Stakeholders and objectives
The rationale of different organizations is dissimilar and unlikely that is described as follows:
- Glaxo Smith Kline or GSK: The main priorities of the strategies are to create a balanced growth and development procedures, reduce the threats and vulnerabilities and improving the financial issues and challenges affecting the long-term perspectives of a company.
- National Health Service or NHS: NHS aims at delivering the care and health services to the society. The priority includes the provision of the services with higher standards to users of the services i.e. to the communities and public. It also provides an assurance of the effectiveness in the utility of the resources that are valuable to get outcomes, that are noteworthy and profitability for the society, communities and the individuals (Mithas, Tafti and Mitchell 2013).
- Red Cross: Red Cross aims at putting a stop to the pain and miseries of the individuals from the society. It works through creation of mobility of the volunteers and workforces through donations and other cost effective resources.
- Heart of England Co-Operative Society: The major purpose of the society is the provision of a better value and care with a wide variety of facilities that has an association with the services.
The key stakeholders include the following, and the extent of meeting the objectives are described below:
- Investors – The GSK informs the shareholders and the investors about the ventures to be undertaken in the future as well as provide a risk capital and returns offered by the investments. The company provides the requisite knowledge and information for the assistance and determination for the investment in the stocks (Bender 2013).
- Employees – The employees of an organization work towards the welfare of the public. The management of GSK provides their employees with pay raise and other benefits to retain them and diminish the employee turnover (Morden 2016).
- Government and Legal Framework– The Company maintains the policies and procedures of the legal and legislative authorities and the government.
- Customers- The customers constitute the most important stakeholders for an organization. GSK offers quality services of a higher standard. It also considers the health and care of the community thus making it efficient and noteworthy (Boons and Lüdeke-Freund 2013).
The major responsibilities constitute the following:
- Legislative Framework: The framework of legislations must be maintained for every operations of the business and the policies must be developed on the maintenance of the legislation and laws of the government authorities (Ayuso et al. 2014).
- Social Responsibilities: A Corporate needs to fulfill a variety of responsibilities towards the society by improving the quality and enabling the public to stay and feel better.
- Contractual: There are a wide range of contracts created by the company by following the legal and legislative processes of the activities of an organization.
The different strategies towards meeting the obligations towards stakeholders consist of the following:
- Employee: There must be a decent amount of salary and pay structure to gain the job satisfaction on the part of the employees. Hence, GSK must work towards providing a safe environment for working and providing modern technologies and communication procedures (Greaney 2014).
- Customers: There must be a sense of social responsibility towards meeting the requirements of the customers. GSK must work towards providing a suitable value in the product contributions, decline in the prices (Aula and Heinonen 2016).
- Government: The legal and legislative policies need to be followed for the healthy and efficient working of the organization.
- Local Community: GSK need to carry out the ethical and communal responsibilities towards the local procedures including the carbon footprint, clean energy, strength of the local population and serving them in getting a better accessibility to the healthiness and societal care through proper medication and other policies (Davenport and Beck 2013).
UK comprises of various policies and laws of the government under the environment of the business. The year 2009 is marked in the economy of the UK market, to face the greatest recession that has led to a scarcity in the valuable resources and assets in the market economy. The government has implemented the monetary and fiscal policies to reduce the risks, threats present in the financial structure, and the same are having a major impact on the activities of business like AZ and GSK (Becker et al. 2013). The impacts are discussed as follows:
- Fiscal Policy: The opportunities and the development structure of the organization have increased due to the fiscal policies. It helps in the improvement of the situation of the national economy and includes the policies of spending and taxation. Furthermore, the supply of economic assets is maintained through the policies (Hill et al. 2013).
- Monetary Policy: These policies monitor the contribution of money and the pace of the dealings (Galí 2015). These policies also change the rates of savings and interest. It also takes into control the inflation rates and the prices of the products and services of the company are settled through the monetary policies (De Grauwe 2014).
The UK parliament has formed the Enterprise Act 2002 for making modifications in the Law of Competition of UK for the mergers and insolvencies. The evaluation and impacts are discussed below:
- Competition Policy: It comprises of a set of rules regulations followed by the organization in the market of competitiveness. The major policies that are required to be followed by the organizations are covered under the policies and they manage the threat of entrants. The GSK and AZ are required to go through and follow the rules of the competition act as it helps in the encouragement of the advantageous mergers (Leonidou et al. 2013).
- Trade Policy: The policy of competition has an attachment with the fair-trading policies. The Enterprise Act has to carry on the fair-trading to efficiently monitor and manage the government rules and trading activities (Budzinski 2012).
