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June 17, 2014

Research Paper on Business Environment

Purpose of Organization
An organization is a group of individuals grouped in a controlled structure having a communication system to facilitate the flow of information, in order to meet needs and achieve specific objectives. The basic purpose of organization is that the organized and controlled group’s efforts are directed towards a common goal. The group effort can be achieved by coordination. Authority and responsibility relationship help to achieve coordination (Mowday, 1993).
The existence, growth and modernity of organizations can be explained through different theories and school of thoughts. While several theories have been advanced in an effort to explain the structure, functioning and management of organization, to date, none is considered as complete; or is accepted as final. Each theory has some limitations, and the field of management theory is still in the process of evolving (Longenecker, 1994).
In the input – output model of organizations, the organization only take care of the desires and wishes of four parties which provide input to the organization, i.e. investors, employees, suppliers and customers.  On the contrary, stakeholder theory discusses that there are other groups which have stake in the organization (Phillips & Edward, 2003). These include governmental bodies, trade associations, trade unions, political groups, prospective employees, prospective customers etc. public and the competitors of the organizations are also consider as the stakeholder.
According to the new stakeholder theory that is now practiced in contemporary organizational mainstream the number and quantity of stakeholders that constitute the organizational framework of a non-profit organization can either be classified as external or internal. External stakeholders of the organization primarily comprise of people and general public belonging to a certain community or area that are either directly or indirectly influenced or affected by the working or the functioning of the organization (Post, 2002).The administration and executives of an organization usually formulate or try to formulate a strategy which satisfy all the stakeholders because they have overlapping goals and interests (Counte, 1995).
Responsibilities and Strategies
Effective and efficient governance of a an organization is a team effort which can be accomplished with the help and support of all the stakeholders. Governance is the primary focus of any organization because it is the governance which decides the fate of the organization; whether it is a good organization or bad. Governance of an organization is considered effective if it possesses the following traits and characteristics
·         It must be simple
·         Efficient
·         Allows and respect conflicts of ideas
·         It must be focused
·         Integrated and synergetic
·         Provide efficient and good results
·         Preserve community assets and
·         Provide good rewards
In order to achieve the goal of effective governance, the role of board revolves around three basic responsibilities: 
1.      Policy establishment
2.      Strategic and significant decision making and
3.      Oversee organization’s activity
Policy making:
Policies set the goals and define strategies to achieve these goals. A well-written and well-managed policy makes the target achievement much easier. It is the duty of the board that, for efficient and effective governance, does not try to implement policies. Board’s responsibility is to set the policy and leave the implementation to the management of the organization because board’s time is more valuable; it meets for only 24 hours in a year, so they have to utilize their time on more important issues. It is also the duty of the board to review the past policies and refine these policies, if necessary.
Decision making:
Decision making is an important responsibility of the board. It must make significant decisions, keeping the vision, mission and strategies of the organization in mind. However, it is advisable to delegate the power to make non-governance type decisions to the management.
Oversee organization’s activity
Boards must oversee the working of the organization but do not try to intervene in management activities. The oversight role makes the board responsible for whatever happens in the healthcare organization.
Apart from these above-mentioned roles, board has various other responsibilities. These responsibilities include:
·         Monitor the management of the organization
·         Oversee quality and finance issues
·         Set ethical standards and values and
·         Select a CEO and monitor his / her performance etc.
Among all the mentioned responsibilities, selecting a CEO and monitor his performance is most important because CEO is the person who runs and manages the day to day management and affairs of the organization.
The mission and vision of every organization is dependent on its culture, and the people whom it has to deal with. Thus, it does seem appropriate that every community and vicinity should have their own Health Care Organization with specific mission statement. The board should use every strategy available to measure and evaluate its performance, whether it is a balanced scorecard or ten measures formula. The primary goal of this performance evaluation is to govern the health care organization more effectively and thus every tool is used to achieve this goal.
Allocation of Resources
Considered in its generality, the problem of the allocation of resources in a society according to their needs seems immense. Among the resources provided by nature, there are a number which are consumed as such: water quenches our thirst, the ground we occupy etc. But there are many other goods that we consume, and which are not directly provided by nature in a suitable form. In our country, temperature of the climate is not sufficient to keep us alive, we must "produce" the driving force heat with wood, coal or fuel oil.  
