Assignment 1

Prague College

Business Environment and Organization’s Mission

Statement

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Table of contents

1.0 Introduction

2.0 Main body

2.1 Identify the mission, values and key objectives of an organization and assess the

influence of stakeholders

2.2 Evaluate the extent to which an organisation achieves the objectives of three

stakeholders

2.3 Explain the responsibilities of an organisation and strategies employees to meet them

2.4 Explain how economic system attempt to allocate and make effective use of resources

2.5 Discuss the impact of social welfare and industrial policy initiatives on organizations

and the wider community

2.6 Evaluate the impact of macroeconomic policy measures and the influence of the

global economy on the UK-based organizations and stakeholders

3.0 Conclusion

4.0 References

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Introduction

In this assignment I will identify and discuss the ‘mission and goal’ of organization. I will show

the key objectives of organization and the responsibilities of organizations. I will also show the

example of organization’s responsibility. Also I will add the analysis of the three components of

business environment. This will include the analysis of Economic, Global and Social

environment. In the end I will make conclusions about the organizations’ tasks, goals and

responsibilities and about the role of the environment of organizations.

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Main Body

Identify the mission, values and key objectives of an organization and assess

the influence of stakeholders.

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010)

mission ‘describes the organization’s basic function in society, in terms of the products and

services it produces for its clients’. The mission of any organisation is the specific role, which

the organisation is planning to fulfill within society over the long term. This mission of

organization doesn’t allow the organisation to work in the areas outside its started mission. So

we can say that the mission of the organisation is a set of principles the organisation should

follow. But it can also influence the planning process. All the plans of the organisation should

follow the mission statement of the organisation. So we can say that the mission statement of the

organisation is the set of rules that organisation should follow in order to be successful, but there

are some problems connected with the mission. The first and the main problem is that mission is

sometimes stated only on the paper, when in real life no one is following it. The second big

problem is that mission can be made by the organisation in order to rationalize the relationships

with the certain audience (e.g. government, investors, stakeholders). Another problem I should

point out is the turning of wishes into the mission (e.g. the mission of the company is to become

the major and the biggest company on the market with the best quality product in one year).

The values of the company are the common beliefs of the all employees about how the company

should work and what mission it has. The values identify the culture and structure of the

company. Also it can give the opportunity to the owner of focusing his thoughts on the strategy

of the company, instead of controlling the employees, because when people are sharing beliefs

the owner will know how they are working so that he /she can predict their actions. According to

BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) the values provide

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you with the set of principles ‘that govern the overall conduct of the organization’s operations,

code of behavior, the management of people and its dealings with the other organisations. The

problem you can meet that is connected with the values of the company is that the values give

you the opportunity to reduce the control, but if someone will not share the values of your

company it can cause real problems.


Objectives of the organization ‘set out more specifically the goals of the organisation, the aims to

be achieved and the desired end result’. The objectives of the organisation can be divided with

two characteristics: the first is the importance of the objective and the second is what the

objective is related to. According to the importance the objectives can be divided into primary

and secondary objectives, and according to the relativity the objectives can be corporate and unit.

Let’s look at all the objectives separately: The primary objectives are the objectives that are used

to be the main goal for the whole organisation. The secondary objectives are made to bring the

company to the point of reaching the primary objectives. Usually the three primary objectives

that the organisation always has are: to continue in existence – survive; to maintain growth and

development; to make profit. These are key objectives of any organisation that are relatively

connected with each other. The corporate objectives are the objectives that are connected to be

related to the whole organisation. According to BPP Learning Media Ltd ’Business Essential:

Business Environment’ (2010) the corporate objectives are:

Profitability

Market share

Growth

Cash-flow

Return on capital employed

Sales

Customer satisfaction

Quality

Industrial relations

Added value

Earnings per share

Risk

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Brand loyalty

The unit objectives are the objectives that are connected to the certain department of the

organization. There are: commercial (e.g. increase the number of customers); public sector (e.g.

respond more quickly on calls) and general (e.g. employee development, technology) unit

objectives. The problems you can have with the objectives are that the unreachable objectives

can be set up.


