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Business Environment : Themes And Issues

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Question:

Discuss about the Business Environment for Themes and Issues.
 
 

Answer:

Introduction:

A sole trader is the person who needs a business licence before commencing with the business. A sole trader should first take into consideration the clerk’s advice and obtain relevant information that is being required to perform business. It is also mandatory for them to focus on matters like federal and state taxation requirements. In sole tradership business all the profits and loss that are being incurred comes under the personal income tax segment. He is also responsible for paying off the self-employment tax, which are the social security tax and medicare (Aktar 2016). Registration of the business name is another legal responsibility of the sole proprietor, which they should fulfil.

For the partnership business, the partners have certain legal responsibilities like they are being responsible for maintenance of business records, keeping assets in order, paying the taxes in business. Further, the roles of the management of the individual partners setting out ahead of time in the management of partnership led to others fulfilling the same. As per Pakroo (2016), all partners would be bearing the legal duty in making sure that profits are being distributed in a manner that is being agreed on along with the other matters that is being listed in the agreement of partnership.

For corporations it is the duty of the directors to make certain it retains its legal status keeping details of the financial records. There are certain obligations that corporations need to follow like obtaining federal and tax identification numbers for the business, filing of necessary tax returns on annual basis (Steingold  2015). It should also maintain records and other corporate books inclusive of the ledgers of accounting and corporate minute books. The corporations should be holding successive board meetings, recording decisions and actions of the board of directors in the corporate minute book.

There are certain stipulations for forming a legal contract that can be stated as an offer, an acceptance, capable parties having the legal capacity to enter into a contract, lawful matter of the subject, mutual agreement, consideration, mutuality of obligation and if needed under the Statue of Frauds (Moran and Hunt 2014).

Offer- An offer can be stated as a promise that has to be conditional upon an act, moderation or return promise that is being provided in exchange of the performance or promise that has been made. It is an expression of willingness for entering into a bargain that has been made in justifying the understanding of another party in inviting that person to bargain and would finish off it (Babin. and Zikmund 2015). Any sort of offer must be having a statement of present approval that is positive in terms along with the identification of the intended communication of the offer and probable offeree. Missing of any of these elements would make it impossible for the basis of the contract to be formed.

Acceptance: An acceptance of offer is the expression of assent to the terms of it. It must come from the offeree in a manner demanded or authorized by the offeror. An acceptance is applicable only when the offeree knows about the order, the offeree patents acceptance intent where the offer is unconditional in nature and the acceptance is visible as per the offer terms (Scott 2015). The purpose of a valid agreement is generally governed by the promise or an act by the offeree was that the bargained for purpose.

 

Competent parties: A competent party is a natural person agreeing to a contract having legal capacity in becoming accountable for duties beneath the contract unless that person turns out to be an infant, intoxicated or insane.

Subject matter: A contract might be able to take in any sort of undertaking only on the condition that it is not been prohibited by law. At the time of forming a contract in command of trade, courts would not be enforcing it as it would be imposing an unlawful and unreasonable contract on commerce through hindrance of the competition (Oman 2017). Contracts that offer for the commission of a crime or any illegal intention are also invalid.

Mutual Agreement: there has to be agreement among the parties or certain mutual consent for the formation of a contract. For the existence of the contract, the parties need to have a common intent or meeting of the minds on the contract terms, subscribing to the same bargain (Glover and Kusterer 2016). The parties might settle on one term at one single time but their agreement becomes a complete one only where there has been an assent to the final terms.

Consideration: Consideration can be stated as a legal damage that is often been suffered by the promise that is often been demanded for his/her promise.

Mutuality of Obligation: In this case it is the promises that constitutes the consideration in a bilateral contract with a mutually binding. This concept is stated to be obligation mutuality. If one of the parties does not bind him to some sort of performance, it is said to be illusionary promise and there would be no enforceable contract. In case of contracts that offers another party the cancellation rights, there might actually be no consideration due to lack of mutuality of obligation (Kubasek, Brennan and Browne 2016).

Statement of Frauds: This got enacted in 1677 and since then has found place in both UK and US but in varied forms. It needs certain contracts to be in writing. The main purpose here is to avert the proof of an agreement that is non-existent in nature through fraud in the actions for contravene of alleged contract.

There are two types of business contracts, which are bilateral and unilateral contracts. In case of bilateral contract, it is an agreement in which all, the parties involved in the contract makes certain promises to the other party (Vedder, et al. 2014). For example, in a contract where buying of  a property is involved, the buyer promises in paying a certain fixed amount as per the deal and in exchange for that the seller promises to offer the property along with the property title.