In economics, the usual way to characterize an optimal situation is to use the concept of Pareto optimality. The market is a mechanism for allocating resources effectively because if markets are complete and agents' preferences are monotonic, the equilibrium leads is Pareto optimal (First theorem of welfare economics). Markets must be "complete" for the theorem to be valid. All assets in the economy entering the utility functions of agents should be traded. This condition excludes the existence of externalities and public goods.
There are pure public goods including lighthouses, fireworks, national defense. Other assets are "partially public." This is particularly the case of knowledge. That candidates for examination at the same time using a method of solving a system of equations should not, in principle, affect the quality of copies made. Market failure is a term used to describe situations where the conditions for the market lead to an efficient allocation of resources are raped so characterized. The findings of the efficiency of general equilibrium theory are no longer valid in these cases.
Impact of Fiscal Policy
It appears that the impact of monetary policy and the exchange rate on agricultural competitiveness has increased in recent years due to an economic context characterized by the conjunction of three factors: the indebtedness of farmers and States, the liberalization of agricultural markets and growing economic conditions.
The application for a bilateral comparison between the United States and the European Union makes it clear that this impact is fluctuating from one year to another, but still significant. Variable exchange rates and interest rates of central banks are two factors more essential than in the past agricultural competitiveness of State.
Competition Policy
The term "competition policy" is used with different meanings in different countries and contexts. In its broadest sense, it includes all measures which affect competition in a market, including trade policy measures, regulatory and fight against anticompetitive practices of private and public companies. Within the narrow meaning, the term refers to the last of these aspects, that is to say, the laws or regimes for anti-competitive behavior of companies.
Reasons should include the relationship between trade and competition in the work program of the WTO,  Concerns about possible adverse effects of anticompetitive practices in business (often called " restrictive business practices ") have been expressed already fifty years ago when the GATT was created.
Increased interest in the debate on competition policy observed in recent years is attributable to many factors, including the following four:
·         It appears more and more that as formal barriers to trade are dismantled by successive rounds of negotiations of commercial importance of restrictions and distortions resulting from business practices;
·         The global economy is increasingly integrated, not only under the influence of liberalization of international trade, but also because of considerable expansion of foreign direct investment. Therefore, anti-competitive practices gain increasingly a cross-border dimension and affect many countries and in some cases the world;
·         There is a proliferation of international rules at the bilateral, regional and multilateral levels, to protect the interests of foreign companies operating in the territory of a country. Some countries believe that these rules of organizations should be complemented by a strengthening of international cooperation in the fight against the trade anticompetitive business practices in question;
·         There is a growing convergence of views, tends to blur the old divisions North-South and East-West, the fact that competition law is often the appropriate means to address against the anti-competitive practices, even if there is still much to be done to agree on points of detail.
Pricing and Costing
Costing and pricing steps are closely related to the definition of product prototype. They aim at pricing of product prototype that will be tested. Costing, prior to the step of charging, should allow a better understanding of the cost structure of the institution to ensure that the price proposed will ensure the long term viability of the new product. It is easier to set the price of a new product or an improved product if the cost of existing products is already known. The principle is to rely on the actual costs to estimate the expected costs for a new product (Guadalupe, 2007).
The calculation of cost of goods is to analyze income and expenses in the income statement by product offered, i.e. to allocate costs to products. The allocation of costs to products addresses a fundamental business principle: a company (usually) to maximize its profits by selling its products, and all costs of the company must be connected to this objective, and thus one or more product (s). Therefore, even indirect and even seemingly unrelated products, a cost must always be attributed to one or more product (s). This basic principle is also valid for MFIs, although the goal is to achieve sustainability and not to maximize profits.
In order to position the company and its competitors in a given market is realized in two directions: the environment, in terms of attractiveness of the sector (opportunities and threats), and the company in terms of intrinsic potential (strengths and weaknesses). It can inform strategic choices, confirm or disprove. It sometimes involves a redefinition of business processes of the company.
