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P5 describe the influence of two contrasting economic environments on business activities within a selected organisation.

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P5 describe the influence of two contrasting economic environments on business activities within a selected organisation.

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Tesco's core purpose: Serving Britain's shoppers a little better, every day.

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Economy
Economic Environment
Business Cycle
Boom
Recession
Trough
Recovery
GDP
Inflation
Interest Rates
Economic stability
Global interdependence.

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United Kingdom GDP | 2019 | Data | Chart | Calendar | Forecast | News

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The Gross Domestic Product (GDP) in the United Kingdom was worth 2622.43 billion US dollars in 2017. The GDP value of the United Kingdom represents 4.23 percent of the world economy. GDP in the United Kingdom averaged 1162.89 USD Billion from 1960 until 2017, reaching an all time high of 3074.36 USD Billion in 2007 and a record low of 72.33 USD Billion in 1960.

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P3 describe how two businesses are organised

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P3 describe how two businesses are organised

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1. Watch the video.

2. Follow the report structure and create your report for P3.

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BTEC Business Level 3 Year 1 Unit 1 The Business Environment P3

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Thank you for comment, like and for subscribing. For me to upload more great contents on this channel, which will help you. I am kindling asking you to buy my book on amazon/kindle. You can buy it by clicking this link https://goo.gl/IbDMl5 Be a star and help a student in need (I am struggling with university fees!)

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PRESENTATION (P3)

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P3: Functional areas of business/business plan and aims and objectives

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P3: Functional areas of business/business plan and aims and objectives

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P4 explain how their style of organisation helps them to fulfil their purposes.

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P4 explain how their style of organisation helps them to fulfil their purposes.

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Supply is the quantity of a good or service that a producer is willing and able to supply onto the market at a given price in a given time period.
The Basic Law of Supply
The basic law of supply is that as the selling price of a product rises, so businesses expand supply to the market. The higher selling price acts as an incentive for businesses to produce more - and it may also attract other suppliers into the market.

This is illustrated in the diagram below:

Causes of Changes in Market Supply
The four main causes of changes in the amount supplied to a market are:

Costs of Production

External Shocks

New Technology

Taxation & Subsidies

Let's look briefly at each of these
Supply and Costs of Production
It stands to reason that the costs of producing output will influence how much a business is able to supply:

Lower unit costs mean that a business can supply more at each price - for example through higher productivity

Higher unit costs cause an inward shift of supply e.g. a rise in wage rates or an increase in energy prices / other raw materials

For example, consider businesses that makes food products that contain a substantial amount of wheat. Falling wheat prices will cause a reduction in the resource costs for food manufacturers such as cereal producers. If other factors remain constant, producers who use wheat will be able to supply more for the same cost.

Supply and External Shocks
Significant and often unexpected changes in the external business environment usually impact on market supply.

For example, the sharp and sustained economic downturn between 2008-2012 across the world's developed economies led to many firms cutting back the scale of their operations, including cutting production capacity.

The chart below shows how in 2009 (during the global economic recession) demand for sports shoes declined and Adidas responded by cutting output.

Supply and New Technology
Technological change encourages new entrants to a market (increasing supply) and can also enable existing suppliers to become more efficient, thereby increasing their potential to supply.

A good example is the 3D printing industry where the rapid development of additive manufacturing techniques has led to an explosion in supply of and demand for 3D printers.

Supply and Taxation
Changes in taxation can affect both supply and demand.

For example, the provision of subsidies to households and businesses installing solar panels in recent years encouraged a substantial increase in supply to the market.

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Supply is the quantity of a good or service that a producer is willing and able to supply onto the market at a given price in a given time period. The Basic Law of Supply The basic law of supply is that as the selling price of a product rises, so businesses expand supply to the market.

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The Pros and Cons of 7 Popular Organizational Structures

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The Pros and Cons of 7 Popular Organizational Structures

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The following is an excerpt from our free resource, An Illustrated Guide to Organizational Structures. If you'd like to download the full resource, click here.
Choosing the best organizational structure for your company, division, or team is a lot like picking out a new car.

At the most basic level, you're always looking for something road-worthy -- something that can take you (and your passengers) from point A to point B without a hitch. But beyond that, there are a lot of options to consider. Automatic or manual? Four-wheel drive or two? Built-in GPS? Leather interior? Flux capacitor?

