Business envoirnment assigment BTEC HND

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Hijaz Ahamed Page 1

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Table of Contents
Acknowledgement..............................................................................................................................5
LO1...............................................................................................................................................6
1.1 identify the purpose of different types of Organization..........................................................6
Access Engineering.........................................................................................................................6
Nawaloka Hospitals PLC..................................................................................................................7
Bank of Ceylon................................................................................................................................8
Mas Holdings..................................................................................................................................9
Softlogic:Softlogicb provides a wide range of service in many industries. They provide
service in ICT, Healthcare, Retail, Financial Services, Automobiles and Leisure. The
company’s purpose is to make the right decisions to increase returns on money invested.
Employing and rewarding the best, to leverage market potential and become the most
admired corporate in Sri Lanka. .............................................................................................10
P1.2 Describe the extent to which an organization meets the objectives of different stakeholder
........................................................................................................................................................12
Strategies to meet stakeholderobjectives – A case study of Nawaloka Hospitals PLC.........................12
Nawaloka Hospitals PLC............................................................................................................12
We can analysis Stakeholders of Nawaloka Hospitals ............................................................13
Stakeholder Mapping .................................................................................................................14
Objectives of internal stakeholders in Nawaloka Hospitals.......................................................15
How does the company keeps everyone happy........................................................................17
P1.3Explain the responsibilities of an organization and strategies...............................................18
Access engineering responsibilities...........................................................................................18
LO 2.................................................................................................................................................22
P2.1 Explain how economic systems attempt to allocate resource effectively .................................22
Task2.2.........................................................................................................................................27
Assess the impact of fiscal and monetary policy on business organizations and their activities ..........27
Task2.3.........................................................................................................................................30
Evaluate the impactof competitionpolicyandotherregulatorymechanismsonthe activitiesof a
selected organization....................................................................................................................30

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LO 3.................................................................................................................................................33
Task3.1.........................................................................................................................................33
3.1Explain how market structure determines the pricing and output decisions of businesses.........33
Task3.2.........................................................................................................................................34
Task 3.3........................................................................................................................................39
LO4..................................................................................................................................................40
Task 4.1........................................................................................................................................40
Task 4.2........................................................................................................................................43
Task 4.3........................................................................................................................................47
Conclusion .......................................................................................................................................50
Bibliography.....................................................................................................................................51

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Declaration of Authenticity
I certify that the work submitted is my own. Where the work of others has
been used t supportmy work then credithas beenacknowledgment.
Signature: ………………….. Date:……………...

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Hijaz Ahamed Page 5
Acknowledgement
I have taken efforts in this assignment. However, it would not have been possible
without the kind support and help of many individuals and organization. I am using this
opportunity to express my gratitude to all those who provided me the possibility to
complete this assignment. I am thankful for their aspiring guidance and friendly advice
during the assignment work. I would like to express my warm thanks to Mr.Shanker
Rajamani,Mr.Zarudeen. Thank you sir for your guidance and support . I would like to
extend my gratitude to the management of British College of Applied Studies and my
fellow class mates BM 16 for providing and helping me in all the materials required to
complete this assignment.
Hijaz Ahamed
BM 16

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Hijaz Ahamed Page 6
LO1
1.1 identify the purpose of different types of Organization
An organized group of a company, business, club that is formed for a purpose is called as
an organization. All organizations have a management structure. This structure will help to
develop relationships between the different activities with the members,. In Sri Lanka the
organizations can be categorized into private and government and Non government
organizations. The private companies are managed under the private sector and government
organizations works according to the rules and regulation system of Sri Lankan government.
For this purpose I have selected 5 organizations;
Access Engineering: We are one of Sri Lanka’s foremost entities in the Civil
Engineering and Construction industry in srilanka. We live and breathe plans, blueprints,
specifications and all manner of systems and processes that ‘come with the territory’.
Access Engineering ensures sustained value creation for the benefit of all stakeholders.
Owner : Mr.Sumal Perera
Purpose:
VISION
To be the foremost Sri Lankan business enterprise in value engineering
MISSION
To meet the challenges in the development of multi sector civil engineering projects,
providing innovative solutions whilst developing long term progressive relationships with
all our stakeholders.
Legal Type: Public limited company

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Nawaloka Hospitals PLC: The entry of Nawaloka Hospitals into the state dominated
healthcare sector in 1985, saw the private health care system take root in Sri Lanka. The
launch of the hospital and the overwhelming response it received from the people
demonstrated a long felt need for superior healthcare in a pleasant environment.
Owner: Mr.Jayantha Dharmadasa
Purpose:
VISION
“To be the hospital of tomorrow”, to provide quality and safe
healthcare to the people whilst maintaining leadership and
Excellence in the healthcare facility.
MISSION
“Healing with feeling” to provide the best quality healthcare in accordance with
international standards to the needy in a cost effective, timely and professional manner.

