Analytical Report on Business Organizations and Policy: Factors that Affect a Business (Essay Sample)

ANALYTICAL REPORT ON BUSINESS ORGANISATION AND POLICY
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Table of Contents TOC \o "1-3" \h \z \u Introduction PAGEREF _Toc448832636 \h 2TASK ONE: PAGEREF _Toc448832637 \h 2Micro Environment PAGEREF _Toc448832638 \h 2Suppliers PAGEREF _Toc448832639 \h 3Resellers PAGEREF _Toc448832640 \h 3Competition PAGEREF _Toc448832641 \h 3Customer PAGEREF _Toc448832642 \h 3The public PAGEREF _Toc448832643 \h 4Macro Environment PAGEREF _Toc448832644 \h 4Demographic PAGEREF _Toc448832645 \h 4Natural/Physical PAGEREF _Toc448832646 \h 4Technological PAGEREF _Toc448832647 \h 5Social and cultural PAGEREF _Toc448832648 \h 5Political PAGEREF _Toc448832649 \h 5Economic PAGEREF _Toc448832650 \h 5TASK TWO: PAGEREF _Toc448832651 \h 5TASK THREE: PAGEREF _Toc448832652 \h 7Unfreezing PAGEREF _Toc448832653 \h 7Change PAGEREF _Toc448832654 \h 7Refreezing PAGEREF _Toc448832655 \h 8Conclusion PAGEREF _Toc448832656 \h 8Recommendation PAGEREF _Toc448832657 \h 8References PAGEREF _Toc448832658 \h 9
Introduction
The growth of a business can be affected by various factors. As a result of political upheaval and economic crisis, Carrefour chooses to leave Greece and venture in the UK. This report seeks to bring to light the macro and the micro environmental factors that may affect the business. Second, the report will give an in-depth description of the policies in the United Kingdom regarding acquisitions and mergers and how they can affect the growth and development of business. Finally, the report will explore the application of Kurt Lewin’s change model regarding Unfreeze, Change, and Refreeze in a business venture. Mainly the scope of the essay will revolve around the United Kingdom.
TASK ONE:
There are two types of environmental factors affecting businesses; micro and macro. All business organizations are affected by the business environment within which they operate. No single business can function in isolation. Micro factors influence the working of a particular business while the macro factors affect the functioning of all businessesCITATION Bin05 \p 25-35 \l 2057 (Bing , et al., 2005, pp. 25-35). The micro factors can also be referred as the nearby environment affecting business operations while macro environment can be referred as the general environment which affects all businesses in general. The microenvironment is alternatively known as internal environment while macro environment is alternatively known as external environmentCITATION Bin05 \p 25-35 \l 2057 (Bing , et al., 2005, pp. 25-35). For Carrefour to reduce its risks of failure, it must put into consideration the following environmental factors:
Micro Environment
Micro environment refers to the factors that are directly in contact with the business organization. These factors directly affect the routine activities of a business. The micro environment is specifically associated with the small area in which the business functions. The micro environment is also known as the internal environment of a business. The microenvironment comprises of all forces close to the business. These forces affect a particular business on day-to-day operations and for a short period. The element in micro-environment include suppliers, resellers, competition, general public and customersCITATION Eid04 \p 16-30 \l 2057 (Eid & Myfanwy, 2004, pp. 16-30).
Suppliers
These are the people who provide inputs like raw materials and equipment to the firm. When suppliers hold power, they can control the success of the businessCITATION Mol03 \p 109-118 \l 2057 (Moller & Pekka, 2003, pp. 109-118). The supplier may affect the business’ success significantly if they are the largest or the only supplier. It is there vital for Carrefour to look for a reliable supplier. Unreliable suppliers pose a threat to the success of the business because the products they supply are the core part of the finished product or the business.
Resellers
These are the wholesalers, retailers, and the distributors. Resellers may affect the success of Carrefour when they hold reputable name. This may happen when the business’ produce is taken to the third world market.
Competition
Competition can be in the market and on the resources. For Carrefour to succeed in the United Kingdom, the business must know its competitors’, their prices and products. This will help the business to know on how to leverage to reap more profits and obtain a better reputation.
