Describe the influence of two contrasting economic environments on business activities within an organisation?


Economic environment refers to the aggregate of the nature of economic system of the country, the structural anatomy of the economy to economic policies of the government the organization of the capital market, the nature of factor endowment, business cycles, the socio-economic infrastructure etc. The successful businessman visualizes the external factors affecting the business, anticipating the prospective market situations and makes suitable to get the maximum with minimize cost. Case 1:In the case of BP the recent world economic recession has lead to decrease in the profitability of the company which has affected its growth and made many of its branches world wide to close because the overall business environment and lack of disposable income to many of its customers.Case2The BP policy of buying other oil companies like shell has made it to expand and penetrate into the markets which initially it had not reached. This has made the company realize more profit and increase its world market share making it more firm and productive.
1 Additional Answer
Every business is affected by the economic climate. One has to understand their business operations fully and compare the challenges to selected business activities in two different economic environments. So in other words what are the challenges in times of a recession and how do they differ from the challenges an organisation faces in times of the growth part of the business cycle.
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