Table of contents LO1 (Task 01): Understand the organisational purposes of business 1.1 1.2 1.

Identify the purposes of different types of organisation Describe the extent to which Siemens meets the objectives of different stakeholders !xplain the responsibilities of Siemens and strategies employed to meet stakeholders.

LO2 (Task 02): Understand the nature of the national environment in operate 2.1 2.2

hich businesses

!xplain how economic systems attempt to allocate resources effectively. "ssess the impact of fiscal and monetary policy on business organisations and their activities. !valuate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation

2.

LO! (Task 0!): Understand the behaviour of organisations in their market environment .1 .2 . !xplain how market structures determine the pricing and output decisions of businesses Illustrate the way in which market forces shape organisational responses using a range of examples #udge how the business and cultural environments shape the behaviour of a selected organisation

LO" (Task 0"): #e able to assess the significance of the global factors that shape national

business activities $.1 $.2 $. Discuss the significance of international trade to %& business organisations "nalyse the impact of global factors on %& business organisations !valuate the impact of policies of the !uropean %nion on %& business organisations.

LO1 (Task 01): Undertand the organi$ational purposes of business 1%1 Identify the purpose of different types of organi'ation (here are different categories of organi'ation) orgatisation can be according to their legal structure private company) public company) government) voluntary organi'ation) co*operative) charitable also they can be divided in different sector +primary) secondary or tertiary,. (he purposes of the organi'ation is mission) vision) aims) objectives) goals) values) profits) etc. Different organi'ations have different purposes. "ll business organi'ations have purposes a rage of objectives) they can change over time. -ew private sector initially are likely with survival and establishing a position in the market. .hen they are established they will tend to regard profit and growth as key objectives included market domination) maximi'ing sales revenue and minimi'ing operating costs. /rganisations objectives are conditioned by the firm0s legal structure. 1ublic companies) these companies tends to be separate from control. (hey operate in the interest of the public at large + or 2national interst0, favours the creation of a state*owned*and* controlled organi'ation) with goals laid down by politicians and generally couched in social and financial terms +e.g. return on assets) reinvestment) job creation, rather than in terms of profit maximi'ation. (his apparent dichotomy betwen the profit motive of the private sector and the broader socia* economic goals of public) however) become less clearcut over last decade) as an increasing number of state*owned organisations have been prepare for privatisation and successive goverments have sought to bring private money into public projects by creating public3private partnerships. " co*operative is an autonomous association of persons united voluntarily to meet their common economic) social and cultural needs and aspirations through a jointly*owned and democratically controlled enterprise. 4o*operative purposes are to serve their members by carrying on business as a co*operative in accordance with co*operative.

1%2 Describe the extent to which Siemens meets the objectives of different stakeholders "ll organi'ations have stakeholders) there are individual or group who are affected by or affect the performance of the organi'ation in which they have an interest. Stakeholders are owners) customers) suppliers) employees) debtors) creditors) financial institutions) environmental groups) government agencies) trade unions) etc.

Stakeholder is defined as 5a person) group) organi'ation or system who affect or can be affected by an organi'ation actions6. " 5proyect stakeholders6 is defined as 5a person) group or organi'ation with an 5interest in a proyect6. In order to perform good project management) you need to both manage and meet stakeholder expectations. (he result of the project should match their expectations for what will be delivered at the end of the project. 7ere are some ways that organi'ations use to meet stakeholders objective8 *1roviding a mechanism for stakeholders to check on the status of the project + such as task and schedule completion,. *1roviding a collaborative platform to interact and view interactions) such as via a blog. *Sending proactive reports) such as cost) schedule) and issue data. In addition) project management software can help the 1roject 9anager and other managers ensure that a, the project team understands the stakeholder expectatios +perhaps by having a project description or attaching a key project document,) and b, the project team is currently on the right path to meeting those objectives. 7ow you utili'e project management software depends on your particular needs) objectives) and culture) but meeting stakeholder objectives is one way to demonstrate the value of a good tool.

