aim of this unit is to provide learners with an understanding of different organisations, the influence of stakeholders and the relationship between businesses and the local, national and global environments. Organisations have a variety of purposes that depend on why they were established. Some operate for profit, whilst others do not. Organisations structure themselves and operate in ways that allow their objectives to be met. Every organisation has a range of stakeholders whose interests need to be satisfied, but stakeholders have competing interests that may be hard to reconcile. Businesses operate in an environment shaped by the government, competitors, consumers, suppliers, and international factors. Learners will understand that some influences on the business environment are direct and clear, for example taxation policies on corporate activities. Other influences are less clear, perhaps coming from the international arena and sometimes with only an oblique impact on the national business environment. It is within this business environment that organisations function and have to determine strategies and a modus operandi that allow them to meet their organisational purposes in ways that comply with the relevant legal and regulatory frameworks. In addition, business markets take various forms and the structure of a market enables an understanding of how organisations behave. In this unit learners will consider how different market structures shape the pricing and output decisions of businesses, as well as other aspects of their behaviour.. 1.2 Learning Outcome By the end of this unit a student will be able to: 1 Understand the organisational purposes of businesses. 2 Understand the nature of the national environment in which businesses operate. 3 Understand the behaviour of organisations in their market environment. 4 Be able to assess the significance of the global factors that shape national business activities. 1.3 Essential Content LO1 Understand the organisational purposes of businesses Categories of organisation: legal structure; type e.g. private company, public company, government, voluntary organisation, co-operative, charitable; sector (primary, secondary tertiary) pg. 4 0916 Purposes: mission; vision; aims; objectives; goals; values; profits; market share; growth; return on capital employed (ROCE); sales; service level; customer satisfaction; corporate responsibility; ethical issues Stakeholders: owners; customers; suppliers; employees; debtors; creditors; financial institutions (banks, mortgage lenders, credit factors); environmental groups; government agencies (central government, local authorities); trade unions Responsibilities of organisations: stakeholder interests; conflict of expectations; power-influence matrix; satisfying stakeholder objectives; legal responsibilities e.g. consumer legislation, employee legislation, equal opportunities and ant discriminatory legislation, environmental legislation, health and safety legislation; ethical issues e.g. environment, fair trade, global warming, charter compliance e.g. Banking Code LO2 Understand the nature of the national environment in which businesses operate Economic systems: the allocation of scarce resources; effective use of resources; type of economic system e.g. command, free enterprise, mixed, transitional The UK economy: size (gross domestic product, gross national product); structure; population; labour force; growth; inflation; balance of payments; balance of trade; exchange rates; trading partners; public finances (revenues, expenditure); taxation; government borrowing; business behaviour e.g. investment, objectives, risk awareness; cost of capital; consumer behaviour; propensity to save; propensity to spend; tastes and preferences Government policy: economic goals; fiscal policy: control of aggregate demand; central and local government spending; Public Sector Net Borrowing (PSNB) and Public Sector Net Cash Requirement (PSNCR); euro convergence criteria, monetary policy; interest rates; quantitative easing; private finance initiative (PFI); competition policy (up-to- date legislation including Competition Act 1998, Enterprise Act 2002); Competition Commission, Office of Fair Trading; Directorate General for Competition); European Commission); sector regulators e.g. Ofgem, Ofwat, Civil Aviation Authority; Companies Acts; regional policy; industrial policy; enterprise strategy; training and skills policy LO3 Understand the behaviour of organisations in their market environment Market types: perfect competition, monopoly, monopolistic competition, oligopoly, duopoly; competitive advantage, strategies adopted by firms; regulation of competition Market forces and organisational responses: supply and demand, elasticity of demand; elasticity of supply; customer perceptions and actions, pricing decisions; cost and output decisions; economies of scale, the short run; the long run, multi-national and transnational corporations; joint ventures, outsourcing; core markets; labour