Business and Business Environment

This document provides an overview of the business environment, including the types of organizations and their purposes. It discusses the scope and size of different business organizations and the interrelationship between organizational functions. It also analyzes the impact of macro environmental factors on organizational structure. Finally, it identifies the strengths and weaknesses of specific organizations through external and internal analysis.

Business and business
environment

INTRODUCTION
Business Environment includes various internal and external factors such as customer
needs, employees, demand and supply, owners, suppliers, government, technological changes,
etc. all these factors are not under the control of business but impact the organisation directly or
indirectly (Beynon-Davies, 2020). The environment is dynamic and so are businesses as they
keep on changing. There is discussion about various types of organisations that are private,
public as well as voluntary organisations and they all are different in nature . In the report there
is impact of all these on economic growth and their contribution to the economy. The models
like PESTLE and SWOT analysis are part of report and there importance in relation to
understanding the external and internal environment. John Lewis Partnership is discussed to
gain knowledge about internal and external business environment. John Lewis Partnership has its
headquaters in Westminster, London. The report deals about various types of organisations and
how they achieve their goals and objectives. The negative impact that is caused by macro factors
on operations of business.
TASK 1
P1 Various kinds of organisations with their purposes such as private public and voluntary
organisation.
The main types of organisations that exist in the market are voluntary, public and private and
they all have their own purposes which are explained below:
Public sector organisation: It includes all those organisations that are managed and controlled
by government. The government has full interference and controls the decision-making process
of such organisations. They are dependent on government to take decisions and then they carry
on their actions. BBC is undertaken in this report for studying public sector organisation.
Purpose- Their main purpose is to serve customers and provide them services while earning
enough profit that helps them to run their business effectively.
Legal structures- The three main bodies that control the legal structure of the organisation are as
follows:

Central Government: Control and management of public sector organisation is in the hand of
central government. The Environment Agency, Department for International Development, etc
come under their control and their structure are decided by them.
State Government: The organisation that are working of state level come under the control of
state government. The management is done by the state government and decisions are taken by
them (Bughin and Chui, 2017).
Local Government: The legal structure of municipal corporation that are involve under loyal
areas. They all come under the control of local government.
Private sector organisations: These organisations are separate legal entities and are not under
the control of government. They have to make decisions by their own and can manage the
organisation. John Lewis partnership is a large organisation and deals in many products and
services, they have their own super market and have loyal customer base.
Purpose- the main purpose to earn maximum profits.
Legal Structure- The legal structure for private organisation are mentioned below:
Sole Proprietorship: They have one owner and controls the business alone, the proprietor has
unlimited liability.
Partnership: The partnership means a agreement between two people that agree to share profits
and losses in the proportion they have contributed money in capital. Also the partners have
limited liability.
Companies- Company comes into agreement by following rule and regulations. The
organisations are incorporated under Companies Act, 2013. They can be public and private.
Voluntary organisations: These organisation are formed for the purpose doing charities and for
welfare of society. National Council for Voluntary Organisations (NCVO) is discussed for
understanding voluntary organisation.
Purpose- The purpose of existence of voluntary organisations is to do social welfare and not for
profitability.
Legal structure- The legal structure of voluntary organisation is mentioned below:
Unincorporated Association: The focus on charity and not on making profits.
Trust- The organisations work for the purpose of donations and profit earning is not their motive.
So above mentioned are purpose and scope of existence of different types of organisation,
it is important to understand each of them.

P2 Scope and size of various kind of business organisations.
Different organisations have different scope and size that help them to achieve their goals
and objectives. It is important to formulate policies and strategies according to organisation and
be successful in achieving the goals of the organisation. Below is the description and discussion
related to size and scope:
Public sector organisations: BBC is large organisation and has world's largest broadcaster in
sense of employees.
Size- BBC is a large organisation and has expanded business operations and have a big team.
The have around 35400 employees that include both part time and full time employees.
Scope- BBC has large scope and it does not limit only to news channels, it also includes radios,
online services and TV channels as well.
Private sector organisations: In context of John Lewis Partnership, it is a large supermarket that
deals in variety of products and services like jewellery, clothing, and they also provide financial
services.
Size- John Lewis Partnership has around 85000 employees and that shows that it is a large organ
satiation in sense of employees, These huge number of employees impact the working of
organisation.
Scope- The organisation has wider scope as the customers are more they have to take care of
their needs and wants and satisfy them (Carlucci and Schiuma, 2018).
Voluntary organisations:The discussion is about National Council for Voluntary Organisations
(NCVO) which has narrow scope.
Size- The size is small as around 14000 peole are ready to do charity in regard to this
organisation.
Scope- The scope is also small as normally people are not willing to do charity and such
businesses.
P3 The inter relationship between various organisational functions and how they are related to
organisational structure and objectives .
All the organisations perform various functions all of these are related to each other. It bis
important for organisations to make balance between them and follow all the functions
effectively. To achieve the goals and objectives it is vital to focus on all the functions and gain
success by accomplishing them on time. These functions are mentioned below:

