UNIT Organization is defined as a unit of

Task 1
Purpose of Different Businesses:
Organization is defined as a unit of people which are structured and managed in a way in order to pursue or meet collective goals. CITATION Bus155 l 1033 (BusinessDictionary, 2015)Organizations are mainly divided into two sectors which consist of public sector in which the organizations are owned and run and services are provided by the Government itself and the private sector which include organizations that are not owned by Government or goods and services are provided outside of the Government e.g. sole trader companies. CITATION Ave151 l 1033 (Averkamp, 2015) The public company which I have selected is OGDCL prevailing in Pakistan related to oil and gas while the company in private sector and for my assignment is Engro Foods Ltd. This is prevailing in Pakistan and relates to confectionary and eatable goods. The main purpose of Engro foods is profit oriented being a company in private sector while the purpose of OGDCL is to provide expenditure to public as it is governed and run by the Government (Public sector).
OGDCL Vision Statement:
”To be a leading multi-national exploration and production company.” CITATION OGD15 l 1033 (OGDCL , 2015)OGDCL Mission Statement:
”To become the leading provider of oil and gas to the country by increasing exploration and production both domestically and internationally, utilizing all options including strategic alliances. Also to continuously realign ourselves in order to meet the expectations of our stakeholders through best management practices, the use of latest technology and innovation for sustainable growth while being socially responsible.” CITATION OGD15 l 1033 (OGDCL , 2015)Organizational Purpose, Aims and Objectives:
The organizational purpose of any organization can be extracted from its mission and vision statement. The main objective of OGDCL is reflected in its vision statement as to be the leading exploration and production company in Pakistan and to increase their production profile and reserves in order to achieve competitive advantage and prosper from other countries while maximizing value for its shareholders.
OGDCL’s main target is to build strategic reserves for expansion and growth to take place in the future. They should grow and provide superior returns to all of its stakeholders. The value of the company should be doubled in the coming years along with the profit maximization by investing is profitable avenues. The performance results should be improved by reducing and cutting costs through latest technology and innovation. The quality of service should be improved continuously in order to satisfy the customers. Timely and reliable supply should be given to the customer. The management should be motivated in increasing their knowledge through HR practices. Knowledge management systems should be used in increasing and motivating organizational learning. Full autonomy must be given in financial and decision making matters.
The SOP’s should be well defined along with ownerships and specific accountabilities. It should prosper and excel in commercialization and exploration providing a base for expansion and growth. Internal controls of the company should be improved and continuous improvement techniques should be used for better performance including business process reengineering. The concept of transparency should be shown in all the transactions occurred and all the work force should be goal congruent. CITATION OGD15 l 1033 (OGDCL , 2015)Engro Foods Vision Statement:
”The company aims at transforming itself into first national food industry giant, then into regional force and ultimately become global player by forming strategic alliances.” CITATION Eng12 l 1033 (EngroFoods, 2012)Engro Foods Mission Statement:
”To build branded food business for better quality of life by offering tasty, affordable and high nutritional products to our customers while maximizing the stakeholders value.” CITATION Eng12 l 1033 (EngroFoods, 2012)Organizational Purpose, Aims and Objectives:
Engro foods according to its vision statement aim at becoming the market leader and industry giant along with global expansion. Its main objective is to supply everyone its flagship product which is Olper Milk in order to satisfy the customers and their needs. Its objective also includes to increase the stakeholder’s value by maximizing profits and distributing them to the shareholders and excel the company. Engro foods want to become the major player in the food industry and become the market leader.
Engro foods aims at building substantive market share and achieve competitive advantage from its competitors through differentiating its products in order to satisfy the changing needs of its customers. The differentiation must be carried out in the form of taste, quality and availability of its products in the market. Engro foods want to be the company which elevates consumer delights worldwide and challenge the industry norms. CITATION Eng12 l 1033 (EngroFoods, 2012)
Task 2
