Assignment for HNC business management unit 1: Business management.

1. Assignment 1-Business Environment.
By Jemma Redman 20/10/15
The aims of this assignment are to consider the objectives of businesses in both the private
and public sector, as well as to consider the importance of stakeholders, defining who
stakeholders are and why they are important, the writer will also consider what corporate
social responsibility is, then go on to define and explain the different economic systems, the
writer will also consider the natural business environment, and the impacts of economic
changes on a business, as well as what economic policy is, and how different economic
policies impact on businesses.
Objectives of businesses.
In the business environment all businesses, at the beginning of their venture, define a
mission statement, this provides guidance when making decisions related to the business, as
well as providing a structure to where the owners want the business to be in the future. The
businesses mission statement also provides all the businesses employees with a day-to-day
work purpose. As well as the mission statement businesses also have values, which are
defined by the ideals that the organisation considers to be important to the business, there
is also the company’s vision, this defines the ambitions of the business and where it wants
to be in the future. A business also has goals and objectives, goals define what the company
is trying to achieve, objectives are the targets that the business must take to achieve those
specific goals.
The writer has identified two companies to define their mission, values, vision, goals and
objectives, the businesses the writer has chosen are Kirklees metropolitan council, which is
the local government in Huddersfield. The writer has also chosen the Shaw Trust, which is a
not-for-profit organisation funded by the European Union.
Kirklees metropolitan council has a specific mission statement, to serve and improve their
local communities, this is ‘to be a modern, flexible and emotionally intelligent organisation
able to work with our diverse communities to sustain the services they need, the outcomes
we choose, and the opportunities they want.’ Kirklees council’s vision statement is ‘we want
Kirklees to be a district which combines a strong, sustainable economy with a great quality
of life- leading to thriving communities, growing businesses, high prosperity and low
inequality where people enjoy better health and wellbeing throughout their lives.’ Kirklees
council’s goals are ‘to expect all staff to be able to honestly say, I know exactly the
difference my work makes to local people. I spend every council pound as if it were my own,
including my time and other peoples time. I work with whoever I need to, across the council
and outside of it, to make a real difference. I am creative and I empower people to do more
things for themselves and each other, and I am a can-do person, I don’t avoid challenges or
taking risks.’ Kirklees councils values are defined on their website as ‘ we will be passionate
about the difference that we make, confident in our abilities to get things done and flexible
in doing what we can, as well as we can. Their objectives are to improve and sustain health

2. and wellbeing in Kirklees and to further strengthen the economy in Kirklees.
http://www.kirklees.gov.uk/you-kmc/deliveringServices/pdf/corporatePlan201415.pdf
Shaw trust have a very definitive vision, which is ‘for a society in which everyone has the
opportunity for employment, inclusion and independence.’ Shaw trusts mission statement
supports their vision strongly, this is ‘to deliver services for people at a disadvantage, so that
they can gain life and employability skills in order to live more independently, secure
sustainable employment and actively contribute to family and community life.’ As well as ‘to
educate and influence society to remove barriers and create opportunities for those at a
disadvantage; to build supportive communities and ultimately, a more inclusive society.’
Shaw trusts values further support their mission and vision statements, these values are; ‘
To be people centred, to ensure that everything we do is to realise the full potential of the
people we are here to help. To act with integrity, to be an organisation that is open and
transparent, that actively embraces equality and diversity and has a honest, inclusive and
respectful culture which everyone trusts. To be innovative, to be a creative, forward
thinking organisation which finds new ways of doing things to break down barriers to
independent living and sustainable employment. To be best in class to be a top performing
provider of employment and independent living services, that helps as many people as
possible into work, or on the journey towards independent living, To be accountable, to
encourage everyone to take personal responsibility for their actions, for clients to
understand their role moving towards employment or a more independent way of living.
For staff to be empowered to do their jobs and take personal responsibility for carrying out
their roles, in line with our values and code of conduct.’ Shaw trusts final value is ‘to be
people centred, to ensure that everything we do is to realise the full potential of the people
we are here to help. http://www.shaw-trust.org.uk/about-us/our-vision-mission-and-
values/#
Who and what are stakeholders?
‘The stakeholder theory suggests that the purpose of a business is to create as much value
as possible for stakeholders. In order to succeed and be sustainable over time, executives
must keep the interests of the customers, suppliers, employees, communities and
shareholders aligned and going in the same direction. Innovation to keep these interests
aligned is more important than the easy strategy of trading off the interests of stakeholders
against each other. Hence, by managing for stakeholders, executives will also create as
much value as possible for shareholders and other financiers.’
https://en.wikipedia.org/wiki/Stakeholder_theory
In the writers opinion this means that in order to succeed a business must balance the
interests of all its stakeholders, the stakeholder theory also helps to translate business
ethics to the businesses management and strategy. The stakeholder theory also aims to
create equal value for all stakeholders, to maintain their interests in the company. a
business must keep all stakeholders satisfied otherwise they may have an effect on the
companies running, e.g. if employees weren’t treated right they may quit or go on strike,
this would affect productivity, which would then affect customers as they wouldn’t be
getting their product or service, then as a knock-on effect this would affect the companies’