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Bank of Ceylon: BOC having completed more than seven decades of glorious existence, the
Bank is firmly entrenched as Sri Lanka’s premier financial services organization offering a broad
range of services consists of commercial banking, trade finance, development financing,
mortgage financing, lease financing, investment banking, corporate financing, dealing in
Government securities, pawn brokering, credit card facilities, off-shore banking, foreign currency
operations and other financial services. BOC holds the leadership position in its assets,
deposits, and foreign currency remittances
Owner: Government-Owned
Purpose:
VISION
“Bankers to the Nation.”
MISSION
Customers – Foster mutuality rewarding customer relationships with all our customers
exceeding their expectations.
Staff – Give all our staff the recognition and rewards to be the best team of achievers in
service excellence.
Owners – Be a profitable catalyst for equitable development covering urban & rural areas.
Society – Provide world – class banking services across the nation as a beacon for
progress and growth.
Legal Type: Government-owned Corporation

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Mas Holdings:A company which focuses on fashion and lifestyle. It is a manufacturer of
intimate apparel, sportswear, and provides IT solutions to the apparel and footwear industry
.The seamlessly integrated supply chain that is balanced to perfection with the organization’s
strategically placed design houses gives MAS the knowledge, the means and the speed to
delivery that is demanded by the industry..
Owners: Mr.Mahesh Amalean, Ajay Amalean, Sharad Amalean
Purpose:
VISION
To Inspire, Innovate, Create Value and Respect Human
MISSION
Inspire Innovation and Sustainability
Build Talent and Strategic Relationships
Achieve Excellence and Ambitious Profitable Growth
VALUES
Values
Honesty & Integrity
Humility
Passion for Excellence
Trust & Mutual Respect

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Hijaz Ahamed Page 10
Softlogic:Softlogicb provides a wide range of service in many industries. They provide service
in ICT, Healthcare, Retail, Financial Services, Automobiles and Leisure. The company’s
purpose is to make the right decisions to increase returns on money invested. Employing and
rewarding the best, to leverage market potential and become the most admired corporate in Sri
Lanka.
Chairman: Mr. Ashok Pathirage
Purpose:
VISION
To be the most preferred and trusted product and service provider, delivering high quality
solutions to corporate and retail customers so as to set new industry standards and enhance
shareholder value.
MISSION
Making the right decisions to increase returns on money invested. Employing and rewarding the
best, to leverage market potential and become the most admired corporate in Sri Lanka.

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Table 0-1.: Types and purposes of the organization
Organization Legal Form Type Advantages
Purpose/vision/mission
Access
Engineering
Public
Limited
Company
Private
Profit
distributed
among
stakeholders.
To raise huge
financial
resources
Their purpose is to meet the challenges in the
development of multi sector civil engineering projects
, providing innovative
solutions whilst developing long term progressive
relationships
with all the stakeholders
Nawaloka
Hospitals
PLC
Public
Limited
Company
Private
Profit
distributed
among
stakeholders.
To raise huge
financial
resources
We are committed to achieving and maintaining a
standard of excellence in all we do. – Excellence in
clinical care, service and communication – Collaboration
within our Institution and with others who share our
mission and goal
Bank of
Ceylon
Government-
owned
Corporation
Public
Stability and
Service According to the Mission, Vision they are doing their
strategies, By following Mission, Vision they are following
their objectives. This is helping them to reach their target
very soon. From this their quality is increasing among the
society.
Mas
Holdings
Public
Limited
Company
Private
Profit
distributed
among
stakeholders.
To raise huge
financial
resources
To Inspire, Innovate, Create Value and Respect
Humanity.
Softlogic
Holdings
Public
Limited
Company
Private Profit
distributed
among
stakeholders.
To raise huge
financial
resources
Soft logic provides a wide range of service in many
industries. They provide service in ICT, Healthcare,
Retail, Financial Services, Automobiles and
Leisure. The company’s purpose is to make
the right decisions to increase returns on money
invested. Employing and rewarding the best, to
leverage market potential and become the most
admired corporate in Sri Lanka.