Objectives of Stakeholders:
Stakeholder is defined as an employee, a customer or citizen who is involved in a certain organization and has interest in it through owning a share in that business. The stakeholder relationship explains the connections between stakeholders and organizations, and to what extent they influence each other. The following are the different stakeholders which the Engro Foods have: CITATION Cam151 l 1033 (Cambridge, 2015)Customers:
Customers are the end users of products and services and are considered kings for an organization. They are relevant to Engro foods as they require quality along with fair and affordable prices of all the food products. They require a range of products to be given to them in order for them to make choices according to their taste and use. Engro foods uses differentiation strategy for its products and continuous improvement through which it is able to match the change which takes place in the taste of customers and provide to them better quality products.
An organization’s success is connected with its management as proper and smooth working is possible through effective and efficient management. Management is concerned with the financial statements of a company which provides them with a clear picture in carrying out proper analysis for better and effective decision making. The performance of management is affected by the company’s financial statements ultimately affecting other user groups. Engro foods for this purpose hires highly trained and professional workers for better output and is able to comply with the latest accounting and reporting standards by which the financial statements are prepared consistently and with clarity.
Employees are considered as labor or people which are working in an organization for achieving its mission and vision through combined goals and objectives. Employees are mainly concerned with the profitability of the company along with the incentives and benefits they are to receive for their work. Their discussion mainly focuses on matters such as salary hike and promotions. Engro foods provides its employees with incentives and benefits along with after retirement plans. Basic incentives and promotions are given to the employees for their hard work and they are considered as top priority.
The macro-economic behavior of a company includes the Government. The economic changes made are somehow interrelated with the decisions made by the Government. The main need of Government is the collection of revenue through tax and public borrowings. For this, they use the financial statements and properly identify the right amount of taxable income and tax declared in its tax returns. Engro foods comply with the laws and regulations laid by the Government and provides timely and accurate financial statements. Full and proper tax is paid timely and all the laws are complied with.
Shareholders are the persons who have direct interest in the company and are considered the owners according to the amount invested in it or the amount of shares purchased. Shareholders are interested in the profitability of a company and the amount of dividend or return which will be given to them for the shares they have purchased. Engro foods, being a publicly limited company is considered as one of the highest listed company in stock exchange of Pakistan. Engro foods has paid huge amount of dividends to its shareholders by making considerable amount of profit through continuous improvement and effective and efficient operations. CITATION Acc l 1033 (Accounting-simplified, 2013) CITATION Bou15 l 1033 (Boundless, 2015)Task 3
Responsibilities and Strategies of Engro Foods:
Engro Foods Values and Responsibilities:
Engro Foods supports its leadership culture through unique policies and systems for better and open communication, foster environment for its employees and privacy. They also guarantee the security and well being for its employees.
Ethics and Integrity:
Engro foods puts due diligence in the results achieved and care is taken in providing honest and ethical behavior in all its activities. Their intent is to choose the highest course of integrity as possible while establishing and maintaining highest professional and personal standards. It has a well defined reputation among the industry which is itself a priceless asset.
Health and Safety:
The management and utilization of resources will be effective and efficient through operations providing safety and health benefits to the people, neighbors, customers and visitors. The safety, health and environmental responsibilities are extended beyond the protection and enhancement of facilities and the business.
Innovation and Risk-taking:
Success is considered as important part of our business which forces us to continuously strive in producing unique ideas for improved solutions and services. Challenges and encouraged and accepted to the status quo in which ideas are generated and nurtured. The employees are recognized and appreciated in taking the risks in all realms of the business and the results achieved through.