Stakeholders are ‘individuals or groups who have an interest in how the enterprise performs

because it affects them in some way’. Traditionally the most important group of stakeholders are

shareholders. According to BPP Learning Media Ltd ’Business Essential: Business

Environment’ (2010) the list of stakeholder groups looks like it is shown below:

Stakeholder groups

Shareholders

Lenders

Intermediate (business) customers

Final (consumer) customers

Suppliers

Employees

Past employees

Retires

Competitors

Neighbors

The immediate community

The national society

Corporate management

The chief executive

The board of directors

Government and local government

Special interest groups

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Every organization has three types of stakeholder groups in organization. They are:

Internal stakeholders (employees, management)

Connected stakeholders (shareholders, customers, suppliers, financiers)

External stakeholders (the community, government, pressure groups)

The internal stakeholders are the stakeholder groups that are mostly connected with the

organization. The organization is a place where managers and employees spend a great part of

their lives. They are mostly interested in the continued existence of the company. Many writers

have stated that employees are the most important of all of the factors of production. These

stakeholders have their own individual interests and goals. According to BPP Learning Media

Ltd ’Business Essential: Business Environment’ (2010) these factors are:

Security of income

Increase in income

A safe and comfortable working environment

A sense of community

Interesting work

Skills and career development

A sense of doing something worthwhile

Another type of stakeholder groups is connected stakeholders. They are: shareholders/owners,

bankers (or lenders), customers and suppliers. These groups have different goals and type of

influence on the company so let’s speak about every group separately.

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Shareholders/owners. The main interest of this group is to get the return on their investments.

Some shareholders are concerned with the corporation’s ethical performance. Nowadays

shareholders are being asked to be more involved in company’s affairs.

Bankers (lenders). This group of stakeholders is interested in the overall condition of the

company in order to be secured that they will get the interest for every loan they give to this

company. Banks can give money under different conditions and according to what it is the loan

or a mortgage the banks are looking at the organizations’ condition from different points. For

example for mortgages the bank is looking at the property the company has because the

mortgages are secured by the real property, but when the bank is going to give a loan to the

company they are more likely to look at the income of the company.

Customers. This stakeholder group wants services and products. A big group of customers can

have a great effect on the products produced, prices of these products, the quality of the products

and if the development is needed. The customers can affect the companies with the help of

feedbacks, complains, suggestions, filling out questionnaires and actually choosing to byu this

product or not.

Suppliers. This group of stake holders has a small amount of interests but the great impact on the

workability of the company. If the company loses suppliers they will not be able to produce the

product because they will not have components or materials. The wants of suppliers are simple:

to be paid in time and to have the cooperation with this company in the future.

The last part of stakeholder groups is external stakeholders. According to BPP Learning Media

Ltd ’Business Essential: Business Environment’ (2010) ‘external stakeholder groups – the

government, local authorities, pressure groups, the community at large, professional bodies – are

likely to have quite diverse objectives and have a varying ability to ensure that the company

meets them’.

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Government. The government of the state can have a great influence on business through

creating new laws and regulations. According to BPP Learning Media Ltd ’Business Essential:

Business Environment’ (2010) its main laws include:

Passing laws to protect workers and customers

Collecting taxes

Supporting business in socially or economically deprived areas

Subsiding activities

Aiding exporters

Local authorities. This group of stakeholders is interested if the company can bring local

employment or cause damage to the local environment.

Professional bodies. They are interested if the company and its members comply with

professional ethics and standards.

Pressure groups. Every pressure group has its own interest and its own opportunity to influence

the company.

Now as we can see the stakeholders have a great influence on the organization and their wants

should be taken into the consideration of the company.

Evaluate the extent to which an organisation achieves the objectives of three

stakeholders.

We would like to speak about customers, employees and government. I decided to speak about

these groups because these are the most important groups of stakeholders. They have the biggest

influence on the organization. Let’s take a look at the needs of these groups.