3. profits, then the company may not be able to pay suppliers. The main point of the
stakeholder theory, in the writer’s opinion is to keep all the stakeholders satisfied, and if this
is not possible, it is to keep the most influential stakeholders satisfied.
Kirklees council’s stakeholder map shows that, the councillors, mayor, directorates and chief
executive have high power and interest in the council, as they do the majority of the
decision making within the council, and the mayor oversees these decisions. The
government are a high power high interest stakeholder as they fund and own the council.
The people who have high power and medium interest is the councils partners, the partners
are delegated tasks, such as external children and families services will be delegated to
support families. Low power high interest stakeholders are the banks and other lenders,
these are high power as if they were used they were used, the council would increase the
banks’ profits from loans etc. but banks are not used within a council as the government
funds them, this is the reason why the banks are low interest stakeholders. The council’s
employees have medium power over the council as they are who the council heavily relies
on to complete their jobs and ensure that their vision and values are followed, employees
have high interest in the council as their jobs rely on the successful running of it. The media
have medium interest in the council as they closely follow their activities and report these
activities to the public, the council’s customers. The media have low power over the council
Banks Partners Councillors
Directorates
Chief executive (Adrian
Lythgo) Mayor
Government
Buyers Employees unions (UNISON) Employees
Contractors Media Customers
Kirkleescouncil- Powerinterestmap
High
Medium
Power
Low
Low Medium High
Level of interest

4. as they have no say at all in how it is run or any decisions made. Employees unions have
medium power and interest over the council, they are there to inform employees and this
could lead to the employees going on strike if they feel that they are being mistreated
within the workplace. The unions also have medium interest in the council as they need to
stay informed in the event that an employee of the council contacts them for advice.
Contractors have both low power and interest in the council, in short, they are just there to
do their jobs. Customers of the council have high power and interest in the council as they
like to know what’s happening in their local area and in the council as a whole, the
customers have high power as they provide an extra income for the council, customers are
also high power as the council regularly invites them to have their say in how the council is
run, the customers also elect councillors.
Shaw trusts main stakeholders are the European union, who are high power and medium
interest and the government, who are high power and low interest, the writer believes the
power and interest to be true as the European union funds the charity, and the government
provides the details and projections of the company with the European union, the reason
the writer believes the European union to be medium interest is because the Shaw trust is
one of many charities that is funded by them and the government is low interest primarily
for the same reason, the charity is one of many that is funded by them. The CEO of the Shaw
trust is high power and high interest as he makes all the decisions to ensure that the
company runs successfully. The charity’s trustees have medium power and high interest as
they are responsible for the control and management of the company’s administration,
including reports for the government. The company’s customers have high interest as they
are relying on the company to get back into work or to be able to live independently, they
have low power as they have no say in the company management or how it is run. Donors
to the charity have medium power and interest, the writer believes this to be true as they
want to see how their donations are being used and spent, and they also have medium
power as without their donations the company may not run as effectively. Employees of the
Shaw trust have medium interest in the company as they do their jobs there so want to
Government European union CEO Roy O’Shaughnessy
Communities Donors Trustees
Line Management Employees Customers
High
Power Medium
Low
Low Medium High
Level of interest
Shaw trust power interest map.

5. work hard to ensure that they sustain their job and to support the successfulness of the
charity, employees are low power as they do not have any say in how the company is
operated. Line managers have Medium interest in the company as they need to know what
the company is doing and what is expected of them and their team in order to achieve their
targets, line managers are low power as they do not have much input over how the
company is run. Businesses are the final stakeholder, they have medium power and low
interest, they are medium power as it is up to them to help the charity succeed, e.g. a
business can help the charity succeed by employing one of their customers. Businesses are
low interest as they only deal with the Shaw Trust when they employ one of the charities
customers.
The Shaw trust meets their stakeholders objectives by helping their customers gets back
into work, this is satisfying the government and European union as it is demonstrating that
their funding is being used effectively and it will also reduce unemployment figures and
boost the economy. By supporting people back into work the Shaw trust are meeting their
CEO’s objectives as they are meeting the targets required to receive funding. Customers of
the Shaw trust’s objectives are met as they are getting back into work which is their main
objective, this will provide a better lifestyle for them, they also meet businesses objectives
by providing staff that is needed.
What is corporate social responsibility?
‘Corporate social responsibility is defined as when a company takes responsibility for their
effects on environmental and social wellbeing, this term generally applies efforts that go
beyond what may be required by regulators or environmental protection groups.’
http://www.investopedia.com/terms/c/corp-social-responsibility.asp
Shaw trusts main corporate social responsibility point is accessibility, helping organisations
improve access to disabled customers and employees. Other parts of Shaw trusts corporate
social responsibility policy include taking action and responsibility for the environmental
impact of their activities, as well as minimising any potentially harmful impact of their
activities on the environment.
What is an economic system?
An economic system has many definitions, one of which is; ‘an economic system is a system
of production and exchange of goods and services, as well as allocation of resources in
society.’ https://en.wikipedia.org/wiki/Economic_system
The writer’s interpretation of this definition is that economic systems are systems in which
businesses operate by buying and selling items and services.’
Another definition of economic systems is; ‘an economic systemis an organised way in
which a state or nation allocates its resources and apportions goods and services in the
national community.’ http://www.businessdictionary.com/definition/economic-system.html