1%! !xplain the responsibilities of Siemens and strategies employed to meet stakelholders. (o explain responsibilities of organi'ations we need to analy'e about stakeholders interest) conflict of expectations) power influence matrix) satisfying stakeholder objectives) legal responsibilities e.g consumer legislation) employee legislation) e:ual opportunities and anti* discriminatory legislation environmental legislation) health and safety legislation) ethical issues e.g environment) fair trade) global warming) charter compliance e.g. ;anking 4ode. ;usiness objective are the ends that an organi'ation sets out to achieve. " business creates business plans to enable it to achieve these ends. (he objectives and plans that an organi'ation creates are determined by balancing the re:uirements of the various stakeholders in the organi'ation. (he stakeholders are those individuals and groups that are affected by and have an interest in how the business is run and what it achieves. !very business has a range of stakeholders) including8 (he objective that a company establishes are based on blending the various interest of these stakeholder groupings. <or example) an objective to be the market leader) will benefit all stakeholders because customers will receive high :uality products) shareholders will receive high dividends)

employees will receive good wages) and so on. /rganisations create a hierarchy of objectives. "t the top level an organi'ation will often create a 2mission0 setting out the purpose of the organi'ation. (his will be followed by a set of objectives relating to such aspects as8 */bjectives about market share. */bjectives about customer satisfaction. */bjectives about employee satisfaction. */bjectives about returns to shareholders. */bjectives about cutting pollution */bjectives about reducing waste) etc. " business plan will then enable an organi'ation to achieve its objectives. (he business plan must be set within a time frame and set out how the organisation) and the various components of the organi'ation will work towards meeting re:uired objectives. =esponsibility for delivering various parts of the plan will be allocated to key individuals) and performance targets will be established which enable the plan to be delivered. (he business will create a series of policies) programmes and budgets to enable it to achieve planned targets. It is also essential from the outset to clarify how the plan will be evaluated on an ongoing basis.

LO2 (Task 02): Understand the nature of the national environment in operate 2%1 !xplain how economic systems attempt to allocate resources effectively.

hich businesses

Introduction8 the economic problem of resource allocation has a political dimension. Different countries have different economic systems and different political regimes. 1olitical systems can be characteri'ed as ranging from democratic to authoritarian) depending on the degree of public involvement in decision*making processes. "ccording to the level of state intervention in the process of resource allocation we can differentiate8 democratic*free3market on the one hand to authoritarian*planned on the other. <ree* market are predominantly associated with democratic states. Democracy includes the notion of individuals being able to express their preferences through the ballot box and having the opportunity to replace one government with another at periodic intervals. "uthoritarian regimes and planned economic system can e:ually be rationalised) in that government control over the

political system is considerably facilitated if it also directs the economy through the ownership and control of the means of production) distribution and exchange. In practice) some authoritarian states have predominantly capitalist economic systems) while some democratic countries have a substantial degree of government intervention either by choice or from necessity. "dded to this) even in states where the political or economic system appears to be the same) considerable difference can occur at an operational or intitutional level and this gives each country a degree or uni:ueness not ade:uately portrayed by the model.

"n !conomy Sytem is the system of producing and distribucion of good and services and allocating resources in a society) production is influence by the limited supply of such elements as labour) land and natural resource and capita. (he scarcity of supply of resources means that the >overnment has decided the allocation of these limited resources >overnment intervention are usually in the form provision or prohibition) subsidies or tax and regulation. (here are8 * <ree 9arket8 government intervention is kept to the minimum while supply and demand and the ability to pay influence decision making * 4ommand !conomy8 resources are centrally planned and controlled by the >overnment * 9ixed !conomy8 combines elements of both free private enterprise and intervention in varying guises by the state. " mixed economy is usually adopted by government to promote free enterprises while some degree of intervention with the objective of effective allocation of resources within country.

2%2 "ssess the impact of fiscal and monetary policy on business organisations and their activities <iscal policy is defined as >overnment spending policies that influence macroeconomic conditions. (hrough fiscal policy) regulators attempt to improve unemployment rates) control inflation) stabili'e business cycles and influence interest rates in an effort to control the economy. <iscal policy is largely based on the ideas of ;ritish economist #ohn 9aynard &eynes +1?? @ 1A$B,) who believed governments could change economic performance by adjusting tax rates and government spending.

(o illustrate how the government could try to use fiscal policy to affect the economy) consider an economy that0s experiencing a recession. (he government might lower tax rates to try to fuel economic growth. If people are paying less in taxes) they have more money to spend or invest. Increased consumer spending or investment could improve economic growth. =egulators don0t want to see too great of a spending increase though) as this could increase inflation.

"nother possibility is that the government might decide to increase its own spending @ say) by building more highways. (he idea is that the additional government spending creates jobs and lowers the unemployment rate. Some economists) however) dispute the notion that governments can create jobs) because government obtains all of its money from taxation @ in other words) from the productive activities of the private sector. /ne of the many problems with fiscal policy is that it tends to affect particular groups disproportionately. " tax decrease might not be applied to taxpayers at all income levels) or some groups might see larger decreases than others. Cikewise) an increase in government spending will have the biggest influence on the group that is receiving that spending) which in the case of highway spending would be construction workers. <iscal policy and monetary policy are two major drivers of a nation0s economic performance.