market trends; employee skills, technology; innovation; research and development; core competencies; business environment (political, economic, social, technical, legal, environmental); cultural environment pg. 5 0916 LO4 Be able to assess the significance of the global factors that shape national business activities Global factors: international trade and the UK economy; market opportunities; global growth; protectionism; World Trade Organisation (WTO); emerging markets (BRIC economies – Brazil, Russia, India, China); EU membership; EU business regulations and their incorporation in to UK law; EU policies e.g. agriculture (CAP), business, competition, growth, employment, education, economics and finance, employment, environment, science and technology, regional); labour movement; workforce skills; exchange rates; trading blocs (e.g. monetary unions, common markets; customs unions, free trade areas); labour costs; trade duties; levies; tariffs; customs dues; taxation regimes; international competitiveness; international business environment (political, economic, social, technical, legal, environmental); investment incentives; cost of capital; commodity prices; intellectual property; climate change e.g. Kyoto Protocol, Rio Earth Summit; third world poverty; the group of 20 (G-20); global financial stability Recommended Resources BARON, P. (2012) Business and its Environment. 7th Ed. London: Prentice Hall. PALMER, A. and HARTLEY, B. (2011) The Business Environment. 7th Ed. Maidenhead: McGraw-Hill. WEATHERLEY, P. (Editor) and OTTER, D. (Editor) (2014) The Business Environment: Themes and Issues in a Globalised World. 3rd Ed. Oxford: Oxford University Press. WORTHINGTON, I. and BRITTON. C. (2014) The Business Environment. 7th Ed. Harlow Pearson. Assessment criteria LO1. Understand the organisational purposes of businesses 1.1 Identify the purposes of different types of organisation 1.2 Describe the extent to which an organisation meets the objectives of different stakeholders 1.3 Explain the responsibilities of an organisation and strategies employed to meet them LO2. Understand the nature of the national environment in which businesses operate 2.1 Explain how economic systems attempt to allocate resources effectively 2.2 Assess the impact of fiscal and monetary policy on business organisations and their activities 2.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organization LO3 Understand the behaviour of organisations in their market environment pg. 6 0916 3.1 Explain how market structures determine the pricing and output decisions of businesses 3.2 Illustrate the way in which market forces shape organisational responses using a range of examples 3.3 Judge how the business and cultural environments shape the behaviour of a selected organisation LO4 Be able to assess the significance of the global factors that shape national business activities 4.1 Discuss the significance of international trade to UK business organisations 4.2 Analyse the impact of global factors on UK business organisations 4.3 Evaluate the impact of policies of the European Union on UK business organisations. Links This unit links to the following related units: Unit 3: Organisations and Behaviour Unit 7: Business Strategy, 1.4 Scheme of Work Wee k Session Lecture Schedule Outcome of session: The learner should be able to; Activity/semina r and formative assessment Resource s 1 AM Categories of organisation Legal structure; type e.g. private company, public company, government, voluntary organisation, co- operative, charitable; sector (primary, secondary tertiary); Mission; vision; aims; objectives; goals; values; profits; market share; growth; return on capital employed (ROCE); sales; service level; customer satisfaction; corporate responsibility; ethical issues PM Organisation purposes Mission; vision; aims; objectives; goals; values; profits; market share; growth; return on capital employed (ROCE); sales; service level; customer satisfaction; corporate responsibility; ethical issues 2 AM Stakeholders Owners; customers; suppliers; employees; debtors; creditors; financial institutions (banks, mortgage lenders, credit factors); environmental groups; government agencies (central government, local authorities); trade unions pg. 7 0916 PM Responsibilitie s of organisations Stakeholder interests; conflict of expectations; power-influence matrix; satisfying stakeholder objectives; legal responsibilities e.g. consumer legislation, employee legislation, equal opportunities and ant discriminatory legislation, environmental legislation, health and safety legislation; ethical issues e.g. environment, fair trade, global warming, charter compliance e.g. Banking Code 3 AM Economic systems The allocation of scarce resources; effective use of resources; type of economic system e.g. command, free enterprise, mixed, transitional The UK economy: size (gross domestic product, gross national product); structure; population; labour force; growth; inflation; balance of payments; balance of