Assignment 1: due date Class 2Week 3
Businesses and the National Environment
The following tasks should be presented as a written report (600- 800 words).
1.1. Explain the economic system that controls how resources are allocated in theeconomy of your home country. Give examples of how alternative systems try to achieve effective resource allocation.
This is NOT a request to describe your country’s economy, but to assess the economic system of your country that controls how resources are used. The classic economic ‘systems’ that control how resources are allocated are markets(capitalism)orgovernments(communism), and ‘resources’ means the economic resources of capital (money), labour, and land. Basically the Task is asking you to explain if jobs, land and money in your country are allocated to industries by governments or by markets.
Some countries have traditional economies with a large subsistence agriculture or non-cash sector. Many developing countries are emerging rapidly from a traditional economy.Primary and secondary education, primary healthcare, roads, and railways are provided through the governmentin nearly all modern market economies. A countrywithmarkets in many sectors but substantial control by the State of other key industriesis a mixed economy. Note that the UK hasnot had a mixed economy since the 1980s, but France, for instance, still has substantial government involvement in industries such as cars, airlines, utilities and banks.Or a country that was communist can be in transition to a fully capitalist economy (e.g. the government still controls vital sectors like oil or gas). Pick the theoretical model which closest fits the reality of your country.
1.2 Assess the impact of fiscal and monetary policy on businesses in your home country
a) In one sentence each define what fiscal and monetary fiscal is
b) Explain the most importantrecent changes in your country’s fiscal or monetary policies
c) Say what effect (‘impact’) these policy changes have had on two actual businesses in your country.
1.3Evaluate the impact of competition policy and other relevant regulatory mechanisms on the activities of a UK bank such as Barclays, the Co-op, HSBC, Lloyds (includes Halifax and Bank of Scotland), NatWest (Royal Bank of Scotland) or Santander.
a) Pick a company– abank in the UK
b) Starting in the UK,see if there have been any investigations by the Competition Commission or its successor the Competition Markets Authority into your company in the UK in the last ten years
i. If you fail to find an issue in the UK see if the European Union’s Competition Directorate has investigated your company anywhere in Europe in the last ten years
ii. Failing that try the Justice Department in the USA
iii. Failing this try another country’s competition authority or search on Google, but then investigate the facts closely – i.e. to score high marks you will need more than the Google or news report – you will need to check the relevant competition authority’s own website]
c) When you find a case involving your firmsummarise in your own words what the regulator found
d) If your search revealed absolutely nothing for the entire 21st century (i.e. your search revealed that there were no competition investigations of your companyat all), say so: this is highly unusual for very large firms and is valuable evidence
e) What did the regulator doto ‘remedy’ the issue?(If it did nothing say so)
f) What could the regulator have done, if they had found a more serious problem?
Class notes for Assignment 2: due date Week 5
Organisational Behaviour in the Market Environment
2.1 Explain the main theoretical differences between perfect competition, imperfect competition and oligopoly. Thenuse an example of eachto explain how market structurescan determine a business’spricing and output decisionsin practice.
Describe
1. perfect competition,
2. imperfect (or monopolistic) competition, and
3. oligopoly
using one sentence for each market structure. Use the note given to you in class as your FIRST source butNOT your only source.
Then write a sub-heading for each market structure and underneath each heading write one paragraph about eachmarket structure, bringing out the key differences between them.Pick one example of each market structure from the real world and show how (for instance) the farmer, restaurant owner or supermarket chain tries to control prices or quantities (outputs) – but not both – for their firm. Students who find real examples of each (on the web or elsewhere) and use public data to show how the managers change prices or quantities to respond to changes in their situations may gain a D3 Distinction here. (Sources: use the class note, or the BPR textbook, or any good economic textbook).STUDENTS WHO USE POOR WEBSITES SUCH AS investopedia, businessballs, tutor2u, etc,WILL FAIL THIS TASK.
2.2 Illustrate the way in which market forces (supply and demand) shape organisational responses, using recent examples from different sectors.
Choose twocommodity industriesthat are easily measured such as gas, coal, rice, wheat, iron, steel, orange juice, nuts, coffee, cocoa, cotton or any other agricultural commodity. DO NOT USE CRUDE OIL as it has already been analysed and used as an example in the class tutorials.
Now pick a real company in each industry that makesor buys this product, and is likely to have been affected by any changes in the prices of this commodity.