Our People:
Engro foods believe and strive in providing dignity and value to its people. This results in fair treatment to all of its employees and workers which creates and organizational environment in which everyone is treated equally and fairly and are encouraged to develop themselves for the betterment of the business. Any form of harassment and discrimination is not tolerated.
Community and Society:
A successful business creates high economic impact and value in the community. A business which is sustainable and is going concern in the future will reflect positively towards the community and society and will provide a better sign for the key stakeholders.
Consumer Legislation:
The rights of the consumer are the main priority of Engro foods as they are considered kings for the organization. The basic rights of consumer are fulfilled by providing them with the quality product for the price offered and health and safety of the product is provided accordingly. The responsibility of Engro foods is to timely provide the product to the consumer along with perceived benefit. In case of defective products provided or the rights of the consumer broken, Engro foods will be liable for the consequences. CITATION Eng12 l 1033 (EngroFoods, 2012)Task 3
Different Economic Systems:
Scarcity of resources will affect an individual by making choices. This is the main economic problem having four dimensions as to what to produce, how much to produce, how to produce and for whom to produce. CITATION Ahm116 l 1033 (Ahmed, 2011) The three economic systems are as follows:
Mixed economy
Command economy
Free economy
Mixed Economy:
Mixed economy refers to the countries in which public and private both exist simultaneously. Some part of the economy is left free and some of it is run by the Government. Mostly the businesses are privately conducted in which the Government intervenes in certain areas. United Kingdom has mixed economy system in which the share of Government spending is 48% as that of GDP. Mixed economic system is successful as many businesses should be run privately rather than the Government because they have profit incentive by cutting costs and being innovative.
The intervening of the Government is also important as private businesses aim at making profit only and by this exploit the labor and minimize their costs. In the mixed economy system, the Government intervenes by providing laws for the protection of labor. This system allows the people to conduct their own businesses privately in certain limits and by following certain regulation put forward by the Government. Also some of the resources and businesses are owned partly by the Government and partly by the private sector. Public sector aims at improving the welfare of the society and work towards it while private sector aims at profit maximization. Some restrictions are however placed by the Government which forces the private sector in exercising its right accordingly. CITATION Ahm116 l 1033 (Ahmed, 2011) CITATION Eco15 l 1033 (Economics, 2015)Free Economy:
Free economy or market economy is a system in which the economic decisions are made by the producers, consumers and owners of factors of production. Freedom of markets is limited to certain extent and Government intervenes occasionally. CITATION Bus156 l 1033 (BusinessDictionary, 2015) In the free economy the price mechanism acts as a signal to coordinate economic activities. It is determined by interaction of demand and supply. The main theme of using resources effectively are what goods and services are to be produced, how much are to be produced by producer, how to produce them and for whom to produce so that the goods and services are provided to the people who can pay for them.
In this system, the private ownership of property is granted and people can own them for production and can transfer them. The sovereign party in the free economy is the consumer as it can consume any product it wants and can spend money on the products they like. The consumer determines the level of activity for the producer by showing the demand towards a certain good. As free market system has maximum private ownership of businesses, it strives for profit maximization only. Investments are made in businesses giving maximum profits. Due to this, the producer will produce the product giving more profit and hence factor of production will move where more incentive is given on job. Economic freedom is provided in which the producer and consumer are free to produce and consume goods they like. As no restrictions are placed on the producers to produce, competition is promoted where the quality is increased at a low price. CITATION Ahm116 l 1033 (Ahmed, 2011)Command Economy:
Command economy also known as planned economy is a system in which the economic decisions are solely taken by the Government, commissions or dictators. The economic production is controlled by the Government. Economic planning is carried out by the Government in which it decides on what, how and when to produce.