For unilateral contracts, it is one party making promise to the other. In this scenario, the other party does not get involved in any sort of promise (Ryan 2016). An example of this can be the reward contract where a particular party promises to reward to another party if that party can find the lost thing of the previous party. Here the previous party is involved in a promise but not the latter party.

Liability is the part where one party presumes on behalf of the other via the contract known as the contractual liability. Contractual liability covers the automatically incorporated policy of general liability. Contractual liability indemnifies the policyholder from all the liabilities that may have been expressly defined in the contract (Babin, and Zikmund 2015).

On the other hand, negligent torts are not any sort of actions that are deliberate in nature, but are presented when an individual fails in acting as a responsible person with someone he owes a duty to. The negligent action that has been found in the picky tort leads to personal loss. Negligence is the failure in using the reasonable care resulting in harming another party.

Vicarious Liability refers to a particular state of affairs where somebody is being held liable for the behaviour of another person. In the workplace, an employer is generally liable for the oversight of its employees, offering that they occur in the employment course. Many employees are uninformed of the fact that they can be reliable for the variety of actions often dedicated by the employees in the employment course, bullying, discriminatory acts and harassment (Dyson, Goudkamp and Wilmot-Smith 2017).

 

Lange v. Nabisco Biscuit Company:

In 1969, Nabisco Biscuit Company hired a salesperson by the name of Ronnel Lynch for delivering and storing bakery products on the shelves of the stores. In his own territory, Lynch was in the habit of making stops at local stores for replenishing the products previously delivered in consumer purchase. He arrived at the store of Lynch for storing the stock in shelves, noticing that the major shelf space was not available. He involved in exchange of words with Lange over the shelves, assaulting him. On his way out, he threw down products on the floor. To this, Lange sued the biscuit company on the damages he suffered. He won the case, proving the Lynch working for Nabisco made company representative.

Global forces that are affecting the UK business takes into account the growing level of multiculturalism among the organizations in UK and their ever increasing inter-dependency level on the national economies and others. Through the PESTEL analysis the global forces impact on the UK business environment can be evaluated.

Political:

-The level of stability in the global politics

-Media’s freedom extent

-Initiatives in global trade control

-Tariffs exiting between other countries and UK

 

Economical:

-Fluctuations in stock market

-Crisis in the global economy

-Increasing significance in initiatives of outsourcing

 

Social:

-Changes in the pattern of the family

-Increase in the mobility between the social classes

-Greater anxiety for minorities in society

 

Technological:

Level of infrastructure in global technology

-Technology adoption as part of the competitive advantage through increasing business numbers

Ecological:

-Tendencies in global impacts

-Increase in the level of air and pollution

-Initiatives and actions taken up by the global organizations

 

Legal

-Laws and regulations as per the protection of data

-Rules and regulations regarding global data protection

Overall, the U.K business environment is getting hampered as there has been an increase in the in the import volume to UK, suppressing the export level from UK for the last few years. The importers like India and China have been showing enough competitiveness to the UK with the primary focus being on the low cost of labour. Increase in the level of multiculturalism in the workforce impacts highly on the global force on the UK business (Sherwin  2015). On the other hand, multiculturalism have the ability to benefit business in UK through provision of fresh and altering perspectives to conventional problems in business. High instance of multiculturalism at workplace can produce enough misunderstanding due to the differences in cross-culture having negative impact on the UK businesses’ perspective.

As per the EU policies, UK businesses have been aiming in merging for seeking the approval of the EU if the amalgamated business turnover does go beyond the specific entrance of sales that has been specified by EU.

The internet has been able to generate a global community of peers. Internet forums and chat rooms have been created staging a platform for the entrepreneurs to learn. In the present scenario, a person in Portland can now exchange valuable advice related to marketing with someone staying in Sydney or Auckland. Another biggest advantage is the use of internet in a cost effective manner. Advertising through online is less expensive than in the conventional media, facilitating the business to reach a targeted demographic (Daughety and Reinganum 2014).

Internet is an open platform, and an expensive one that cannot be protected and contained. Internet’s nature generates opportunities for the hackers in taking advantage of the consumers who are vulnerable and organizations not focusing on security factors. Online organizations should do well in maintaining upgraded encryption and available security technology to the customers of products for any form of sensitive information. They must also be protecting their website from malware, viruses, hacking and other factors that might prevent it from functioning properly. Any breach in security can deter the customers, especially where credit card numbers and security numbers are susceptible.