- Reorganization of Liquidation: The implementation of the rescue of the liquidation and bankruptcy are recognized by the organizations for effectiveness in the process of the administration (Wagner III and Hollenbeck 2014).
The two major factors in the market affecting the decision making process of the organizations comprise of the demand and supply.
Different market forces are there within the market to influence the organization’s decision. Demand and supply are the two main factors within the market forces, which affects the decisions of the organizations. They affect the price and sales decisions in the following manner:
- Demand: The willingness of the customers in buying the products of GSK is their demand and the amount of orders placed determines and defines the demand structure of the products. GSK can set up higher amount for the products having high demands (Prahalad and Ramaswamy 2013).
- Supply: the supply depends on the demand of the products present in the market. GSK aims at creating an availability of the products in accordance with the demand in the market. The increase in the demands requires an increase in the supply too (Haria 2016).
The increase of the demand and supply of the products have resulted in higher quantity and equilibrium prices of the products of GSK. The decline of the demand of the products may lead to an increase in the prices.
PEST analysis – GSK:
- Political Environment: These factors have an integral impact on the Pharmaceutical companies. A variety of laws like taxation, export import and environmental laws are the legal worry for GSK. The carbon footprint and related environmental laws has to be considered for the maintenance of the impact and threats of the environment
- Economical: The globalization of the GSK market requires the facing of various economic constitutions in various countries. The difference in the rates of inflation, interest and purchasing power of the buyers has an influence and effect in the case of GSK.
- Socio-Cultural Factors: the concerned factors in these criteria include the culture, behavior of humans; life style and the fitness factors in the society, for GSK. GSK has an ability of managing these factors and approaches a wide range of countries that results in fewer threats and risks.
- Technological Factors: GSK has an extensive usage of the Research and Developments in the operations of businesses. They apply better approaches having effectiveness in the projects decided or proposed for research (Jackson et al. 2016).
The cultural environment that determines the behaviors of GSK comprises of the internal and ecological factors. There are various factors in the cultural environment like the employee behaviors; relations and advancement of GSK towards the employees.
- Culture and Values: GSK provides continuous motivation towards their employees through the values, transparency and integrity present inside the culture. There must be strong relationships and leadership in the management and the employees.
- Integrity: The actions of GSK have a commitment towards the truthfulness and integrity. This has been enforced within each levels or strata of the cultural environment.
- Transparency: The maintenance of the global business transparency has integrity with the cultural surroundings of the company (Epstein and Buhovac 2014).
The international trade helps in the offering of better and standardized goods and products all across the globe. The expansion process helps in achieving a wide variety of opportunities and achievements for the companies.
GSK and AZ have been successful in creating a wide series of goods that have an association with diverse diseases. The offering of huge number and variety of the products like nutritious drinks, oral health care services and other medicinal drinks and products like Horlicks, Gaviscon, Sensodyne etc. Both GSK and AZ have been preparing medicinal of products for the wide range of general diseases like oncology, respiration and other infections for approaching to a wide range of countries. Globalization and trading done internationally can provide accessibility to variety of resources that are required in the production process. The accessibility of various resources can have an extension through the implementation of the international trade (Buchbinder and Shanks 2016).
Meeting obligations towards stakeholders
There are diverse ranges of global factors that have an association with the processes of the international industry. The factors constitute the following:
- Political: There are various laws in the global markets and in the present scenario of the politics has affected GSK and AZ. The trading activities of both the companies need to face variety of laws in various countries in the importing and exporting activities of a business. The situations like instability in the other countries can have an impact on the business of AZ and GSK.
- Economic: The stability in the economy is a major requirement for staying inside the universal market. The unstable conditions in the economy of the global markets create an impact on resource of the countries on an individual basis. Hence, the stability in the economic conditions in the international market is essential for giving shared advantageous advancement to the consumers.
- Social: GSK and AZ. should analyze the social inclination in the worldwide situation carefully. There must be a research work conducted in relation to the present food lifestyle, standard of living etc that are putting into effect diseases like chronic diseases and obesity. GSK and AZ must consider the above for the development of their medicines and other products.
- Technological: The current trends of globalization influence the operations of a business. There must be an improvement in the communicational aspects by GSK and AZ.
- Legal Factors: The lawful factor has a significant linkage with the global trade. The diverse legal policies and regulations can make GSK to face fear in the global trade.
- Ecological: the global warming scenario and the breaking out of the damaging diseases, along with the shortage in the natural products have been imposing risks and threats for GSK (Henson 2016).