Employees. Employees have to be educated and be insured that they will get their salaries and

that they will not lose their workplace without reasons. Also employees have to have the

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opportunity of improving their skills and the opportunity of career growth. The needs of

employees are shown in the Maslow’s hierarchy of needs. For motivated employee it is enough

to reach the safety and security needs for every employee.

Fig. 1

The education of employees can be reached with the help of organizing trainings for staff or

sending them to the courses in order to improve their qualification. The motivation can be

reached with the help of providing good working environment and good attitude to the

employees.

Customers. This group of stakeholders has a great influence through the creating the demand on

your product. According to their wants and needs you set up the price of the product, its quality

and the development of the product. The wants of this stakeholder group are to have a good

product that suits their needs and wants. This can be easily reached by producing the good

quality product and respect their wants. The definition of what the customers want can be

gathered with the help of questionnaires and respecting the complains from the customers.

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Government. Government is also a very important stakeholder group. They can directly

influence the work of the company and the costs it has by providing new laws and regulations.

Also this is the group that can stop the work of the company. The interest of this group is that the

organisation should respect all the legal regulations. It is easily reachable goal and this is a

required part of the existence of the organisation.

Explain the responsibilities of an organisation and strategies employees to

meet them.

Every organization has certain responsibilities. These responsibilities are different and related to

different organisations. Also they can be caused by the responsibility in front of the society.

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) there

are five types of responsibilities of organization. They are:

Social responsibility

Environment responsibility

Management responsibility

Social responsibility

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) social

responsibility of an organisation may be defined as the obligations that the organization has

towards the people and the environment in which the organization operates. Social responsibility

is expected from all types of the organisations. Even organizations like governmental schools

and hospitals exist because health care and education are seen to be desirable social objectives by

government at large. There are some examples of social responsibility by different types of

organisations.

Local government is expected to provide or improve the services for the local

community, but at the acceptable cost to the council tax and business rate payers.

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Universities and schools are expected to produce students whose abilities and

qualifications will prove beneficial to society.

Pollution control is a particular example of social responsibility by the industrial

company.

Environmental responsibility

Environmental responsibilities of the company are defined by several issues. First is the legal

regulations and legislation; second are ecological issues; third are green concerns and forth are

the aspects that relevant to business.

Legal regulations and legislation. This is the laws and acts that the government has according to

the rate of pollution your factory can cause. These regulations are regularly updated and

companies are responsible for respecting the laws.

Ecological issues. According to BPP Learning Media Ltd ’Business Essential: Business

Environment’ (2010) ecological issues can have direct and indirect impact on the organization.

Direct impacts:

Can affect the costs or availability of resources. E.g. it can be prohibited to get the natural

resources as coal in the places that are interesting for science or history.

Can affect customer demand, especially nowadays when a lot of people are really

concerned about the environmental protection.

Affect power balances between competitors in a market. Can lead to the additional costs

for some companies and this will put them into the disadvantage in front of the

competitors.

Indirect impact may manifest themselves in. E.g. pressure from customers or stuff as a

consequence of concern over ecological problem.

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Green concerns. Green concerns have different relation to the different sectors of industry. Let’s

take a look at each sector separately.

The primary sector

Many industries in the primary economical sector such as mining or extraction of oil are directly

connected with the physical environment. They are under the constant control with regard to

environmental legislation. According to BPP Learning Media Ltd ’Business Essential: Business

Environment’ (2010) concerns here relate to the following:

Deforestation

Threats to wild creatures

Replacing a natural habitat containing a diversity of species with a monoculture where

only one strain is bred

Pollution

Health and safety of produce

Poor working conditions and wages.

Green policies here would aim to promote efficient and effective use of resources and recycling

where appropriate, and creating alternatives to the materials that are being used up.

The secondary sector

In the secondary sector of economy building and constructions are relevant. There can be

opposition of building new roads and houses in the wild nature or in places that can be

historically important.

