Factors Affecting Firms And Their Activities Reports Example

Factors Affecting Firms and their Activities

Introduction
The UK business environment has for a long time managed to maintain a positive and business supporting look. This is why investors have been flocking to the nation to invest in various sectors. Even in the midst of global economic turmoil as well unique economic challenges, the UK Business environment has largely remained business supportive. This does, however, mean that it is perfect. Companies and firms in this business environment still experience various hurdles and challenges. The UK Business environment is a perfect exemplification of the external environmental theory. This theory acknowledges that business usually converts inputs and raw materials into outputs from which they are able to make profits. However, a business or a firm do not exist in vacuum, but rather exists in an environment that is made of factors, and other players or competitors who are outside the firm or the business and who affect a business’ operations. This paper will look at several UK companies and try to relate them to various business concepts that are in one way or another connected to the external environment theory.
The Guardian: Tesco names 42 stores to close in Turnaround Plan, The Guardian. 28 January, 2015, Mitchell, J.
This article is about Tesco, which one of Britain’s largest retail stores. This case explores a change that the company is recently going through, and this is a reduction in size and stores distribution. The change will see Tesco close up to 43 stores across the country. Some of the stores that are going to be closed are currently considered to be unprofitable. This change has been initiated by Dave Lewis, the company’s chief executive with the aim of reviving Tesco that has been embattled by crisis in recent months. In addition to this, Tesco has abandoned about 49 sites where it was planning to put up new stores.
The main reason given by the management for this intensive change process is that the reduction in the number of stores will protect Tesco’s future business in the United Kingdom. According to Lewis, recent performance has fallen significantly short of expectations and targets, and this is why this massive decision to close over 43 stores has been made. The decision obviously has casualties with more than 2000 individuals expected to lose their jobs. The stores to be closed are spread all across Britain. Lewis goes on to state that the decision to close the stores has been very difficult especially given the huge number of people who will be affected.
This case is a brilliant example of the different change processes that companies are sometimes forced to initiate in order to deal with the prevailing internal and external environment conditions. Obviously, Tesco has realized that perhaps it has over-expanded than it was necessary, and this is why it has made the decision to not only abandon plans to expand even more, but also to close already existing stores. When business organizations find that the size of their organization is acting as an impediment to maximum performance and is actually hindering the achievement of organization goals, then a change is needed (Gareis, 2010). Tesco appears to have followed this path.
This is a concept that’s is very prevalent in many business organizations. Organizations have to change when the conditions demand it. If it does not, then the organization is bound to fail. As the size of a business organization increases, it becomes even harder to manage especially from the top and more often than not, a business may start experiencing losses. When this comes about, change must be initiated immediately (Gareis, 2010). This is exactly what has happened with Tesco and with this change in size; it remains to be seen whether the change will bring about a turnaround in the business’ fortunes. The company’s management on its part maintains that this restructuring will see the company saves millions of pounds that it would have otherwise lost.

Cheaper flights on easy Jet as oil price cuts airline's fuel bill, The Independent, January 22, Molloy, A.