trade; exchange rates; trading partners; public finances (revenues, expenditure); taxation; government borrowing; business behaviour e.g. investment, objectives, risk awareness; cost of capital; consumer behaviour; propensity to save; propensity to spend; tastes and preferences PM Assignment workshop 4 AM Government policy Economic goals; fiscal policy: control of aggregate demand; central and local government spending; Public Sector Net Borrowing (PSNB) and Public Sector Net Cash Requirement (PSNCR); euro convergence criteria, monetary policy; interest rates; quantitative easing; private finance initiative (PFI); competition policy (up-to- date legislation including Competition Act 1998, Enterprise Act 2002); Competition Commission, Office of Fair pg. 8 0916 Trading; Directorate General for Competition); European Commission); sector regulators e.g. Ofgem, Ofwat, Civil Aviation Authority; Companies Acts; regional policy; industrial policy; enterprise strategy; training and skills policy PM Market types Perfect competition, monopoly, monopolistic competition, oligopoly, duopoly; competitive advantage, strategies adopted by firms; regulation of competition 5 AM Market forces and organisational responses Supply and demand, elasticity of demand; elasticity of supply; customer perceptions and actions, pricing decisions; cost and output decisions; economies of scale, the short run; the long run, multi-national and transnational corporations; joint ventures, outsourcing; core markets; PM Labour market trends; employee skills, technology; innovation; research and development; core competencies; business environment (political, economic, social, technical, legal, environmental); cultural environment 6 AM Assignment workshop PM 7 AM Global factors: International trade and the UK economy; market opportunities; global growth; protectionism; World Trade Organisation (WTO); emerging markets (BRIC economies – Brazil, Russia, India, China); EU membership; EU business regulations pg. 9 0916 and their incorporation in to UK law; EU policies e.g. agriculture (CAP), business, competition, growth, employment, education, economics and finance, employment, environment, science and technology, regional); labour movement; workforce skills; exchange rates; trading blocs (e.g. monetary unions, common markets; customs unions, free trade areas) PM Labour costs; trade duties; levies; tariffs; customs dues; taxation regimes; international competitiveness; international business environment (political, economic, social, technical, legal, environmental); investment incentives; cost of capital; commodity prices; intellectual property; climate change e.g. Kyoto Protocol, Rio Earth Summit; third world poverty; the group of 20 (G- 20); global financial stability 8 AM Assignment workshop PM 9 Assignment support week 10 Assignment submission 1.5 Teaching Ethos The college's approach towards teaching and learning is simple and effective. The main aim of UKCBC is to assist learners in maximising their potential by ensuring that they are taught clearly and effectively. This will enable students to engage in the learning environment and promote success in both their academic studies and subsequent career. The module tutor(s) will aim to combine lectures, workshops and tutorial activities. This environment will provide opportunities for the student to understand the course material through case study and text and to apply it in a pg. 10 0916 practical way. The intent is to facilitate interactive class activities, and discussion about the significant role of research in a global and local business environment. 1.6 Methods of Delivery LECTURES: These will be developed around the key concepts as mentioned in the indicative course content and will use a range of live examples and cases from business practice to demonstrate the application of theoretical concepts. This method is primarily used to identify and explain key aspects of the subject so that learners can utilise their private study time more effectively. SEMINARS: These are in addition to the lectures. The seminars are designed to give learners the opportunity to test their understanding of the material covered in the lectures and private study with the help of reference books. This methodology usually carries a set of questions identified in advance. Seminars are interactive sessions led by the learners. This method of study gives the learner an excellent opportunity to clarify any points of difficulty with the tutor and simultaneously develop their oral communication skills. CASE STUDIES An important learning methodology is the extensive use of case studies. They enable learners to apply the concepts that they learn in their subjects. The learners have to study the case, analyse the facts presented and arrive at conclusions and recommendations. This assists in the assessment of the learner's ability to apply to the real world the tools and techniques of analysis which they have learnt. The case study serves as a supplement to the