Business and Business Environment

This document discusses the types, purpose, and legal structure of organizations, the scope and size of different organizations, the interrelationship between different marketing functions of an organization, and the positive and negative impact of macro environment on business operations. It includes a case study of Sainsbury and Red Cross.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
1 – Types, purpose and legal structure of organisation...............................................................3
2 Scope and size of different organisation ..................................................................................4
3. The interrelationship between different marketing function of organization..........................6
4. Positive and negative impact of macro environment within business operation.....................7
5 Internal and external analysis of Sainsbury and NHS to identify strengths and weaknesses...9
6 Strengths and weaknesses interrelate with external macro factors.........................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment is the sum of collection of all internal and external factors such s
employees, customer needs and expectations, demand and supply, clients , suppliers and various
other. Business if the group of people who are being gathered together to achieve common goals.
Business environment consists of all the factors that affect the business operation. Sainsbury is
the second largest chain of supermarket in United Kingdom that provides wide variety of
products and services in the range of clothing, food, electricals, home- wares, beauty and various
others. Present report will assess to explanation of different types,size and scope of organisation,
will demonstrate interrelationship with various functions within the company such as marketing,
human resource, finance and various others and will account to use various contemporary
examples to demonstrate negative and positive influence or can be in effects of macro
environmental factors and lastly will brief into strength and weakness of a specific business and
there interrelationship with external factors
1 – Types, purpose and legal structure of organisation
There are variety of types of organisation which have there own purpose and legal
structure industry in which they operate. The three different type are public, private and
voluntary organisations
Public organisation – this are defined as the organisations which are being operated and owned
by the government of that country that exists to provide products and services to the citizens of
the company, it is publicly and government owned enterprises that deliver goods and services to
the public.
The purpose of public organisation is to helps the government of the country to exercise
social control on industry and trade for equitable distribution of services and products. The main
purpose of this organisation is to provide services to public rather than accounting to make
profits out of them (Sani, 2018).
As public sector refers to the companies which are being accountable with central and
local government, this enterprises are being funded by the government directly . This are being
run by certain board of directors and accounts to annual general meeting and are being listed on
stock exchange of the country where it sells its shares. Example of public sector undertaking is
National health services that provide health care services to people of UK.

Private sector – This are the companies whose shares are not offered top public and which are
being subject to various legal requirements. This are the companies held under private ownership
where business accounts to separate legal entity from that of its owners
purpose of this companies is to maximise profits for its shareholder and to be the leading
player in there line of business by capturing huge customer base. This are being focused around
setting right kind of structure that helps in meeting with there interest of business.
Legal structure of private company that its shares can be sold to public, each share
entitles owner for one vote in time of company annual general meeting and share in profits at
time of end of financial year which is being know as dividend. Company is being run by various
director, and a chairman is being appointed to run the business where members liability are
limited to number of shares they account held to (Ihm, 2019). Example of private sector In UK
is Sainsbury which is giant player in retail sector.
Voluntary sector- this are the companies which are collection of individual who work together
to account to various activities for the benefits of the company.
Purpose of this companies to identify with the needs of groups, individuals and accounts
to initiating programmes in collaboration of government of that country. The purpose is to give
concrete expression to fundamental rights to group of members and individuals.
This companies exist as people of community perceive a need and account to work
together top bring a change (Ingram, 2016) This are being managed by various executive
committee, management committee and various board of directors that exercise control in the
same. Example of voluntary organisation in UK is Red cross society which encourages to
humanitarian activities and reduce human sufferings.
2 Scope and size of different organisation
Public sector
NHS -These types of micro enterprise have low employee according to their business
development.
Mission- To ensure affordable and accessible quality healthcare by compassionate medical
professionals to all
Vision- To be the centre of excellence for medical research and academics and to cultivate an
environment of trust, mutual respect, honesty, ethics and equality

Objectives – To provide quality services of treatment to all its patients whereby accounting
with minimum number of flaws and errors in the same while providing medical services
Size National health services which deals in health care services. This work according to their.
As they have listed number of shares in their competitive advantages.
Scope -There are developed in many different countries micro industry has their input with
value added their monetary income and helps in providing better opportunities for them.
Private sector
Sainsbury’s They have enough number of funds and invest many more capital while in
developing their business and developed in local and internationally level. as these has large
number of employees with them
Mission – to be the consumers first choice for food, delivering products and goods of
outstanding quality and great service at a competitive cost by working faster, together and
simpler.
Vision to be the most trusted retailer all over UK where the people love to work and shop
Objectives- to sell quality products and be highly competitive in the retail industry
Size Sainsbury is one of largest retailing company which developed their own brand product
and required large number of customer which has based to sale their product online.
Scope These are multinational retail company which has their own product brand with large
scope and build them with large number capital of fund with them
Voluntary sector
Red Cross Investment in small enterprise is low so they hire worker accordance to their
capital with an intension for achieving large enterprises along with short term goals and
increasing their work sales.
Mission &Vision to encourage, inspire, facilitate and promote all times of humanitarian
activities with a view to prevent and reduce human sufferings and there by contributing to the
promotion and maintenance of human dignity and peace in the world
Objectives