This article is about the British air carrier Easy Jet. The article explores recent global oil price reductions and its effect on this airline. It is shown that recent falls in oil prices have benefited the company significantly. Low oil prices have meant that the company’s overall fuel costs have been significantly slashed. This is obviously very beneficial to the company. Fuel costs comprise a large component of the company’s overall expenditures. High fuel prices obviously translate into reduced profits. The company often has to charge customers a lot of money for ticket prices so as to balance the enormous fuel costs. However, the reduction of global oil prices by almost 100% could not have come at a better time for the company. A huge burden has been taken off its back and fuel costs now only comprise a relative small fraction of the company’s overall expenditure. The company has consequently passed on these cost reductions on the air travel prices. This means that ticket prices have gone down. Because of this, the company has been able to attract even more customers. Statistics show that the company’s overall customer base has risen by a whopping 4.1 %. Not only has it been able to reduce its operation costs, it has increased its customer base which in the near future is bound to translate into increased profits.
The case of Easy Jet exemplifies how the economic environment can affect a company. Economic environment conditions depending on their nature have the ability to affect a company either positively or negatively (Kew & Stredwick, 2005). In this case study, the economic environment condition in question is low global oil prices. An economy environment characterized by low oil prices has obviously impacted Easy Jet in a positive manner. A business does not exist in a vacuum and is thus bound to be affected by various factors in the environment. The external environment is indeed very dynamic, and some of the factors that affect many businesses are beyond their control. For example, the observed decrease in global oil prices is something that is beyond the company’s control. This external environment condition has just happened to work in favor of the company. On the other hand, it could have worked in the opposite direction, for instance, increase in oil prices would have inadvertently affected the company negatively particularly in regards to increased fuel costs and expenditures. Therefore, the case of Easy Jet and the effect of reduced oil prices is an exhibition of an important business concept which is the influence of the external environment. The external economic environment, affects the operations of a business and affects even its capability to make profits and perform efficiently. If oil prices remain at their current level, Easy Jet will continue benefiting.
Argos accused of racism after selling a white doll for £10 more than a black or Asian doll made by the same company, The Telegraph, January 27, Tovey, A.
This article deals with a very serious ethical issue being faced by one of Britain’s largest companies “Argos”. Argos is a catalogue retailer that operates mainly in Ireland the UK. In this particular article, the company is being accused of a serious ethical issue ad this is racism. This issue was raised when a mother who was shopping for a doll online found disparities between the prices of white, Asian and black dolls. The white doll cost more than the black and Asian dolls by over ten pounds. The mother raised the issue claiming that it was unacceptable especially in this modern society for any company to insinuate or promote the idea that one race is better than the other. This is especially in regards to children who on seeing the white doll being more expensive would adopt the idea or notion that it is more superior to the Asian and the black dolls. However, Argos, when confronted with this fact, defended itself arguing that it was a genuine mistake. The company refuted any suggestion or claims of discrimination and attributed the problem to an online pricing error and also promised to take action immediately.
The ethical issue raised in this article is very serious. Racial discrimination in the modern days is a very serious ethical issue that can translate into the downfall of a company. There are many companies in the past that have fallen down because of less serious ethical issues and if a company is found to engage in a serious ethical violation such as racial discrimination, then it is bound to fall (Ferrell & Fraedrich, 2005). This is perhaps why Argos has moved so fast to define itself and attribute the discrepancies to an online pricing error. The company’s image was tainted and this would have deteriorated. The shopper who saw this discrepancy raised the issue with a local newspaper and the company’s operations was tainted for some time.
Ethical issues socially in modern business are taken very seriously, and every business organization, or company is supposed to ensure that it fully assesses all its operations and process and ensures that they abide by ethical standards and guidelines (Ferrell & Fraedrich, 2005). Consumers and the public do not generally take it kindly if an organization is found to have violated ethical standards. This is particularly the case for serious issues such as the one raised in this article; racism. The UK environment is particularly notorious for its non-tolerance on organizations that violate various ethical standards and an organization that is found to constantly violate ethics does not only face the wrath of the public but may also find itself exposed to legal prosecution.

Conclusion

This research has brought several things to light. First, it has shown that the UK business environment although quite positive and supportive to business endeavors is also characterized by various environment conditions that affect the operations of businesses. The case of Easy Jet is a brilliant example of this, whereby the organization has been affected positively by external economic conditions. It has also been shown how business within this environment can be forced to restructure in order to gain profit and competitive advantage such as the case of Tesco. The research has also shown that an ethical violation by companies can also taint their image negatively and may eventually lead to collapse of a business.

References

Mitchell, J. 2015, ‘Tesco names 43 stores to close in turnaround plan’. The Guardian. 28 January, accessed January 29, from http://www.theguardian.com/business/2015/jan/28/tesco-names-43-stores-to-close
Molloy, A. 2015, ‘Argos accused of racism after selling a white doll for £10 more than a black or Asian doll made by the same company’. The Independent, January 22, accessed January 29, 2015, from http://www.independent.co.uk/news/business/news/argos-accused-of-racism-after-selling-a-white-doll-for-10-more-than-a-black-or-asian-doll-made-by-the-same-company-9994742.html
Tovey, A. 2015, ‘Cheaper flights on easy Jet as oil price cuts airline's fuel bill’. The Telegraph, January 27, accessed January 29, 2015, from http://www.telegraph.co.uk/finance/newsbysector/transport/11371657/Cheaper-flights-on-easyJet-as-oil-price-cuts-airlines-fuel-bill.html
Gareis, R 2010. Changes of organizations by projects. International Journal of Project Management, vol 28, no. 4, pp. 314-327.
Kew, J., & Stredwick, J 2005, Business environment: managing in a strategic context. CIPD Publishing.
Ferrell, O. C., & Fraedrich, J 2014. Business ethics: Ethical decision making & cases, Cengage learning.
Appendix
The Guardian: Tesco names 42 stores to close in Turnaround Plan, The Guardian. 28 January, 2015, Mitchell, J.
Cheaper flights on easy Jet as oil price cuts airline's fuel bill, The Independent, January 22, Molloy, A.
Argos accused of racism after selling a white doll for £10 more than a black or Asian doll made by the same company, The Telegraph, January 27, Tovey, A.