theoretical knowledge imparted through the course work. 1.7 Plagiarism Any act of plagiarism will be seriously dealt with according to the colleges and awarding bodies' regulations. In this context the definition and scope of plagiarism are presented below: Plagiarism is presenting someone's work as your won. It includes copying information directly from the web or books without referencing the material; submitting joint coursework as an individual effort; copying another student's coursework; stealing coursework form another student and submitting it as your own work. Suspected plagiarism will be investigated and if found to have occurred will be dealt with according to the college procedure. (For further details please refer to the plagiarism policy and the student code of conduct.) pg. 11 0916 1.8 Assignment brief Unit 1 Business Environment Unit code Y/601/0546 Unit type Core Block Start date 21/11/2016 Assignment/hand-out date 21/11/2016 Deadline/hand-in date 12/02/2017 Word count 3000 - 4000 APPROXIMATELY Task 1 Case study - PRIMARK Primark is a subsidiary company of the ABF (Associated British Foods) Group. The company was launched in 1969 in Ireland trading as Penny's. By 2000, there were over 100 stores across Britain and Ireland. By 2012 Primark had 238 branches across the UK, Ireland and Europe. Primark has become distinctive for offering unbeatable value whilst never losing its innovative, fashion-driven edge. Like many retail fashion businesses, Primark does not manufacture goods itself. Its expertise lies in understanding its customers and working with its suppliers to produce goods to Primark's specification. It then gets the right goods to the right places at the right prices. Its profitability depends on sheer volume of sales. Primark's value-for- money prices rely on low costs. These are achieved in part through economies of scale and efficient distribution. Primark's products are mainly sourced from suppliers in Europe and Asia. Its key sourcing countries are China, India, Bangladesh and Turkey. Putting the manufacturing of garments into these countries creates jobs. These are often at better rates of pay than other types of work on offer, improving overall standards of living. Read more: http://businesscasestudies.co.uk/primark/beyond-corporate- social- responsibility/introduction.html#ixzz4L0Tk1slY You are required to; 1.1 Identify what type of organisation is Primark and discuss its purpose. In addition identify and discuss the purpose of one organisation within the following categories; a) The public sector pg. 12 0916 b) Charity c) Cooperative 1.2 Describe the extent to which Primark meets the objectives of its different stakeholders 1.3 Explain the responsibilities of Primark as an organisation and the strategies employed to meet them Task 2 – Individual questions 2.1 Different countries operate different economic systems to attempt to allocate resources effectively. Research and explain the type of system operated in the following countries and reasons why you think they follow these systems. a) Cuba b) United Kingdom c) China 2.2 In the UK the Chancellor of the Exchequer and the Bank of England plays a significant role in regulating the economy. The tools used by them are referred to as Fiscal and Monetary policies respectively. You are required to assess the impact of fiscal and monetary policy on the following type of businesses a) Farming b) Housing 2.3 Competition is an essential element in the efficient working of markets. However businesses are of different sizes and that can create unfair competition. In the UK as in other European nations Competition policies are used to encourage and improve the competitive process, and to ensure consumers feel the benefits of that process. You are required to identify at least five competition policy and other regulatory mechanisms in the UK and evaluate their impact on the activities of a selected organization(s). Task 3 – Essay With the aid of practical examples and using suitable organisation(s). You are required to write as essay ( no more 1500 words) to; 3.1 Explain how pricing and output decisions of businesses is determined in the following market structures a) perfect competition b) monopoly c) oligopoly pg. 13 0916 d) duopoly 3.2 Illustrate the way in which market forces (demand and supply) shape organisational responses using a range of examples (diagrams are essential) 3.3 Judge how the business and cultural environments shape the behaviour of a selected organisation Task 4 Debate - BREXIT On 23 June, the UK finally settled the question that's been rumbling close to the surface of British politics for a generation: should the country remain within the European Union or go it alone. The EU is a single market in which no tariffs are imposed on imports and exports between member states. "More than 50 per cent of our exports go to EU countries," says Sky News. Membership of the bloc means we have always had a say over how trading rules are drawn up. Britain also benefits