Economics and Business Essay

Submitted By hkhatun
Words: 664
Pages: 3

Business Environment
Assignment - 3
P5: Describe the influence of two contrasting economic environments on business activities within a selected organisation.
The business environment consists of a range of major influences that are outside a business. These include political, social and legal changes that affect a business. I will be looking at how two economic environmental problems influence a business.
Political factors:
The politicians make important decisions. At the national level the UK is governed by the political party that secures the most members of the parliament in the general election. At the international level, Britain is part of the European Union and this body makes political decisions that increasingly affect what can be done within member states. Political decisions involve making choices that affect large numbers of people and business.
The choice made by politicians, for example creating new laws that will tend to favour some groups at the expense of others. Sometimes these decisions favour business, for example in the granting of a subsidy or an exception from paying taxes (not having to pay them). At other times political decisions restrain businesses are stopped from carrying out given activities.
During the period of political stability it favours a lot of businesses because it helps business planning and the business is able to use the government manifesto to identify likely changes and how these will affect them. It provides businesses with a degree of certainty for the next few years.
Legal factors:
Businesses must operate within the frame work of the law. Failure to do so can lead to fines and even imprisonment of directors. Therefore businesses give high priority to make sure they comply with the law. There are lots of separate pieces of legislation that affect the business.
This is the 3 important areas they focus on: Type of law | Governs | Company | - How business are set up and run | Contract | - The contracts that businesses make with employees, consumers, suppliers and so on | Competition | - How businesses deal with employees, consumers, suppliers, and so on. and how businesses are allowed to compete with each other |

Social factors:
Many changes take place in the society which is relevant for business organisations such as: * Changes in structure * Household and families * Demographic (population) issues * Education * Religions * Attitudes to work * Attitudes to male and female roles * Ethics
Economic Environment:
The totality of economic factors, such as employment, income, inflation, interest rates, productivity, and wealth, that influences the buying behaviour of consumers and institutions. The economy…