Contemporary Issues In Business Commerce Essay

Contemporary Issues In traffic Commerce Essay1.0 IntroductionThis report is found upon a critical evaluation of British Air musical modes in response to a matter in contemporary issues in pipeline. The report will first make out the issues to British Air musical modes and then evaluations on how British Airways is dealing the issue by the means of using academician research critically.2.0 History of British AirwaysThe British Airways group consists of British Airways plc and a number of subsidiary companies including British Airways Holidays Limited. British Airways is a worlds steer airlines with a group that supply passenger and freight services to 149 destinations in 72 countries. In 2004/05, the comp whatever carried over 35 million passengers and nearly 900,000 tonnes of cargo. Its airline network is based in the United Kingdom, where 85% of its 47,500 workforce is found.The mission of the group is to deliver a service that matters for volume who c atomic number 18 how th ey fly. To welcome this, the company recognises the importance of working in partnership with its stakeholders. This has bowd its approach to business complaisant responsibility. Its approach has to a fault been influenced by the ac get it onledgment that airlines generate major social and economicalal benefits, provided excessively moderate significant impacts on the milieu (for example, noise and air lineament) and on fields or so airports. British Airways (2010)3.0 Findings3.1 The outdoor(a) Environment3.1.1 The oecumenical environmentThis represents the outer layer of the environment. These dimensions influence the organisation over time but often be not involved in day to day transactions with it. The dimensions of general environment include worldwide, technological, sociocultural, economic and legal-political.3.1.2 The international dimensionThis dimension of the external environment represents events originating in foreign countries as swell up as opportun ities for U.S companies in other countries. The international environment provides new competitors, clients, and suppliers and shapes social, technological, and economic trends, as well.Today, either company including BA has to compete on a globose basis. High quality, low priced automobiles from Japan and Korea stick permanently changed the American automobile fabrication. In cell ph champions and handhelds, US based companies face stiff opposition from Koreas Samsung, Finlands Nokia and Taiwans High Tech Computer Corporation (HTC). For umteen US companies, such(prenominal) as Starbucks and Wal-mart, domestic markets throw away stimulate saturated and the altogether potential for growth lies overseas. E-commerce organisations too are making international magnification a priority. The US share of worldwide e-commerce is falling as foreign companies set-up their own e-commerce ventures. This is the case for BA where they have to compete with foreign airlines offering simi lar services. Kotter (1979)The most dramatic change in the international environment in recent years is the shift of economic power to china and India. Together, these countries have the population, mind and dynamism to trans exploit the twenty first century global economy. If things continue on the current track, analysts omen that India will overtake Germany as the worlds third largest economy deep down three decades and that china would overtake the US as number 1 by mid century. In china, per capita income has tripled in a contemporaries, and leaders are building the infrastructure for decades of expansion, as reflected in the countrys hunger for raw materials. In 2005, china represented nearly 47 percent of the global cement consumption, 30 percent of coal and 26 percent of unrefined steel. No one can predict the future, but it is clear that however things in India and china cast out, US and other western firms have no choice but to pay attention. This could be an res p ublica BA could go into and grow. zany (2009)The global environment represents a complex, ever ever-changing and uneven play field compared with the domestic environment. Managers who are workd to thinking only about the domestic environment moldiness learn new rules to remain competitive. When operating globally, managers have to consider legal, political, sociocultural and economic movers not only in their home countries but in various other countries as well. For example, the rising consumer class in china and India plays a growing role in setting the standards for senior high school tech proceedss and services such as cell phones, multimedia gadgets and wireless web services.3.1.3 The technological dimensionThis includes scientific and technological advancements in a specific industriousness as well as in society at large. In recent years, this dimension created massive changes for organisations in all industries. Twenty years ago, many organisations didnt even use desktop computers. Today, computer networks, internet access, handheld devices, videoconferencing capabilities, cell phones, fax machines and laptops and the minimum tools for doing business. A new generation of handhelds allows users to check their integrated email, daily calendars, business contacts and even customer orders from anywhere theres a wireless network. cadre phones can now switch seamlessly in the midst of cellular networks and corporate wifi connections. This dimension for BA is significant as it uses new technology all the time to maximise efficiency. Daft (2009)3.1.4 The economic dimensionThis represents the general economic health of the country or region in which the organisation operate. Consumer purchasing power, the unemployment rate, and interest rates are part of an organisations economic environment. Because organisations today are operating in a global environment, the economic dimension has become exceedingly complex and creates enormous uncertainness for man agers. The economies of countries are more closely fastened together now. For example, the early 2000s economic recession and the decline of consumer confidence in the US affected economies