Good Example Of Organizational Purposes Of A Business Business Plan
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An organization is a unit of people structured and managed to pursue collective goals as a matter of need and to operate in a given environment. The organizational structure and collective goal defines the purpose of the organization. Organizations get designed on the basis of the management structure and the labor aspect that determines the relationships between members and the activities involved. This paper seeks to identify, describe and explain the organizational purpose of businesses, nature of the environment in which businesses operate, behavior of organizations and the significance of the global factors that shape national business activities.
The private and public organizations involve stakeholders associated with the company internally or externally and directly or indirectly with the organization’s operations all with specific objectives. Internal stakeholders including investors, managers, and workforce provide capital, skills, and expertise to the organization. Hence, the organization has an obligation of appreciating their efforts and support. Besides the monetary appreciation offered commonly as a standard operational component, dividends and shares are also common. That allows the shareholders with partly and wholly ownership of the business to receive a share of the generations of the company or the profits according to their contribution. The organization adopts innovative ideas and decisions to maximize profits and general performance to fulfill the objectives of its internal stakeholders. In other cases, status, power and promotion get used as an inducement to the contribution of stakeholders to the organization. For external stakeholders including customers, government, and the general public their fulfillments are obligatory and expectation-based. To the customers, the organization ensures delivery of the best goods and services to meet their expectations and attract more customers. To the community, the organization has to maintain ethical and fair practices by ensuring that all operational standards are keenly observed. Some organizations take their ethical commitment further to include the undertaking of corporate social responsibilities. The government is the policy making body and apart from obliging to the set regulations, the organizations also get involved in policy making matters as economy contributors. The organization has to operate according to the laws and regulations set.
Organizations have a responsibility of performing presently and building capacity for the future. Performance responsibility entails various factors including profitability, staff welfare, observing the regulations and other work-related functions. In building future capacity, the organization forecasts the trends and makes informed creative decisions to ensure sustainability and relevance of the future operations. In order to fulfill their responsibilities, organizations use competitive advantage strategies through structural analysis and generic strategies to outperform competitors by creating and sustaining superior performance. For an industry based company, for instance, involved in the manufacture and sale of its products, the strategies of competitive advantage will grow and maintain profitability of the company (Bilyk 2-5). There are four key strategies involved: cost leadership, differentiation, cost focus and differentiation focus. Differentiation involves the company making products that differ and are more attractive than that of the competitors by delivering high-quality products and extensive research to develop innovations. Cost focus involves focusing on a particular niche markets and understanding its dynamics and the unique needs of customers. Cost leadership involves strategies for reducing costs and pricing according to the industry averages. Differentiation entails building a brand that will associate with the quality involved. With the strategies, optimizations of current operations and performance will materialize and through research the future requirements and specifications are anticipated.
Nature of the National Environment in which Businesses Operate
A mechanism for allocating resources is one of economic systems’ features, and it focuses on the market and command. There are different types of resources available in the market, and the economic system creates a rationale for exchange and allocation of the resources. The main component of the allocation focuses on demand and supply and in order to facilitate the exchange, value gets incorporated. Economic systems introduced monetary valuing system that carries with it the value of the resources in question. For this reason, the value measure can be used for resource transfer from the supplier to the consumers on the basis of demand (McCulloch 365).
Fiscal and monetary procedures are important in achieving economic objectives in relation to spending and taxation. The policies are government controlled. So as to stimulate growth of the economy, spending on goods and services should increase. As a result of the increasing the demand, supply also increases. In that case, business production and operations grow to keep the economic cycle going. Taxes are meant to stimulate economic growth, and they affect the operation of businesses directly; resulting in the provision of more production and employment (McCulloch 363). Reduced taxation tends to improve the performance of the businesses and increasing taxes affects the productivity of the businesses.
Regulatory policies provide an evidence-based approach useful in policy development and standardization. Competition policies enable businesses come up with innovative ways to attain competitive advantages. However, in the case of private sector organizations, it limits the level or extent of operations. Some of the policies surpass individual company policies and create a level playing field for all businesses in the sector.
Organization Behavior in their Market Environment
Market structures refer to an arrangement in which buyers and sellers interact directly or indirectly to buy and sell goods and services (O’Connor 115). The types of market structures include monopoly, oligopoly, perfect competition and monopolistic competition. In monopoly, a single firm has control over the market supply and chooses the level of price and output to maximize its profits. In oligopoly, competition is key. Sellers with market power have to respond to the choice of their rivals and prices are set considering that of the rival sellers. In monopolistic competition, the market structure has a large number of small firms with a small degree of market control and the prices are more or less similar to very small margins if they exist. In perfect competition, the prices are a consequence of the market forces or demand; with the seller or buyer having insignificant control on the prices.