Customer
These are the consumers. Sometimes the customers are considered as the king of the businessCITATION Bin97 \p 167-178 \l 2057 (Binks & Ennew, 1997, pp. 167-178). It’s important for the firm to understand the reasons the customers are buying the productsCITATION Bin97 \p 167-178 \l 2057 (Binks & Ennew, 1997, pp. 167-178). This plays a critical role as it helps the business know how to approach the marketing of their services and the products.
The public
Carrefour has a duty to satisfy the UK people. All actions should be put into consideration, the effects these actions have to the general public. The public as a whole is powerful such that it may help you achieve your goal, the same way they can prevent you from achieving them.
Macro Environment
This is the general environment that affects the success of business in matters performance, business strategy, and decision making. The macro environment of a business keeps on changing - it is dynamicCITATION Eid04 \p 16-30 \l 2057 (Eid & Myfanwy, 2004, pp. 16-30). It comprises of the external forces that Carrefour will not have direct control over but impact greatly on the functioning of the business. They include demographic, natural, technological, economic, social & cultural and political forcesCITATION Eid04 \p 16-30 \l 2057 (Eid & Myfanwy, 2004, pp. 16-30).
Demographic
Some of the demographic forces that can affect different market segments include; region/ country, ethnicity, age, education, household lifestyle, education level and cultural characteristics & movements. All these forces can affect and are relevant to the formulation and in the implementation of Carrefour’s strategy for controlling and achieving the objectives. The growth rate of a population, composition, family size, life expectancy, employment patterns, occupational status and spatial dispersal may affect the demand for the goods and the services.
Natural/Physical
Carrefour must also take into account the availability of natural resources; agricultural products, and marine products. It all depends on with the earth’s renewal of these products. Other natural resources are the non-renewable products like oil, minerals and coal.
Technological
These include the knowledge and skills applied in the production plus the materials and technology needed for the production of the services and the productsCITATION Eid04 \p 16-30 \l 2057 (Eid & Myfanwy, 2004, pp. 16-30). They impact on the progress of the business.
Social and cultural
The firm must consider the impact it has on the society. Any harmful products/services or process of production must be eliminated as a sign of social responsibility. It is important for organizations to review their services and products so that they can become environmental friendly.
Political
All sound decisions on marketing must take into account legal/ political developments relating to the entire organisation and its markets.
Economic
While Carrefour is setting its business in the UK, it must put into consideration the economic environment. The economic factor may impact on the consumer’s processes of making the decisions and the organization’s production.
TASK TWO:
Acquisition refers to the situation where one business firm purchases another in which no new company is formed while a merger refers to the combination of two different businesses to form a new firmCITATION Dic97 \p 344-361 \l 2057 (Dickerson, et al., 1997, pp. 344-361). Global mergers and acquisitions activities can be spearheaded by credit availability. In simple terms, if credit conditions deteriorate the acquisitions and merger activities decline. The transaction on M&A takes a period and in some cases, there may be a lag on the improving economic conditionsCITATION Ros04 \p 277-304 \l 2057 (Rossi & Volpin, 2004, pp. 277-304).
A merger or acquisition can have some weighty impacts on a business’ long-term outlook and growth prospects. While acquisitions can change the acquiring firm literally overnight, a significant degree of risk can be involved, as transactions on mergers and acquisitions are approximated to have 50% success chanceCITATION Dic97 \p 344-361 \l 2057 (Dickerson, et al., 1997, pp. 344-361).
Many companies engage in mergers and acquisitions for the following reasons; become bigger, synergies & economies of scale, pre-empt competition, tax purposes and achieve domination. As these companies aspire to achieve these they end up failing due to culture clash, integration risk and due to overpayment.
During acquisitions and mergers, the UK government may intervene due to the following reasons: where the public interest is endangered or threatened or when the result is one firm which has undue market power - where the market share is 40% and aboveCITATION Ros04 \p 277-304 \l 2057 (Rossi & Volpin, 2004, pp. 277-304). The government of UK will support an acquisition or merger in cases where partial nationalism is upheld.
Besides, The UK Competition Policy also conducts an inquiry of markets, mergers, and major regulated industries. On the other hand, we have the OFT (Office of Fair Trading) which is responsible for mergers situations reviewed. This may lead to minimizing of competition.
In acquisition, an acquirer’s futur...