Consumer goods


manufacturers here may be seen as:

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Damaging the environment or social institutions to meet consumer demand

Producing ‘dirty’ products

Using ‘dirty’ processes

Using up scarce raw materials.

The tertiary sector

The tertiary sector is divided into two groups: retailing and service industry. Each group has its

responsibilities so let’s take a look at each group separately.

Retailing

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) in

retailing the green customer is dealing with the enterprise. The enterprise acts as a ‘filter’,

deciding which product will actually reach the customer.

Service providers


service providers have less environmental impact comparing with other businesses, but they still

consume goods and produce waste. They still face the same decisions in their choice of

suppliers, their investment and their contribution to the welfare of staff and customers.

Small businesses

Small businesses consume less raw materials and produce less waste so they face a different

scale of environmental challenge. According to BPP Learning Media Ltd ’Business Essential:

Business Environment’ (2010) green issues are becoming more significant for the following

reasons:

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Small companies may be able to develop products for green ‘niches’ more effectively

than large enterprises, and can take advantage of flexibility to create green processes and

systems.

Many small businesses are using traditional methods of manufacture, which are often

greener than more modern processes, using less energy and fewer non-renewable

resources. Demand for such products is increasing.

Aspects which are relevant to business


ecological aspects that are likely to be seen as relevant to business are:

Resource depletion;

Genetic diversity

Pollution concerns

Acid rain

Ozone depletion

Waste

Climatic changes

Energy resources

Resource depletion

Resource depletion may influence business operations through impacts on the availability of raw

materials through damage to soil, water, trees, plant-life, energy availability, mineral welth,

animal and marine spices.

Genetic diversity

Genetic diversity is relevant to pharmaceutical firms, firms in biotechnology and the agriculture

and food industries. The modified types of plants and animals can cause damage to the wild

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species. Nowadays the opposition to genetically modified products is growing because

uncertainties about the long-term effect on people and animals.

Pollution concerns

Pollution concerns are at the center of most worries about the environment. According to BPP

Learning Media Ltd ’Business Essential: Business Environment’ (2010) there are several main

parts of pollution concerns.

The businesses are pressured to curtail the impact of their activities on the water table,

the seas and oceans.

The quality of the air is plays a big role today. The fact that a lot of scientists are saying

that the global warming is starting because of the air pollution there were a lot of

discussions about how to reduce it.

Concerns about the pollution of land, through landfill policies and the long-term damage

wrought by industry upon the land it occupies.

Noise pollution is getting more and more important and it can have a great impact on any

type of business.

Acid rain

Acid rain is linked to damage to forest of the Northern Europe and acidification of water. It

causes problems with water supply and health of fish. The industries that can cause the such

effect are under constant pressure from the political power of different countries all over the

world because this affects the whole world.

Ozone depletion

This is a big problem that causes a lot of damages to the environment. Alternatives to CFCs have

been developed and many other things done (such as new legal regulations) to prevent the further

depletion of the ozone layer.

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Waste

There are different types of waste like nuclear waste, industrial waste and domestic waste. The

handling of waste is becoming the target of legislation by national governments. A lot of new

laws and regulations were invented to decrease the amount of waste.

Climatic changes

Nowadays climatic changes are constantly occurring in our everyday life. Because of the

pollution the unnatural weather is being fixed in many parts of the world. A lot of international

agreements are made to reduce the pollution and especially the emission of gases that cause

‘greenhouse effect’. The main agreement is still the agreement that occurred in 1997 in Kyoto. It

is called The Kyoto Treaty.

Energy resources

The concern about the energy resources and environmental impact of its usage are related to the

concern about the climatic changes. Another thing is that some resources are not giving full

energy when they are used. For example coal is giving only 40% of its potential into electricity.

Therefore energy saving programs are being made.

Management responsibilities

The stakeholder view is that management is responsible not only to shareholders but also to

employees, customers, suppliers, competitors and to the community. Let’s look at the

responsibility to each group separately.