Governments in this system own some or all of the factors of production of goods and services. The pricing and production decisions are taken by the Government. Also this system ensures economic quality in which the wealth in few hands is not possible. The factors such as profit motive, ownership of private property and price mechanism do not exist in the planned economy which promotes concentration of wealth. The provision of basic needs is also provided by the Government for the welfare of the society. The basic necessities are provided to each and every citizen hence the system of beggars is mitigated. CITATION Eco151 l 1033 (Economics, 2015) CITATION Ahm116 l 1033 (Ahmed, 2011)Task 4
Impact of Fiscal and Monetary Policy:
Fiscal policy refers to the taxes and expenditure which the government measures. CITATION Placeholder2 l 1033 (Ahmed, 2011) This affects the business on two levels: legislation that covers the overall economy and targeted legislation which aims at specific sectors. Fiscal economy has time lags. If the economy is down falling, government take time to work their way through. Government spending can have direct impact on the businesses and industry.

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Monetary policy refers to measures taken from central bank to influence rate of interest, money supply and availability of credit. CITATION Res14 l 1033 (Anon., 2014) The impact can be on the interest rate when the government borrows money. The main impact of printing more money increasing money supply can result to low value of money. Also the impact of monetary policy is on unemployment from loose monetary policy, inflation from tight monetary policy and balance of payments by adopting tight monetary policy.
Fiscal policies include the fees and excise taxes which are to be paid by the air carriers. These taxes are charged in order for the government to play its role funding security, different services and support operations for the airports including British Airways. The airline industries are affected by the fiscal policies of Government by the elimination of many jobs and bankruptcy situations because the consumers react towards the increasing price in the industry through high ticket prices. The air carriers have low potential in meeting the operating budget demands through the current fiscal policy.
Deregulation policy has also affected the airline industry on a large scale. This provided growth for the industry. New competition gave arise to huge amount of jobs while lowering the ticket prices downward and expanding the market. The economy of UK has a great impact on British Airways as the ticket prices are increased and it is able to fill its flights when pleasure traveling increases due to stability of the economy whereas instability affects the buying habits of the consumer due to which the airline struggles in keeping its flights booked fully. CITATION Bri15 l 1033 (British Airways, 2015)Different Market Structures:
An industry consists of many firms which are producing similar or identical products in specific systems. The market structure depends on the number of firms in the industry and the competition prevailing in them. The four basic types of market structures are as follows:
Perfect Competition:
This consists of a market in which homogeneous products are sold by large number of sellers. In this structure many small firms compete against each other. Firms produce high quality and optimum level of products at lowest possible cost. A firm under this structure is occupied under a large competition making it difficult for it to charge the prices it wants. Large number of sellers and buyers exist in the market and where the product is identical which is sold. The firm is a price taker in this situation where the prevailing price of a good or service is considered. Also the entry barriers to the industry are free where a firm can enter or exit an industry whenever it wants. CITATION Placeholder2 l 1033 (Ahmed, 2011)Monopoly:
In this structure a single producer exists which has the overall control on the supply of a certain commodity and it has no substitutes. The producer of the product is single which makes it difficult for the consumer to find complements or substitutes. The barriers of entry in this type of market are closed because of certain implications imposed such as legal and natural barriers along with barriers of economies of scale. Price discrimination is a major drawback in this system as one firm is supplying a single product, it can charge differentiated prices for the same product. This restricts the consumer in paying the price desired by the firm as no other supplication is available. A monopoly firm is a price maker i.e. it charges prices of its own and the market in which it lies is inelastic. A monopoly firm can charge higher profits through allocative efficiency. The concept of sovereignty is of the producer as it charges the prices above the cost of resources and the margin of its own. CITATION Ril122 l 1033 (Riley, 2012) CITATION Ahm116 l 1033 (Ahmed, 2011)Monopolistic:
This market consists of large number of sellers which are selling differentiated product and is termed as imperfect competition. The sellers in this type of market are of large number such as shoe market. The differentiated product can be imaginary in which packaging or labeling is different while the basic product is the same and manufacturing does not change and can be real in which different formulas are used in creating the products which are different from each other in every aspect. The firm in this situation focuses and invests heavily in the advertisement of the product rather than competing on the price of the product. The differentiated product ensures product royalty by the consumer. The control over the price of the product is at a fair degree where the firms charge the prices according to the uniqueness of their product as well as keeping their competitors prices. The entry barriers for the firms are nil and they can enter or exit out of the industry whenever they want. This forces the firms in charging normal profit in the long run period of time.
Pricing and output determination under short run can result in abnormal profit, normal profit and loss. In the short run period of time, the fixed input cannot be changed for the output to increase accordingly. However the variable production inputs can be changed which determines the production.
In the long run, all the production inputs can be changed and firms can also enter or exit out of the industry in long run time period. Due to this a firm can earn only normal profit in this period of time. In case the firms are earning abnormal profit, new firms enter in the industry which cuts down the abnormal profit tendency and in case of loss, the firms will exit out of the industry creating adverse supply due to which the price of the product is increased resulting in profit. CITATION Placeholder2 l 1033 (Ahmed, 2011) CITATION Ril123 l 1033 (Riley, 2012)Oligopoly:
