The performance of a business

External Factors That Affect Businesses Introduction There are many instances where the performance of a business does not entirely depend on the management, the employees and activities inside the premises. There are some external influences that may be triggered by the government, society or natural phenomena. These factors may play a part in the internal functioning of the business. Some may trigger the business to alter its objectives and its overall plan. This paper explores such factors with specific recent cases. Europe is going through an economic crisis that is affecting activities of many companies.

As a result, many companies have taken cost cutting measures. This economic downturn has not spared Holloway White Allom, a high profile construction company famous for building The Bank of England and has been in existence for more than 100 years. The company had taken cost cutting measures by laying off some 175 workers but the slide continued. These poor results have been blamed on the current recession that is affecting many parts of the world. Many companies are finding it hard to stay afloat and make profits.

This rise is always felt by countries that are not blessed with abundant oil ores. The price of fuel dictates the prices of many products. Companies experience increased expenses as a result of rising transportation costs. For many companies that directly depend on fuel for their day to day activities, the rise fuels increases their operation costs. Trucking companies, bus companies and airlines are directly affected by fluctuating fuel prices.

The value of currencies affects greatly import and export revenues. If a currency becomes weak against a trading partner’s currency, it will reduce export revenues. For companies that operate using all currencies, a depreciating currency negatively affects their revenues. The rise in Aviation Turbine Fuel price coupled with a weak rupee against the US Dollar all played a part in condemning Jet Airwways into making losses. These two factors adversely affected the company’s activities due to increased operational costs and forex losses of about $52. 7 million.