Responsibilities to employees


general principles of responsibility towards employees should take the form of good pay and 17

working conditions, and good training and development schemes. Also it has to be extended

into: recruitment policy, and redundancy and retirement policies. Recruitment of new staff

should be done very carefully because if an individual that is recruited by the organisation turns

to be a bad worker it will be very difficult to fire a person. The staff that is about to retire should

be provided with the good pension scheme. Another problem of the retired people is that they

don’t know how to spend a free time that they got. In this case the organization can provide

people who are about to retire with the special courses that would help them to plan their future

time. Dealing with redundancies is a bigger and more complicated problem. Even for

organizations that show an ethical sense or responsibilities towards their employees there are

some situations when the jobs have to be lost. In this cases the organization should try to

redeploy as many staff as possible and give them retraining to gain new skills so that these

people could work at the other positions. For that people who are made redundant the

organization should make free trainings of skills that can be useful for a person in another

organization, to arrange ‘job fairs’, to provide good redundancy payment.

Responsibilities to customers

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) the

ethical responsibility to the customers are mainly those of providing a product or service of a

quality that customers expect, and dealing honesty and fairly with the customers.

Responsibilities to suppliers


responsibilities to suppliers are usually expressed in the terms of trading relationship.

Big organizations should not use their power to influence the supplies

To pay the agreed amount of money in time

All information obtained from suppliers and potential suppliers should be confidential

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All suppliers should be fairly treated.

Responsibilities to competitors

The responsibilities towards competitors are mainly ethical, but also a great deal of laws

surrounding the fair trading, monopolies etc.

Responsibilities to the community

In fact the organization is also a part of the community that it serves. According to BPP Learning

Media Ltd ’Business Essential: Business Environment’ (2010) it should be responsible for:

Upholding the social and ethical values of community

Contributing towards the well-being of the community

Responding to complaints of local residents and politicians

Explain how economic system attempt to allocate and make effective use of

resources

To make a right decision in allocation of resources there are three main factors you have to

mention when you are making a decision. According to BPP Learning Media Ltd ’Business

Essential: Business Environment’ (2010) they are:

What goods and services will be produces

How will these goods and services be produces

Who will be the customer

Let’s take a look at each factor separately.

What goods and services will be produced?

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) ‘in

the market economy, this will depend on what consumers want to buy, and what they will pay

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for each product or service.’ The decision should be made with the including of the demand and

supply of the product. The actual demand on the product is called consumption and the supply of

the product that exists in the market is called production. By the end you have to choose what to

invest in. In fact the investment into education or machinery can bring a lot of profit but only in

case if there will be the same demand. The fact is that in the end you have to make a decision

about what people will want in the future: if they want food or machinery.

How will these goods and services be produced?

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) after

making a first decision you have to go on and choose the ‘appropriate and efficient production

methods and technology’. Also you have to choose who your supplier will be. You have a

variety of choices beginning with the small businesses and up to the government itself. The next

choice about who will produce the goods and services and what mix of resources you need will

depend on the ‘cost of resources and the efficient of its utilization’.

Who will be the customer?

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) there

must be a mechanism of choosing who will get the product. The main problem of the distribution

is that there are different social layers and different types of consumers. Also some products and

services are provided by the government.

Different economic systems

Also I would like to speak about different economic systems. Different countries have different

systems with their own ways of dealing with various questions. But now I would like to keep my

attention on the three main types: free market economy, command economy and mixed economy.

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Free market economy

According to ‘BPP Learning Media Ltd Business Essential: Business Environment’ (2010) free

market economy – ‘sometimes called capitalism. In this type of economy the most decisions are

taken through the operation of the mechanism. Supply and demand and the ability to pay

influence decision-making. There is very little government intervention in business decision-

making.’ The market economy is based on the ideology that the customer choice will influence

market forces to ensure the optimum allocation of resources and there is no need for government

to influence this process. The only role of the government is to ensure that the “invisible hand” is

free to operate. According to ‘BPP Learning Media Ltd Business Essential: Business

Environment’ (2010) ‘the assumptions of a free market system include the following:

Firms seek to maximize profits.