(hrough monetary policy) a country0s central bank influences the money supply. =egulators use both policies to try to boost a flagging economy) maintain a strong economy or cool off an overheated economy. 9onetary policy can be defined as the actions of a central bank) currency board or other regulatory committee that determine the si'e and rate of growth of the money supply) which in turn affects interest rates. 9onetary policy is maintained through actions such as increasing the interest rate) or changing the amount of money banks need to keep in the vault +bank reserves,.

2%! !valuate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation. (he %& has had a competition policy regime since as far back as 1A$?) but this area of policy has not) for most of this period) been seen as the most gripping or most challenging part of either microeconomic analysis or economic policy*making. Det there has been an evolution) some would say a revolution) in both) which arguably has brought the area where they intersect* competition policy and economic regulation*to a prominence unprecedented in the %&. "ny audience not totally absorbed in this somewhat arcane subject) could be forgiven for not having noticed this phenomenon. "s recently as the beginning of this year it was :uite credible to argue that) despite a general toughening in application) the competition regime of the %& had remained fundamentally unchanged for over 2E years) since the <air (rading "ct of 1AF . ;ut this first year of the new millennium is) as I will seek briefly to demonstrate) a major turning point) in a number of dimensions) which will in due course be seen to have created a sea*change in the regime) and established a new climate) a new culture even within which industry operates in the %&. In short) a new era is upon us) one which reflects a number of economic and social trends) within which :uite powerful economic ideas or even ideologies are moving) and which many +though not necessarily all, regard as manifestly beneficial to the well*being of society. 4ompetition and 9arkets "uthority +49", with new powers and duties. (he %& government has undertaken this reform because it wishes to strengthen the effectiveness of the competition regime) and thereby strengthen enhance economic performance. (he %& regime is changing as a conse:uence of the new legislation. LO! (Task 0!): Understand the behavior of organisations in their market enviroment

!%1 !xplain now market structures determine the pricing and output decision of businesses (he concept of a market structure is therefore understood as those characteristics of a market that influence the behaviour and results of the firms working in that market. (he main aspects that determine market structures are8 the number of agents in the market) both sellers and buyersG their relative negotiation strength) in terms of ability to set pricesG the degree of concentration among themG the degree of differentiation and uni:ueness of productsG and the ease) or not) of entering and exiting the market. (he interaction and differences between these aspects allow for the existence of several market structures) from which we can highlight the following8 *1erfect competition8 the efficient market where goods are produced using the most efficient techni:ues and the least amount of factors. (his market is considered to be unrealistic but it is nevertheless of special interest for hypothetical and theoretical reasons. *Imperfect competition) which includes all situations that differ from perfect competition. Sellers and buyers can influence in the determination of the price of goods) leading to efficiency losses. Imperfect competition includes market structures such as8 *9onopoly8 it represents the opposite of perfect competition. (his market is composed of a sole seller who will therefore have full power to set prices. */ligopoly8 in this case) products are offered by a series of firms. 7owever) the number of sellers is not large enough to guarantee perfect competition prices. (hese markets are usually studied by analysing duopolies) since these are easier to model and the main conclusions can be extrapolated to oligopolies. *9onopolistic competition8 this market is formed by a high number of firms which produce a similar good that can be seen as uni:ue due to differentiation) that will allow prices to be held up higher than marginal costs. In other words) each producer will be considered as a monopoly thanks to differentiation) but the whole market s considered as competitive because the degree of differentiation is not enough to undermine the possibility of substitution effects. 9arket types8 perfect competition) monopoly) monopolistic competition) oligopoly) duopoly) competitive advantage) strategies adopted by firms) regulation of competition.

