HND Business- Unit1 Business Environment- Mont Rose College


Global business expansion has affected the business operations widely. It has created a wide impact on the growth and development of the business units. The business environment includes internal and external environment which helps in effective commercial operations. Aspects such as internal business aspects, Macro environmental factors, market strategy, Government policies etc. has a significant impact on business growth and development (Cheng, and et .al., 2007). Analysis of the same is thus very important for every business to know. The present study will focus on evaluating the impact of business environment on commercial operations of the company in a well-defined manner. Virgin Media has been undertaken for the same. The analysis will be effective in critically determining the overall impact of business environment on organizational operations.

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Task 1

1.1 Purposes of different types of organization

There are main three types of business organization that need to be considered and they are as follows :

  • Public sector organization : The purpose of public sector organization is to provide services to public which is owned by state government or Central government . Where government hold more than 60% of share is a public sector organization. They use all the resources available in a proper manner so that they can benefit the society and community (Dettwiler, Lindelöf and Löfsten, 2005). They provide large number of services to the public. For example a public sector organization is open for all the students regardless of income of there parents.
  • Private sector organization : The Purpose of private sector organization is to earn the profit, increase the market share, maximisation of sales and growth is the main motive which is owned and run by the private individuals. There are various types of private sector business some of there are sole proprietorship. Partnership firm. Companies and franchises which provide services to people to earn the profit not to provide benefit.
  • Voluntary sector organization(NPO) : no individual people owned this type of groups. Anyway someone will take responsibility for setting up the targets and budgets and do those things for which they are set-up (Besbesand Maglaras, 2009). Most of the time they are set-up for providing help to certain kind of people who are in need of help for example helping poor people or providing help to blinds and handicap people. From the point of view to survive in the market they take donations ,fundraising and grants from the people or other organization.

1.2 Extent to which an organization go to meet the objectives of stakeholders

Virgin media is a British organization which is one of the leading organization in mobile telephones, television and broadband internet services to both public and corporate. There are many types of people and group of people who directly or indirectly affect the activities done by an organization these group of people are known as Stakeholders of the organization (Binh and et. al., 2010). Those group of people can be owners, investors, consumers, workers and government. Virgin media has some responsibilities toward these stakeholders.

  • Owners of the organization are those people who invest large amount so as to earn profit so the organization responsibility is to provide with proper return on there investment so that they don't loose interest in the organization. Organization must distribute dividend among the owners equally when there is profit (Bromleyand Melton, 2012). It should provide proper information related annual general meetings so that they can take part in the meeting.
  • Investors are those people who provide fund to the organization like debenture holder they should get proper interest on there debenture.
  • Customers are those people who are purchase the services so they should provide proper services to the customers so that they can trust the organization.
  • Workers are the staff of Virgin media who work for attaining the objectives of the organization so organization must give them time to time remuneration for there work. It can provide bonus to employees to increase there motivation (Casileand Blake, 2002).
  • Government is most important stakeholder so the organization should satisfy the government by following the proper rules and regulation, by providing taxes to the government for running the organization smoothly it is necessary that there is no interference of government.

1.3 Responsibilities of an organization and strategies employed to meet them

The major stakeholders of the organization are employee so there are different responsibilities of organization toward the employees to fulfil the needs of the employee. Organisation must provide equal opportunities to all the employee. It is responsible for providing healthy environment for working so that they can work easily. It must follow all the employment laws which gives security to the employees working in the organisation (Greenwoodand Miller, 2010). Equal opportunities should be given to employees for promotion and growth. There should be no discrimination among males and females employees.

Organization should consider the issue related to environment and social responsibilities. Virgin media should not do the activities which are harmful for environment or which is not good for society. Society Is a important part so all the responsibilities related to the society should be fulfilled so that virgin media can run the business for lifetime.

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Task 2

2.1 In allocation of resources , roles of economic system

In allocating the resources for the organisation both government and economic system plays a great role resources can be of many type like financial resources human resources and new technologies. Without the permission of government the organization cannot start the new trade. There are four parts of ecosystem which includes traditional ecosystem, market ecosystem and mixed ecosystem and command ecosystem (Ho,Wangand Vitell, 2012).

In traditional system while taking decision historical success of social custom and norms are taken into consideration. In capitalist ecosystem the government role is almost negligible. In the command economic system both government sector business and private sector business are almost restricted. In this system adaptation of changes is very slow (Lee and et. al., 2008). Market economic system and command ecosystem combine together to make mixed economic system in other words mixed economic system is combination of both these system. All the power rest in the hand of a single individual as Virgin media is a private organisation. In UK mixed economic system is adopted in which both public and private sector business gets equal opportunities. To fulfil the demands of customer in a proper way the management of an organization is not restricted by government to make any kind of policies which is good for customer (Maguire, 2003).