Consumers seek the greatest benefits for least cost.

Workers seek to maximize their wage relative to the cost of working.

Individuals are free to make their own decisions, e.g. where to work, what to buy. Firms

are free to choose what to produce, who to sell.

The ‘Price Mechanism’ decides prices in the free market.

Prices will also rise if the demand is growing and fall if the goods become unpopular.

If there is an excess of supply than the price of the good will fall. As the price falls

consumers will get more benefits for less costs and thus demand more. The price will

eventually reach the point at which all the excess supply will bought up.

Because of the interaction of supply and demand, prices will fluctuate. But they will

always tend towards the ‘equilibrium price’ where the amount consumers want to buy

equals the amount producers wish to sell.’

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These all gives the opportunity for the companies to have the free competition. But there are

some problems with the market economy. According to ‘BPP Learning Media Ltd Business

Essential: Business Environment’ (2010) they are:

‘There is an unwillingness on the part of consumers to pay for ‘merit goods’ or ‘public

goods’

The public goods are most likely will not be produced in the free market economy

Willingness on the part of consumers to pay for ‘demerit goods’

Inequality of power in the market place

Barriers restricting entry to the market place and the immobility of factors of production

Producers may ignore ‘externalities’

The planned (command) economy

According to ‘BPP Learning Media Ltd Business Essential: Business Environment’ (2010) the

command economy – ‘sometimes referred as state controlled. In this type of economy decisions

are taken collectively, usually by central planning committees.’ In this type of economy the

government decides what to produce and how much of it to produce. In the today’s world there

are two countries that are still using the command economy. These are Cuba and North Korea.

According to ‘BPP Learning Media Ltd Business Essential: Business Environment’ (2010) ‘the

state plans at three levels:

Macroeconomic level

Microeconomic level

The distribution of output between consumers’


main fallings of command economies include:

‘Lack of investment

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No incentive to productivity

Wastage of resources

Black markets’

Mixed economy


missed economy is ‘one that combines elements of both private enterprise, where individuals

have the freedom to set up in business in their own right and personally enterprise and

intervention, in varying guises, by the state.’ In the mixed economy the government has two

main strategies to pursue – replacing the market or augmenting the market. According to ‘BPP

Learning Media Ltd Business Essential: Business Environment’ (2010) the ‘three main types of

intervention are:

Provision or prohibition – public goods are provided at zero prices to maximize

consumption and increase social benefit. Alternatively some products are meant to be so

harmful for the person and for society so that it is prohibited.

Subsidy or taxation – merit goods are encouraged by subsidies to increase their

consumption. On the other hand the taxes on some products are so heavy that they reduce

consumption and increase the social costs.

Regulations – price and quantity controls can be used to change production and

consumption patterns. Externalities that are bad can be taxed or banned; externalities that

are good may be subsidized.

Discuss the impact of social welfare and industrial policy initiatives on

organizations and the wider community

Social welfare policy and industrial policy have different aspects, different motives and different

impact on organization. I would like to look and discuss the impact of each policy separately.

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Industrial policy

The industrial policy has a great impact on the functioning of the organization and the position of

the product in the market. There are several fields of industry where the government can have a

greater influence, but firs I would like to speak about the impact of the industrial policy in

general and then show it on the examples of the certain fields.


government can have a great influence on the whole organisation by giving the assistance to the

companies (usually to the companies that are used to be the winners in their industry). Also

‘indicative planning’ includes the identifying of so called bottlenecks – the areas of industry that

has problems with the supply of goods. Also the government industrial policy can ‘either hamper

or promote the growth of new industries’. Also the government can also make difficult the entry

of new firms. According to BPP Learning Media Ltd ’Business Essential: Business

Environment’ (2010) it can be done in three main ways:

By placing restriction to foreign firms

By subsiding domestic firms that are already in the market

By imposing product standards requiring a particular level of safety.