1erfect competition Cot substitutes <ree entry

Imperfect competition -ot lot substitutes Sine restriction

9onopolistic -ot substitutes <ull restriction

1erfect 4ompetition (here are large number of buyers and sellers) homogeneous product) free entry and exit and perfect information. In perfect competition do not choose price and total cost +(4, includes opportunity cost of capital invested !.g coke 9onopoly (here are single seller of product) not close substitutes and significant barrier to entry. In 9onopoly profit maximi'ation will be achieved by setting price. 94H9= Imperfect 4ompetition or 9onopolistic Imperfect competition exict when there are substitutes but not a lot) it is betwen perfect competition and monopoly) in imperfect competition there are some restriction to go inside the market. !.g restaurants 4haracteristics8 there are large number of firms in the industry) there are too control over price) entry and exit are relative easy and consumer and producer know about imperfect. /ligopoly 4ompetition between the few) may be a large number of firms in the industry but the industry is dominated by a small number of very large producers. (here are high barrier to entry non*price competition may be prevalent. 1roduct can be homogenous or highly differentiated. Duopoly Industry is dominated by two large producers. 4ollusion can be a possible feature. 7ighly independant and high barriers to entry.

!%2 Illustrate the way in which market force shape organisational response using a range of examples. 9arket force8 demand and supply. (he Caw of Demand say that the :uantity demanded of a good falls when the price of the good rises) and vice versa. IJuantity demanded is how much the buy want to buy. IDemand say that price change as demand change. Juantity of demand depend on8 prices) prices of related good) consumers income) consumer0s tastes) consumer0s expectations about future prices and income) number of buyers) etc. Demand decrease when price of good increase. (he Caw of Demand say that demand depend on to price plus other factors are unchanged. (he Caw of Supply say that the :uantity supplied of good rise when the price of the good rises. It happens too when price of the good decrease the :uantity of supply decrease.

.e can see shift in the demand curve) examples when consumer0s income increase demand for a normal good increase as when consumer0s income increase the demand for an inferior good decrease. .e can see shifts in the supply curve when there are changes in input prices) technology) number of sellers. (he market supply will shift right if raw material becomes cheaper) tecnology becomes more efficient or number of sellers increases. (o be in !J%ICI;=I%9 demand have to be same than supply) :uantity demanded e:uals the

:uantity supplied. !%! #udge how the business and cultural environments shape the behaviour of selected organisation. /rgani'ation response to market force is the reaction given by a company or business to an economical or business circumstance. (he more successful company have appropiate market research and analysis to ensure that they are able to supply the demand of its customers. 9isinterpretation of market force cause that not enough product have been supplied or overstocked + customer don0t want or need to buy,) in both scenarios company0s profit would be affected. /rganisation have to response to the market forces to get success and customer satisfation) market research is the key to respond corectly) organisation need to respond to any change in market condition.

1!S(C! 81olitical) !conomic) Social) (echnological) Cegal) and !nvironmental analysis8 a management
method that examines the effect that events or influences from outside may have on the performance of a company or organi'ation8 (he 1!S(C! analysis tool is one of many used to help managers identify their market positioning and strengths.

LO" (Task 0"): #e able to assess the significance of the global factors that shape international business activities "%1 Discuss the significance of international trade to %& business organisations International trade can be defined as the exchange of capital) goods) and services across international borders or territories to satisfy the objectives of individuals) companies) and organisations. <irms around the world are going global) including8 manufacturing firms) art)film)music) services companies) it cause a flow of ideas) new choices permits the ac:uisition of a wider) variety of products)facilitates the mobility of labor) capital) and technology provides challenging employment opportunities reallocates resources) makes preferential choices) and shifts activities

to a global level. International (rade can be phrased as Kthe exchange of goods and services across international borders. In most countries) it represents a significant share of >D1. (he significance of international trade varies within each economy. (he share trade in good as a percentage of >D1 increased between 1AAL and 2LLE for all income groups and particularly for the middle income group. (he same is true for services. (here is evidence of increased globalisation. "lthough the share has increased overall) there are countries that have experienced negative growth) share of developing countries has increased over time) world markets are still dominated by ther developed world) especially in high*value) high*tech products. It is also true that increased trade does not automatically lead to increased development as in parts of sub*Saharan "frica where the products sold are basic primary products. International trade is an essential feature of the %& economy) it is vital for the %& so that it can sustain its economics strengths and progress in an increasingly competitive global economy. <irst we need identify how the %& economy operates on an international level. Second) we need consider the costs and benefits of international trade) and how the %& economy has been influenced by international trade and the conse:uences of an increasingly globalised economy. International trade has been vital for the %& economy to develop throughout the colonial period) and the post war period. (he issue of globalisation has created clear economic uncertainty and the evident understanding that the %& economy is susceptible to effects that are clearly outside its realm of influence.