The changing environment often explains the strategy (concept of competitive pressure from the environment). Thus, the diagnosis for all the elements that influence the company (defensive aspect of the strategy) on which it can act (offensive aspect of the strategy). It is to identify market factors (forces present) and non-market factors (regulation, for example).
How market forces shape organizational response?
Market forces which can shape the organizational responses include dynamic consumption and production, including technical and socio technological factors such as the organization of work or level of training and qualification of a population.
The company must also identify what is the main competitive strength in order to influence the terms of trade in the market. It must therefore select its customers and suppliers on strategic criteria, if it increases its vulnerability. Here are some relevant selection criteria:
·         The concentration of supply and demand;
·         Sensitivity to price and quality;
·         The risk of upstream and downstream integration;
·         The costs of switching providers (switching costs);
·         The ability to integrate cost increases in prices
Cultural Environment and behavior of Organization
The term culture has been borrowed from anthropology where there is no consensus on its meaning. It is the collection of common views, expectations and beliefs of the members of the organizations. These values and norms which constitute corporate culture are not in writing but are understood by all the members of the organization. Even the newcomers to the organization get to know them either through formal training programs and orientations or from their peers. When members of an organization share the same values, they will become more cohesive and committed to their goals. Such commitment is essential for better performance and productivity improvement. Although it is not visible, corporate culture still exists and influences people and activities in organizations.
Most of the successful organizations use a systematic approach in bringing new members into their culture. Pascle (1985), after examining a number of companies with strong culture, suggests that the following steps in socializing members into the corporate culture:
·         Exercising care in selecting entry-level candidates. Specific traits are sought by looking deeper into the candidates. These traits are tied to success of the company
·         Subjecting the newcomer to humility-inducing experiences in the initial period which will provide an opportunity to question prior beliefs
·         Practical training leading to mastery of one of the core disciplines of the business using promotions as incentives
·         Focus on measuring results and rewarding individual performance
·         Adapting to corporate values which will build trust between the individual and the organization
·         In order to validate corporate culture, folklore are reinforced and events in this history of the company are interpreted
·         Those who move up fast are used as sole models.
Managing Corporate Culture is not simple. It requires constant assessments and monitoring by examining the external and internal environment. Such examination would reveal the nature of changes that are anticipated or are taking place in these environments. These changes may force the organization to adapt or modify their corporate culture according to the demands of the environment. A relaxed attitude on the part of the managers who believe they have a strong culture built over the years to enable them to cope with any kind of situation is risky. Uttal asserts that a static culture means a continuation of old, inefficient ways (Uttal, 1982).
Many leaders believe that organizational excellence can be achieved through effectively managing corporate cultures. It is sometimes observed that most managers do not know how to manage culture because of their lack of knowledge in monitoring and changing an ailing corporate culture although they realize that corporate culture is critical to corporate success (Miller, 1983). Basically managing culture involves identifying the existing norms, values and beliefs, comparing them against the desired values, norms and beliefs, and planning and implementing the socialization process systematically.
Culture provides a solid foundation and a positive climate for productivity improvement. Sathe points out that corporate culture determine both the efficiency and effectiveness of the company (Sathe, 1985). Luce also affirms the same view and states that by improving the organizational culture, the organization can be made more effective and productive (Luce, 1984). Of course culture per se does not directly increase profit or decrease cost. But it influences the behavior of people in an organization. Because the companies have certain common cultural attributes, other companies can become excellent by emulating them (Peters & Waterman, 1982).
Moskowitz identifies the following as characteristics of working places in good companies not found in other companies:
·         Make people feel they are part of a team
·         Encourage open communication
·         Stress on quality
·         Profit sharing
·         Reduce rank distinctions (Moskowitz, 1985).
Although corporate culture is an invisible and elusive concept, it significantly affects all spheres of corporate life activities, ranging from day-to-day routines to corporate strategy. How much mileage a corporation can get out of this culture depends on how it is nurtured and managed. It is proven fact that companies with strong corporate culture maintain leadership in their business activities.
