Many guidelines and procedures are established by the governments that support the businesses. Some of the guidelines for say, minimum wages are obligatory, whereas the business may get indirectly impacted by the other policies. To respond to the changes in the regulations and the rules, business organizations must be flexible enough (Beaulieu‐Guay, et al., 2020). Even the municipalities and the states have their set of rules and procedures, and thus corporate needs to be flexible at both the local and the international levels. The present study describes how environmental factors’ changes affect the organization of the business and its activities.

Main body

Forms of Organization

Different types of organizations are there in the business based on the types of ownership as follows.

Private Sector: Individuals maintain these types of organizations. The financing of private sector organizations is done through bank loans and money received from the investors. Various types of business organizations in private are:

Sole Proprietor: It can be established with a meager capital cost, for instance, beauticians, doctors, etc. In a sole proprietorship, there are limited liability and unlimited liability.

Partnership: It is a business defined by the Partnership Act 1890 and runs by two or twenty members. There can be limited partnerships or ordinary partnerships.

Limited Companies: These companies are governed by the Registrar of Companies and must apply a Companies Act 1965. Limited companies can be public limited or private limited.

Public Sector: The government owns the business organizations in the public sector. These organizations provide the goods and services for the advantage of the community (Klievink, et al., 2017).

A divisional structure is followed by the government, including the departments and the commissions. Various activities are performed by the Department of Health and the Department of Corrections.

Third Sector: This sector work for making a difference in society instead of making a profit (Evers, 2020). It is classified between two categories 1) Social Enterprises and 2) Charities and community Group.

Legal Structures of Organizations

TYPES OF BUSINESS ENTITIES

ADVANTAGES

DISADVANTAGES

Sole Proprietorship

Low establishment cost.

Autonomy in decision making.

Reporting of income in the personal income tax returns (Reiser, 2018).

Fewer alternatives to access capital.

Liability is unlimited.

Cost reduction of some employee benefits is not possible.

General Partnership

Easy to maintain and operate.

Centralized or shared accountability of management.

Access to capital is more.

Sharing of assets and profits.

Personal liability is unlimited.

Mutual decision making can lead to disagreement.

Corporation

Reduction in some business expenses can be made.

Capital can be raised by way of the sale of stock.

The formation is complicated and very expensive.

Decision-making depends on the ownership of stock.

Limited Liability Company

The ability to access capital can be enhanced.

Earnings are reported in the member’s personal income tax returns (Kadelbach, 2017).

Irrespective of the financial investment made in the company, members are involved in making decisions.

The establishment is more complicated.

In some states, there is a requirement of at least two members.

Transfer of ownership is not easy.

In the current study, the selected company KFC which a private limited, is offering high-quality food products to customers across the world. It is among the largest food chain in the world.

Public and Private ownership

The major categories of differences are:

Accessing Capital and Liquidity

The main advantage of public companies is that they can raise funds by accessing public markets along with the benefit of selling the shares very easily. When an organization undertakes IPO (Initial Public Offerings), it will be able to raise resources easily (Allee, Badertscher, and Yohn, 2020). These funds can be utilized for mergers and acquisitions. After a company gets listed, the stakeholders can move in and out of stock by purchasing and selling shares traded on the stock exchange.

Requirement of Reporting

Another difference between the private and the public company is the reporting requirement. This can be a major disadvantage of being a public company that is required to file the annual reports as well as the quarterly financial reports in addition to other documents. However, in private companies like KFC, yearly reporting can be considered.

Valuation

The valuation of public traded companies is much easier as compared to private businesses. The reason behind this is that the public ownership businesses have to follow the reporting requirements, as mentioned above.

Further, it can be stated that the different options are available to private companies for raising capital as compared to public companies. These can include bank loans, venture capitalists, angel investors, crowdsourcing, and friends and family. For example, KFC can take advantage of different funding sources.

Competition Policy

The major purpose of Competition Policy comprises the promotion of competition, improving the working of the market, and making a contribution towards developing efficiency in the markets as well as enhancing the competitiveness of businesses in the UK (Lyons, Reader and Stephan, 2017). By considering the risk of market failure, which gets resulted from the abuse of monopoly power, the government focused on protecting the interest of the consumers. Thus, the UK regulators acquired more power from The Competition Act (1998).