1. Draw a chart of prices over recent years for your first chosen commodity from a good quality data source, or (for a Pass) use a chart from a good sourceyou found on the internet;this might be like the first oil price chart shown in class:
Figure 5: the world oil price since 2005
Source: FT monthly world oil prices
2. Look at some of the major rises or falls in prices, and researchexpert industry commentaries to give you the facts to help youexplain these using “market forces” – changes in supply or demand. Be specific about the exact causes of the change in supply or demand, and what its effect on prices is likely to have been.(e.g. ‘There was a drought in Brazil in 2008 so world coffee supply fell by 12% in 2009, which led to a 10% price rise in 2009’, or ‘Global supply was fixed but world coffee demand fell because of the 2009 recession, so prices fell 5%…’);
3. Now go back to your chart in Excel or Powerpoint, repeat it in your report, and mark on it the supply/demand causes of the price changes; for example, in oil
4. Finally predict what effect these price changes should have on the profits of the real firm you chose in that industry, and then research their actual revenue, cost and profit figures for that period to see whether your predictions came true. If there is a significant difference between your prediction and the actual numbers try to explain it.
Be sure to cite your data sources in your charts or tables and in your references. Students who use good charts drawn by themselves to illustrate developments (remember the command word of this task is to “illustrate”) may gain an M3 Merit here (“approach to communicationwhich is appropriate”).Furthermore, students whosuccessfully explain price changes using a consistent table of data on recent world trends in production (supply), consumption (demand) and stock changes for the product,could also gain an M2 Merit (use of supply and demand theory) here.
Some good sources for prices, supply and demand data, and industry commentaries are
• The BP Statistical Review of World Energy for oil, coal and gas, and total energy – this has world prices and supply / demand figures for oil, gas, and coal at http://www.bp.com/sectionbodycopy.do?categoryId=7500&contentId=7068481
• The Food and Agriculture Organisation of the United Nations – for wheat, rice and other cereals – at http://www.fao.org/worldfoodsituation/wfs-home/csdb/en/
• The World Steel Organisation collates iron and steel production data for over 60 large steel-producing countries in the world – at http://www.worldsteel.org/statistics/statistics-archive/annual-steel-archive.html
2.3 Assess how the way your chosen firm behaves is affected by the business environment, specifically by the macro environment, particularlyby cultural factors.
Take your firm from Assignment 1 (Task 1.3) and readthe Chairman and CEO’s reports in the latest report and accounts. What does the Chairman or CEO say about the current business environment that affects their firm that is not about the global economy? Remember that the question particularly asks you aboutsocial or cultural factors (e.g. changing tastes over time or differences between countriesin tastes or customs). How are social changes affecting the firm? Students who find evidence from numbers in the report that what the Chairman/CEO says is truemay gain an M2 Merit here.
Unit 1: Business Environment
Assignment 3: due date Class 2 Week 7
Business organisations: their aims, stakeholders, and responsibilities.
The following tasks should be presented as a written report (600- 800 words) about the firm you picked in 1.3.
3.1. Identifythe purposes (long term goals, vision or mission) and related values of the company you selected in 1.3. Draw comparisons with another organisation, small or large, in a different industry.
Look over your company’s website for evidence of what it says its long term purposes are; these could be on its home page or a high-level page headed “About Us” or “What we stand for”; failing this try looking in a Chairman or CEO’s annual report. Simply searching by word on the company’s website often leads to misunderstandings – i.e. what they call a mission statement might actually be about their values. Remember what we callvalues are different to purpose. Your firm might call something a vision, mission or value statement but you must decide what is and how much it really drives what the company does or how it does it.
Now repeat the exercise for your second company – which must be in a different industry – and then summarise both in 200-300 words. A table comparing the two companies’ purpose and value statements might save a lot of words.
3.2 Describe the objectives ofthree key stakeholders in this company and assess the extent to which you think the company has achieved their likely objectives over the last five years.
The three stakeholders you should consider are employees, customers and shareholders. Use bullets to list them and explain exactly what sort of firm or person they are for this firm – e.g. customers and shareholders are easy enough, but what is the typical background of the staff, especially the lower and middle managers.
Then think what each of your stakeholders really wants and draw a table like so:
Insert a Word caption here, to give this table a heading such as
Table 1: Likely objectives of the firm’s main stakeholders
Main stakeholder Likely objectives Extent to which the firm has met these objectives over the last five years
Shareholders Profits or Earnings per share
…growth in profits ….a table of profits from 2007 to 2012 in the space below would be good – a chart would be better
Employees Jobs
Salaries
… A table of no of employees …
A table of average salaries …
Etc.
Customers
…?