2.2 Impact of monitory and fiscal policies on organisation

In a economy of UK and other European countries for increase and decrease of supply federal reserves and financial instruments are responsible. To enhance the money contribution in market government bonds and treasury bills are also helpful. Money supply is mainly responsible for the success of business. Unbalancing situation will arise between supply and demand if there is a decrease in money contribution (Mayfield and Taber, 2010). For investing money in business the investors will get demotivate. In the recent policy of UK government generate employment for improving the market condition. Fiscal policy main element is government spending and taxes which can affect the direction of demand curve. When there is favourable monitory policy for virgin media there will be huge amount which can be invested. It will help the company in upgrading their system and and improve the process that is involved in doing business. The organization will be able to reduce the problem related to environment. So, it can be said that fiscal and monitory policy affect the virgin media business because the customer will get demotivated in investing when the taxes are very high (Maguire, 2003). And when the taxes are low the customer can easily invest.

2.3 Examining the impact of competition policy and other regulatory mechanism

At affordable price providing services with quality the organization requires the healthy competition . To invest money in telecom sector government of UK encourages the investors by developing the industrial policy. The organization follow Competition Act 1998 (EU competition policy) for the purpose of harmonizing the corporation. Enterprise Act 2002 was applied by organization for doing execution, merger and acquisition effectively. UK government developed training and skill policy and equality and discrimination Act so these policies and Act also affected the telecom organization (Lee and et. al., 2008). The EU regulations proved to be beneficial for telecom industries for providing quality services and for gaining high position in the market. It also helps the management for making plans and organizing them properly. To compete against the global competitors the EU competition policy help the Virgin media to stay in the market by proving quality services at reasonable prices. Competition policy bought more choices for customers at reasonable prices to survive in the competitive market the telecom industry started providing good quality services (Ho,Wangand Vitell, 2012). The EU helps the European countries to hold there position even in global market and give a good fight to their competitors. To gain the high share in the market the company started providing the services at the better price. Competition policy bought a fair competition in market and also help the organization to enhance the quality of services and also boost the economy in general.

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Task 3

3.1 Market structures determine the pricing and output decisions of businesses.

Market plays a very important and crucial part for all those organisation who are in the business. It is very important for all the entity of business to recognise and establish their business activity in the correct market so that perfect profits can be achieved. A market can be considered as place where buyer and sellers meet to carry out the activity regarding trade of any goods and services. a market can be a high street shop or any online website. A business is said to be in completion in market place when the other business organisation are serving the same services to the consumer. There are various kinds of market which are established for the regulation of business purpose of which one of the most exercisable and common market is perfect competition (Greenwoodand Miller, 2010). It can be termed as the situation in a market where, there are N numbers of buyers and sellers and the market price of any commodity is beyond the control of individual buyer or seller. It is kind of market where the competition is at its best level. The pricing and the output decision of a business are often dependent upon the market in which business is prevailing. The best example of perfect competition is Virgin Media. It a British company which provided various types of broadband, telephones, televisions etc. services to consumers. As it is the company associated with perfect competition, the price and output shall be determined accordingly (Casileand Blake, 2002). Virgin media being in the perfect competition market, make price of its product lower so that supply can be increased. Economic profit cannot occur in such kind of market for long run equilibrium. The company is forced to lower down its price so that it can match the price of new firms. The out put decision shall be taken by Virgin media in such a manner that it shall attract the buyer in perfect competition.

3.2 Market forces shape organisational responses

A market force for a company can be explained as those power or forces which are important as well as effect the price, demand and availability of the commodity. It can be said that an economy where there is minimum involvement of government. A market force get rise when there is rise in the demand of the product and decline in the supply as well as a market force gets down when there is rise ion the supply but there is no demand. There are certain situation in which the demand and the supply of the product reach to a equal level then the market is said to be equilibrium. An organisation always reply in context to market forces (Bromleyand Melton, 2012).These forces helps in shaping up of organisation structure as they help the organisation to determine whether the supply has to be increase or not depending upon the demand for an example while shaping the structure of virgin mobile, it must consider the market forces which will determine the supply of the company. When the demand of its electronics increase then supply of the product will automatically decrease. This way the company shall be able to incurred profits in its account. Market force of virgin media will describe that how much of product has been produced by company and at what price they will go on to the market.