Now let’s look at the different fields the government can strongly influence.

New products


government controls the adopting of new products in certain fields.

In pharmacy the government checks all the new drugs and medicines before the product

goes to the market. Every country has its own standards.

The food industry is under the strict control of the government. Organizations that are

working in this sphere have the biggest problems with changing the technology or the

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product mix that they are using for manufacturing. The biggest debate today is about the

safety of genetically modified product.

Competition

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) ‘as a

buyer, controller and supplier in the mixed economy the government can bring considerable

pressure to bear on competition within an industry’. Sometimes the government can identify the

structure of industry to be sure that the competition exists.

Industrial competitive policy

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) ‘the

new approach of the industrial policy is to focus on improving the factors that shape the nation’s

competitiveness’. This can be done with the help of:

Investment in physical and human capital

Reduction in non-wage employment costs

Support of small- and medium-sized enterprises

Promotion of R&D and innovations

Improvements to infrastructure

Reinforcing the law on copyright and patents to encourage enterprises to develop new

products.

Regional policy


industrial policy is complicated by the regional policy that is different for each region of the

country. In Ukraine for example there are twenty four regions and every region has its own

additions to the industrial policy.

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Training and skills policy

You have a lot of opportunities to improve your skills at all levels. These are trainings for the

employees and Skills Funding Agencies that provide the opportunity of getting new skills or

improving skills outside of higher education.

Social welfare policy


‘Social Welfare Policy seeks to protect and directly improve people’s standards of living’. The

social welfare has two senses. In the first sense the social welfare policy is ‘partly concerned

with the social services and welfare state’. In the second sense it ‘stands to the range of issues far

beyond the actions of government. Today the welfare policy ‘biases the role of the state towards

promotion of equality of opportunity and the provision of services targeted on specific lower

income or disadvantage groups’. Social policy expenditure accounts around 50% - 60% of

government spending and includes:

Old age programs

Unemployment

Sickness/disability

Social assistance/poverty alleviations

Health/medical care

Environmental policy

Universality and selectivity

The universal benefits are the benefits that are available for everyone and at any time (e.g.

roads). Selective benefits are reserved for people in need.

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Social security

Social security includes Contributory benefits and non-contributory benefits. The contributory

benefits are the benefits a person has paid for. These are:

Retirement pension

Incapacity benefit

Maternity allowance

Jobseekers’ allowance

The non-contributory benefits are:

The Child Tax Credit and Working Tax Credit

Housing benefit

Council tax benefit

Social fund

Child benefit

Attendance allowance

Invalid care allowance

Industrial injuries disablement benefit.

Health and social protection


welfare state ‘seeks to provide citizens with benefits they would find it hard to purchase as

individuals’. The government built hospitals and provides free health services. People are free to

choose and pay for the private medical insurance.

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Evaluate the impact of macroeconomic policy measures and the influence of

the global economy on the UK-based organizations and stakeholders


government economic policy affects organization in many ways. There are a lot of policies that

have a great influence on the company. These policies and their impact we will show lower with

the help of the table.

Government policy Impact on organization

Overall economic policy Market demand

Cost of finance; Taxation

Government policy Impact on organization

Industry policy Protection v free trade

Grants, incentives, sponsorship

Regulation eg, investor protection,

company law

Entry barriers, capacity

Environment and infrastructure policy Distribution

Social policy Workplace regulation, employment law

Labor supply, skills, education

Foreign policy Trade promotion, export credits

EU and WTO obligations

Export promotion to allies, aid

recipients

The government in the UK can influence the economy in three ways. They are:28

Taxation and interest rate policies

Public spending on goods and services

Regulations

There are a lot of points the economic policy is trying to reach but the main three which are used

to be the main ones. According to BPP Learning Media Ltd ’Business Essential: Business

Environment’ (2010) they are: ‘

Economic growth is desired in order to provide employment for the national increase in

the population and to improved living standards

Full employment (that is, the economy’s resources are fully employed, and there are very

few people out of work – just those between jobs, for example)

Price stability (e.g. no inflation)’

These aims often conflict to each other so it can be difficult to find a compromise.

