International Factors Affecting Patton Group

Changes in the international economic environment have an effect on the Patton Group in a variety of different ways. Some changes can have quite a large and significant impact.

For example, a change in oil prices will have a large knock-on effect on the Patton Group, as they, like every other company in industrialised nations, require oil to run their machinery and vehicles in order to work effectively. Uncertainty about oil creates a concern that countries cannot maintain supply, pushing prices up as demand increases although supply decreases.Countries start to demand more oil which also pushes up the price, and if a country gets too greedy with their oil supply, it can increase tension between nations. When there is a price increase in oil, it has to be passed on to the consumer via the Patton Group. This could push the cost of the project over the edge and Patton group may end up losing jobs.

War and political instability also causes issues which can affect businesses. Countries become unstable and there is an uncertainty which affects global trade and markets.If a business such as the Patton Group is operating in an unstable country when war is declared, it may lose investments which have been made in that country, and it will also lose time and progress on the work being carried out, as they must try to get all their employees home as safely and quickly as possible. Investors in that country will hold on to their money until the crisis is over – this causes a slowdown in world trade. Even if the Patton Group isn’t operating in an unstable country, it will still be affected by a global slowdown in trade, which can lead to a worldwide recession if it is not managed correctly.

Environmental concerns and actions are also a factor of changes in the international economic environment that affects the Patton Group. There are tight controls from the UK & EU on pollution and waste management. The Patton Group must not pollute the environment with any bi-products of their construction work, as there are large fines and penalties that they will face. Economical waste management and disposal comes at a cost, increasing the Patton Group’s expenditure. Staff must be aware of legislation surrounding waste management, therefore they must be educated about it.This also comes at a cost to the Patton Group.

However, there are various opportunities involved in effective, economical waste management. The Patton Group can maximise their exposure by building eco-friendly buildings and forging a reputation for building quality, new-age buildings as they progress. New technologies require the user to be educated, but by training their employees to use the most recent technological advances in construction, they allow themselves to save time and labour as new technology makes the job easier and more efficient.The government will also give grants to companies using renewable energy sources and disposing of their waste responsibly, which increases the Patton Groups sales. Major corporate failures are failures that would impact on the construction industry, such as problems with the banking sector. A problem in the banking sector would have an impact on the accessibility of business loans to cover costs – the cost of a loan may increase for the business by way of a higher interest rate.

If the Patton Group needed to take out a business loan in order to buy new machinery, for example, the raised cost of obtaining and paying off the loan would have to be passed on to clients of the business in able to make it financially effective. It would also be more difficult for people to get mortgages in order to purchase property, leading to a knock-on effect in the construction industry as consumers are not selling their current home to move into a new house or to build their own.The lack of demand for building and renovating drops as consumers don’t have money to spend on things that would be seen as “luxuries” – a new house would be nice but isn’t necessary. Stock market fluctuations arise from problems on the stock market, such as falling share prices and apprehensive investors reluctant to share their money.

This would have an impact on the Patton Group as they could find it difficult to secure much-needed investments in the business. Businesses use the stock market in order to raise funds in the business by selling shares and attracting investors.These investors will have a minor say in the running of the company, such as electing a CEO for example. Fluctuations in the stock market have no direct effect on the company, unless they wish to raise money by selling stock into the market. In that case, current stock prices determine how much money the Patton Group will be able to raise by selling shares. Once the shares are sold, however, the company is no longer directly affected by their stock price.

Company managers often also own shares in the company.Since they want to do well personally, they will (theoretically) work harder when stock prices fall to make the company more profitable and raise stock prices. Although this is the right way to go about raising stock prices, often managers will cut and slash in order to make to company look more profitable and provide a temporary boost to share prices, although the business will suffer in the long run. Shareholders may also become unhappy with the price of the shares and increase pressure for a change of CEO.Only 15% of workers aged 53-58 have invested in stocks, although the generation of retirees rely more on their traditional pensions rather than wealth invested in the stock market.