The statutory framework surrounding anti-competitive practices

In the UK, two groups of competition rules apply in correspondent to each other. Chapters I and II contained in the Competition Act 1998 and the Enterprise Act 2002 disallow the anti-competitive behavior that may influence trade inside the UK (Lyons, Reader and Stephan, 2016). Two types of anti-competitive activity are prohibited by the UK competition law. 1) Prohibitions under chapter I for the anti-competitive agreements and 2) Exploitation of the leading market position mentioned in Chapter II.

To achieve a broad target, KFC is utilizing a differentiation Strategy as a competitive advantage. KFC is more focused on exceptional recipes, chicken to attain market share, and have a concern for healthy food. KFC also need to consider the anti-competitive practices accurately.

How the Competition and Markets Authority (CMA) Operates

UK’s main competition and consumer authority is Competition and Market Authority (CMA). The responsibility of this department is to carry out investigations into markets, mergers, and the controlling authorities, along with implementing consumer and competition law. It is ensured by the regulators that the companies should not abuse the monopoly power by way of charging higher rates (Cole and de Ponsay, 2020). The indication of pricing behavior is looked upon along with the ROI on the capital employed to observe the proof of ‘profiteering.’

In addition to this, standards of consumer facility are considered by the controllers. Fines can be placed on businesses that are unable to encounter specified service standards. The key responsibility of CMA across the globe is to protect the consumer interest, especially against the businesses that abuse their dominant position (Jones and Stothers, 2018).

It is reviewed by the Competition and Market authority that KFC is providing quality products and services to the customers and satisfying their needs. It is observed that the KFC is conducting proper market research in order to serve their customers in the best possible manner.

Macroeconomic Objectives and Policy Instruments

The main objective of the macro-economic policy is to provide an economic environment that is favorable to develop the growth of the economy in a strong and sustainable way. The main supporters of macro-economic policies are monetary policy, exchange rate policy, and fiscal policy. The complete operations of the economy are considered in macroeconomic policy.

The main micro-economic objectives are low government borrowing, low inflation, low unemployment, exchange rate stability, etc. One of the macro-economic conflicts is economic growth vs. inflation. It is possible that the inflationary pressure will increase in case of speedy economic growth. Another conflict in the macro-economic objective is the balance of payment vs. economic growth. If consumer spending increases, it results in a deficit in the current account.

The monetary and fiscal policies are considered as demand-side policies. The monetary policy comprises of the modifications in the supply of money and the interest rates, and the fiscal policy considers the changes in government expenditure. The supply-side policies involve incentives given to firms for investment and production, developing competence and competition in the product market, etc.

The economy can be restored to complete employment creation by the often use of fiscal and monetary policies collectively (Mumtaz and Theophilopoulou, 2020). When the economy experiences a severe downturn, one of the possible solutions is to encompass fiscal policy so that the aggregate demand can be increased. The fiscal and monetary policies are taken into account in an extensive manner, and the economy is developed. Therefore, in fiscal policy, either by decreasing the private expenditure or government spending, it is possible to control inflation.

The government can enhance demand by reducing taxes and increasing government expenditure. The increase in government expenditure generates more jobs and provides an economical drive. Moreover, inflation, interest rates, unemployment rates, and output are influenced by monetary and fiscal policies (Benmelech and Tzur-Ilan, 2020). To say, the government has enlarged the spending. The collective demand is increased with this expansionary fiscal policy resulting in more production, higher inflation, and a low employment rate.

The Concept and Scope of the Globalisation of Business

Globalization is considered the spread of data and jobs, technology, products, etc., over the nations. In developed nations, a competitive edge can be gained through globalization.

