The Significance of International Trade to UK Business Organisations - Assignment Example

Business Environment Table of Contents Introduction 3 Task 4 1 Identifying and Assessing Business Purpose and Objectives of Siemens 4 2 Describing the extent to which an Organisation Meets the Objectives of different Stakeholders 4 1.3 Explaining the Responsibilities of Siemens and its Strategies Employed to Meet these Responsibilities 5 Task 2 6 2.1 Influence of Economic Systems Attempt to Effectively Allocate Economic Resources 6 2.2 Assessing Impact of Fiscal and Monetary Policy on Siemens and Its Strategic Measures 7 2.3 Evaluating Impact of Competition Policy and other Regulatory Mechanism on Siemens 8 Task 3 9 3.1 Explain how Market Structures Determine the Pricing and Output Decisions of Businesses 9 3.2 Illustrating Market Forces that Shape Organisational Responses 10 3.3 Analysing how the Business and Cultural Environments Shape the Behaviour of Siemens 10 Task 4 11 4.1 The Significance of International Trade to UK Business Organisations 11 4.2 Analysing Impacts of Global Factors on UK Business Organisations 12 4.3 Evaluating the Impacts of Policies of the European Union on UK Business Organisations 13 Conclusion 15 References 16 Introduction The emerging trend of globalisation has long been witnessed to build a strong competitive environment due to the developed strategic measures and practices adopted continually by the modern organisations (Kennerley & Neely, 2003). The organisations in this unconventional era are frequently recognised to perform business operations with the aim of addressing the needs along with changing demand trends of the target groups of customers. In this process, the strategic directions and practices help marketers to build a strong competitive advantage and ensure establishment of their long-term sustainability (Nwanji & Howell, 2004). The essay focuses on critically assessing the current business purposes and practices of Siemens AG (Siemens), a German multinational corporation with an annual turnover of £53 billion. The organisation currently operates in around 190 nations with more than 450,000 employees. Siemens has been considered as one of the leading technology and engineering conglomerates operating across a number of fields including healthcare, energy, commercial industry development along with infrastructure and cities development (Siemens AG, 2014). With due significance to the pace of modern organisational practices, the essay tends to assess the major purposes of Siemens to build its long-term sustainability in the global business environment. The discussion also provides an in-depth understanding regarding the nature of the operating national environments and critically evaluates the organisational behaviour of Siemens in its market environment. In order to accomplish the desired objectives of this essay, the discussion further focuses on assessing the significance of the key global factors leading to shape national business activities of the organisation. Task 1 1.1 Identifying and Assessing Business Purpose and Objectives of Siemens The business purpose of Siemens has long been witnessed to encompass the aspects associated with organisational values along with the interests of its global stakeholders. The organisational values of Siemens refer to a strong set of practices that reflects its responsibilities and continuous innovation to build its long-term sustainability. In general, the business purpose of Siemens specialises in the innovation of new ways, with the aim of improving quality of life and work. According to the mission statement of the company, it has been observed that the principle business purpose of the company is to render continuous focus on designing a wide range of innovative products and solutions for the commercial industries, healthcare and energy sectors in response to the environment (Siemens, 2009). 1.2 Describing the extent to which an Organisation Meets the Objectives of different Stakeholders In relation to the business purpose of Siemens, it has been widely observed that responsibly addressing stakeholders’ interests forms one of its primary objectives related to its versatile range of business operations. Complying with the responsibilities to meet the stakeholders’ objectives is further regarded as one of the major factors with regard to the existing organisational values of Siemens. In order to critically address the stakeholders’ objectives, the business process of Siemens is committed to its wide range of ethical and responsible practices that can enable the organisation to improve the quality of life of each individual (Siemens AG, 20014). 1.3 Explaining the Responsibilities of Siemens and its Strategies Employed to Meet these Responsibilities In this context, following are few of the major business practices of Siemens that can certainly enable the organisation to meet the objectives of each group of its stakeholders. Corporate Social Responsibilities (CSR) The CSR activities of Siemens can be regarded as an effective set of integrated facets of the organisation, which incorporates range of practices with the aim of developing local communities. In this context, Simons Foundation is identified to play an essential role by providing more than US$7 million annually in favour of educational initiatives across different subject areas including health and science, technology and engineering among others around various locations of the US (Siemens Corporation, 2014). The continuous process of providing a major support