In the world of organizational structures, the options you have to choose from include things like chain of command (long or short?), span of control (wide or narrow?), and centralization (centralized or decentralized decision-making?), just to name a few.

(If you want to dive deeper into what all of these different organizational structure components are, check out my earlier post, " The 6 Building Blocks of Organizational Structure.")

In the rest of this post, we're going to explore how you can combine those components to form different types of organizational structures. We'll also highlight the benefits and drawbacks of different structure types so you can evaluate which is the best option for your company, division, or team. Let's dive in.

Mechanistic vs. Organic Structures

Organizational structures fall on a spectrum, with "mechanistic" at one end and "organic" at the other.

Mechanistic structures are typified by narrow spans of control; high centralization, specialization, and formalization; as well as by rigid departmentalization. And the chain of command, whether long or short, is always clear.

Organic structures (also known as "flat" structures) are typified by wide spans of control; decentralization; low specialization and formalization; and loose departmentalization. And the chain of command, whether long or short, can sometimes be difficult to decipher.

As you've probably been able to infer from their respective characteristics, the mechanistic structure represents the traditional, top-down approach to organizational structure, whereas the organic structure represents a more collaborative, flexible approach.

In this rest of this post, we'll uncover more specific types of organizational structures, most of which fall on the more traditional, mechanistic side of the spectrum.

1) Functional Org Structure

One of the most common types of organizational structures, the functional structure departmentalizes an organization based on common job functions.

So an organization with a functional structure would group all of the marketers together in one department, group all of the salespeople together in a separate department, and group all of the customer service people together in a third department.

The functional structure allows for a high degree of specialization for employees, and is easily scalable should the organization grow.

The downsides: The structure also has the potential to create barriers between different functions -- and it can be inefficient if the organization has a variety of different products or target markets.

2) Divisional: Product-Based Org Structure

You can think of a divisional organizational structure as a structure that's comprised of multiple, smaller functional structures (i.e. each division within a divisional structure can have its own marketing team, its own sales team, and so on). In this case -- a product-based divisional structure -- each division within the organization is dedicated to a particular product line.

This type of structure is ideal for organizations with multiple products and can help shorten product development cycles.

The downsides: It can be difficult to scale, and the organization may end up with duplicate resources as different divisions strive for autonomy.

3) Divisional: Market-Based Org Structure

Another variety of the divisional organizational structure is the market-based structure, wherein the divisions of an organization are based around markets, industries, or customer types.

The market-based structure is ideal for an organization that has products or services that are unique to specific market segments, and is particularly effective if that organization has advanced knowledge of those segments.

The downsides: Too much autonomy can lead to divisions developing systems that are incompatible with one another, and divisions may also end up inadvertently duplicating activities that other divisions are already handling.

4) Divisional: Geographical Org Structure

The geographical organizational structure establishes its divisions based on -- you guessed it! -- geography. More specifically, the divisions of a geographical structure can include territories, regions, or districts.

This type of structure is best-suited to organizations that need to be near sources of supply and/or customers (e.g. for deliveries or for on-site support).

The main downside of a geographical org structure: It can be easy for decision- making to become decentralized, as geographic divisions (which can be hundreds, if not thousands of miles away from corporate headquarters) often have a great deal of autonomy.

5) Process-Based Org Structure

Process-based organizational structures are designed around the end-to-end flow of different processes, such as "Research & Development," "Customer Acquisition," and "Order Fulfillment." Unlike a strictly functional structure, a process-based structure considers not only the activities employees perform, but also how those different activities interact with one another.

In order to fully understand the diagram below, you need to look at it from left to right: The customer acquisition process can't start until you have a fully developed product to sell. And likewise, the order fulfillment process can't start until customers have been acquired and there are product orders to fill.

This structure is ideal for improving speed and efficiency, and is best-suited to rapidly changing business environments, as it is easily adaptable.

The main downside: Barriers between the different process groups can lead to problems communicating and handing off work.

6) Matrix Org Structure

Unlike the other structures we've looked at so far, a matrix organizational structure doesn't follow the traditional, hierarchical model. Instead, all employees (represented by the green boxes) have dual reporting relationships. Typically, there is a functional reporting line (shown in blue) as well as a product- based reporting line (shown in yellow).