In the last few decades, globalization has become the key factor in business life, and thus it is an important concept (Casson, 2020). Business life, society, environment, and economy are affected in many ways by globalization. Further, globalization inspires the entities to considerably increase the quantity and type of international transactions in services, products, and capital. Thus it generates opportunities to enlarge the revenue streams. The concept of globalization has drastically increased revenue and economic progress in developing countries. The companies are required to consider the various aspects of the major effects of globalization. KFC can attain better opportunities in context to competition by having a focus on globalization.

Competition

Globalization results in a bigger competition. The competition can be in relation to quick response, adoption of technology, faster production by business organizations, etc. The company is capable of increasing its market share if it manufactures its products at a low cost and sells them at a cheap rate. The consumers want to acquire the products and the services in an efficient way. The availability of a great multitude of selections in the market affects the behavior of the consumers.

Exchange of Technology

The use of the latest technology by business and internationally concerned companies to achieve opportunities is the most unusual indicator of globalization. Technology is also considered as one of the main tools of rivalry and the value of goods and services. Contrary to this, a higher cost is involved in the use of technology (Coulibaly, Erbao, and Mekongcho, 2018). The companies like KFC are required to use the new technology to increase their quality of product and sales.

Transfer of Information

In the present environment, information is considered a costly and valuable production element. The transfer of information can be done very easily from one place to another. The company is able to adapt to the changing global environment if it can get a chance to use the information and knowledge.

Conclusion

The above-mentioned points state that various types of entities work under different organizational structures, as discussed. The capital funding requirements of all types of businesses are based on different sources. The company has to follow all government policies and procedures. The UK competition policy is discussed, followed by the KFC Company by using the differentiation approach. The competition policy is in the interest of the consumers. Lastly, the globalization effect on the business is discussed.

References

Allee, K.D., Badertscher, B.A., and Yohn, T.L., 2020. Private versus public, corporate ownership: Implications for future changes in profitability. Journal of Management Accounting Research, 32(2), pp.27-55.

Beaulieu‐Guay, L.R., Tremblay‐Faulkner, M., and Montpetit, É., 2020. Does business influence government regulations? New evidence from Canadian impact assessments. Regulation & Governance.

Benmelech, E., and Tzur-Ilan, N., 2020. The determinants of fiscal and monetary policies during the COVID-19 crisis. NBER Working Paper (w27461).

Casson, M., 2020. International rivalry and global business leadership: a historical perspective. Multinational Business Review.

Cole, M., and de Ponsay, J., 2020. The UK Competition Authority publishes its guidance on merger assessments during COVID-19 pandemic. e-Competitions Bulletin, (April 2020).

Coulibaly, S.K., Erbao, C. and Mekongcho, T.M., 2018. Economic globalization, entrepreneurship, and development. Technological Forecasting and Social Change, 127, pp.271-280.

Evers, A., 2020. Third sector hybrid organisations: two different approaches. In Handbook on Hybrid Organisations. Edward Elgar Publishing.

Jones, A. and Stothers, C., 2018. Establishing Unfairly High Prices: The Implications of the CAT’s Judgment in Flynn and Pfizer v Competition and Market Authority.

Kadelbach, S., 2017. 7 The concert and existing organizations and legal structures at the global level. Great Power Multilateralism and the Prevention of War: Debating a 21st Century Concert of Powers.

Klievink, B., Romijn, B.J., Cunningham, S. and de Bruijn, H., 2017. Big data in the public sector: Uncertainties and readiness. Information systems frontiers, 19(2), pp.267-283.

Lyons, B., Reader, D. and Stephan, A., 2016. UK Competition Policy Post-Brexit: In the Public Interest?. Centre for Competition Policy Working Paper, pp.16-12.

Lyons, B., Reader, D. and Stephan, A., 2017. UK competition policy post-Brexit: taking back control while resisting siren calls. Journal of Antitrust Enforcement, 5(3), pp.347-374.

Mumtaz, H. and Theophilopoulou, A., 2020. Monetary Policy and Wealth Inequality over the Great Recession in the UK. An Empirical Analysis. European Economic Review, p.103598.

Reiser, D.B., 2018. Alternative business organizations and social enterprise. In The Routledge Companion to Business Ethics (pp. 257-274). Routledge.

Business Environment

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Introduction