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P1.2 Describe the extent to which an organization meets the
objectives of different stakeholder
Strategiesto meetstakeholderobjectives – A casestudyof NawalokaHospitalsPLC
Stakeholders are individuals or groups who have an interest the operations and objectives of
the business how the organization performs. They can be internal or external. Stakeholders are
very important for the organization to be success. They can affect or be affected by the
organization’s actions, objectives and policies. There are mainly three categories of
stakeholders who have an effect on the organization.
Figure 1: Stakeholders
Nawaloka Hospitals PLC:
We can categorize their stakeholders under these main three categories:
Internal Stakeholders Connected Stakeholders External Stakeholders

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 Directors
 Managers
 Medical Staff
 Suppliers
 Investors
 Customers
 Competitors
 Government
 Media
 Local Community
Table 0-1: Stakeholders of Nawaloka Hospitals.
We can analysisStakeholders of Nawaloka Hospitals
Stake holder Power Interest
Investors H H
Directors L H
Managers L H
Employee H L
Government H L
Customer H L
Media H L
Competitors L L
Table 3: Stakeholders ofNawalokaHospital

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StakeholderMapping
Figure 2: Stakeholder mapping for Nawaloka Hospitals.
LOW HIGH
L
O
W
P
O
W
E
R
HI
G
H
INTEREST

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Objectives ofinternalstakeholders in Nawaloka Hospitals
Directors
 In this Hospital directors serve as the company’s central manager
which possesses formal control of the hospital.
 And also their objective is to take accurate decision which helps for
the success of the company.
Managers
 Managers here identify, discuss and agree clear performance
objectives or standards with the staff which define effective
performance for their job.
Medical Staff
 Staff are important assets in an organization
 In Nawaloka the employees bring the skills such as Friendly and
problem solving which will help the organization to reduce risks and
more responsible.
Table 4: Internal Stakeholders in Nawaloka Hospitals

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Suppliers  Here we are well engage with Suppliers becausethey are very
important asset.
 Their objective is to provide good quality medical, and equipments.
 Increase Profit and higher customer satisfaction.
Investors  Investors expect more profitable share on time
 Choosing profitable organizations to invest money Ex: private
hospital
Customers  Customers expect quality Service with Low cost from the
organization
 Customers will give feedbacks with the services which provided to
the patient which helps us to improve our hospital.
Table 5: Connected stakeholders in Nawaloka Hospitals.
Objectives of external stakeholders in Nawaloka Hospitals
Competitors
 Competitors challenges will help us Bring more quality products and
equipments to compete with competitive companies.
Government
 Government allocates share of money from budget to companies for
development of their businesses.
 Influence for the business through the fiscal policy to maintain
economy
Media/Local
communities
 Media makes a relationship between the company and consumers.
 It improves international communication and creates a vision about
the company.
Table 6: External Stakeholders in Nawaloka Hospita

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How does the company keeps everyonehappy
Company provides these important factors to the employees
Staff welfare

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P1.3Explain the responsibilities of an organization and
strategies
Every organization has some specific responsibilities towards people. It is important for an
organization to have responsibilities towards social, environmental and many other which will
satisfy the people and also it has a positive impact on the organization. According to my
scenario I have divided into two common responsibilities
1) Legal Responsibility
2) Ethical Responsibility
Legal: How are companies follows the Rules and regulations of the government, how the
company treats their employee according to the employee Law.
Ethical: How the company influence the individual to work, Judgment about good and bad. We
need to conceder about work ethics and work practice.
*work ethics; A work ethic is a bunch of moral principals an employee uses in his job in the
organization.
*work practice; Basic requirement of the organization or company usually do.
Access engineering responsibilities
Responsibilities Significance How the Access Engineering
deliver this responsibility
Environmental
Responsibility
Environmental
responsibility is a kind of
duty that how the
company going to protects
human health and the
environment while
operating the business.
Companies create their
The environmental
responsibilities of Access
Engineering is achieved by
the strategies that is the
contribution to sustain
natural resources and the
environment for future
generations through

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own environmental
responsibilities, follow
those responsibilities and
evaluate that to attract
customers as well as the
community to their
business. Through these
responsibilities,
companies produce their
goods and services in
environment friendly way
and continue the business
as Eco friendly.
business operations in
compliance to environmental
regulations, conservation of
natural resources, protection
and enhancement of wildlife
habitats, strict control of the
production and disposal of
hazardous waste, and
support to the local
environmental projects and
activities. They also have the
go green concept.
Social
responsibility
Social responsibility is the
obligation that the
organization has towards
the people and the
society. It’s a modern
philosophy states that all
individuals and
organizations are
obligated to help the
community at large.
Social responsibilities
need to relate to the
corporate objectives of the
organization and
companies try to attract
the society for their
business through the
For the social responsibility
the company has done many
CSR projects which will help
the society. The company
has done many tree planting
programmes, apprenticeship
programmes, renovation of
the kande Nawakkulama
Tank,
Malayaparaththakulama and
also the company has done
mentoring programmes for
university students.