"%2 "nalyse the impact of global factors on %& business organisations. .ith the increase of the countries of the !uropean %nion) the !uropean %nion +!%,) the !uropean monetary %nion +!9%,) international trade) globali'ation) economic integration and global markets) and these nouns has come up in the line of sight of people. (he report mainly analysis the international trade) the reason of international trade) the importance of international trade) economic integration and global markets to %& business organi'ations) the fiscal policy and monetary policy of the !uropean %nion on %& business organi'ations) and the economic implications for the %& of entry into !9%. /rganisations funcome part of its work that can be completed off site. <orrester =esearch jobs that . million %.S. service* and knowledge*based occupations will be conveyed overseas by the year 2L1E) FL per century of which will move to India. 4ommunication and facts and

numbers circulating are occurrence over the globe in multiple dialects and multiple cultures. >lobal affray and worldwide collaboration coexist in the new world economy. /ne foremost conclusion of globali'ation is bigger mobility in worldwide capital and work markets. (his conceives a worldwide marketplace where there is more unfastening) because there are more pledge customers. 7owever) there are furthermore more affrays) as locali'ed businesses have to argue with foreign businesses for customers. "ccording to Dani =odrik) lecturer of worldwide political investments at 7arvardMs &ennedy School of >overnment) the procedures affiliated with the worldwide integration of markets for pieces) services) and capital have conceived two determinants of tensions +9ohammadi) 2LLL) pp. $1*1AB,. <irst) declined obstacles to trade and buying into accentuate the asymmetries between assemblies that can cross worldwide boundaries) and those that cannot. In the first class are proprietors of capital) highly carried out workers) and many professionals. %nskilled and semiskilled workers and most middle managers pertain in the second category. Second) globali'ation engenders confrontations interior and between nations over house norms and the communal organisations that embody them. "s the know*how for assembled pieces becomes normali'ed and diffused internationally) nations with very distinct assemblies of measures) norms) organisations) and collective preferences start to argue head on in markets for alike goods. (rade becomes contentious when it unleashes forces that destabilise the norms implicit in locali'ed or house workplace practices +9ilanovic) 2LL ) pp. BBF*B? ,. (able 18 4hange*(rends and (ensions in /rganisations (rends (ensions 1. >lobali'ation >lobal versus Cocal 2. Diversity 7eterogeneity versus 7omogeneity . <lexibility <lexibility versus Stability $. <lat 4entrali'ation versus Decentrali'ation E. -etworks Interdependence versus Independence

"%! !valuate the impact of policies of the !uropean %nion on %& business organisations. !uropean %nion play a big part in influencing business activity today8 *through taxation and spending *through laws) directives and regulations *through encouraging business activity through subsidies and support *by providing advice and support for business. 7ere are some examples of the way in which government influences business activity today8 1. !mployment policy8 >overnments play a major part in trying to stimulate employment. <or example) the present government is keen to encourage business efficiency so that %& businesses are competitive in international markets and therefore create jobs. <or those who have difficulty finding work) the government has created what is termed M(he -ew DealM) offering people the opportunity of developing training and experience on government funded and sponsored employment programmes. 2. =egional policy8 "t !uropean %nion level) funds are made available to support regions of high unemployment and social deprivation such as large areas of Southern Italy and rural <rance) as well as the 7ighlands and Islands of Scotland. =egional policy sets out to compensate for the fact that with the development of the more prosperous parts of the !uropean %nion) jobs have been lost in other areas. . Inflation policy8 (he government seeks to make sure that there are no sudden general rises in prices. (hey do this through the 9onetary 1olicy 4ommittee +914, of the ;ank of !ngland which sets interest rates. Interest rates are put up if there is a danger of people borrowing and spending too much) thus pushing prices up. =aising interest rates makes it more expensive for businesses to borrow money. It also makes it more expensive for consumers to borrow money. (hey then have less to spend) which helps to force down prices. $. !ducation and training policy8 !ducation and training is seen in the %& as having a valuable contribution to make to business life. (he government plays an important part in forcing through education and training changes) for example by creating more Nocational Subjects in the school curriculum. E. (axation policy8 ;usinesses can make a valuable contribution to the community by the taxes they pay. In return)

the government can help businesses by spending money on projects like airports) roads) aid to developing countries and many other items. B. International policy8 (he government can promote trade) encourage sales of ;ritish goods abroad +exports,) or discourage goods coming in from other countries +imports,. F. !stablishing the Mrules of the gameM. 9any of the laws of this country have been in existence for a long time. /thers are much newer. -ew legislation can be made at a !uropean %nion) national or local level. (hese laws set out how people can and should behave towards one another) and particularly) how business should be conducted. (hey are very important in setting Mthe rules of the gameM.