6. The writer’s interpretation of this is; an economic system is a systemin which the
government allocates funds to projects or services as well as ensuring that all funds and
services are shared appropriately, to serve the communities of the nation.
What are the types of economic systems?
Market economic system- In a market economic system, the market forces decide what to
produce, how much to produce and who to produce for. All resources in a market economic
system are privately owned by people and firms, profit is the main motive in this particular
system. The main ideal in this systemis that it should be the producers and consumers who
decide how to utilise available resources.
Planned economic system- In a planned economy, the government or another governing
body make all the decisions about a company’s production and investment.
Mixed economic system- A mixed economic systemis where both market economy and
planned economy have an influence. In a mixed economic system a company will have a
level of private economic freedom in the use of capital, this economic system allows for the
governments to interfere in economic activities in order to achieve social aims.
What economic system does the UK follow?
In the writers opinion the UK economic system is currently a mixed one, this is evidenced as
the government currently has state ownership of some companies, for example network
rail, further evidence that the UK is a mixed economy is that the UK also has government
regulation and social welfare, the UK also has many globally competitive businesses that are
run and operated privately with no government assistance, for example virgin group, which
is a privately owned enterprise which now operates globally and has also successfully
branched out to many different market areas. This supports the writer’s belief that the UK’s
economy is a mixed one as the government has state ownership of some companies, but
not all.
How do economic systems allocate resources effectively?
In an economic systemresources are allocated by whomever has control over the particular
system, most countries follow a mixed economic system, this is a mix of both market
economy (where the government has little or no control over supply, demand and decision
making within a company) and a planned economy (where the government is responsible
for making decisions and distributing resources.) By implementing mixed economies, private
organisations have the freedom to run their business independently, with the security of
being under government supervision. Public organisations are owned by the government, so
the government makes big decisions on their behalf.

7. What impact do fiscal and monetary policies on the activities of organisations?
Fiscal and monetary policies have a great impact on businesses and their activities.
Monetary policies are controlled by the major banks, this policy impacts both the economy
and the business. Monetary policy is the ability to obtain credit, expansionary monetary
policy ensures that interest rates are low and credit is attainable to businesses, whereas
contractionary monetary policy reduces the availability of funds and makes it more difficult
for businesses to obtain funds. Fiscal policies are controlled by the government, this is the
amount of tax a business has to pay (such as income and corporation taxes.) If the tax levels
are set too high, it may reduce the businesses ability to expand and employ new staff,
because of this businesses may be forced to charge their customers more for their products
or services, to cover increased running costs. This shows that fiscal and monetary policies
have a profound effect on the running of businesses.
What is competition policy and how does this affect the running of a business?
In every market, there are many competitors, all of which invest a lot of time and funds into
product and service development, to gain competitive advantage. Competition policies are
based on four main points; antitrust and cartels, state aid control, market liberalisation and
merger control, all of these policies restrict competition, including price fixing. Competition
policy ensures that new competitors have easier entry onto the market. The policy also
breaks the monopolistic market. Competition policies are actively enforced by the
government. Competition policies actively promote competition and makes markets better,
this improves the efficiency of organisations and ensures that all competitors in the market
have an equal chance of success.
Conclusion
It is the writer’s conclusion that all organisations must research and understand their
business environment in order to be successful. By understanding their business
environment businesses have the opportunity to recognise their strengths, opportunities,
weaknesses and threats. To fully understand their business environment businesses should
also carefully monitor political, economic, social and legal factors that may affect their
company and the way they operate, the business can then make a strategic plan around
these factors. By monitoring the economy and business environment and planning
accordingly, a business has every opportunity to become a successful business.
Bibliography.
 Wilson, S (July 2014) corporate plan 2014-15, Available at:
http://www.kirklees.gov.uk/you-
kmc/deliveringServices/pdf/corporatePlan201415.pdf (Accessed: 19th October
2015).

8.  (January 2015) Our vision, mission and values, Available at: http://www.shaw-
trust.org.uk/about-us/our-vision-mission-and-values/# (Accessed: 19th October
2015).
 (September 2015) Stakeholder Theory, Available at:
https://en.wikipedia.org/wiki/Stakeholder_theory (Accessed: 19th October 2015).
 (2015) corporate social responsibility, Available at:
http://www.investopedia.com/terms/c/corp-social-responsibility.asp (Accessed:
20th October 2015).
 (2015) Economic system, Available at:
https://en.wikipedia.org/wiki/Economic_system (Accessed: 20th October 2015).
 (2015) what is an economic system, Available at:
http://www.businessdictionary.com/definition/economic-system.html (Accessed:
20th October 2015).