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Avoid the Hustle

Explain how economic systems attempt to allocate resources effectively

Category: Essay Writing

Task 2 – Individual written report



The dominant aspects of an organisation’s environment are assumed to exist in and around the industry, or industries, in which a firm competes. Thus, for strategic decision-making there is no such thing as ‘the’ environment-if the work ‘environment’ is taken to mean a single, holistic entity. Instead, organisations may confront multiple environments, each with its own characteristics and pivotal competitive issues.

Environmental variables exert significant influences on corporate performance. According to Grant (1997) these environmental variables are critical determinants of threats and opportunities a company will face in the future. The complexity of the environment is heightened by the fact that change is a regular feature of these environmental variables and they are also in constant interaction. The demand on management, therefore, is to establish a framework for understanding this complex web of interaction and changes in order to survive (Wendy, 1997).

Therefore, managers’ task of influencing the rate and direction of change within their organisation becomes an uphill task if the enterprise is ignorant of the events and trends outside the organisations. The fact is that managers’ perception and scanning of business environment are crucial for the formulation and attainment of corporate goals and objectives.


According to Grant (1997) a firm’s environment can be regarded as all external influences that impinge upon the firms’ decision and performance. Extant literature’s view of business environment is not significantly different, for example, Ducan (1972) defined business environment as all factors outside an organisation that are taken into considerations by the organisation in its decision making. Business environment is usually classified by source or proximity. Bourgeoise (1980) segregated the environment to general (macro) and task (micro) environment: both have implications for the organisation, especially in strategy formulation and adaptation and consequent performance.

Select one national large organisation (large PLC or Ltd.) and prepare a report addressing the following:

(a) Explain how economic systems attempt to allocate resources effectively. AC 2.1.

(b) Assess the impact of fiscal and monetary policy on business organisations and their activities AC 2.2.

(c) Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a selected organisation AC 2.3.

(d)Explain how market structures determine the pricing and output decisions of businesses AC 3.1.

(e) Illustrate the way in which market forces shape organisational responses using a range of examples AC 3.2.

(f)Judge how business and cultural environments shape the behaviour of a selected organisation AC 3.3.