to the community development initiatives in this regard helps Siemens to address the objectives of its stakeholders. Legal and Ethical Responsibilities At Siemens, each activity associated with business operations is determined to comply with a strong set of legal and ethical guidelines. The business responsibilities of the organisation are thus conducted in accordance with a strong set of professional and ethical principles. Moreover, the business operations also tend to conduct strict measures related to any non-compliance behaviour regarding the legal and ethical standards of the organisation (Siemens AG, 2014). Task 2 2.1 Influence of Economic Systems Attempt to Effectively Allocate Economic Resources Economic systems can be regarded as a major set of regulations that can impose strong influences on modern organisations, especially the multinationals to achieve their desired commercial goals efficiently. Economic systems are comprised of multiple processes that impose an un-ignorable impact on the organisations to effectively organise, produce, distribute and motivate labour in order to achieve the determined organisational objectives successfully. Moreover, the economic systems that are generally accepted by the global nations have also been found to impose major influences on modern organisations to allocate technological and human resources appropriately to suffice their growth needs (Siemens AG, 2014). There are three types of economic systems generally accepted by the different global nations including free market, centrally planned and mixed market economic system. The free market economic generally refers to a system in which, the government has minimum or considerably less amount of intervention and the economic resources of that particular country comes under the privately held institutions. On the other hand, centrally planned economic system refers a structure in which the government enjoys adequate control or provisions regarding the use of national resources. In this system, government of a particular country tends to make the decision of planning different economic activities in response to the needs of the individuals. In this process, privately held institutions are likely to face different hurdles when using national resources for producing products and/or services. In addition, the mixed economic market system generally signifies a structure in which the government takes decisions regarding the economic resources getting involved in both public and privately held institutions. According to the present, majority of global nations are likely to adopt a mixed economic system by facilitating international trade opportunities to the global firms (Gregory & Stuart, 2013; Sawyer, 2004). 2.2 Assessing Impact of Fiscal and Monetary Policy on Siemens and Its Strategic Measures According to the current business policy of Siemens, the organisation has been widely accepted to maintain adequate standards and practices in response to the fiscal and monetary policies of the nations in which the company operates. However, in various operating destinations, Siemens has also been observed to face challenges due to the changing fiscal monetary policies of the nations in the form of increasing tax rates and changes in different economic regulations. Moreover, the company is also observed to have survived negative impacts on its annual financial performance due to the unabated changes in currency exchange rates or revaluation of national currencies by the government (Gregory & Stuart, 2013; Sawyer, 2004). In relation to the current business practices, the changing taxation rates and changing trade regulatory norms of the national countries has been observed to reduce the organisational capability to accumulate sufficient resources. The impact of limited availability of economic resources further lowers the production capability, which further imposes major complexities for Siemens when aiming at continually increasing its investment level by a certain degree. For instance, the continuous revaluation of currency, as observed in different Asian countries can be regarded to lower its production capability, which has been observed to convey significant risks to Siemens to remain in the leading position (Siemens AG, 2014). 2.3 Evaluating Impact of Competition Policy and other Regulatory Mechanism on Siemens According to the modern business environment, marketers are often recognised to face significant challenges due to the increasingly fierce competition with the existing rivals. In this regard, country’s competition policies and regulatory frameworks also impose a major influence on the organisations towards implementing strategic measures and practices. Concerning the impacts of competition policies and regulatory mechanisms on Siemens, the organisation can be observed to have faced rapid complexities due to the fierce competitive forces of the existing rivals (Begg, 2009; Sawyer, 2004). However, the holistic business purpose and wider organisational objectives of Siemens provide adequate support to the company to effectively deal with complexities associated with different competitive policies and regulations. Moreover, the budding concern regarding the regulatory norms indeed acts as a major assistance to the company to maintain adequate quality and produce cutting edge products and solutions for its wide range of customers. In addition, market liberalisation along with state-aided control mechanism in different European nations has also been witnessed to streamline the business practices