This is a type of market in which few suppliers exists producing homogeneous products or differentiated products. The market remains concentrated as it is shared between few sellers. Few producers prevail in the market and are selling homogeneous products such as petroleum or differentiated products such as cars. The firms in oligopoly market can create price cartels. Cartel is considered as a joint association of producers to influence the price or supply of the product. Example can be taken of OPEC (Organization of petroleum exporting countries) which is world known cartel in petroleum market. The entry barriers are erected in oligopoly market due to which new firms cannot enter the industry. The price output decision of the firms in oligopoly market is interdependent. Any of the firm cannot set its price output without considering its rival’s price and how it will affect the profit. CITATION Ahm116 l 1033 (Ahmed, 2011) CITATION Eco152 l 1033 (Economics Online, 2015)Different Market Forces:
The interaction between demand and supply of a certain product describe the market forces due to which the response of organization’s changes according to it. The response of an organization is mainly given to the economic or business change taking place in which it is operating. The market forces impact directly towards an organization as the company’s profits and reputation are affected by them. The market forces which shape the organizational response of Engro Foods are as follows:
Supply and Demand:
Supply is the quantity of commodity which is available for sale in a given time frame. It is the amount of goods which is available in the market. Organizational response change according to the law of supply which states that, a rise in price of a commodity will result in extension in supply while decrease in price causes contraction in supply. Organizations tend to produce more when the price of the product is increased. Demand is the quantity of a commodity at a given price which is bought per unit of time. The law of demand states that increase in price causes the demand to become low while decrease in price causes demand to increase. The companies which have proper research and development are able to supply the product according to the demand and need of the customer. In case of correct judgment of the demand of market the supply of the product will be appropriate keeping the customers satisfied. The profits and reputation of a company are greatly affected in case of any wrong decision taken. Proper research on supply and demand of a product should be carried out in order to ensure proper organizational response towards the changing market conditions. CITATION Phi15 l 1033 (Phillips, 2015)Engro foods is second largest company in food industry. Many items are produced and sold by it in which its flagship product is Olpers milk. The demand of milk is increasing day by day regardless of the changing environment. Competition exists for Engro due to which the supply of the product is somehow equal to the demand of the product. When the demand of a product is increased, the supply increases drastically along with it.
Elasticity of Demand:
This is the measure of the responsiveness shown in the demand of a certain product to the change in its price. The formula which is used to measure price elasticity of demand is as follows:
PED = % change in quantity demanded / % change in price
The elasticity of demand varies from product to product and Engro foods manufactures a range of products whose elasticity can be determined. The organizational response is accordingly changed by analyzing the demand of the product. The various degrees in which the products are categorized are as follows:
1. When the quantity demanded of a product does not change with the change in its price, the demand of a product will be perfectly inelastic in which an organization producing the required product will be in an advantage as the price can be charged according to it regardless of the decrease in the demand.
2. When the demanded quantity of a commodity is less than the change in its price, the demand is said to be inelastic. In this the basic needs produced by the company are an example. When the demand for the product is increased to some extent, the price can be increased at a higher rate which will have a little impact on the demand.
The price elasticity of demand affects the response of an organization. When the price elasticity of a product is elastic, an organization can increase its turnover by decreasing the price of the product while in case of inelasticity the price of the product can be increased which in return will increase the revenue. CITATION Ahm116 l 1033 (Ahmed, 2011)PESTLE Analysis:
PESTLE is the acronym for political, social, economical, technological, legal and environmental factors. These are the macro-economic factors which directly influence an organization’s response. As political instability is uprising in Pakistan, the policies and budget of Engro foods is affected adversely which forces the organization in making decisions according to it such as increase in sales tax or excise duty can limit the import of raw materials and machinery from other countries so as to reduce cost expenditure. The shortage of electricity and other basic needs for industry sector fall under political factors which can alter the course of the production of a company. Social factors mainly include the ways where the consumer shows certain behavior towards a product. Consumers in Pakistan rely on the price of the product rather than price for quality. As perfect competition also exist in the industry, Engro focuses on research and development in order to cut the costs to minimum and provide its products according to the changing needs of the customers. Technological factors affect an organization as new methods and innovation can be used to increase the quality of the product as well as reduce costs substantially. As the company is profit oriented, it will adopt new ways for continuous improvement of its products manufacturing to satisfy the need of its customer to its fullest resulting in high revenue generation. CITATION Oxf12 l 1033 (Oxford, 2012)Task 3
Affect of Business and Cultural Environments:
Business environment includes the internal and external factors in which the company is operating and which have direct impact on the operations and performance of an organization. The factors included in them are suppliers, employees, management, Government, social and economic trends etc. CITATION Bus15 l 1033 (BusinessDictionary, 2015)
