company and income generation. As soon as the business realises the importance of every stakeholder category and analyses their needs, the organisation becomes competent in building a long-term relationship with them. Sainsbury holds responsibilities before different stakeholders. For example, employees rely on the management for salaries and wages to provide for their families; shareholders expect return on their investment in the business; suppliers want on time payments and sufficient ordering of their goods. Stakeholders are crucial for any organisation in term of capital, human resource, and environment. So far, Sainsbury has met the objectives of the stakeholders in the timely manner.
Economic system is the situation, in which government and business work together to offer commodities and facilities to consumers. It is a process of allotting rare resources where needed. This system has some impacts in that prices of some commodities may increase, which is a factor that leads to a low demand for the commodities. In the economic system, there are some aspects that affect the work of the government and the organisation in order to offer the required outcomes. When the government expenditures and taxes influence the economy, it is known as fiscal rule. This rule influences the economy of the United Kingdom in terms of demand and supply of the commodities. Taxation affects the economy by redeployment of cash from consumers and manufacturers to the governments funds. In this process, the greater the tax, the fewer people have disposable income and thus the lower aggregate demand is in the economy. In terms of inflation in the United Kingdom, it is a local aspect that affects the economy. In the recent years, the inflation has decreased due to the successful economic state and the rapid growth in aggregate demand. This global factor has led many countries to experience the factor of lowering inflation. Some of the factors that have led to the decrease of inflation are greater output, advanced technology, and employed practice help in reducing the cost.
The factor of labour power in the economy influences the economic advancement of the United Kingdom. It is influenced by the availability of skilled human resources. Immigration in the labour market has an effect on the economy, since there might be many unemployed people, which is a factor that affects the countrys overall standards. In addition, when the country is affected economically, the people suffer since they have to work hard for a smaller amount of income. Moreover, in times of economic instability there might be downsizing, which in turn leads to unemployment. Business behaviour is in the instant change. When the budget sinks faster in an economy of a country, there is influence on the economic development since the prices of commodities increase and the income remains constant.
The competition rule is a free body recognized as the controls and unions commission. The functions of this rule are to describe approvals made by the directors and trail petitions exclusions under the act. The conclusion rule prohibits destructive competitiveness in a marketplace and the misuse of leading position. The purpose of the competition rule is to stimulate initiatives, invention and competence. This system also allows clients to buy commodities and services as they want. In the United Kingdom, the competitive rule is influenced by the European basics on the running procedure of the company. The rules have several responsibilities and planned mechanisms, which assist in the working process. The rule forbids any kid of agreement that limits fair competition between different bodies. The rule also excludes the offensive performance of an organisation in relation to the rivals. In addition, the competitive rule controls the unions and attainment of big companies, which are deemed to intimidate the competitive process. These mechanisms assist the small businesses in their operation and development in order to uplift them to a higher level like the developed companies.
A market is an assembly of buyers and traders of particular products at a certain region. There are diverse categories of markets. These markets include competitive market, monopoly, monopolistic competition, oligopoly, monopsony and perfect competition market. Competitive market is a market with several buyers and sellers. This type of market represents a small effect on the price of commodities. This type of market affects the organisation behaviour as they invest in competition, and the customer benefits from the variety of goods produced.
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Perfect competition market is a type of market organisation categorized by many buyers and traders. In this market, there are unlimited buyers and traders. This type of market has effects on behaviour of organisations as a result of stiff competition in the market. The higher the number of traders, the less expensive the commodities are, a factor that leads to decrease on the prices on commodities. Thus, consumers are benefiting, while suppliers have little power over the prices.
The monopoly types of market are exact opposite form of a market system as perfect competition. In this type of market, there is only one producer of a particular commodity or service, but several traders who sell the commodities. In the monopoly system, the traders are capable of changing the prices into whatever they want although the general revenue will be restricted by the capacity of customers to pay the prices. In this type, the producers can decide to increase the prices of the commodities without sufficient reason, since he is the only supplier. This could affect the sellers, which results into their inability to sell products at a higher rate.
In the oligopoly type of market, there are many manufactures of a commodity, a factor that differentiates it from monopoly. It has many manufactures in order to create a leading common company of production in the market. In addition, this type of market does not have similar pricing powers as a monopolist, because it conspires with the other players in setting the prices. The effect of this type of company on the organisation behaviour is that some companies may decide to sell the commodities at higher prices, which affects the customers.
Monopolistic competition is a category of a market system combining elements of a monopoly and perfect competition. The features of monopolistic competition are having many producers and the market can set a fixed selling price. There are many opponents in the market, but each opponent is adequately separated from those that are more competitive. In this type of market, the organisational behaviour is affected by the different types of prices the companies set. The different prices factors may affect the customers.
Monopsony type of market is distinguished by the number of suppliers and buyers, whereby there is one buyer and many sellers in the market. This type of market presents gains for the customers, since the sellers are many, which leads to bargaining power for the consumer. As a result, producers can sell at a minimal price in order to attract customers.
Market Forces of Supply and Demand
In the business surroundings, there are powers that affect the supply and demand of the commodities. The demand refers to the total number of goods that the consumers need. The law of demand claims that the increase in the capacity of commodities demanded reduces, as the price for commodities increases. There are two types of demand. The first one is market demand, which is the amount of the capacity demanded by all the purchasers at a certain price. The second one is individual demand, which refers to the total goods required by the clients at a certain period. Supply is the capacity that the sellers are ready and capable to sell. The rule of supply shows that, the amount of supplied commodities increases, when the prices of commodities increase (Mitchell 2003). In the powers of demand and supply, the demand arc and the supply arc intersects at a certain point, named equilibrium, whereby the demand rises when the prices are low, and the supply is high when the prices are high.