The policies of EU have a great impact in the business procedures of AZ and GSK. The trades constitute the reduction of the cross border trades and others discussed below:
The trade through borders includes the flow of the goods and services that can be exported and imported across the borders. The cross border trade helps in the expansion and growth of the activities of a business. The Excise and Vat tax have an association with the trade across the borders. The lower tax over the products can be efficient for carrying out the business in the income aspects and the low VAT in the borders of Spain can reduce the cost of import and exports for AZ and GSK.
The barriers of trade have an association related to each traded products. The discrimination of the products affects the welfare of the nation as a whole and the removal of such discriminations can have a severe impact that is mostly negative on the organization.
The barriers of technical trading have an association with the EU strategies and guidelines. It also creates an impact on the liberty of the mobility and transferability of the goods. There is an existence of harmonization in the health, safety and environment policies, which creates a major impact on the products of the company (Gillespie et al. 2014). The year 1968 has been marked as the year in which EU had taken assured steps in the harmonization of the set of laws.
The three forms of economic systems constitute the following:
- Free Market: The Free markets have been developed and created in excess of the authority and the control of the demand and supply of goods. The free market system of economic policies does not consider any intervention from the government.
- Command Economy: The surrounding of the command economy implements a system in which the administration has entire command over the value of the goods and services along with the construction. The government authority can decide these varieties of the products and the services that are required to be produced. The channels of the distribution that have an association with the businesses have a requirement of getting the decision making process done by the authority and government in the system of economy.
- Mixed Economy: In this kind of the economic system, there is an inclusion of both the characteristics of the free market and command financial system. The partial control of such economy is under the government and other parts have a base on the ratios of the supply and demand. The mixed economy has an involvement of both the public and private sectors.
The free market has led to a situation of dependence of the customers over the process of the allocation of the resources. The supply of the goods and products is dependent on the demand of such products. The planning in a centralized manner leads to the allocation of the resources by the government in the economy of the command, as there was a decision of the requirement of production through the available components (Alban-Metcalfe and Alimo-Metcalfe 2016).
The mixed structure has an inclusion of the allocation of the resources in accord and agreement with the supply and demand structure of the products. The private sector has a tendency and structure of the allocation of the possessions and resources through the analysis of both the demand and supply graph. The public sector has a procedure of allocation of resources with the help of planning. Among these discussed monetary arrangements, the most efficient one is the mixed economy, for the purpose of the allocation of resources. The reason for the mixed economy to be the best is that in this case of economic situation, the allocation of resource is reliant over the power of buying of the customers. It is also related to the welfare of the customers as well as the factors of the business environment have maintenance through the dominion of the governmental authorities (Alban-Metcalfe and Alimo-Metcalfe 2016).
Impacts of UK policies and laws
The prices and output decisions are determined in the various forms of market in various ways. The types include a perfect competitive market, Monopoly, monopolistic competition and Oligopoly and the decision-making processes applied by the above markets in relation to the prices and output are discussed as below:
- Perfect Competitive Market: This form market constitutes a huge number of small or undersized sellers and buyers. The market has an ease of the buyers and sellers to enter and exit in comparison with the other forms of the markets. The integral features of the market consists of the following:
- There is no power of the markets in the marketplace.
- The firms in the marketplace have an offering of the similar products present in the market.
- The demands of the products have a major impact on the decisions of output
- The amount of the purchasing power of the customers is the main signal and the indicator of the decisions of the pricing (Duffy and Jonassen 2013).
Figure 1: Perfect Competitive Market
(Source: Created by author)
- Monopoly: The market structure consists of a single market firm having no close alternatives, substitutes or near competitors within the market, as there is an absence of a price competition. The integral features of the market consists of the following:
- The owner of the market is supreme and there is an existence of government regulations and policies.
- There is only one organization and therefore the pricing decisions are to be obtained by the organization.
- The producer of the demand of the products has been always superior in this market. The higher demand shows the way towards the decisions of the outputs (Prahalad and Ramaswamy 2013).
Figure 2: Monopoly Market
(Source: Created by author)
- Monopolistic Competition: In this form of market competition, there are numerous smaller organizations. The production has a dependence on the discrimination and differentiation between the products. The significant feature of the market includes the forces of the non-pricing competition.
Figure 3: Monopolistic Competition Market
(Source: Created by author)
- Oligopoly: In this case, the smaller and larger firms have a mutual dependence on the market situation. This market consists of different brands that propose and offers arrange of similar goods. The market demands that are placed by the buyers have an influence over the decisions of the outputs. The decisions of price have an influence on the buyers.
Figure 4: Oligopoly Market
(Source: Created by author)
References
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