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social responsibilities.
Customer
Responsibility
Customer responsibility is
a kind of obligation that
the organization has
towards their customers.
Companies produce their
goods and services
according to the common
standards and qualities.
And also the
organizations established
their own standards to
produce quality goods and
services to their
customers. People are
seeking to buy quality
goods and services from
the companies because of
that organizations
motivated to follow
customer responsibilities
for attract their customers
to company
And also the company is
providing a good
construction service to
satisfy their customers as
well. And the company
investing the advancement
of the construction industry
through diverse education
programs, development of
human resources and
dissemination of best
practices in construction
management which will
satisfy their customers.
Supplier
Responsibility
Supplier responsibility is the
organization work according
to the all rules and
conditions that agreed with
suppliers and treated fairy
As the Civil Engineering and
Construction industry it
important to meet the supplier
needs. For that company is
maintaining a good relationship

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for all suppliers. The
organizations try to motivate
their suppliers and help them
through many ways to
increase their sustainability
of supply.
with their suppliers and also the
company does many
programmers which will satisfy
their customers.
Shareholder
Responsibility
It’s the way that how the
company treat to their
shareholders and give the
relevant power to them.
The company does many
provides many projects for Sri
Lankan consumers and try to
increase their profit. According
to their rules, they divide the
profit in fair way to their
shareholders.
Figure 3: Access engineering responsibilities

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LO 2
P2.1 Explain how economic systems attempt to allocate resource effectively
Economic system is the way that which a country allocates their resources and produce goods
and services for usage of their community. In the world economy, there are three main categories
of economic systems known as, free market economy, Command economy and Mixed economy.
Generally all these three economic systems face three basic economic problems that are,
 What to produce
 How to produce
 To whom to produce
There are three common economic systems,
1. Free Market Economy
2. Command Economy
3. Mixed Economy
Free Market Economy
Free market economy is also called as capitalism. Here the economic decisions are taken by the
market mechanism. The supply and demand of goods and services to be determined entirely by
the values of the market rather than the government. This is a type of economy where the price,
supply and demand are distorted by government regulations .All the revenue owned by
individuals The free market and the free price system, commodity around the world available to
consumers. Here the economic decisions are taken by the market decisions and firms try to
maximize their profit in order to be successful in the market. Individuals can make their own
decisions without any barriers and because of that they try to produce goods through the
minimum cost. And the consumers expect greatest benefits through the products for least cost.
Individuals are independent to decide
1) What to produce?
2) How to produce?
3) Whom to produce?

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Advantages in Open market economy
Price is determined by the competitors.
So consumer enjoys the benefits of the competition.
Consumer feels free to choose the product.
Example: Smart phones
Fast foods
Telecom (Charges)
Command Economy
Command economy is also called as planned economy. It is controlled by the state or
government. Here the decisions will be made by the central planning committees. Government
makes all the planning regarding economic activities. Private sectors are expected later in the
involvement of all economic accumulation. Here the government allocates all resources
according to the central plan and uses the nation’s capital, labor and natural resources in the most
effective ways. The central plan sets strategies to product all goods and services and the main
aim is to supply enough foods, housing and other basic needs to everyone in the country or
government allocate the resource . The government has the fully control on taking decision
1) What to produce?
2) How to produce?
3) Whom to produce?
Advantages in command economy
Government is the monopoly
No domestic competitors
Example: Sri Lanka Petroleum Corporation
Sri Lanka Telecom
Sri Lanka Energy Power sector
Mixed Economy
The mixed economy is controlled by the government and the market. In this globalized world
most countries are getting this economic system. Mixed economic system divides the available
economic resources available in the country for the private and government sectors. An example
for the mixed economy is Sri Lanka. Most modern economies display the features of two or
more economic systems. In many economies, the private sectors are working to increase their

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sales of products as well as the profit. But the government is not like that because they provide
goods and services to increase the standards and life style of the community. They do not
provide to increase the profit. But mixed economies do not block the profit seeking of private
sector.
So considering these economic systems the mixed economic system is the suitable one for our
current world. The advantage of this market is that it allows competition between producers of
regulations in place to protect society as a whole. With the government being present in the
economy, it brings a sense of security for sellers and buyers. This security helps maintain a stable
economy. Overall, businesses, and consumers in mixed economies have freedoms that are
important to both. And while the government actively participates and supports, its control is
limited, which is good for the structure. So for the current situation mixed economy is the most
appropriate one in the world.
Example: Garments Factories
Tea Factories
Explain to what extend private set get involved to resource allocation process in Sri Lanka.
Before 1977, Economic of Sri Lanka followed by command economy economic policies, To
build a command economy throughout country without any interface from other countries.
Example (Singapore, United Kingdom, China, Korea etc).Government limits the export exports
and imports, limits the foreign exchange currency example (Indian rupees, Pakistan Rupees).
Economic policies of Sri Lanka tried to build a national economic or command economy without
any influence of other countries.
After 1977, The newly appointed president J. R Jayewardene (1977) thought to change the
economy polices. He gave hands to the private sectors to involve to the market. J.R Government
changed to mix economy Instead of command economy.. After this changes entire foreign
policies also changed.
Some characterizes of the Economic in these years, shown below.
1)To encourage Foreign investors to invest in this country.
2)To limited investments by government
3)To increase job opportunities( unemployment rate over 18%)
4)Prices of the internal market mainly decided by market demand and supply, but prices of some
goods and services still control by government authorities. (Bus fees, petroleum etc.)