Size Red cross reduce human suffering from any disease and size have more with their funds
of investments
Scope Organization such as Red cross is best for small enterprise. they formed their own
function and capital formed accordingly them and have not much scope for developing them n
some other countries.
3. The interrelationship between different marketing function of organization
The organizational structure of Sainsbury is flexible and matrix structure is allow for
their employee. They adopted different situation of their employee pay rise and can also adopt
their conflicts in many stores and while to complete their situations they have used matrix for
their competitors.
Marketing and finance department:- Every organization their aim for business for making
some profits like Sainsbury company work for earning profitable, gain growth and maintain their
cash flow. It seems that marketing often to get more budget for advertising and many more
promotions while finance try to always cut the budget (Hanssens and Pauwels, 2016). Both
department have better communication as they both can make more growth for company among
their competitors in market. Finance and marketing are two pillars of company without doing
promotion of products Sainsbury could not increase their sales while for developing profits
finance department should require working. Organization have to maintain their relationship for
promoting themselves in market with best finance terms. Both required each other for
completing them from competitors. marketing needs finance for making their budget in
advertising and promoting their business and finance needs marketing for analysing what they
have update from market with some new balance sheet method.
If there will be conflicts among them hen company would not able to work, and they have will
have to earn more losses in product and balance sheet will not be proper maintain as per year.
Marketing and human resources department:- Marketing department helps Sainsbury for
developing them in many countries across the world for higher profits. In competitive market for
hiring more employees is most important in success. HR have to use many tools for attracting
more employees towards their company. The relationship of HR and marketing communication
is brand of company. HR gives proper allocation of resources for promoting their products and

making more technology with help of this they can hire more employee and have people
management satisfaction.
Due to some issue if they do not work together ( for example- Marketing will promote their
vacancy into market and human resource work to make their efforts for hiring and selecting their
employee) company can face more challenges or situation for their work (Matovic, 2020). Both
should maintain balance at workplace and easily make profit.
Human resources and finance department:- Sainsbury should maintain their relationship
between both departments. As human resource function is hiring and firing of employee and look
over resource utilization is proper in company and finance department function is to prepare
budget for their company along with budget of different department so that they can keep in
mind while before using their resources. As finance departments thinks that hiring candidates is
just investing expanses but HR thinks that hiring must be essential part of organization.
Interrelationship between should be proper and useful for company as well to their employee.
But finance department I sometime break down with their budget that could be directly affected
their working place.
IT and finance department:- Finance team prepared balance sheet and financial year plan for
company. IT helps finance in achieving their cooperate objective, they can work in collaboration
for keeping their work in proper line (Moorman and Day, 2016). Technology can find out more
new tools and techniques that can be more benefits for finance department in summarizing their
data and secure their information of Sainsbury store.
For having lack of knowledge there can be also conflict among them if suppose they have
adopted new technology and if some employee could not be applicable for understanding and
misuse that, it would be more losses for company.
Marketing function and other departments work together or achieving their business objective
and earn more profit. as they can make more income for their company and marketing functions
helps all department for promoting their product and help them making more upgrade regarding
if any technology or new policy is must introduce by government.

4. Positive and negative impact of macro environment within business operation
Sainsbury is multinational retail company which has many stores across country and
there are positive and negative impact on their business for identifying them external analysis
being described-
Political factor:- While increasing globalization Sainsbury has to face challenges in growth of
foreign country products price it being more difficult to afford their supermarket imports
products. Due to increasing product pricing in brand and large number of customer may losses
their competitors who provide them goods and services at cheaper prices. Many rules and
regulation have been given by government to retail which can be positive impact for organization
but sometime many of them are barriers for their company and put negative impact over their
income expectations.
Economic factor:- Sainsbury is mainly based on road transport for exporting and importing their
goods and services across country (Shtal and et. al., 2018). This means that raising in fuel can be
major reason for increasing their product pricing. The rise of new supermarket chains is always
being strong economic factor. Brands like ASDA and Tesco have major source to competitors in
market. Due to having increase in inflation rate it may cause positive impact for them and less
market share and shareholder can be more affected they can easily being loss for their company
with highly negative impact.
Social factor:- Social factor can be sometime have positive for company as many people prefer
organic food for their health and Sainsbury have opened many new stores with healthy food
along with more services. As they offer soft drinks, heavy snacks, vegetables with reasonable
price. The rise of products prices can be negative impact for their business operation if farmers
have increased their grain, vegetables price than it could be more difficult for organization to
purchase them and make their customer satisfaction.
Technology factor:- Sainsbury have also started their online business operation for food delivery
to their people and provide them better experience of their food quality (Yusop, 2018). They can
better understand their customer demographic needs and cater them for making satisfaction. This
could be help company in increasing their sales and run their business. If company do not
upgrade them according to time it could cause their negative impact on customer and have bad
experience of food and other products which are essential to them. Technology is very important