When looking at a matrix structure org chart, solid lines represent strong, direct-reporting relationships, whereas dotted lines indicate that the relationship is secondary, or not as strong. In our example below, it's clear that functional reporting takes precedence over product-based reporting.

The main appeal of the matrix structure is that it can provide both flexibility and more balanced decision-making (as there are two chains of command instead of just one).

Its primary pitfall: complexity, which can lead to confused employees.

7) Circular Org Structure

While it might appear drastically different from the other organizational structures highlighted in this section, the circular structure still relies on hierarchy, with higher-level employees occupying the inner rings of the circle and lower-level employees occupying the outer rings.

That being said, the leaders or executives in a circular organization aren't seen as sitting atop the organization, sending directives down the chain of command. Instead, they're at the center of the organization, spreading their vision outward.

From an ideological perspective, a circular structure is meant to promote communication and the free flow of information between different parts of the organization. Whereas a traditional structure shows different departments or divisions as occupying individual, semi-autonomous branches, the circular structure depicts all divisions as being part of the same whole.

From a practical perspective, however, the circular structure can be confusing, especially for new employees. Unlike with a more traditional, top-down structure, a circular structure can make it difficult for employees to figure out who they report to and how they're meant to fit into the organization.

And that concludes our exploration of different types of organizational structures. Keep in mind that what we've just looked at are archetypes -- in real-world applications, organizations often use hybrid structures, which can borrow elements from multiple structure types.

Want to learn more about working in marketing? Check out the 6 Building Blocks of Organizational Structure [Diagrams].
Want to see some real-world examples of marketing team org structures from companies including Zendesk, GitHub, and Rue La La? Download the complete resource, An Illustrated Guide to Organizational Structures.

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The Pros & Cons of 7 Popular Organizational Structures [Diagrams]

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The following is an excerpt from our free resource, An Illustrated Guide to Organizational Structures . If you'd like to download the full resource, click here. Choosing the best organizational structure for your company, division, or team is a lot like picking out a new car.

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Advantages and Disadvantages of five different types of structure. 

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Advantages and Disadvantages of five different types of structure. 

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Frynas & Mellahi (2015) defined the five structures followed by multinationa organizations to be international division structure, geographic division structure, product division structure and a matrix structure. Depending on the needs and the volume of the activities of a multinational company, a structure from these five may be utilized to run business activities in different countries. Some of these structures are centralized some are not. In the following discussion, I have provided the advantages and disadvantages of the five.

Advantages and disadvantages of functional structure

The functional structure is an organizational structure that divides its operations into separate departments or units according to the role of each department. For example the accounting activities of different operations are grouped in on accounting department. Speaking of a multinational organization, accounting activities from all the regional offices and the headquarters would be handled by one accounting department.

The advantage of functional structure is that the different functional units of the company get specialization in their specific operations and can carry these activities more efficiently. The disadvantage of this approach is that there is specialization within a unit in its specific activities but different units may find it had to work in collaboration with other units which could make the overall management of different units to be difficult.

Advantages and disadvantages of international division structure

In an international context, a division structure is utilized to break down the organization into many divisions and each division is responsible for a combination of functions. This is a more democratic structure where the divisions are free to make their own decisions based on their analysis of the situations.

The advantage of the division structure is that each division is performing their own set of functions, it is easy to manage and measure its performance. The managers of each division can be held responsible if something goes wrong.

The disadvantage of this approach is that each division my need professional managers to lead them. It could mean the allocation of more financial resources to each division. Different divisions may also develop rivalries with each other in order to get financial resources invested in them.

Advantages and disadvantages of geographic division structure

When a multinational corporation makes geographic divisions, they would delegate power downward to these geographic divisions which would enable timely decision making in accordance with the needs of the geographic area.

Employees in the same geographic division tend to develop personal relations with each other, which might be termed as an advantage as well a disadvantage. A disadvantage, because this could mean more communicating on division level but less communication on multinational level with headquarter and other subsidiaries.

Advantages and disadvantages of a product division structure

In this kind of structure, different divisions are made to handle different products. The advantage of the product division structure is that a division would get full expertise in handling a specific product.