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How the private has combined with government?
Private sector was assigned to play a major role in economic development. Such as industry like
Transport industry:
Sri Lanka depends heavily on its public transportation systems with buses and trains forming the
backbone of the system with limited presence of sea and air transport in the domestic setup. The
domestic passenger transport sector is primarily made up of cars, vans and motor cycles for
private transport, while the public transport sector largely consists of buses and a small
percentage of par transit vehicles. (World Bank, 2015c)
After private combined with government there was a big impact on vehicle as well

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Road Construction : High ways
History of Lanka’s Expressways The first concept for this was mooted just after the
1988-89 JVP uprising by then President Ranasinghe Premadasa who proposed an
‘alternate trunk road network’ to develop the country’s hinterland areas. The pre-
feasibility studies for several of these highways were done in the early 1990s. However
it was left to the subsequent Government of President Kumaratunga to move this
forward. ADB financing was approved for one section of the Southern Highway in
November 1999 and the RDA started clearing work thereafter. Approval of funding from
Japan’s JBIC was also obtained in March 2001 for the balance section. However in
August 2001 a group of 49 villagers filed a petition in the Appeal Court seeking
reasonable compensation. This action delayed the project till a new compensation
system was developed and the project was allowed to proceed only in 2005 with one
part as four lane and the balance as a two lane highway. The initial cost estimate for the
126 km from Kottawa to Matara was US Dollars (USD) 349 million, at a unit cost of USD
2.8 million per km. The Government of President Mahinda Rajapaksha, had the
highway re-designed as a fully four lane expressway of 96 km up to Galle and had it
completed in 2011 at a cost of USD 741 million or USD 7.7 million per km, the increase
being partly due to the redesign and in some cases re-construction. The subsequent
section up to Matara – a length of 35 km was completed in 2014 at a cost of 180 million
USD or 5.1 million USD per km. Similarly, an expressway to the Katunayake airport was
planned in the late 1980s and the current road trace finalized in the late 1990s but not
implemented due to the inability to obtain favorable financing terms. The construction of
the Katunayake Expressway started with funding from China in 2009. The planning for
the Outer Circular Road also dates back to the 1990s for which funding from Japan was
secured in 2007. Since then the current government has accelerated the expressway
construction program having completed a total of 167 km with a further 101 km under
construction a commendable progress to date (Source Sunday Times Paper)
In future Most of the government sectorgoingtobe privatizationitcans disadvantages aswell.

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Task2.2
Assessthe impact of fiscal andmonetary policy on business organizationsand their
activities
Inflation- gradually increase of price of goods, In order to control inflation every country
follow two policy
1)Monetary Policy
2)Fiscal Policy
In economic, fiscal policy is the use of government expenditure and revenue collection
to influence the economy. This policy is basically used for the betterment of the a
country or a nation, it works for the development of the countries economy. It generates
its own funds via taxation and the revenue generated by the government is spent on the
state in its different fields like education ,Health ,Road constructions etc.
Health Budget:
358. Honorable Speaker, we have a large number of base and divisional hospitals.
These hospitals lack basic healthcare facilities such as bed strength, diagnosis
equipment, consumables, etc. I am also aware that these hospitals find it difficult to
retain doctors as they lack proper facilities for the resident doctors such as suitable
accommodation etc. In this background, I propose to fulfill the basic accommodation
requirements of doctors and other medical staff in rural areas within a period of 2 years.
I encourage private public partnerships where the private sector will construct and
maintain the facility for which government will provide rent.
359. It is also proposed to build and equip 10 district-based stroke centers attached to
tertiary care hospitals within the next 2 years and also it is proposed to strengthen the
accident and emergency care services in the hospitals. As such I propose to allocate a
sum of Rs.5,000 million for this purpose.
If the tax is low there will be more disposable income which will increase the purchasing
power of people’s, more money for further investments.