for company in making them more developed into competitors market and make more advantage
for their business.
Legal factor:- Sainsbury has to adopt quickly changes which made by government for their
business structure and while keep changing according to their customer (needs) than company
can meet out their objective. Brexit economy is also important factor for legal factor in
developing external environment and require to make many changes in their policies (Perera,
2017). Negative impact can cause if legal environment could not be followed by company then
changing in their policies may affected their customer satisfaction. for example- if government
have make law regarding employment and policy for their health and safety they must have to be
follow by their organization.
Environment factor;- Supermarket of Sainsbury have produces carbon foot print in improving
their environmental conditions. They have also started recycling plastic and fossil fuel
transportation methods which can be more positive impact for their surroundings. Their
environmental would be more affected and unhygienic in resources can also cause negative
impact over their income and target audience in developing them.
PESTLE for Red cross-
Political factor:- These factor actually plays important role in growth of national Red cross,
modern technology expansion and also set up modern technology that need to be adopted. plans
for moving towards modern technology was being from many years while R&D efforts have
been considered since from 1999-2000.
Economic factor:- The excess demand for this industry is followed up rate which can be less than
the price of Red cross and which can have issue that caused capital for manufactures.
Improvement in manufactures can bring more effectiveness for them and make them to develop
their industry in many more countries.
Social factor:- These factor have added direction of advancement into tier industry which have
actually concentrated on their training and enhancing to understand their resources. Social factor
may developed quality and image that can be reality seen only in that sector that had expertly
build up in departments of labour worldwide.
Technological factor:- They do not have their own innovation but still they depend on their
international technical partners. The participation of government has been actually focusing on
National Red Cross in reducing their addiction.

Environmental factor:- A general environmental has suggested that Taiwan is balancing area for
National Red Cross which has power to make them developed in another sector with same
industry.
Legal factor:- This firm has legal right shield in dispensation and novelty that can develop their
reliance of others. They also give high significance to legal agreements as evident by certainty
Micron's interest in National Red Cross because company lawful sindenture with other countries.
5 Internal and external analysis of Sainsbury and NHS to identify strengths and weaknesses
Internal and external factors both affects the business. Management should consider
internal environment factor and external environment factor while doing the decision-making
process. By analysing these factors company can know their strengths and weaknesses and can
plan their goals according to it. Internal analysis help the company to know about the resources
available or their capabilities of the employee to do any task. Resources include plant and
machinery, fixes assets etc. external analysis incudes market trends, government etc. SWOT
analysis is used to identify the strengths and weaknesses.
SWOT of Sainsbury:
Strength:
Strength of Sainsbury is their business philosophy. Company had adopted low cost strategy
which help them to attract large customer base and help to retain customers. They create their
brand loyalty by manufacturing products for all class segments. They do innovation because
company know that customer got attracted more towards the innovative products.
Weaknesses:
Sainsbury's weakness is the low margins they had adopted such pricing strategy from which they
get low profit, they are able to attract good number of customer but lowering their margins
(Vlados,2019). With the increase in the competition company have to take advance technology
or have to hire educated and skilled employee which incur high costs.
Opportunities:
Sainsbury has the opportunity for international expansion. They can explore other countries
markets and can take advantage of their low labour costs.
Threats:

Sainsbury threat is the competition which is faced by the rivalry company. They loss the market
share because of the competitors. They have to take property on rent for which they have to give
high rent.
SWOT of NHS-
Strength:
NHS strength is they deliver good quality of services and their employees performance are also
very good. They have loyal employee with high morale. Their governance is well-developed.
they have good research and development team who do timely research so that company can
reach towards its goals. They have motivated interns who deliver their best (Phadermrod,
Crowder and Wills, 2019).
Weaknesses:
They are facing employee turnover because of the excess night shifts and have to do hiring again
which incur cost. They are also facing financial deficit issues which should be solved because
financial balance must be their in every company to reach towards goal. Their employees are not
motivated always which affect the productivity of the workforce.
Opportunities:
From private patients they can earn good money. Their brand image is made because they work
for public which will create trust among the public. They provide good services to the cancer
patients and elders as well.
Threats:
Company had lost the market because of growing in the numbers of their rivalry companies.
6 Strengths and weaknesses interrelate with external macro factors
Strength and weaknesses influence by external macro factors. Thsese factors are analysed
by doing PESTLE analysis.
PESTLE
Political factors:
Political factors influence the business of Sainsbury. Increased globalization gives the chance to
grow Sainsbury which is the strength for the company. The slow econsomy of UK affects the
company which is the weakness for the company. Another weakness is the High in the inflation
rate which is the problem for the company. Company should have such workforce who can