of Siemens while operating in diverse global regions. Therefore, it can be stated that the competition policies and other regulatory mechanisms in different global nations also influences the business performance of Siemens to help it achieve a strong competitive position over its major rivals (Siemens AG, 2014). Task 3 3.1 Explain how Market Structures Determine the Pricing and Output Decisions of Businesses Market structure is a major determinant for the organisations, especially for the multinationals to achieve their commercial goals and objectives successfully. From a theoretical point of view, there are three basic types of market structure identifiable in the current business environment, such as perfect competitive market, imperfect competitive market and monopoly market. The imperfect competition structure of the market is further characterised in three types of structures including monopolistic competition pure oligopoly and differentiated oligopoly market structure. In response to the different characteristics of market structures, it can be observed that each type of structure has a significant influence on the organisations while determining price of the product and/or services (Srivastava, n.d.). According to the present phenomenon, with increasing competition within the global business environment, organisations are however observed to make effective pricing decisions by evaluating competitive positioning of the existing rivals in a particular market structure (Siemens AG 2014; Siemens AG 2011). The pricing decisions of Siemens has been observed to follow an effective value based structure that enables the company to attract and retain a strong base of clients with the virtues of its wide range of products and services being offered in diverse business areas. In general, the organisation provides quality assured products and solution services in different business areas including energy, commercial industry, technology, infrastructure, and city development segments. In this regard, the execution of value based pricing strategy shall help the organisation to differentiate its competitive positioning from its existing rivals. The differentiation in products/services significantly helps the organisation to build its strong identity in a differentiated oligopoly market with a few numbers of competitors (Siemens AG, 2011). 3.2 Illustrating Market Forces that Shape Organisational Responses Market forces including supply and demand; elasticity of demand and supply within a particular market along with perception of the target customers have been considered as few of the major market forces that shape the response of the organisations (Srivastava, n.d.). According to the current business environment in healthcare and technology-infrastructure development industry, the continuous innovation of advanced technology based products and/or services of Siemens have been observed to create new demand cycle across the different developed and developing nations. Moreover, cutting-age solutions relating to different commercial industries also help the organisation to achieve competitive advantages over its existing rivals across its different operating nations (Siemens, 2011). 3.3 Analysing how the Business and Cultural Environments Shape the Behaviour of Siemens In relation to current form of strategic measures, it has been widely accepted that the nature and valuable business practices of Siemens significantly play an essential role for the company while operating its subsidiaries across more than 190 countries. The influential external factors, including political, economic, socio-cultural, technological legal and environmental factors also impose major influences on the organisational operations of Siemens, leading to substantial changes in the business practices of the global organisations. Concerning the external factors associated with business environment, it can be argued that the business strategy of Siemens, by making strong alignments with the governmental regulations and economic policies, significantly help the organisation to strengthen its dominant position across different commercial fields (Siemens AG 2014). Additionally, the internal business environment of Siemens also incorporate adequate values and respect towards the diverse forms of cultural aspects, as it also imposes major influences on the company’s global exposure. The strong organisational policy towards providing equal opportunity to each individual, irrespective of their cultural differences can be regarded as a major set of attributes for Siemens, playing a crucial role towards its long-term achievement in diverse business sectors (Siemens AG 2014). Task 4 4.1 The Significance of International Trade to UK Business Organisations International trade has long been considered as one of the major factors offering wide range of benefits to the commercial sectors across the global nations. It plays a pivotal role for the nations to make continuous improvements in its Gross Domestic Product (GDP) growth and contributes as a key source of revenue for a developing nation. In the context of UK business organisations, the significance of international trade has been observed to flourish with the modern production techniques to a substantial extent. In the context of Siemens, it has been critically identified that the modern production techniques have been playing an essential role for the company to make continuous improvements of its transactional systems, transportation systems along with outsourcing of products and/or services of the organisations. The emergence of international trade in the UK has also been observed to bring rapid industrial growth, which has been leveraging major support to Siemens while performing its various trade activities effectively across the national boundaries (Jain & et. al., 2010). The benefits of international trade for the UK business organisations also makes it one of the key drivers to ensure effective control of the business functions and likewise, provide appropriate direction towards trade operations of Siemens. The strong form of international trade in the UK has also been identified to provide a major support to the world economy, as it has helped reducing a significant level of poverty across the different regions of the nation (Jain & et. al., 2010). 