 

Types of e-commerce business models:

This business model takes in selling products directly to the retail consumers through online. Amazon.com is a prime example of B2C model. An online identity through which it has the opportunity to provide various products to consumers through the B2C model

It involves organizations using the internet for conducting transactions with each other. In case of B2B model there is enough complexity though it is multifaceted involving numerous transactions.

An unique business model that takes in the value creation by consumers and demand for any product. Airline ticket websites are prime examples of C2B business model facilitating customers in bidding for tickets and offering their own prices.

Fraud in internet and the sophistication has expended even quicker than the internet. There is enough probability of crime over the internet when the buyers and sellers are unknown to each other. Through e-commerce, people have been witnessing lot of crimes that are being committed over the internet.

Fraud on the internet:

The popularity of websites have given birth to e-commerce fraud. This has been a hot topic for both the cyber merchants and the click-and-mortar ones. The frauds have been active mainly stock areas. The promoters of stock are luring the petite investors on the guarantee of false profits. Auctions are also being conductive to deception, by both the buyers and the sellers. As per Wetherly and Otter (2014), pop up ads and emails availability have cemented the way for financial criminals in having easy access towards the people.

The laws in copyright of the intellectual property in protecting different forms are not been used in free manner. In e-commerce, it is very difficult to protect the intellectual property. For instance if one is buying software, one has the right to employ it and not the right of distributing the same. The distribution privileges remain mainly with the holder of the copyrights.

Another legal issue is the domain names, which appears in levels. Top-level domain names are being assigned by the organization that is non-profit in nature, checking in the conflicts or possible violation of the trademarks (Hamilton and Webster 2015). Problem occurs when various companies have same names competing over the other with the same domain name.

Market forces are generally the demand and supply that affects price and item quantity. Organizations have been trying to focus on their operations in trying to appreciate, forecast and persuade their services and products demand. Market forces have the ability to affect the price and organizations would be working towards ensuring there is immense benefit in such impact (Hill, Cronk and Wickramasekera 2013). All the organization should be able to react to the four primary demands of the market taking various forms like cycle time, quality, satisfaction of consumers and profitability. Organizations need to be supple and flexible, competent of measuring the efficiency in responding to their speedily changing technology.

As per De Medeiros,  Ribeiro and Cortimiglia (2014), output and pricing decisions have been interdependent except in perfectly competitive markets. In case of perfect competitive markets, individual firms are small in comparison to the markets, that it cannot influence the prices. In such cases, the company should take in the given price and then decide on the quantity to be supplied. Cost also have been playing influential role in organizational price setting. An organization might sell its products at fewer prices than that of its competitors even when it generally incurs high cost. The legal and regulatory issues too have been persuading the marketers in changing pricing decisions. The regulatory and legal laws have been setting prices on different products like insurance. Market competition also takes into account the pricing and output decision of the organization. Organizations generally match the pricing factor of their competitors and assess factors like responding to price change.

The marketing environment can be considered the important factor that every organization should consider at the time of improving on their products. The marketing environment elements have been taking in the customer’s changing preferences, competition, political environment, budget, present trends and the overall economy. To be successful, every organization need to focus on the present trends in the market and the preference of consumers. For instance, big retailers have gone online in opening corporate accounts for adapting with the consumers increasing use of social media. Budget also plays an important role in the marketing decisions like buying of advertising and affording to place it. Competitors too prudent the decisions in marketing on the effectiveness of the company and the ways they are good in disrupting your plans. For instance rivals might price their products at lower price, but this company needs to make customers understand on the superior quality of their product.

Designing a website that is user focused is an significant element in internet marketing. A website that is designed nicely can suggest visitors that the marketer takes pride in the way the site looks.

Strategic Content

Every single page on the website should be having the goal that the marketer or users need to take like purchasing a product, watching videos, clicking a link and downloading of documents. Each word content in the website should be having a purpose.

  • Marketers should simplify their services in the website or things might get jumbled up and consumers might feel lost. An example of In-N-Out Burger is the ebst on how the online menu should be. They have the shortest menu on offer:
  • Cheeseburger
  • Hambuger
  • French Fries
  • Milkshakes
  • Sodas
 

Benefits of Online Marketing:

Cost effective: Online advertisement can be stated as the cost effective method in marketing as compared to some of the other mediums. Business owners should have the ability to produce, deliver and perform a marketing campaign that is online in nature spending that much which is necessary.