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If the taxation is high, it will result in reduction in disposable income which will reflect
ineffective business activities.
Fiscal policy instruments
1) Budget
2) Taxation
3) Public Expenditure
4) Public Works
5) Public Debt.
In economic, monetary policy the change in supply and demands of any states
economy is known as the monetary policy of that state. The interest rates given by any
states increases or decrease by the need of their money which makes the money
available easily. Due to the availability of money the economic activities of the state
increases or decreases. This is controlled my by central bank of the respective country.
When there is low interest rate, consumers will have higher disposable income.
If people have high purchasing power more business will enter to the market with profit.
high interest rate will reduce the buying power of the consumers which will have a
negative impact for businesses. When consumers spend less, sales volume will be
reduced and lower the profits.
Monetary policy instruments
1. Open market
2. Bank rate
3. Cash reserve ration
4. Statutory liquidity ration
5. Repo rate
6. Reverse repo rate
1) Open market : An open market is an economic system with unrestricted market with
free market access by and competition of buyers and sellers.
2)Bank rate: it is rate which is taken by central bak of the respective country
3) Cash reserve ration :which is known as CRR,which bank hold certain amount as
reserve
4)salutary liquidity ration: Amount of liquid assets such as metals(Gold) or other
approved securities, that a financial institution must maintain as reserves other than the
cash(investopedia).
5)Repo rate: It’s is known as repurchasing agreement rate which is known as repo rate.
buying the security and agreeing to sell in the future for the short term.
6)reserve repo rate: rate at which the central bank of a country borrows money from
commercial banks within the country.

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The two policies affect the sir Lankan industry
1)Fiscal policy : vehicle import On 26th May 2016, the government introduced new
Unit Rate Tax that will affect vehicle prices in the country according to the engine
capacity of individual vehicles. Exactly country has more vehicle than expected with this
issue public effected a lot. Reason is to control the inflation government identify many
ways as a result they increase tax of import vehicle over 1000cc.Threr fore price of
imported vehicle price increase.
Example;
It affects consumer purchasing power as well.
Increase of tax will cause vehicle industry and risk of loss.

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2) Monetary policy: As per the annual budget its clear showcase that the interest rate
have not changed much, so borrowing has been highly increase as per that
government bank issue more money, So many entrepreneur will enter to the market so
automatically demand will increase.
As per the results customers will enjoy the price because of the demand.
2016 budget government giving hands to small businessmen’s with low interest rate .
i. Less than 1 million : No charge
ii. Between 1 million and 10 million : 2 percent
iii. Above 10 million : 3 percent
Task2.3
Evaluate the impact of competition policy and other regulatorymechanisms on the
activities of a selected organization.
Competition Policy:
Competition policy means the activities carried out two or more business in order to
capture a certain market. Competition is must because it will help businesses to
produce quality products and maximize the benefits to consumers.
It will ensure following factors:
Innovation
Efficiency
Quality
As per the policy government focus to create a fair market.

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Regulatory mechanism:
Regulatory mechanism is the means by which something can be controlled or
monitored. They are appointed by the government to see how market works and the
outcomes that results for both producers and consumers. This controls the internal
environment relatively stable and maintained with narrow limits.
UK imposes some rules and regulation on companies according to the compertition
policies.
Tesco PLC
Tesco is a British multinational grocery and general merchandise retailer .which is the
leading general retailer in uk.
Success story: The main features is that the company policy prevents firms without
abusing their dominant market policies.
Company aim to protect public interest to ensure company does not produce profit due
to anti-competitive methods as same companies become greedy of exist only to make
profit basically those companies do anything to succeed in the market.
This policy allows companies to achieve their goals while achieving profit in the other
hand. perspective in this policies is to gain profit tas long as they don’t use unethical
methods, because of this short term methods many companies lack their place in the
market.
Globalization results in more multinational companies coming into the market and
compete for long. Example VODAFONE UK
Disadvantages in competition policies
1)Competition policies in UK is very lengthy.
2) Every government has it own way regulatory the companies polices
Example: new industrial policy that would protect industries that are strategically
important to the UK this decision was taken by this government led by prime minister of
UK Theresa May. It defers with government to government this indicate the how new
prime minister willing to change.

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Solution
1)Break in to many departments
2)protecting dominant market (Vodafone,tesco,aston martin)
3)Creating merges investigation team
4)Cartel investigation team
5)not allowing to buy out market,because of this many companies gone away from uk
such as Jaguar,Landrover
Tesco PLC
In this case competition commission identified TESCO plc. Because of tesco many
small companies in a risk it effected on small retailer grocery shops in uk. As per the
issue tesco is a larger retailer so price reduction comparing to small shops. Tesco has
every thing under one roof any of the small businessmen cannot compete so one by
one going away. Purchasing the existing grocery shops to make the price with control.
Local market was highly concentrated. Allowing new competitors to enter in to the
market. Competition policies ased tesco to regulate the price.
GSK
GSK believes that they are the biggest competitive today uk.GSK is leading
pharmaceutical company in uk.many pharmaceutical companies facing difficult
challenges in the instry because gsk had a great market.gsk is always think different
and goes with new innovation it made them to be the leader in the market.Gsk has
made a concept that their brand is the best. Governments can have a major influence
on investment decisions made by the industry and thereby on the contribution made by
the industry to the local economy. It is against this background that new national
partnerships between industry and governments must be formed to develop a better
mutual understanding and develop solutions that benefit both partners.