A pattern has emerged which shows that those who have invested a lot on the stock market in addition to their pension will be more likely to retire in boom periods and less willing to retire during a slump. Along with the recent economic bust, house value fell, leaving those on the cusp of retirement with less money than they had hoped for.Therefore, these retirees and their benefactors are less likely to spend money until the market recovers, leaving little demand for construction and construction businesses, the Patton Group included. In order for management to react positively to changes in the stock market and retain the best prices for the shares even in an economic slump or stock market crash, they must be insightful and see problems before they happen, so to speak. By watching stocks closely, they will be able to foresee any potential problems and make changes within the company, thus avoiding a much larger drop in share prices.Single European Market Being part of EU means that UK businesses have access to a large market of over 400 million people.

Removal of trade barriers such as import and export taxation and currency devaluation all have effects on the Patton Group’s trading habits with businesses or clients in other countries. A single market provides benefits to the Patton Group as there are common policies regarding service regulation, freedom of movement of services and products. Businesses and consumers in a single market will find it competitive, with less tolerance for monopolies.This means that the process of natural selection will occur, with smaller, less productive businesses that will fail in a single market. Efficient firms will benefit from the increased competitiveness, lowered costs and increased productivity. Consumers benefit from the single market as businesses competing with each other will continually try to offer lower prices to attract clients, increased efficiency and a wider range of products.

Furthermore, competing companies will try to be the most innovative and create new products or services, further benefiting consumers. Mobility of LabourThis is the geographical and occupational movement of workers from place to place. This can benefit the Patton Group in a number of different ways, as it can remove skills shortages in different areas, without hiring new employees. Labour mobility keeps employees within the organisation, removing recruitment and training costs and is also of benefit to the employees as they are usually rewarded with a higher wage or other bonuses.

Movement within the organisation from job to job is seen by management as filling the shortage on a temporary basis, therefore the moved employee is seen as a short term replacement.Another factor in mobility of labour is that workers from less affluent EU countries can come into the UK to work for an organisation such as the Patton Group for a lower rate of pay than what UK citizens expect. This keeps outgoings in wages from the country as low as possible even though it will be a higher wage than what the worker would receive in their own country. Labour mobility is also beneficial to the customers of the Patton Group as it means there will be less delay on projects and services that they are expecting, as the Patton Group won’t have to go through the long recruitment process.

EU Policies The European Structural Funds are financial tools implemented by the EU to reduce regional incongruities in terms of opportunities, wealth and income. Europe’s poorer regions receive the most support, but any EU country is eligible for funding under various programmes in the policy. The current regional policy is set for a period of seven years, from 2007 to 2013. Another purpose is to bring all areas of the EU up to a similar standard in terms of infrastructure, something the Patton Group can benefit from, as they have tenders with the government.As the Patton Group develops a larger presence across the water on the mainland and within Europe it can use the opportunity to place tenders with other governments. If the EU economy was to enter a recession, however, funding might be restricted to countries on a needs basis.

This would affect the Patton Group negatively as the government will not be so interested in infrastructure during a recession. Social policy refers primarily to principles, guidelines, legislation and activities that affect the living conditions of citizens.A piece of legislation included in the social policy is national minimum wage, the lowest legal rate a company can pay its employees. The Patton Group can take advantage of the European Structural Funds and gain work on infrastructure projects, increasing income and profits but also increasing outgoings in wages for the enlarged team. Performance of EU Economies There are many opportunities for construction work in EU countries that are doing well – traditionally the richer nations (Germany, France, UK, etc.

– however, the impact of recession on these countries caused a slowdown in the construction industry, as less money was invested in construction there was less demand for building companies, but due to the financial boom there was a large supply of companies that were all competing to get the job. This affected the Patton Group as they had to keep their prices low in order to attract potential contractors, as well as also covering their costs of keeping the business running on a day-to-day basis.