Great Flexibility: Alterations of campaigns possible to test the new markets, evaluation of the fresh programs and making changes to specific ones

Search engine Optimization: There is existence of organizations specializing in assisting companies market their services and products in the best possible way in positioning them at the top of the important search engines like Bing and Google.

There are several online tools like feedback forms, content, bookmarking and online chats that makes internet marketing effective. Organizations often make use of feedback forms in improving their own site and offering better service to customers. It’s about knowing what the customers have to say and want from the organization offering an opportunity to improve. Content in websites can be an effective tool in encouraging customers to visit repeatedly along with knowledge that matters. Online chat is the place where customers can come together and share their views and other grievances if anywhere marketers can learn about the trends and consider the ways industry is taking a turn.

An order processing system generally captures order data from the employees in customer service, storing the data in the central database, sending information on order to the departments of accounting and shipping. According to Dabic, González-Loureiro and Harvey (2015), customer satisfaction is important in the long run for business and fulfilling reliably the orders of customers is key too. Order processing system helps in ensuring that the filling up of customers orders are being done on time as automated systems have the power of controlling errors. Having some of the best order processing system, helps in a win-win situation for businesses, as customers generally experience deliveries of reliant nature and accuracy in order fulfilment. Businesses thus can maximize their profit by not reducing or misplacing orders.

 

References:

Aktar, S., 2016. Factors Influencing Entrepreneurs’ Business Performance in Small and Medium Businesses: Comparative Analysis Between Demographic and Environmental Factors in Bangladesh. Journal of Business and Technology (Dhaka), 10(2), pp.1-17.

Babin, B.J. and Zikmund, W.G., 2015. Essentials of marketing research. Nelson Education.

Chen, Y., Wang, Y., Nevo, S., Jin, J., Wang, L. and Chow, W.S., 2014. IT capability and organizational performance: the roles of business process agility and environmental factors. European Journal of Information Systems, 23(3), pp.326-342.

Dabic, M., González-Loureiro, M. and Harvey, M., 2015. Evolving research on expatriates: what is ‘known’after four decades (1970–2012). The International Journal of Human Resource Management, 26(3), pp.316-337.

Daughety, A.F. and Reinganum, J.F., 2014. Cumulative harm and resilient liability rules for product markets. Journal of Law, Economics, and Organization, 30(2), pp.371-400.

De Medeiros, J.F., Ribeiro, J.L.D. and Cortimiglia, M.N., 2014. Success factors for environmentally sustainable product innovation: a systematic literature review. Journal of Cleaner Production, 65, pp.76-86.

Dyson, A.D., Goudkamp, J. and Wilmot-Smith, F., 2017. Thinking in Terms of Contract Defences.

Glover, D. and Kusterer, K., 2016. Small farmers, big business: contract farming and rural development. Springer.

Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University Press, USA.

Hill, C.W., Cronk, T. and Wickramasekera, R., 2013. Global business today. McGraw-Hill Education (Australia).

Kubasek, N.K., Brennan, B.A. and Browne, M.N., 2016. The legal environment of business: A critical thinking approach. Pearson.

Li, L. and Duchnak, S., 2016. Growing your business.

Mata, F.J. and Quesada, A., 2014. Web 2.0, social networks and e-commerce as marketing tools. Journal of theoretical and applied electronic commerce research, 9(1), pp.56-69.

Moran, M. and Hunt, B., 2014. Search engine marketing, Inc.: Driving search traffic to your company's website. IBM Press.

Oman, N.B., 2017. The Dignity of Commerce: Markets and the Moral Foundations of Contract Law. University of Chicago Press.

Pakroo, P., 2016. The small business start-up kit: A step-by-step legal guide. Nolo.

Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

Scott, D.M., 2015. The new rules of marketing and PR: How to use social media, online video, mobile applications, blogs, news releases, and viral marketing to reach buyers directly. John Wiley & Sons.

Sherwin, E.L., 2015. Formal Elements of Contract and Fiduciary Law.

Steingold, F.S., 2015. Legal guide for starting & running a small business. Nolo.

Strauss, J., 2016. E-marketing. Routledge.

Vedder, A., Cuijpers, C., Vantsiouri, P. and Ferrari, M.Z., 2014. The law as a ‘catalyst and facilitator’for trust in e-health: challenges and opportunities. Law, Innovation and Technology, 6(2), pp.305-325.

Wetherly, P. and Otter, D., 2014. The business environment: themes and issues in a globalizing world. Oxford University Press.

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