from trade deals between the EU and other world powers. "The EU is currently negotiating with the US to create the world's biggest free trade area," says the BBC, "something that will be highly beneficial to British business." Strong arguments have been made by both the Remain camp and the Leave camp. Amongst several arguments put forward by supporters of the Leave camp is that Britain's links with the EU are holding back its focus on emerging markets – there is no major trade deal with China or India, for example leaving would allow the UK to diversify its international links. Whilst the Remain camp disagrees with this argument and argues that 44 per cent of Britain's exports go to other EU countries. Putting up barriers with the countries that Britain trades with most would be counterproductive (The Telegraph, 2016). Britain risks losing some of that negotiating power by leaving the EU, but it would be free to establish its own trade agreements. Your local MP is concerned and worried about how Brexit will impact on local businesses that trade locally and internationally. You have been asked to provide an objective report (no more than 1500 words) for your local MP to; 4.1 Discuss the significance of international trade to UK business organisations 4.2 Analyse the impact of global factors on UK business organisations 4.3 Evaluate the impact of policies of the European Union on UK business organisations PLEASE NOTE- You will be required to give practical examples making references to Brexit where appropriate. pg. 14 0916 1.9 Evidence to achieve Pass, Merit and Distinction Pass LO1 To achieve a Pass you must show an understanding of the organisational purposes of businesses to address assessment criteria 1.1, 1.2 & 1.3 as instructed. LO2 To achieve a Pass you must show an understanding of the nature of the national environment in which businesses operate to address assessment criteria 2.1, 2.2 & 2.3 as instructed LO3 To achieve a Pass you must show an understanding of organisations in their market environment to address assessment criteria 3.1, 3.2 & 3.3 as instructed LO4 To achieve a Pass you must be able to assess the significance of the global factors that shape national business activities to address assessment criteria 4.1, 4.2 & 4.3 as instructed Merit M1. Identify and apply strategies to find appropriate solutions. Effective judgements have been made M1 Analyse how the structure, size and scope of Primark link to the business objectives and product and services offered by the organisation M2. Select/ design and apply appropriate methods/ techniques. A range of sources of information used. Appropriate structure and approach has been used. To achieve M2 The learner should have substantiated their answers by sourcing relevant legislations, cases, texts, articles correctly and appropriately to present their answers. M3. Present and communicate appropriate findings. Technical language accurately used. You should also show evidence of accurate use of legal technical language particularly. Possible evidence areas could be in Tasks 1, 2, 3 and 4 Distinction pg. 15 0916 D1. Use critical reflection to evaluate own work and justify valid conclusion. Synthesis has been used to generate and justify valid conclusions D1 Provide a critical analysis of the complexities of different types of business structures and the interrelationships of the different organisational functions. D2. Take responsibility for managing and organizing activities. Autonomy/independenc e demonstrated To achieve D2 you will have demonstrated autonomy across your assignment backed by effective independent research. There is also need to demonstrate interdependence in learning outcome across the assignment. D3. Demonstrate convergent, lateral and creative thinking Convergent and lateral thinking have been applied To achieve D3, your work needs to demonstrate creative thinking and receptiveness to new ideas across the assignment, especially in any of the task 4. 2.0 Glossary of academic words used in this and other assignments pg. 16 0916   Account for Give reasons for: explain why something happens. Analyse Examine something in very close detail and from a number of angles. Identify the important points and chief features, and understand their relationships. Argue Present a case for and against a proposal or statement and present your own opinion at the end. Compare Show how two or more things are similar. Contrast Look at two or more things and draw out differences. State whether the differences are significant. Critically evaluate Weigh arguments for and against something, assess the strength of evidence on both sides. Define Give the exact meaning of. Describe Give a detailed account of the main features or characteristics ... Discuss Write about the most important characteristics of something. Give arguments for and against, look at it from a variety of perspectives. Distinguish Identify the differences between two items. pg. 17 0916 Evaluate Assess the worth or usefulness of