 Human resource and marketing: The work of Human Resource is to recruit and select
staff for the organisation. There task is to put the right persons and right place. The
department focuses on finding out the best people that can perform the duty. Marketing is
important function of management and should be effectively managed as this functions
helps to manage the sales and increases the profitability of the organisation. John Lewis
Partnership is a large organisation and needs to manage all its functions effectively. The
HR focuses on finding the skilled personnel who can market their goods and services and
helps in achieving goals of the organisation (Charter, ed., 2017). Also the vacancies are
told to the public and it is done by marketing department as it increases the reach. Finance and Information & Technology: The IT industry is trending in today's era and
it is one of the most efficient department in relation to organisation. The world is turning
digital and this requires the technology improvement. To know about the real image of
the organisation it is important to make finances. In context of John Lewis Partnership
the IT department is regularly updated and the products and services also get help of
updated technology and are gaining product development. This development needs
permission from finance department and helps the organisation to grow.
 Production and Research & Development: To serve the customers it is important to
know about he trends in the market. So by making research the organisations are able to
understand the needs and wants of customers. Research helps the production department
to manufacture the products and services according to likes and dislikes of customers.
John Lewis Partnership makes fine Research and development and that leads to
conversion of raw material into finished goods in an effective manner.
These are the various departments and all have relationship with each other and it is
important for an organisation to have cooperation between all the organisations. It is required by
business to compete all these functions effectively to gain the targets on time and be successful.
P4 Impacts of macro environmental factors on the organisations structure.
The external factors that impacts the business and have to face them to achieve the goals
and targets. In such a dynamic environment it is important for businesses to research about the
current trends and analyse the uncertainties that may arise in future. PESTLE Analysis is done
to understand these macro factors and their impact on businesses:
PESTLE analysis of John Lewis Partnership

Political factor- The political factors includes the political condition of the nation. In case of
John Lewis Partnership it has impact by the political conditions of UK:
Positive Impact: UK government has taken decision to reduce the tax rate from 30% to 28%
which will help the organisation to reach better (Hamilton and Webster, 018).
Negative Impact: UK has unstable political environment that may cause problem to the
organisation.
Economical factor- The economic conditions of the country like inflation rate, interest rate also
impact the business that is operating in that country.
Positive Impact: John Lewis being a large organisation make huge profits and leads to economic
growth of the nation.
Negative Impact: There is recession in UK and that is impacting the condition of business
adversely.
Social factor- The religion, customs and other social factors that are followed in the country.
Positive Impact: John Lewis Partnership makes right use of technology and regularly updates its
product that keeps the needs of customers updated.
Negative Impact: When the company is unable to grab opportunities it is problematic for the
company.
Technological factor- It is important for organisations to regularly update technology and gain
competitive advantage.
Positive Impact: John Lewis Partnership uses technology and takes benefit of updates.
The company has not made presence on online sites and that is a problem for the organisation.
Legal factor- The laws that are prevailing in the industry impacts the business
Positive Impact: John Lewis Partnership follows all rules and regulations and abides the laws
that are important to be followed.
Negative Impact: The companies if not follow the laws they have to face many problems.
Environmental Factor- The activities that are done in favour of environment and those who
have impact on environment come under this category (Kokodey, Gnezdova and Lomachenko,
2018).
Positive Impact: The organisation follow CSR and makes renewable clothes.
Negative Impact: The main objective of John Lewis Partnership is to earn profit and not to be
environmental friendly.