Cultural environment is the study of social hierarchy, norms, customs, religion and other behavioral groups through which it shapes the values, attitudes and aspirations of people. An organization can take advantage from these factors and can align its product accordingly to the given segment. CITATION MBA14 l 1033 (MBAskool, 2014)
Business Environment Shaping Organizational Behavior:
Business environment includes the factors which prevail inside and outside the organization. They can directly or indirectly influence the operations of a business. Economic factors are prevailing in Pakistan where the inflation rate is growing which affects the purchasing powers of the consumer resulting in fewer sales for the business. As the prevailing market structure is of perfect competition where the entry barriers of competitors are low, domestic industries tend to capture the market with low introductory price such as Nirala, Good milk etc. it affects Engro to change its response accordingly. Due to this the production is kept at a constraint level and the organization works on a demand-pull system. Also the changing response which is seen is the reduction in the price of the commodity to keep the production running and sales intact. This change is also evident as the tax burden on the organization is high for which they have to generate substantial amount of revenue to overcome it. Social factors are of great importance as they show the behavior of the consumers towards a certain product. The flagship product of Engro food is Olpers milk which is used from centuries and is an important part of Pakistani culture. Most people in Pakistan prefer open milk rather than processed because of the addition of certain chemical in the process. For this, the company ensures the health and safety of the product and customer satisfaction as part of its core values. Organizations are forced in providing accurate and substantial amount of knowledge about the product in order to provide the perceived benefit a customer is looking for. Continuous investment and innovative perceptions should be used to educate the consumers about the product and its benefits. This also links with the price policy, as to endeavor the customer to buy the product, the price should be kept attractive and for this the reduction in costs should be achieved which forces the organization to use innovation and cost reduction techniques. Technology has played an important role as Engro foods and most of the organizations have prosper and progress through new technological advancement creating unique and quality products for the consumer. As Engro food provides its flagship product of Olper milk, it used the technique of business process re-engineering in order to switch the customers to its product. Also new technology helped the management to adopt best practices for better operational efficiencies and to train their employees for better productivity. CITATION Poo13 l 1033 (Poonawala, 2013) CITATION Eng12 l 1033 (EngroFoods, 2012)Cultural Environment Shaping Organizational Behavior:
Engro foods have strived to provide superior quality of products to its customers. It believes that the taste and well being of the consumer is of great importance and decisions are made by the organization to the extent where the consumer demand and expectations are met. The culture of Engro food is energetic and dynamic highlighting the core values and the loyalty towards the customers. The environment of the organization is set in a way which promotes the respect for its employees as well for its clients. The management and utilization of resources by Engro food is carried out in such as way that the health and safety of customers, visitors and society at large should be ensured. A dynamic work environment is provided to the employees for them to work effectively and efficiently. Development of business is committed in order to engage the stakeholders by providing positive result. The dignity and value of the people is encouraged to maintain highest level of satisfaction of the employees. For this, the organization treats each other with respect and creates an environment for the workers to be encouraged and treated fairly in order to develop themselves and each other. Engro focuses on creating an environment in which new ideas are generated and developed for getting improved solutions. The risks taken by the employees and results achieved through them are appreciated. The appreciation and full support is also given to the employees who are keen in participating in spreading positive impact on the communities and societies. Engro provides a suitable environment for its employees in order to them to manage their professional and personal responsibilities. It provides opportunities to its employees such as coaching and mentoring which results in personal and professional development of an employee which is an advantage and core competency for a business. CITATION Poo13 l 1033 (Poonawala, 2013) CITATION Eng12 l 1033 (EngroFoods, 2012)Importance of International Trade to UK:
International trade is referred to the exchanging of capital, products and services across borders. Advantages include greater utilization of resources and importing products which cannot be produced. International trade is considered as a vital part of the UK economy for it to grow in past periods. Uk mostly aid the economically depressed sectors by relying on trade for a significant part of their national income and to meet the domestic consumption. Many of the goods produced in UK are not consumed by the domestic people due to which they are exported to satisfy the needs and wants of consumers in foreign countries. As the service sector of UK is strong, exports are strong which stabilizes the balance of payments. UK service sector is dependent on the import of raw materials as it is considered as increasingly important element in the economy of UK. It is considered to have a high marginal propensity to import indicating high economic relation to other countries. The economic performance is greatly affected by the international trade providing a major base for technological progress and productivity. Without international trade, the companies based in UK were to market domestically due to which the potential will be limited. Lower production of costs can be achieved by trading in different countries. One of the major importance of trade to UK is the import of raw materials which are used to make everyday products. The benefits which international trade provides to businesses in UK are:
Expand market share domestically and in foreign markets.