4.2 Analysing Impacts of Global Factors on UK Business Organisations Global factors, such as the aspects associated with international trade and UK economy, along with market opportunities across different overseas nations, can be considered to impose major impacts on the UK business organisations. In this regard, the EU business regulations along with their incorporation are few of the direct influencing factors for the UK business organisations when addressing needs and interests of the key stakeholders (Begg, 2009; Sawyer, 2004). Corresponding to the global factors, the exchange rates and other variables in the economic policies of both neighbour and overseas nations can also be regarded as few of the major determinants leading to strong impacts on the UK’s business organisations. In this context, the changing economic policies along with fluctuating trends of currency exchange rates of the global nations have also been found to impose major risks to Siemens. Labour movement, adequate availability of vital resources and workforce skills can also be considered to impose significant impacts on trade operations of the organisation. In addition, the factors impose major risks for Siemens in different UK marketplaces to make effective decision of investments and achieve their long-term commercial goals (Begg, 2009; Sawyer, 2004). 4.3 Evaluating the Impacts of Policies of the European Union on UK Business Organisations European Commission policies are commonly regarded as a strong set of global factors, having un-ignorable impacts on the UK organisations. The directives and regulatory policies in taxation and spending regulations of EU are few of the major aspects that play a crucial role in shaping the opportunities and challenges being faced by the UK’s business organisations. For instance, the trade policies practiced in the EU also imposes major influences on the UK entrepreneurs providing subsidies while expanding business locations across the different parts of the Europe. In relation to modern business principles of Siemens, the policies also tend to ensure adequate governance and support to flourish its business practices and effective as well as planned addressal of the growing needs within the UK customers. The establishment of well-built employment policies and regional policies has also been witnessed to improve the organisational practices in the UK radically. The inflation and taxation policies in the EU also empower the commercial trade activities of Siemens to stimulate its annual financial growth. The policies have also been witnessed to reduce a large amount of unemployment and poverty across the different European regions (Jain & et. al, 2010; Begg, 2009; Sawyer, 2004). The global factors have been considered to influence the operational performance of Siemens irrespective of its diversified business areas across different parts of the European nations. In this context, the factors associated with strong economic performance along with wider opportunities across the European markets are few of the key aspects of Siemens to build its strong and sustainable position. Moreover, the spending regulations and taxation policies provide a major support to Siemens to perform independently across different European markets. The current employment and regional policies within the EU has also been observed to provide adequate numbers of highly skilled employees, which further help the organisation to remain as the leading innovators in it’s each business segment (Siemens AG 2014; Siemens AG 2011). Conclusion According to the present unconventional era, organisations are often observed to have variety of purposes that play critical roles to build long-term sustainability in the competitive global business environment. However, there are various influencing factors such as governmental policies, economic policies, trade regulations and various international factors, which are likely to shape the business practices of the organisations. In this essay, many influencing factors have been critically examined that can impose major impacts on the business performance of Siemens. With critical assessment of the external environmental factors, it has been critically identified that the strategic measures and practices of Siemens are the key sources leading to the company’s dominant position in the diversified business areas. References Begg, D., 2009. Foundations of Economics, 4th edition. McGraw-Hill Higher Education. Gregory, P. & Stuart, R., 2013. The Global Economy and Its Economic Systems. Cengage Learning, Jain, T. R. & et. al, 2010. Business Environment. FK Publications. Kennerley, M. & Neely, A., 2003. Measuring Performance in a Changing Business Environment. 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