3.3 Business and cultural environments shape the behaviour

In addition to this, it can be said that overall understanding of cultural and environmental values is significant so that management of Virgin Media can have better opportunities in the market. Political factors are considered as factors which might impact the overall working. In UK political aspect are well maintained that provides a fair trade opportunities. Taxation and other rates are also properly decided as per standards so management must consider it in appropriate manner (Binh and et. al., 2010). Along with this, Each nation is different and every nation has a unique mindset and thoughts. Social belief of UK must be considered as critical aspect in order to meet key goals and objectives. If UK citizens are having focus on accomplishment of social needs then overall working might get improved for sustainable development. Other than this, economic values are also key factor which must be referred in appropriate manner so that goals and objectives can be accomplished in appropriate manner. It has been noticed that UK inflation rate is also under control which creates better opportunity. If inflation rate is not referred effectively then overall financial condition of company might get affected (Besbesand Maglaras, 2009). In today's high competitive market, technology changes every minute. By having improved focus on technology the business firm can have sustainable opportunities because it improve work productivity. It is also beneficial to have advancement in profit margin ratio.

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Task 4

4.1 Significance of international trade to UK business organisations.

International business includes activities flow of capital, finance and technology and transfer of goods and services from home country to host countries. It has been noticed that improved focus on the international trade allows to have effective development of business opportunities. It is because it provides an fair trade policies which create a sustainable opportunities. In addition to this, it can be said that with an assistance of international trade policies the advancement in profit margin ratio can be advanced effectively. It also allows to improve the work quality standards according to international standards (Dettwiler, Lindelöf and Löfsten, 2005).

It also allows businesses to have better focus on diverse strategies that allows to have sustainable development. It has been noticed that strategic alliance is one of key factor that allows to have sustainable development. It is because the labour cost and further benefits can be attained effectively from the business firm. Due to supportive nature of the UK government most of the companies are wanted to invest in country which is referred as one of positive sign for the UK economic system.

4.2 Impact of global factors on UK business organizations

Virgin media is one of the largest telephone, television and broadband internet service provider entity of UK provides facility to its customers. The global factors effects on business organization such as political factors, economic factors, social factors, technological and ecological factors including legal factors.

Political factors:- These factors involves level of bureaucracy affairs and tariffs between virgin media and other countries entities. To manage and balance on these factors systematically, company remains stable and developed.

Economical factors:-Economy plays great role in business economic growth. International marketing of virgin media goods and services some institutions plays roles in balancing economic environment (Casileand Blake, 2002). World bank and WTO rules and regulations on international transaction of media industry.

Social factors:- Social environmental factors includes increasing popularity transaction and country's interest, choice towards mobile and broadband service organization. These factors effects on virgin media efficiency also effects on society and community environment globally.

Technological factors:- Technologies as tools and techniques changes time to time for better quality of goods and services. To apply innovative ideas and technological infrastructure effects on international business transaction activity of virgin media. To adopt new innovations and latest techniques considers helpful in rapid production and qualitative products.

Ecological factors:- Ecology of version media effects on virgin media effectiveness. The factors involves are increasing level of air and pollution (Bromleyand Melton, 2012). It also includes global warming tendencies. These elements create environment of media industry and plays great role in expansion of the entity.

Legal factors:-Adopting dynamics in cross countries employment and health as well as safety laws are legal factors of UK firms. These legal factors play great role in virgin media's international goods and services transactions.

4.3 Impact of policies of European Union on UK business organizations

European union regulations remains bound for UK organizations for global mobile and internet service transactions. It makes policies to monitor on international transaction services of Virgin media.

Employment policy:-UK government plays main role to implement this policy for stimulating employment. It offers people to grab opportunity of growing training and development on government fund (Binh and et. al., 2010). Therefore, employment increases globally and virgin media reduced issue to increase in number of workers in UK mobile and internet market.

Regional policy:-Government collects funds to provide employment facilities at European Union level. Regional policy of the union develops UK and its business organizations. For all regions, government tries to grow employment facilities for societies.

Taxation policy:- Business organization pays tax to government annually. On behalf of this tax fund, government plans to spend money on certain projects for instance; airports, infrastructure development of country also includes education and implementation of training and development program. It results to national efficiency as development at large scale (Besbesand Maglaras, 2009).

International policy:-For increasing in trade and promotion of international transactions government makes policy for economic development. European Union policy concentrates on increasing in exports and decreasing in imports. It effects improved financial position of UK businesses.

Inflation policy:-interest rates and tax rates effects on virgin media's market activities. Increasing in rates adversely effects on financial position of virgin media. To monitor on these rates, European Union is formed therefore, source and investment activity effects economy of organization.


The overall analysis reflected that business environment creates a wide impact on business decisions and growth. The study helped in understanding the impact of environmental factors on business operations and analysis. The micro and macro analysis of the firm developed a well-defined understanding about controllable and non-controllable environmental factors. The overall analysis reveals that effective assumption environmental aspects has helped Virgin Media in developing a significant market position.


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