New segments, providing new potential customers.

Remission of taxes helps organization.

Exports result in more sales and profits of an organization.
International trade helps to reduce dependence of organizations in extending portfolios.
Organizations can continue their operations whenever the domestic market becomes saturated.

Stabilizes seasonal market.
It increases traffic, customer figures and sales in an economy. CITATION Mar151 l 1033 (Marked, 2015)Impact of Global Factors on UK Businesses:
The impact of global factors on UK businesses can be explored by the various business strategies which are employed in the United Kingdom. CITATION Placeholder1 l 1033 (Blurtit, 2014) These are as follows:
Export to foreign markets
Association with trade blocs
Partnering with strong international markets
Establishing overseas competitiveness
Following are the factors that that affect the success rate of the above mentioned strategies:
Government stability ensures the development plans globally. It also depends on the role of government in the economy, its relations internationally and relations between business. These create risk to a business by political unrest.
These factors mainly affect the demand and ability to acquire the goods and services. Inflation in domestic and overseas market can be the main reason to affect the business. Following that, exchange rate determines the value of currency which leads the business down. Economic growth in newly industrialized countries can affect it.
The major changes in social trends have impact on demand of a product and availability and willingness of people to work. In United Kingdom, population is affected by ageing which results in the increased costs of firms dealing with pension payments.
Businesses mainly are affected by technology through low access to domestic and overseas patents, intellectual property protection and technology transfer requirements. Also the cost of technology compared to labor becomes the major problem in any industry.
These are referred as PEST, which not only have impact on UK business organizations but also on the economy of a state that takes part in international trade or the free market.

Impact of European Union on UK Businesses:
European Union directives have laid down specific end results that have to be achieved in every member state. National authorities have to adapt the laws of them to meet the necessary goals. CITATION Gav13 l 1033 (Thompson, 2013) To join the Union, economic and political conditions are to be fulfilled which are as follows:
A member must be a stable country, respecting rule of law, human rights and protection of minors.
A member must have a functioning market.

It must adopt the common rules and policies laid down by European Union.
The European Union policies affect the UK businesses by following:
They put an end to customs documents relating goods.
Traders are exemplified from providing tax declarations on goods.

The comparison of firms becomes more effective in internal market.

Open trade policies makes European Union firms at a high ranking.

Stable exchange rates result in developing internal market.
Internal market rules provide high level of environmental protection.

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