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LO 3
Task3.1
3.1Explain how market structure determines the pricing and output decisions of
businesses.
Prefect competition:
There are so many sellers in the market offering same product. And also there is no
way to that firm to charge higher price than its competitors because all firms sells a
standardized products. And the main thing is the interaction of supply and demand
decides the price for all participants in this market.
There will be a large amount of organizations to compete with this. The kind of
competition of this market is price competition. There are no barriers to the new comers.
It means free entry. This type of market structure called as price-takers. The specialty of
this market is perfectly elastic demand
Example: Kandy vegetable store ,Kandy private institution, Airline industry
Monopoly :
Monopoly market has the power to establish any price that it wants. And the
ability of monopoly to satits price is further limited by the possibility of rising
marginal costs of production
This mustbe the one and only organization in the market. There are no
competitors. The entry to the other organizations is impossible. This is called as
price setters. This will be the only one firm in the market.
Example: Highland milk
Oligopoly :
The pricing decisions made by few members in oligopoly market. Whether the
sellers in oligopoly compete each other by differentiating their product,
dominating market share, or both the fact that there are relatively few sellers
creates a situation whereeach is carefully watching the other as it sets its price.
Example : Sri Lanka Gas ,vehicle industry

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According to these 3 organizations they have to consider some factors when they decide
outputs & price when marketing conditions change.
Kandy vegetable store – this store is in the perfect competition There are a lot of
organizations will compete with them. So they have to consider the type of factors. Those are:-
Price, quality, Home delivery customer satisfaction, customer needs.
Highland milk - This is in the monopoly market. Highland use there own ways because they are
the leading local milk provider, specially they are the price setter
Sri Lanka Gas – they do have very few competitors in the market, they are differentiated they
product with the look,price,price,quantity.
Task3.2
List some market forces
 Recession
 Competition
 Technology
 Media
 Legal
 Ethical
 Political
 Completion
1)Recession: Certain time economic gradually decrease because of trade and
industrial activities, it affect counties Annual GDP as well.
2) Competition: Two individual parties or two deferent regions uses the same resource
that country has to gain victory over others.
3) Technology: to invent things or to solve problems make the work easy.
4) Legal: Countries has their own system it call law that’s should follow if unable to it will
be illegal
5)Ethical: Way the people behave based on their own beliefs on what is right and
wrong.
6)Political: Government or parties influence.

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Demand
Demand refers to the quantity of a good that is desired by buyers. An important
distinction to make is the difference between demand and the quantity demanded.
Quantity demanded refers to the specific amount of the product that buyers are willing
to buy at a given price.(academia.edu)
Income A rise in a person’s income will increase
the person’s demand (shift demand curve
to the right). A fall will lead to a decrease
in demand for normal goods.
Consumer Preferences Favorable change leads to an increase in
demand and unfavorable change will lead
to a decrease.
Number of buyers The more buyers will lead to an increase in
demand and the fewer buyers lead to a
decrease in demand.
Price of related goods  Substitute goods – Price of
substitute and demand for the other
good are directly related
 Complement goods – Price of
complement and demand for the
other good are inversely related.
Expectation of future Future price – Consumers current
demand will increase if they expect higher
future prices, their demand will decrease if
the consumers expect lower future prices.

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Future Income – Consumers current
demand will increase if they expect higher
future income, their demand will decrease
if they expect lower future income.
Demand curve shift to the left
 If the price of substitute good (Dove Shampoo) decreases, the demand curves of
good (sunsilk Shampoo) will shift to the left.
 If the prices of complement good (Toothbrush) increases, the demand curve of
good (Toothpaste) will shift to the left
 If the income of consumers decreases, the demand curve for jewelries will shift to
the left.
 If the amount of consumers decreases, the demand curve will shift to the left.
Demand curve shift to the right
 If the income of consumers increases, the demand curve will shift to the right.
 Increase in the price of substitute goods
 If the number of buyers increases, the demand curve will shift to the right.