Elasticity of Demand, Economies of Scale and Output
Elasticity of demand is the key amendment in the worth of demand as a result of alteration in price. The trade increases with the reduction in prices, since the prices of commodities differs with the production prices. The economics of the scale is a modest concept that can be recognized when the cost increases (Mitchell 2009). It is provided with fixed investment, which is lowered per unit of manufacture. Output is the capacity created as per a given stage and the capacity of cash cast-off in the manufacturing. If the output receives more returns, it is a positive one; whilst there are some inputs on the product, it is negative (Cetro 2006). The elasticity of demand varies with the change in price: when the demand is high, the prices are low.
Global Factors Shaping National Activities
Businesses are affected by an exterior surrounding in the world. Some of these factors that affect business are economic, legal, social, political and technological forces. Common factors offer visions into the conduct and existence. In the global environment, it is important that business have their policies planned according to the ethnic peculiarities that differ from one region to another. Economic aspect includes variations in the global marketplace, as the rise in the income level would finally suggest an increase in demand for commodities (Freeman 1999). In case of little benefits rates and rise in demand, businesses develop and support national economy.
The implication of permitted issues on the general business activities affects the organisations in different countries. For a business to prosper in the operation, it is vital to consider the permission issues carried out in a specific situation. Law observance varies depending on a stage of time; hence it is vital to be attentive to what the law entails, particularly for the local organisations that decide to go global. Legal regulations are important for Sainsbury, as far as it imports many of the retail goods. When the organisation obeys the law, there are no possibility of breaking the rules and facing legal suits.
In terms of technological aspect, the businesses are affected by the development and improvement of new inventions. This process stimulates the business to reduce charges and develop new commodities. For example, logistics is greatly improved in the retail business after introduction of RFID system of inventory management. Organisations have to contemplate the modern relevant technological development for the business to be economical (Freeman 1999). The aspect of technological development assists the organisations in the acquisition of competitive benefits and is a main motivator of globalisation. The structure of technology has formulated businesses easier in ways of transmission with other partners in the world through telecommunication development, Internet financial services, etc.
Political environment is the other aspect that has influences the global affairs of the business. The variation in the government strategies and governmental actions manipulate the development of the business (Wallop 2007). This aspect has a big effect on the administration of the business; hence every company should reflect on the steadiness of the political surroundings and government policy in the economy. Moreover, companies should not only concentrate on the political situation in the country of operations, but also in the world. Sainsbury operates in the United Kingdom, but it is also dependent on the foreign suppliers. In case a political situation in one of the supplier countries is not stable, Sainsbury would experience the effects in terms of failed logistics and distribution. Thus, the UK economy depends on the global stability.
The responsibility of the European rule on businesses influences how the organisations conduct their activities. The administration of Europe performs a big part in terms of assessment and expenditure by offering guidance and maintenance to the businesses. The following is some of the ways that the administration aids companies. In employment rule, the administration motivates employment by inspiring business competence. For the unemployed, the management has made a website to assist them in acquiring work. In regard to the regional rule, the European policy has prepared the resources to help the areas with the high level of unemployed (Wallop 2007). This is established to reward for the evidences with the expansion of the partial states in the country.
The European rule has also recognized education and learning, whereby the administration is motivating the people to obtain skills. Taxation rule is the other aspect that the European Union reflects in aiding the citizens in running their business. The administration is developing the duties for the business in schemes that would help in the enhancement of businesses activities. Inflation is another aspect that the European rule is using to aid the business. The administration is making sure that there is no abrupt overall upsurge in prices (Cetro 2001). The administration carries this out by the practice of economic rule committee, which arrays the benefits rate. These benefit rates are positioned if there is a risk of people deriving and using ample, therefore the prices of commodities are hiking (Cetro 2006). In addition, the European Union uses the international rule to stimulate employment and inspire sales of commodities overseas. The administration also controls the import of the commodities the country is producing. These aspects aid the businesses in working and expansion of many organisations, which leads to the growth of the countrys economy, and thus prosperity of the European Union. When the organisations are many, the duties accumulated are massive, which supports each company in growth and the accomplishment of projects. Sainsbury is one of the companies that have developed with the aid of business rules (Jardine 1999). As a result of the expansion of schemes in the country, it has managed to establish several branches. This expansion has been a factor that has led to revenue growth and the return on investment.
In conclusion, every business is formed under a certain category of the business organization depending on the number of people involved, major goal and available resources. The location of the business has some impact on its operations, since it determines the prices, delivery, transportation, sales volume of the commodities. The government rules influence the running of the organisation in terms of the taxation and inflation control. The government should assist the business by reducing the taxation rate and utilising the taxes in projects that are helpful in the commerce development. Every business is working in a different type of market according to the processes it conducts and the competition it faces. In the business administration, there are forces influencing the demand and the supply of commodities, where the price determines the quantity demanded. At the same time, rules apply to the supply as well: the higher the prices, the high the prices of the commodities (Jardine, 1999). Every organisation should understand this economic force in order to run the business effectively. Lastly, no company operates in vacuum, as there are numerous external forces that shape the environment. Understanding of these forces is crucial, as it helps to modify the strategy accordingly to the current situation.