assess the political factors and help the company to tackle these factors. sainsbury also have to
face trade tariffs which lower their revenue (Sarsby, 2016).
Economic factors:
Rise in the cost of fuel affected Sainsbury operations. Fuel is so expensive that company have to
increase the cost of their product and increased price is not able to attract more customer which
lowers the profitability of company which is the weakness. (Teoli and An, 2019).
Social factors:
Customers are now shifted towards healthy eating. They now do not attract towards fast foods
because they are health conscious and want to intake what is healthy. So Sainsbury have to
launch healthy snack options if they want to survive for the long period in the market which is
the strength as the company transforms itself with the change in market.
Technological factors:
Sainsbury have to face challenges from the advance technology. If they have to survive in the
market then they have to adopt new technology. Online shopping are also provided by the
company so that they can capture large market and can increase the revenue which is the strength
of Sainsbury. (Zahari and Romli, 2019).
Environmental factors:
Sainsbury take care of the environment. They do waste reduction by adopting single packaging
method and ignoring the more outer layer. Plastic are also less used by the company. Company
also organize environment awareness program in which they educate people about protecting the
environment. It is the strength of the company because it is creating good image of the company
infront of the public.
Legal factors:
with the growing taxes company should done modification in their products so that they can
ignore some taxes and can save money on that (Widodo, 2016). strength of the company is they
follow all the legal guidelines of the government.
CONCLUSION
From the above case it can be concluded that types and purposes of private, public and
voluntary sectors has explained with their legal structures. Private organization are those whose

main aim is to earn profit. Public organization are those who is funded by the government and
voluntary companies are those who work for the society and not aiming for profits. Along with
the size and scope of those organizations. Further, described the relationship between different
organizational functions and what is their link with organizational objectives and structure.
Identification of the positive and negative impacts macro environment have upon business
operations and is explained through PESTLE. This study has also conducted internal and
external analysis of the organization to identify the strengths and weaknesses using SWOT
analysis. In the end it is analysed that how strengths and weaknesses interrelate with external
macro factors.

REFERENCES
Books and journals
Berghoff, J. and Kelley, J., 2019. The Power of Questions to Create a Purpose-Driven
Organization.
Hanssens, D.M. and Pauwels, K.H., 2016. Demonstrating the value of marketing. Journal of
Marketing.80(6). pp.173-190.
Ihm, J., 2019. Communicating without nonprofit organizations on nonprofits’ social media:
Stakeholders’ autonomous networks and three types of organizational ties. New Media
& Society. 21(11-12). pp.2648-2670.
Ingram, T., and et.al., 2016. Relationships between miles and snow strategic types and
organizational performance in polish production companies. Journal of Management
and Business Administration. Central Europe. 24(1). pp.17-45.
Matovic, I.M., 2020. PESTEL Analysis of External Environment as a Success Factor of Startup
Business. ConScienS. p.96.
Moorman, C. and Day, G.S., 2016. Organizing for marketing excellence. Journal of
Marketing. 80(6). pp.6-35.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management.44.pp.194-203.
Quinn, R.E. and Thakor, A.V., 2018. Creating a purpose-driven organization. Harvard Business
Review.96(4).pp.78-85.
Sani, J.A., and et.al., 2018. Relationship between Types of Organization with the Quality of Soft-
scape Construction Work in Malaysia. Asian Journal of Quality of Life (AjQoL). 3(12).
pp.137-146.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
Shtal, T. and et. al., 2018. Methods of analysis of the external environment of business
activities.
Teoli, D. and An, J., 2019. SWOT analysis.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
White, A., and et.al., 2017. Purpose-Led Organization: “Saint Antony” Reflects on the Idea of
Organizational Purpose, in Principle and Practice. Journal of Management
Inquiry.26(1). pp.101-107.
Widodo, A.K., 2016 Formulating a Strategic Management of Social E-Commerce through a
Combination of SWOT and PESTLE Analysis: Case Study.
Yusop, Z.B.M., 2018. PESTEL analysis. COMRAP 2018. p.34.
Zahari, A.R. and Romli, F.I., 2019. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics.192. p.104901.
14

15