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To diagram show demand curve shift to right and left
Supply
Supply is the total amount of a good or service available for purchase at any specified
price. Higher the price, higher the quantity supplied. Producers supply more at a higher
price because selling a higher quantity at higher price increases revenue. (Investopedia)
Determinants of Supply
Number of sellers Increase in number of sellers will increase
supply and shift the supply curve
rightwards and the decrease in number of
sellers will decrease the supply
Production cost If the production cost is high it will reduce
the profit.
Technology New technologies help to reduce the
production cost and it will increase the
profit. I
Future price expectation If producer expect higher prices in future,
they’ll try to hold on to their inventories and

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offer the products to the buyers in the
future
Supply curve shift to the left
If the costs rise, there’s less can be produced at any given price so the supply curve will
shift to the left. A shift to the left in which less will be supplied at every price caused by,
 Increase in average cost of production
 Taxation of raw materials
 A switch in production
Supply curve shift to the right
Supply curve shifts to the right because that more is supplied at every price. This occurs
due to,
Reduction in average costs of production
 Improvements in technology
 Subsidy on labor
 Subsidy on raw materials

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Task 3.3
Food City in Sri Lanka
Food City is a chain shop which is in Sri Lanka and also it is a Sri Lankan company. This is a
famous supermarket in SriLanka.
What is the external environmental situation Food City face?
The external factors are:- Technology factor, legal factor, economic factor, socio-cultural factor,
environmental factor & political factor.
Technology factor- Food city has to change it technologies according to the new generation. If
Food city do like that it can catch the market.
Legal factor- Food city has to follow the rules & regulations f the government and also it must
register as legal according to the law.
Economic factor- Food city has to follow the economic policies. When they change the
economic policies Food city also must follow according to it.
Socio-cultural factor- Food city has to change its culture according to Sri Lankan environment &
its culture. Before starting the business all the organizations must know this.
Environmental factor- Food city has to sell harmless products to the environment & to the
society.
What are the cultural differencesFood city has faces?
Food city has to be flexible according to the customers. If Food city is flexible only it can stand
firmly in the market otherwise it has to fail in its goals. At first Food city wants to know the Sri
Lankan culture to attract the customers & catch the market.
Food city always change its decoration according to the seasonal celebrations such as
Christmas, English New year & Sinhala; Tamil New year. So like this Food city is moving into
international market.

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LO4
Task 4.1

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Task 4.2

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Task 4.3

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Conclusion
In conclusion, this report has successfully demonstrated the understanding of the organizational
purposes, working environmental.i have gain many important parts in this subject..For example
changes in government economic policies, inflation,rapid technological developments, political
uncertainty, Market focus. All influence the working of business environment in important ways.
Increasing taxes by government can make things expensive. In this entire subject I loved most
is the 4th part that’s International Trade in UK business organizations and the impact of global
factors on UK business organizations which made me strong to get know about international
trade which will help us near future.
Finally once again I need to thank Mr. Shanker Rajamani for the encouragement and support
given to us .Moreover, Providing live industrial experience which will help us to get know about
peoples and process. it is very effective report in giving the information about business
environment and economic condition in Sri Lanka and united kingdom.
Hijaz Ahamed
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Bibliography
Anon.,2015. Access Engineering.[Online] (2015) Availableat: http://www.accessengsl.com/about-us/
[Accessed11 October2016].
Anon.,2015. Bankof Ceylon.[Online] Availableat:
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Anon.,2015. Nawaloka Hospitalplc.[Online] Availableat: http://www.nawaloka.com/info/about-us/
[Accessed5October2016].
Anon.,2016. MASHolding.[Online] Availableat: http://www.masholdings.com/our-values.html
[Accessed5October2016].
Anon.,2016. SoftlogicHoldingsPLC.[Online] Availableat: http://www.softlogic.lk/corporate_info-2-
0.html [Accessed29 May 2016].
Boundless.“The Benefitsof MixedEconomies.” BoundlessBusiness.Boundless,2.S.2.R.2.O.2.f.h.b.c.-b.-
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Carmudi Sri Lanka, May 31, 2016. Vehicle Price Changesin Sri Lanka afterNew Tax Reforms.
http://www.carmudi.lk/journal/car-price-changes-sri-lanka-new-tax-reforms/.
GlaxoSmithKline CommunicationsandGovernmentAffairs,April 2014. GSK Public policy positions.A
publicationof GlaxoSmithKline CommunicationsandGovernmentAffairs.
Gorvenment,S.,2015. BUDGET 2016 FULL SPEECH& PROPOSALS.Budget2015/16.
http://www.ft.lk/article/499335/BUDGET-2016-FULL-SPEECH---PROPOSALS.
Kmart,February24, 2013. Mixed economy,Freemarket,Economicsystem.StudyMode.com.
Kumarage,P.A.S.,n.d.The Real Costof HighwayDevelopment-.Sunday times .

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