and organisations around the world. Similarly, economic problems in Asia and Europe had a tremendous impact on companies and the stock market in the US.One significant recent trend in the economic environment is the frequency of nuclear fusions and acquisitions. Citibank and Travelers merged to form Citigroup, IBM purchased Pricewaterhouse Coopers Consulting, and Cingular acquired ATT wireless. BA is also considering merging with a foreign airline to help get through the economic carry outturn. Cope (1998)3.1.5 The legal-political dimensionThis includes ecesis regulations at the local, state, and federal levels, as well as political activists knowing to influence company behaviour. The US political system encourages capitalism, and the government tries not to over regulate business. However , government laws do specify rules of the game. The federal government influence organisations through various administrations and agencies. Many organisations also have to contend with government and legal issues in other countries. The European Union adopted environmental and consumer bulwark rules that are costing American companies hundreds of millions of dollars a year. Companies such as Hewlett Packard, Ford motor company and world-wide Electric have to pick up the bill for recycling the products they sell in the EU, for example. Pressure groups also work within the legal political framework to influence companies to behave in socially liable ways. This is area is changing all the time because of threat of global warming and the shoot for governments to do something, and so it affects BA. Daft (2009)3.1.6 Task environmentA corporations scanning of the environment should include analyses of all relevant elements in the task environment. Managers need to consider the competi tive environment, also referred to as the task environment or industry environment. The profitability of the firm and the nature of competition in the industry are more directly influenced by developments in the competitive environment.3.1.7 Industry AnalysisIndustry group of firms producing a similar product or service. The firm interacts with a more specific environment, the industry. Four main components that exert influence on industry1. Suppliers2. Competitors and potential substitutes3. Potential entrants4. Buyers3.1.8 Competitors, potential substitutes and potential entrantsThe number of firms operating within the industry as well as the number of firms wishing to enter the industry is regulated by barriers to entry which determine go along participation in and/or exit from the industry. Some of the constraints are the rate of industry growth, the level of resolved costs, and the degree of differentiation. Potential competitors are not limited to firms considering to offer exactly the same or tell apart products or services, substitutes to the existing products and services are also a potential threat. Substitute products/services may co-exist with the present range of products and services or may render the present range obsolete.3.1.9 Buyers and SuppliersThe competitive speckle of business firms is influenced by the nature of its transactions with its buyers and suppliers. Buyers exert their power in the industry when they force down prices, bargain for higher quality or more services, and play competitors against each other. Suppliers can exert bargain power over participants in an industry by threatening to raise prices or reduce the quality of purchased goods or services. In addition, we usually think of suppliers as other firms. But labour has to be recognise as a supplier as well one that exerts great power in many industries.3.2 The organisationEnvironmental UncertaintyOrganisations must manage environmental uncertainty to be effective. Environmental characteristics that influence uncertainty are the number of factors that affect the organisation and the extent to which those factors change. When external factors change rapidly, the organisation experiences high uncertainty. Companies have to make an effort to adapt to the rapid changes in the environment.Adapting to the environmentIf an organisation faces increased uncertainty with respect to competition, customers, suppliers or government regulations managers can use several strategies to adapt to these changes, including boundary-spanning roles, interorganisational partnerships and mergers or joint ventures. margin-spanning rolesBoundary Spanning is concerned with the detection of information. It has two primary roles 1) to detect information and bring it into the organisation. 2) Send information into the environment presenting the company in a favourable light. There are two main sources of information 1) business intelligence which is information about the g eneral environment. 2) Competitive Information which is information about an organizations competitors.Interorganisational partnershipsAn increasingly best-selling(predicate) strategy for adapting to the environment is to reduce boundaries and increase collaboration with other organisations. North American companies have typically worked alone, competing with one another, but an uncertain and interconnected global environment has changed that tendency. Companies are joining together to become more effective and to share scarce resources. Head to head competition among independent firms is giving way to networks of alliances that compete for business on a global basis.Mergers and joint venturesA step beyond strategic partnerships is for companies to become involved in mergers or joint ventures to reduce environmental uncertainty. A frenzy of merger and acquisition activity both in the US and internationally in recent years is an enterprise by organisations to dole out with the tre mendous volatility of the environment. A merger occurs when two or more organisations accord to become one. A joint venture involves a strategic alliance or program by two or more organisations. This usually occurs when a project is too complex, expensive, or uncertain for one firm to handle alone. BA is considering a merger with a foreign airline to help cope with the economic