A business organization operates in an environment, therefore, the factors outside the organization do affect how the organization runs its business .These factors include political, social, ethical and legal factors. The organization has no control over these factors hence the only option becomes to adjust to and embrace different changes that might occur in these factors, in the environment.
Starbucks is a coffee making franchise that operates in the US market. Masteroast Company is a coffee company that has been thriving in the UK market for the past thirty years and has cut a niche for itself as being one of the leading coffee roasting and packaging firm in the market. These two companies thrive in two different regions but despite this, they both face similar problems in the environment that they operate in.
The political factors that affect its operations include political stability, the level of relationships between US and the countries that produce coffee beans and also the specific rules and regulations that the government has set in the food and beverage industry (Vibert 2004).For Masteroast the political factors that affect its operations include rules that affect international trade, political stability and also environmental protection and rules. The political factors affecting Starbucks include the stability of the nations where the firm procures its coffee beans and other raw material. Starbucks imports its raw materials from various locations worldwide. These countries are susceptible to natural disasters, this can have a direct impact on the supply of their end product to their customers. Just like Masteroast, Starbucks is also affected by environmental rules and regulations. The company claims to be mindful about the environment where it operates. Other types of regulation include the compliance with local workers unions.
Social factors are all those aspects that concern the brand value, consumer perception, choice and behavior of the individuals in society (Vibert 2004). The social factors that affect Starbucks Company include changes of the family setup, the wide scope consumer tastes and preferences, changes in the work patterns of the US people, the changes in the lifestyles, level of education of majority of the people and also different values and beliefs of the people. For Masteroast social factors that affect its operations include the income distribution of majority of the people as this affects the purchasing and consumption of the available products. Additional factors include views of the opinion leaders, consumer education and available information and also demographic tendencies of the population. Additionally for Masteroast, the consumer coffee taste is rivaled by the tea drinking culture that is well established and has been in existence. There is also the aspect of consumers being students and workers, this has bolstered the coffee market as most of them are busy and purchase the coffee as they go on with their routines
The ethical components that determine operations at Starbucks include how the organization contributes towards maintaining a greener environment, responsibility in treating of employees, helping solve problems that face the community and also in sourcing of the coffee berries. In Masteroast, the coffee they roast and blend goes through rigorous quality control measures so as to ensure that only quality is delivered to the customers. The organization understands far too well the negative implication of providing poor quality products to the end consumers (Griseri 2010).
Legal factors are aspects that cover issues affecting the role of government involvement in economic issues and how enacted laws affect how business firms operate and generate profits. The United Kingdom has a robust legal system where arbitration especially involving business is seen as very favorable. This means that the law supports business and ensures that arbitrations are unbiased and every party is given a fair hearing where cases reach the courts. Legal issues that impact business activities at Starbucks include the specific food and beverage industry rules and regulations, taxes and licensing laws and also rules regarding employment of staff. In Masteroast legal issues that affect their business operations include customs and trade regulations, taxes and the different policies and regulations that have been set by the health authorities regarding caffeine production and consumption.
These factors affect business operations in various ways. The political and legal factors provide the legal framework under which these business organizations must operate in. Failure to comply with these rules and regulations could attract fines or even impeachment. Social and ethical factors determine purchasing patterns and also overall view or reputation of the organization (Griseri 2010).
All these factors that affect these two business organizations are outside the working environment of the business firms (Vibert 2004). This means that the management cannot control or change these factors. The recommendation would however be that companies put different mechanisms and strategies that enable an organization to quickly and effectively adapt to the changes that occur in any of the above mentioned external factors. These flexible and innovative solutions would however enable an organization thrive well even during turmoil as a result to the changes in the external environmental factors.