The disadvantage of this organizational approach is that it can be difficult to measure, and the organization may end up with multiple resources as different divisions try to be autonomous.

Advantages and disadvantages of a matrix structure

In a matrix structure, the power is delegated on two primary basis, first is the functional are and the second is project to project. These structures are reported to be good for a productive resource coordination. The downside of this approach is that the roles of different people may change according to a change in the project. This could create a psychological stress among these individuals as an element of uncertainty would always exist.

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What are the advantages and disadvantages of the five structures?

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Frynas & Mellahi (2015) defined the five structures followed by multinationa organizations to be international division structure, geographic division structure, product division structure and a matrix structure. Depending on the needs and the volume of the activities of a multinational company, a structure from these five may be utilized to run business activities in different countries.

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A Level and IB > > Tall Organisational structure

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All countries experience regular ups and downs in the growth of output, jobs, income and spending.

Boom

A boom occurs when real national output is rising at a rate faster than the trend rate of growth. Some of the characteristics of a boom include:

A fast growth of consumption helped by rising real incomes, strong confidence and a surge in house prices and share prices

A pick up in demand for capital goods as businesses invest in extra capacity to meet strong demand and to make higher profits

More jobs created and falling unemployment and higher real wages

High demand for imports which may cause the economy to run a larger trade deficit because it cannot supply all of the goods and services that consumers are buying

Government tax revenues will be rising as people earn and spend more and companies are making larger profits - this gives the government money to increase spending in areas such as education, the environment, health and transport

An increase in inflationary pressures if the economy overheats and has a positive output gap

Slowdown

A slowdown occurs when the rate of growth decelerates - but national output is still rising

If the economy grows without falling into recession, this is called a soft-landing

Recession
A recession means a fall in the level of real national output i.e. a period when growth is negative, leading to a contraction in employment, incomes and profits.

A simple definition:

A fall in real GDP for two consecutive quarters i.e. six months

A more detailed definition:

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and retail sales.

There are many symptoms of a recession - here is a selection of key indicators:

1. A fall in purchases of components and raw materials (i.e. intermediate products)

2. Rising unemployment and fewer job vacancies available for people looking for work

3. A rise in the number of business failures and businesses announcing lower profits and investment

4. A decline in consumer and business confidence

5. A contraction in consumer spending & a rise in the percentage of income saved

6. A drop in the value of exports and imports of goods and services

7. Large price discounts offered by businesses in a bid to sell their excess stocks

8. Heavy de-stocking as businesses look to cut back when demand is weak - causes lower output

9. Government tax revenues are falling and welfare benefit spending is rising

10. The budget (fiscal) deficit is rising quickly

The difference between a recession and a depression

A slump or a depression is a prolonged and deep recession leading to a significant fall in output and average living standards

A depression is where real GDP falls by more than 10% from the peak of the cycle to the trough

An example of a country that has suffered a depression in recent years is Greece. National output has fallen in six successive years and real GDP is more than 25% lower than at the peak of the cycle

Recovery

This occurs when real GDP picks up from the trough reached at the low point of the recession.

The state of business confidence plays a key role here. Any recovery might be subdued if businesses anticipate that it will be temporary or weak in scale.

A recovery might follow a deliberate attempt to stimulate demand. In the UK we have seen

1. Cuts in interest rates - the policy interest rate fell to 0.5% in the Autumn of 2008 and they have stayed at this low level since then

2. A rise in government borrowing

3. A policy of quantitative easing (QE) by the Bank of England to pump more money into the banking system in a bid to increase the supply of loans - now worth more than £375 billion.

Why is GDP growth difficult to forecast?
When economists make forecasts about the future path for an economy they have to accept the inevitability of forecast errors. No macroeconomic model can hope to cope with the fluctuations and volatility of indicators such as inflation, exchange rates and global commodity prices.

Uncertain business confidence levels

Fluctuations in exchange rate

External events e.g. volatile oil and gas prices

Uncertain reactions to macro policy changes

Rate of business job creation hard to forecast

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Understanding the Economic Cycle | tutor2u Economics

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All countries experience regular ups and downs in the growth of output, jobs, income and spending. Boom A boom occurs when real national output is rising at a rate faster than the trend rate of growth.