uncertainty.3.3 The Internal Environment Corporate CultureCorporate ending refers to the shared value, attitudes, standards, and beliefs that characterize members of an organization and define its nature. Corporate culture is rooted in an organizations goals, strategies, structure, and approaches to labour. As such, it is an essential component in any businesss ultimate success or failure. It is an unwritten value-set that management communicates directly or indirectly that all employees know and work under, stated John OMalley in Birmingham Business Journal. It is the underlying soul and guiding force with in an organization that creates attitude alliance, or employee loyalty. A winning corporate culture is the environmental keystone for maintaining the highest levels of employee satisfaction, customer loyalty, and profitability.Every company has a culture, though not every culture is beneficial in share a company reach its goals. A healthy corporate culture is one in which employees are encouraged to work together to ensure the success of the overall business. Developing and maintaining a healthy corporate culture can be particularly problematic for entrepreneurs, as the authoritarian practices that helped establish a bantam business often must be exchanged for participatory management strategies that allow it to grow.An Increasing accent on CultureSince the 1980s, several factors have led businesses to evaluate corporate culture alongside such traditional hard measures of corporate health as assets, revenues, profits, and shareholder return. One such factor is the innovation fr om a manufacturing-based to a service-based economy, with the corresponding shift in emphasis from the quality of a material product to the quality of business relationships.Another factor is the need for American businesses to compete in a global marketplace against international rivals whose corporate cultures are distinct but demonstrably effective. A related factor is the need for many businesses to successfully adapt to technological advances in the marketplace or acquisitions/mergers that require absorption of previously separate business entities.Corporate culture affects many areas of a firms operations. One broad area of corporate culture involves corporate citizenship-the companys relationship to the larger environment. In this area, a companys culture helps determine its overall ethics and attitude toward public service. A second broad area of corporate culture involves humankind resource management. A companys culture affects a variety of human resource policies and pr actices, including the nature of interaction between managers and employees, the responsiveness to diversity issues in the workplace, and the availability of flextime and telecommuting options, safety and training programs, and health and recreation facilities. In a smoothly functioning organization, all such policies and practices foster an internally consistent corporate culture. Daft (2009)3.4 Environment and CultureIn considering what cultural values are important for the organisation, managers consider the external environment as well as the companys strategy and goals. Studies suggest that the right fit between culture, strategy, and the environment is associated with cardinal categories or types of culture. These categories are based on two dimensions1) the extent to which external environment requires flexibility or stability and 2) the extent to which a companys strategic focus is internal or external. The four categories associated with these differences are adaptability, come acrossment, stake and consistency.The adaptability culture emerges in an environment that requires fast response and high risk decision making. Managers encourage values that support the companys ability to rapidly detect, interpret and translate signals from the environment into new behaviour responses. Employees have self-direction to make decisions and act freely to meet new needs and responsiveness to customers is highly valued.The achievement culture is suited to organisations concerned with serving specific customers in the external environment but without the intense need for flexibility and rapid change. This results oriented culture values competitiveness, aggressiveness, personal initiative and willingness to long and hard to achieve results.The involvement culture emphasizes an internal focus on the involvement and participation of employees to rapidly adapt to changing needs from the environment. This culture places high value on meeting the needs of employees a nd the organisation may be characterised by a caring, family like atmosphere. Managers emphasize values such as cooperation, consideration of both employees and customers and avoiding side differences.The final category of culture, the use of consistency culture, uses an internal focus and a consistency orientation for a stable environment. Following the rules and being thrifty are valued and culture supports and rewards a methodical, rational, orderly way or doing things. In todays fast changing world, few companies operate in a stable environment and most managers are shifting toward cultures that are more flexible and in tune with changes in the environment. Lewin (1989) distributively of these four categories of culture can be successful. In addition, organisations usually have vales that fall into more than one category. This is the case for BA, who has values in all of the above.4.0 ConclusionTo conclude to this report, it has been evident that British Airways to take in cons ideration of several contemporary issues e peculiarly in the Environment and Corporate Culture. In other words, by BA becoming more adaptable to environment and culture it has and still is a booming success. by and by several failures, BA learnt its mistakes and overcome them. Today knowing the fact that BA, as a company, is one the leading corporate culture companies in the world. Moreover, BA can handle change and innovation extremely well. In other words BA is dealing with issues that are faced their way pretty well. 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