PESTLE analysis of BBC
Political factor- The political factors that are prevailing in the market impacts the business.
Positive Impact: BBC being a public sector company gets the benefit from government.
Negative Impact: At the time of political instability the company the company faces the problem
Economical factor- GDP of the nation is impacted by the businesses
Positive Impact: They have converted the centralised structure to decentralised and is gaining
benefit of economic factors.
Negative Impact: Due to in stable conditions the organisation faces problems.
Social factor- BBC provides its services in many languages.
Positive Impact: They are providing services in many languages as they are following different
religions and customs.
Negative Impact: The company has operations in many countries so are impacted by all the
social factors (Laudon and Traver, 2016).
Technological factor- Technology needs to be updated on regular basis to become successful.
Positive Impact: They are using the technology in a right way that is helping them to gain
competitive advantage.
Negative Impact: As new techniques arise the old become obsolete.
Legal factor- It is essential to follow all the laws that are made.
Positive Impact: BBC follows all rules and regulations and abide the laws.
Negative Impact: The company has to abide with all the laws of different nations.
Environmental Factor- BBC always provide right information to the public
Positive Impact: As right information is conveyed to customers they are taking care of society.
Negative Impact: There are many upcoming competitors of the company.
TASK 4
P5 The discussion about external and internal analysis of specific organisations to identify
strengths and weaknesses.
SWOT Analysis of John Lewis Partnership
Strengths Weaknesses
 John Lewis partnership is present  They are offering less variety of

highly online that helps in getting
more customers.
 The company focuses on innovation
and creativity that strengthen its growth
strategy and it helps the organisation in
extensive product offering (Lyu and
Hwang, 2017).
 Strong base of employees are also the
strength for the company.
products to customers.
 The prices are higher than the stores
that limits its target customers.
 The profits are inconsistent in the
Organisation.
Opportunities Threats
 The organisation has scope and can
operate at different places.
 The youth is highly focusing on
hygienic food and they will go for the
brand as it opens doors for the
organisation.
 There is a direct competition among the
organisation and grocery stores.
 The organisation has to follow a lot of
laws and regulations.
SWOT Analysis of BBC
Strengths Weaknesses
 BBC is old reputed organisation that
has largest broadcaster which is
biggest strength for the company.
 The use of advanced marketing
strategies and technical innovation has
helped them to be one step ahead.
 News can be biased perspective and
may led to raise controversies against
them.
 They do not offer variety of products
and the customers don't get the options.
Opportunities Threats
 It is opportunity for BBC to serve the
customers in an unbiased way to the
 Newspapers are also threat for BBC
general public prefer to read

public which helps them.
 The taxation policy has impact on the
business of BBC as it has opportunity
in opening new opportunities.
 The company can organise events in its
own name and make people more
aware which is opportunity for the
company.
newspapers.
 The strong competition of BBC in the
market is a threat for company and can
hamper its growth.
 Being a global organisation it needs
skilled labours and the problem of
diversity of employees is faced by
them. Also there are many challenges
in this dynamic market that are faced
by the organisation.
P6 Explain how the strengths and weaknesses are interrelated with external macro factors.
The strengths and weakness of company in relation to the macro environment factors is
explained with the help of PESTLE Analysis, which is discussed below: Political factors: The political factors have impact on the organisation. John Lewis is a
private organisation that are given less priorities than the government organisations,
which is considered as weakness for the organisation. Economical factors: The economic condition of UK is not stable, but the company is
generating profits and it enhances the financial position of the company at the time of
recession. Social factors: As the company offers wide range of products and services that attracts
more customers and is strength for them. Technological factors: The world is dynamic and needs to be updated timely and
development of product helps to attract more and more customers. In relationship with
John Lewis the company is not updating technology and is a weakness for the
organisation. Legal factors: All of the legal framework comes under this factor. In relation to John
Lewis the company has no lawsuit pending in the court and it follows all rules and
regulations that is strength for the company (Meissner. ed., 2016).
 Environmental factors: The company makes product and keeps in mind about the
environment and makes use of renewable resources, it also abides the CSR that is

strength for the company. This helps the company to gain a positive image in the market
and gain competitive lead.
Above mentioned are the strengths and weakness of John Lewis which are explained
with the help of considering the macro environment factors.
CONCLUSION
Business environment is the sum total of internal and external factors that have direct
impact on the business. The impact of these are also discussed in the report. There is discussion
about the types of organisations and they help to forecast and know about the uncertainties that
may arise. SWOT analysis is done to know about the strengths and weakness of the organisation
in relation to the environment. PESTLE analysis in relation to understand the companies
capacities and shortcomings are considered in relation with the business environment.

REFRENCES
Books and Journal
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