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Business environment refers to the set of internal as external surrounding in the organization. It Includes political, social, legal and technological changes which impact the functioning of the enterprises. Therefore, it is essential for the firm to address these fluctuations and adjust operations accordingly to run a successful business. Under this report, various aspects of business environment will be studied in the context of Nestle company . The present report covers various types of stakeholders wants to the company for fulfilling their needs and objectives. An organization takes the responsibility for maintaining the environment at the work place. It includes health and safety act and consumer protection act for reducing the unfair practices in the business. In addition to this, fiscal and monetary policy has great impact on business activities. Further, it also focuses on different types of market structure which affects consumer purchasing power.
There are different types of organization which are divided into three sectors such as public, private and voluntary sectors. These are described as below:
There are different types of stakeholders like customers, employees, suppliers who influence the company by fulfilling its objectives and needs. These are described as below:
Nestle takes the responsibility for maintaining environment and following customer legislation for maintaining the consumer relation. Company adopts regulatory frameworks and legalization under which it creates positive environment at the work place and maintain balance between customer and employer relation. There are various ethical issues which are occurred in the company and the firm follows legal norms for reducing these types of issues. These are stated below:
Economic system is regarded as the process of allocation of resources to the corporate and distribute the goods and services to the community.
There are different types of economy which include mixed, free enterprises and command economy. Mixed economy is the mixture of free and command economy in which, private sector operates for profit motive whilst non-profit organizations are controlled by government for the society welfare (Kazadi, Lievens and Mahr, 2016). For the purpose, mixed economy is created as per public interest and government. Other one is free enterprises, government has no role in supply and any other decision making of the company and due to this export and import of the products is easily transferred from one country to another. Apart from this, command economy is fully controlled by the government. In free enterprises situation, Nestle allocate the resource without involving government and freedom for import and export of the products in one country to another. . In this way, company is not required to follow the rules and legislation.
It has great impact on the firm because it is free to supply the products which increase the profit margin and productivity of the business (Meixell and Luoma, 2015). Hoverer, in mixed economy condition, Nestle allocates the resources as per their own need and government distributes the resource to the firm. Furthermore, it has full freedom to use resource for the production but still, government has the right to control business activities. On the other hand, under command economy situation, organization allocate the resources with the help of government and they contribute in the decision making process.
Fiscal policy is created by the government under which organization pay the amount of tax to the government. In this way, the success of economy is highly dependent upon the collection of taxation from the individual as well as company. For example; increase in VAT will change the Nestle pricing strategy as they have to set little higher price so as to generate pre decided return.. It affects production of the business and decrease the productivity (Osborne, 2013). Further, it impacts the performance of the organization and decreases the sales turnover because of less production in the firm.
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Monetary policy is formed by the government under which this policy controls supply of money, the interest rate, cash reserve ratio (CRR), statutory liquidity ratio (SLR) and purchase and sales of securities. For instance, decline in interest rate will increase supply of money and hence, people will spend more on buying Nestle products which in turn will boost up company's sales and return as well. Furthermore, decline in CRR and purchasing of security will increase the monetary supply under which Nestle will be able to borrow money from the bank and meet the capital requirement respectively (Park, 2012). Contrary to this, SLR, CRR and high interest rates are increased which adversely affects the Nestle operation.
There are different types of policy and regulatory framework under which company follows these policies for reducing unfair practice in the organization. These are described as below:
Apart from this, corporation includes other regulations which impact on organization activities such as equality opportunity, health and safety, minimum wages, flexible working hours etc. There are various regulatory mechanisms which Nestle has to address while carrying out their day to day operation.
Market structure is the area in which the buyer and seller exchange goods and services. There are three types of market one is perfect competition, monopoly and monopolist competition oligopoly. These are stated below:
There are many factors which are affected by the Nestle; these factors are like Supply and demand, elasticity of demand and customer perception. Here, supply and demand as well as other factors are explained below:
Business and culture environment has great impact on the organization behavior. There are two types of business environment first one is economic and other one is non- economic environment (Arellano-Gault, Rouillard and Thoenig, 2013). Here, non economic environment under which it includes economic,political, legal, technological, social, etc. On the other hand, business culture includes technological, core competence, market trends etc. These are the key points of business culture and environment are help to shape the organization. By using technology, corporation produces the products and services in effective manner which help to employees deliver the products on the time. It affects performance of the organization because consumer are satisfied his services on time to time is provided by the employees. On the other hand, culture environment is also affected operation of the business under which different types of culture followed by the organization for maintain work environment. In this way, manager give the task and projects to their employees as per his interest and knowledge which helps workers to work in effective manner (Kuri, 2014). Further, company appoints the skilled employees as per vacant post which aids to manage day to day operation and work based activities in the organization.
The economic condition include the interest rate and policy etc under which company follows these types of policy for maintaining business environment. If changes in policy, rate is direct impact on behavior of the organization and its production. Nestle follows legal factor for maintaining the work surrounding in the organization (Bah and Fang, 2015). In this way, by applying all these regulatory framework, employees behave in ideal manner and work in appropriate manner. Furthermore, company also affected by changing the labor market because government formed the legislation related to the employees. It includes health and safety legislation which will maintains work environment in the organization.
International trade refers to exchange the goods and services between countries. It helps in rising in the world economy which has a great impact on exchange rate. Nestle is required to exchange goods and services in other country like India, Brazil and Japan etc. Furthermore, if company deals with another country which creates the profitable for the firm. These poits describes as below:
In the international market, Nestle will be directly affected by the global factors such as political regulations, governmental rules, social, economical and climate changes, technological advancements etc (Borry and et al, 2012). For example, if developing countries are rising rapidly than their supplier will charge high prices for their material and as a result, it will increase Nestle material cost. By using technological, company develops the innovation in the package of the products which help to consumer are attracted towards the packaging and products and influencing for buying the goods. Furthermore, an organization give the job opportunity to the individual and fulling the vacant post as per candidates qualification or its knowledge. It affects performance of the organization because expanding its production and increase the sales turnover. Corporation focuses on the internal growth which expand their production and supply chain. It helps customer to easily purchases the products and it directly impacts on organization because increase the revenue of the firm.
Through the training, employees enhance its performance and improve knowledge or skills. The great impact on firm activities as they employees contributes the best result of the outputs and manage the day to day operation in effective manner which clients are satisfied his service provided by the workers. Apart from this, Nestle follows rules and regulatory frameworks related to consumer protection, trade blocks, equality etc under which maintain work environment and build-up good relation with the customer, clients, employees (Costa and Menichini, 2013). With the help of monetary unions, company exchange the currency as per other country which control by the government. An organization faces many challenges in the market because various competitors sale the products in the market which creates the high competition between firm. It affects performance of the organization as they reduce the profit margin as well as productivity in manufacturing industry. Furthermore, if changes in economical factor under which it direct impact on business activities and buyers demand. It decreases the sales turnover of the organization and its productivity.
Summing up the whole report, it can be concluded that, different types of stakeholders such as , employees customers, suppliers wants to company for fulling their objectives and needs. . Nestle adopts the legislation related to the consumer protection and employees welfare under which it maintains relation with the customers and employees. . By international trading, organization expands its production and supply chain which helps customer to easily purchase the products. With the help of technology, employees works in an effective manner and manage day to day operation in organization with the effective manner. Business and culture environment has great impact on performance of the organization. Economical and technological changes are affected business activities which helps employees to maintain overall productivity of the business and its work quality.
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