A key area of government economic policy is the function that the government gives to the state in the economy. Between 1945 and 1979 the government increasingly interfered in the economy by making state run industries which usually took the form of public corporations. However, from 1979 onwards we saw an era of privatisation in which industries were sold off to private shareholders to produce a more competitive business environment.
Taxation policy affects business costs. For example, a rise in corporation tax (on business profits) has the same effect as an increase in costs. Businesses can pass some of this tax on to consumers in higher prices, but it will also affect the bottom line. Other business taxes are environmental (e.g. landfill tax), and VAT (value added tax). VAT is actually passed down the line to the final consumer but the administration of the VAT system is a cost for business.
Another area of economic policy relates to interest rates. In this country the level of rates is determined by a government appointed group - the Monetary Policy Committee which meets every month. A rise in interest rates raises the costs to business of borrowing money, and also causes consumers to reduce expenditure (leading to a fall in business sales).
Economic policies have different effect on local, national and global business, e.g. Increases in tax rate have more effect on local business as compare to national and global business because local business is like a corner shop or as I mentioned KSM textile have less stock, with the increase in tax definitely increase the prices of item by dint of this it is impossible for the owner to decrease the prices for customer as customer have expensive items so the buying power of customer from local business became less in result the local business will earn less money from the business.
The increase in tax have the effect on global business but as it is a global business ,so global business have so many resources and have many branches in other countries, so if in one country the rate of tax increases yes in that country it will affect the buying power of customer and business will make less profit but as global business have branches in other countries so it can cover from other branches.
Markets are often dominated by large buyers who are able to exercise influences over the market. The domestic market for many specialized defence products may be competitive in terms of a large number of suppliers, but demand for their products is dominated by one buying agency.
In practice there may be a whole range of barriers to entry which could cover the need to obtain licences for prod, the availability of trained staff and access to distribution outlets. Also there are sometimes barriers to exit where firms are locked into long-term supply contracts or where it would be very expensive to lay off resources such as labour. Palmer et al. (2002)
Similar to the law of demand, the law of supply show the number that will be sold at a certain price. But contrasting the law of demand, the supply connection shows a rising slope. This means that the high the price, the high the quantity supplied. Producers supply more at a higher price because selling a higher quantity at higher price increases income.
Contrasting the demand relationship, though, the supply relationship is a factor of time. Time is important to supply as suppliers must, but cannot always, react quickly to a change in demand or price. So it is vital to try and determine whether a price vary that is caused by demand will be permanent or temporary.
Let's say there's an unexpected raise in the demand and price for rain coats in an unexpected rainy season; suppliers may simply lodge demand by using their production equipment extra intensively. If, though, there is weather, and the population will need rain coats year-round, the vary in demand and price will be usual to be long term; suppliers will have to vary their equipment and production services in order to meet
Visualize that a particular edition DVD of your favourite band is released for £20. Because the record company's earlier analysis showed that consumers will not demand DVDs at a price higher than £20, only ten DVDs were released because the opportunity cost is too high for suppliers to produce more. If, however, the ten DVDs are demanded by 20 people, the price will subsequently rise because, according to the demand relationship, as demand increases, so does the price. Consequently, the rise in price should prompt more DVDs to be supplied as the supply relationship shows that the higher the price, the higher the quantity supplied.
If, however, there are 30 DVDs produced and demand is still at 20, the price will not be pushed up because the supply more than accommodates demand. In fact after the 20 consumers have been satisfied with their DVD purchases, the price of the leftover DVDs may drop as DVD producers attempt to sell the remaining ten DVDs. The lower price will then make the DVD more available to people who had previously decided that the opportunity cost of buying the DVD at £20 was too high.
The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcomes are performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from.
It is clear from the elements of organizational behaviour that it consists of structure, culture, leadership style, management approaches and many more ones so these are the other factor which can affect the organizational behaviour for instant we take the example if an organization structure is inappropriate, the following may happen:
Making decision may take longer as individuals have to consult with many other individuals or, if it is not clear who is responsible for what, individuals may avoid taking decisions, which wastes even more time.
Managers may suffer overload because they have too much to do to concentrate on anything effectively. They may be over-seeing too many people (i.e. span of control is too wide) and man not have time to focus on decisions properly.
Decisions may not be made effectively because jobs are grouped together in an illogical way, so the people or information you need is never in the right place at the right time.
The EU is having an increasing important effect on business organisation in the United Kingdom. The relation between a company and its customers is more and more being influenced by EU Regulation and Directives, for example in the provision of the safety features in cars and the labelling of food. The influence extends to the relation between the firm and the public at large, as where the EU passes directives affecting advertising standards and pollution control. Business organisation must monitor proposed EU Legislation not only to spot possible change in legislation which will eventually be implemented through national legislation, but also to lobby to bring about a desired change in EU Law. To an increasing extant, lobbing of the UK parliamentary process is becoming less effected as the United Kingdom is bound to implement legislation emanating from the EU.
The extent to which the single European market legislation will future affect business organisation is open to debate. The EU has already had to effect of removing tariff barrier within the community and great progress has been made on EU legislation specifying common product design standard. Firm are increasingly seeing Europe as one market and designing standardised product which appeal to customer in a number of EU states. Many would argue that overseas investors, especially America firms, have always regarded Europe as one market and developed product as varied as soft drinks and cars to satisfy the whole European market.However, no amount of legislation is likely to overcome the hidden barriers to trade provider by language and by ingrained market characteristics such as the UK practice of driving on the left and using electrical plugs that are not used elsewhere in the continental Europe. The United Kingdom was not among the initial group of countries that launched the single European currency. Shortly after launch, the value of the euro fell sharply against sterling, making export from the United Kingdom to the rest of the EU more expensive. Many firms benefited from the high value of sterling, as imported components become less expensive. Palmer et al. (2002)
It seemed that the problem of reduced fish stocks was not getting any better. In response, the Fisheries Commission at the EU are now proposing complete bans on the fishing of some species, measures which the fishing community in the UK are very angry about. They see such measures as sounding the death knell for fishing in the UK, arguing that the effect on fishing businesses will be so severe that if fish stocks do recover, there will not be a fishing industry left to exploit it! Many fishermen also disagree with the scientific evidence on fish numbers, claiming that the science behind the measurements is flawed.
EMU stands for Economic and Monetary Union. Membership of EMU would mean that the UK would adopt the euro as its currency and UK interest rates would be set by the European Central Bank (ECB), on the basis of economic conditions in the euro area as a whole. The Government's decision on EMU membership reflects what it believes is best for the long-term economic interests of the British people and the performance of the UK economy.