Significance of International Trade
The significance of international trade has become increasingly important in the present global environment. International trade intensified policy coordination with developed economies, playing several times as a mediator in the most crucial moments of the negotiations, to ensure a truly multilateral trading system and to ensure that international trade develops in a more just and reasonable order (Hill, 2004).
Impact of Global Factors
According to the officials present or related to the financial institutions of the country such as the banking or other important regulatory department of the country said that a major factor that influenced and affected the international trade is inclusion in WTO agreement. One important factor is the reforms and economic changes that were encouraged and introduced by globalization. In the midst of adopting the model of globalization and the economic reforms UK was able to transit and shift its economic doctrine to a more capitalist approach. Hence the adoption of UK and realization that it can only survive by incorporating modern changes in its system quickly boosted the economic engine of the country.
There was a unanimous agreement on the fact that the country needs to expand its reach and explore every possible frontier and avenue through which it can provide people its own products and services. It is pre-dominantly because of UK’s strong position on a global economic and financial scale that has further encouraged and motivated regulatory bodies to form regulations in its favor. Also, apart from all this WTO commitments as a reforming force to oppose the rising political influences and undermining of economic control and accountability has also been a major force and the way UK has been combating all these forces within its economic system is highly appreciating and encouraged repeatedly by organizations like WTO.
Impact of EU Policies
The return of the Conservatives to power in 2010 augur much larger problems with the European Union, as the party - MPs and activists - became critical vis-à-vis the European under four successive leaders, William Hague (1997 -2001), Iain Duncan Smith (2001-2003), Michael Howard (2003-2005) and David Cameron. Not content to definitively reject entry into the monetary union, the party had opposed the draft Constitutional Treaty, demanded a referendum on the treaty and had criticized the government's progress on European defense. Despite modernizing its image in other areas, Cameron, once elected in 2005, had confirmed this orientation by asking Conservative MEPs to withdraw from the European People's Party center-right to create a new group in the European Parliament sovereignty. He also promised his troops renegotiation of certain Community policies, repatriation of these at national level, and a law requiring any British government to hold a referendum in case of transfer of new powers to Brussels.
This drift of anti-European party once (in 1960) Europhile mostly be explained by a combination of factors, ranging from the Thatcherite legacy to the supposed superiority of one model against the British liberal bureaucratic rules imposed by the European Commission and countries "statist" as France. Bureaucracy and protectionism would prevent Member States enjoy the economic benefits of globalization, seen as an opportunity and not a threat, unlike the European Union. The conservative argument against the euro, repeated at length columns since the beginning of the sovereign debt crisis, is also based on the idea that a monetary union can be achieved without fiscal union, so without political union, and that they are inherently unacceptable as questioning the sovereignty of national parliaments and thus the very existence of the nation. It is based on a public opinion finally become increasingly hostile to the EU in general, especially in the wake of the wave of immigration from the former Eastern Europe since the 2004 enlargement . In the minds of many Britons, the EU is responsible for the opening of borders, the British government has since 2004, while France and Germany have provided a transitional period, which was followed an influx of Eastern European workers. Poles, Czechs and other Eastern Europeans are often perceived as responsible for wage cuts and shortages of housing, places of schools and hospitals - a theme which feeds right-wing conservative party and the himself had used during election campaigns in 2005 and 2010. On the EU budget for 2012, the government outvoted in the European Council agreed an increase of 2.9% when he was campaigning for the gel.

But it is the question of the response to the sovereign debt crisis in the euro area and the conflict between London and its EU partners crystallized. As a first step, the government took care to stand back internal debates in the euro area and to minimize its financial commitment. On the economic point of view, the calculation might seem strange, since the United Kingdom has much interest that the euro crisis is resolved that countries that have adopted the single currency because of the interdependence of economies Europe. But politically, especially vis-à-vis their own party, it was impossible for Cameron and Hague to engage openly in aid to the euro zone. Thus, if the government has indirectly participated in the first aid plan for Greece in June 2010 through its contribution to the IMF, he denounced the British participation in the first fund European Financial Stability signed by the previous government. It has provided assistance to Ireland in autumn 2010, but the name of the bilateral cooperation and traditional ties between the two countries, not European solidarity. It had then constantly repeating that there would be more British involvement in the rescue of the euro.

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