3.3 Explain the most important responsibilities your selectedfirm has to society and key stakeholders, and how it fulfils them.
First explain how a responsibility differs from an objective – for say, customers and employees. Then
1. Think what is the worst thing that a firm like this – in the same industry – could do to ANY stakeholder (e.g. kill them, bankrupt them, destroy their life savings, make them redundant); the firm’s highest responsibility is to stop this happening
2. list each main stakeholder above as a heading and under each what are the worst two things that this company could do to that stakeholder
3. Think what the company could do to stop this from happening;
4. Search the websites and Google generally for news media reports to see if this has happened, and what the company has done to stop it from happening.
5. Then write up what you have found under this heading and move on to the next stakeholder
When ‘society’ as a whole is the main stakeholder affected, governments generally represent this stakeholder – e.g. governments represent whole classes of people such as taxpayers or victims of a chemical disaster, or have to acquire failing banks.
Lastly, to be eligible for a Merit or Distinction Award, add the previous two assignmentselectronically tothis one, so creating one electronic Word document, then add a Title Page, page numbers,an automatic Contents Table using Word’s Headings facility, and a brief Introduction to the whole report.
Open a new Word document, save it as Business Environment 2015 [yourname].docx and paste in your revised (re-written) answers to Assignments 1 and 2. Then follow the instructions above. Don’t forget to add a very brief Introduction (heading plus 3 sentences or so) about yourself, your nationality (to explain the country you selected in Tasks 1.1 and 1.2), and yourchosen company (for Task 1.3).
If you do not know how to paste electronic documents together, or have forgotten how to create an automatic Contents Table for the whole document,ask your tutor in class to help you. You will not be the only person who has forgotten, and everyone will benefit! This will ensure not only that you know how to write proper reports for the rest of your academic career, but can teach these good practices to others in business who do not know them, which will gain you respect at work.
Unit 1: Business Environment
Assignment 4: due date Week 9
International environment
The tasksbelow should be presented as a written report (600- 800 words) and added to the existing Word document that you wrote for Assignment 3, so that the total is one electronic report 2400-2600 words long, excluding the Title& Contents pages, Appendices, and one Reference List at the back.
4.1. Discuss the significance of international trade to two UK businesses.
Define international trade in one sentence. Think of a British company that relies heavily on exports and another that relies heavily on (or could not do business as it does without) imports. Find evidence to quantify the size of these effects – for the exporter what % of their total production is exported? An impressive figure would be more than 80%. For the importer what % of what they buy is imported?
4.2. Analyse the most important global factors currently affecting two UK businesses, and assess their impact on those organisations.
1. Read the latest Annual statements by the Chairman and CEO of your company from 1.3.
2. What are the main global factors they are worried about?
3. Use STEEPLE to analyse what is driving the changes they refer to, and then see which of these can be traced back to global forces.
4. Pick two of these factors(from different STEEPLE letters) which are driven by global forces and describehow your firmis affected by them. Use the opportunity of class time to discuss your selections in class.
5. Finally, pick a firm from a different industrythat will be affected by either of these factors and search its websites (and Google generally) to find evidence that they are also facing this problem. Then write up your findings.
4.3. Evaluate the impact of EU policies on UK business organisations. Use two or more examples to say how EU rules or policies affect UK firms’ behaviours (or costs and revenues).
1. Find the note you made from the exercise in class to describehowEU policies(not EUcompetition policy) affect real firms in different industries.
2. Nowapply this to your firm from 1.3: howwill they be affected by these policies?Find evidence for this in statements by the CEO or other officers and use this as your first example of how EU policies affect firms.
3. Finally consider another firm in a different industry; how are they affected by EU policies? Again find evidence from their website or elsewhere that this affects what they do, or how they do it.
Students who do this exercise particularly well can earn an M3 or a D3 here.
Finally,for students wishing to obtain a Merit or Distinction
1. revise your Draft Report incorporating Tasks 4.1-4.3 and any comments received on Tasks 3.1-3.3; add a singleReference List using Harvard Standard notation, ensure all Tables and Figures have titles, calledcaptions, and create at least one Appendix from an earlier report, summarising the Appendix’s results in the main text.
2. having learned more about the company since week 3, add a holisticConclusionat the end of your main report, reviewing your company’s most important objectives for the next few years. Students who do this particularly well can earn a D1 here, particularly if they discuss in writing how their perceptions of the firm and its business environment have changed from what they knew at the start of the course, and state clearly what they perceive the prioritised objectives of the firm should now be.
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