Market forces of demand and supply represent the ultimate market structures and the organizational responses. Supply refers to the provision of goods and services to the market and demand refers to the need of goods and services in the market or by the consumers. When the demand is high, businesses tend to produce more in order to fulfill the demand and make profits and with that most businesses will focus on the goods or services in demand (Marshall 269). For example, there are many food manufacturing businesses than tiles manufacturing businesses because the demand for food items is higher than that for tiles. When the demand is low, businesses tend to reduce the supply. For example, as the demand for public transport reduces in some countries, public car companies resort to other services provision.
Business and cultural environments affect the operation of businesses. An environment offering healthy competition will ensure businesses grow objectively and encourage genuine business operations. An unhealthy environment, on the other hand, compromises the standards of businesses to a large extent on matters like quality and safety. Cultural issues may affect the business relationships and may fail the business if ignored. It has played a critical role in businesses establishing the right enterprises for the right customers or to suit the environment.
There are four market types with different characteristics, and they include perfect competition market, monopolistic competition, oligopoly and monopoly. In the perfect competition, there is a large number of firms producing standardized goods and with no individual or group of the firms involved in price control. The monopolistic competition involves many firms producing differentiated products and with slight control over the prices facilitated by different products. Oligopoly market has few numbers of firms involved and the products involved can be standard or differentiated, and firms have considerable control over the price. New firms seeking to operate in this market face a great hurdle in entering the market due to the nature and complexity of the goods involved. Monopoly markets involve one firm with unique products and with considerable control over the price though other bodies can regulate. The market environment a business operates in, determines to a large extent the nature of operation and growth of the business. The nature of the products from a company determines the company’s growth.
Significance of the Global Factors that Shape National Business Activities
International trade continues to impact business organizations around the world. International trade effects on UK organizations present advantages and disadvantages. The main idea behind the effects is best explained by the concept of comparative advantage in which trade facilitates mutual benefit. First, international trade has grown some organizations producing products with relative advantage or products that can be easily manufactured in the UK and exported to other countries. It has improved the operational and engagement standards of some organizations to attain world-class levels. Also, the importation of some goods into the country contributes to the reduction in prices of some commodities, which would have been made locally manufactured and grow the local business organizations.
There are several global factors that affect UK business organizations including international markets, international competitiveness and trade blocs. The availability of international markets greatly influences the extent to which organizations become competitive, and more organizations now focus more on informed decision-making rather than traditionally limited focus. International competitiveness influences most organizations to standardize their operations and products to meet the international level. Organizations focus more on market research and innovations to meet the international standards. Trade blocs influence access to new markets, and that affects the relative trading costs in different regions around the world. In order to reduce the costs, most organizations in the UK are expanding their operations to multinational proportions.
EU as a mandated regional body formulated policies that affected business in the UK and other European countries. A common market is at the center of the whole process as well as regulations on accountability and provisions of growth. The common market place provides the economic environment on a larger scale and in a more practical way (O’Connor 275). The enterprise policies enabled small and medium organizations improve their innovations and grow to provide superior services to the open market. That brought a competitive environment in which the monopolistic markets were broken. The competition also ensured upholding of best practices by organizations and, for this reason; the UK organizations were policy based on performance and operations.
The regional or international bodies should work to create a wider deliberate market, so as to fully exploit the innovative and creative minds in the business sector. The market forces and structures will change, and the economy will grow. Just like the EU common market, organizations are now innovation oriented with a present ready market. For economic growth and development it is a matter of cause and not a consequence and so economic growth should be in perspective in economic planning (O’Connor 223).
Berger, Christian. The 4 Types of Market Competitive Positioning and its Key Strategies. GRIN Verlag, 2008. Print.
Bilyk, Barbara. Identifying Organizational Strategy: Porter's Approach. GRIN Verlag, 2009. Print.
Marshall, Alfred. Principles of Economics. Rev. New York, NY: Palgrave Macmillan, 2013. Print.
McCulloch, John R. A Treatise on the Principles and Practical Influence of Taxation and the Funding System. 3rd Ed. UK: Eyre and Spottiswoode, 2006. Print.
O’Connor, David E. The Basics of Economics. Westport, CT: Greenwood Press, 2006. Print.
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