There are two main policies the government operates in order to influence the economical

situation of the country. They are fiscal policy and monetary policy.

Fiscal policy

According to BPP Learning Media Ltd ’Business Essential: Business Environment’ (2010) fiscal

policy involves:

Taxation and other sources of income

Government spending

Borrowing whenever spending exceeds income

Replaying debts when income exceeds expenditure

The fiscal policy is made to identify how much the government is going to spend and identify

how much it needs to raise the income or by borrowing. You have to make a plan in order to

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establish what rate of taxation should be and which sector of economy (firms, small business, big

enterprises etc) the money should come from. The fiscal policy is usually established once a

year. In the UK the policies adopted are showing the high and stable level of growth and

employment.

Monetary policy


monetary policy influences economic activity through:

Interest rates

Exchange rates

Control of the money supply

Controls over bank lending and credit.

The aim of UK monetary policy is to control the inflation.

Monetary policy gives you the opportunity to control the economy during the year, without

changing the budget. According to BPP Learning Media Ltd ’Business Essential: Business

Environment’ (2010) the monetary policy is using:

A policy of low interest rate. This will stimulate the bank lending and increase the

expenditure. This leads to the growing inflation

High interest rates. Leads to the reduce in spending and reduce of inflation rate because

of it.

Strict credit controls. Might be introduced to reduce lending and so reduce the demand in

the economy.

Alternatively the monetary policy might be given prominence over fiscal policy as the most

effective approach by a government to achieving its main policy objectives.

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In my opinion the good thing to evaluate the impact of global economy is to make a PESTL

analysis. The PESTL analysis is the analysis of Political, Economical, Social, Technological and

Legal position in the country.

Political

The political point means the analysis of the influence of political parties in the country. In the

UK there are two main political parties: Labor party and Liberal Democrats. These are the

parties that have the biggest influence in the UK government and that can affect your

organization.

Economical

The economical factors of the UK are good for running a business. According to

http://www.statistics.gov.uk/cci/nugget.asp?id=19 the inflation rate of the UK in 2010 was 4%.

This is a normal inflation rate which gives you the opportunity of growth. Also the economy is

very stable.

Social

The social factors in the UK are very good. The government has a good social welfare policy and

cares about people who are living in the country by providing the services that are needed.

Technological

The UK is a technologically advanced company. This gives you the opportunity to use the

modern equipment.

Legal

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The legal regulations of the UK have recently changed. The government is strongly supporting

English people with starting their businesses but it became much harder for the foreigners to set

up a business in the UK.

All this factors have a great impact on organizations that already exist and on the organizations

that are just starting their activity.

Conclusions

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To conclude we would like to say that in my opinion we clearly identified the mission, values

and key objectives of the organization. Also we cleared the influence of all the stakeholders of

the organization and the interests that stakeholders have. In my opinion we also took three main

stakeholders and showed their wants and how the organization can achieve them. Also we

clearly identified the responsibilities of the organisation and the strategies that companies are

using to meet them. We had a clear explanation of the influence of economic system on the

effective use of resources. The impact of the social welfare and industrial policy on organizations

was discussed. Also we evaluated the impact of macroeconomic policy and the influence of the

global economy on the organization.

References

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1. BPP Learning Media Ltd. (2010), ‘Business Essential: Business Environment’ London:

BPP Learning Media Ltd.

2. Office for national statistics (2011), [Online]. Available at: http://www.statistics.gov.uk/cci/nugget.asp?id=19 (accessed on: 16.02.2011)

3. Fig.1 The Maslow’s pyramid Available at: http://drvaleriegalante.wordpress.com/2009/12/17/day-101-–-self-actualization/

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Assignment 1

Documents

primary objectives

corporate objectives

secondary objectives

key objectives of organization

started mission

mission of organization

environment of organizations

business essential