Impact of Macro Environment on Business Operations

This article discusses the impact of macro environment on business operations. It covers the political, economic, social, technological, and environmental factors that can have both positive and negative effects on businesses. The article also explores how these factors can influence the profitability, sustainability, and growth of a business.

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
P1.The kind and purpose of public, private, voluntary sector or legal structures ......................3
P2.Different types of organisation in respect to the size and scope............................................4
P3. The organisational function and their connection with business objectives and structure.. 6
P4.The impact of macro environment upon business operations positively or negatively.........7
P5.The external or internal analysis of the company to identify strengths and weaknesses .....8
P6.The weaknesses or strengths in relation with the external macro factor ..............................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment explains the total of all people, businesses or other forces and
factors that are related with the external power of the organisations but at the same time may
affect its production. The government, technological, financial or culture forces which work
outside an enterprise are related with its culture. Northern trust investment bank or NTIB,
founded in Chicago since 1889, is a main source of asset, investment management, banking
solutions for corporations, institution all over the world and almost have 4400 offices worldwide.
This report explains the different size, scope or sizes of organisation in relation with public,
private and voluntary structures and demonstrate the positive or negative impact of micro
environment on business. Moreover, also elaborate the internal or external analysis to identify
strength or weakness of organisation.
P1.The kind and purpose of public, private, voluntary sector or legal structures .
Business can be elaborate as structures or groups established with the purpose of the acquiring
specific goals or objectives. The most basic way to differentiate the business is to look their
specific goals or purposes.
Private organisation is basically established with the primary purpose of generating profit and
these are run in private sector that means they are owned by individual or group entities and not
by state government however they are subject to legal or financial framework regulate by
suitable state authorities (Andonova, 2017). Legal structure – The private organisations is
usually owned and run by private individuals and it consists different types of business, like
partnership, limited companies, sole proprietorship and franchise. Sainsbury founded in 1869 by
John James and Mary Ann Sainsbury, is the second largest chain of UK, and done its operations
in food retailing chain. Its purpose-The mission of Sainsbury is simple that is to supply high
quality products or services to its customers along with the maximisation of profit or supply
good financial return to stakeholders. Their primary aim is to maximise buyers expectation in
accordance with fresh, tasty, safe and healthy food products to make their lives even more easier
or simpler every single day.
Public organisation are set up to serve the purpose other than of financial gain and often refer
as not for profit organisation. The charities or social enterprises are fall under the categories of
the public organisation but some of these might take activities of business and the overall fund

occupied from this activities are utilize to further the purpose they support, and their funds are
never distributed amongst their members (Villani ,Greco and Phillips, 2017). These enterprise
are usually produce their funding through donations, sponsorships and other investment and
they are free from tax. Legal structure – The public sector are accountable to central or local
government or they funded directly by the government and tend to supply social services.
Northern Trust Investment Bank headquartered in Chicago that providing financial services that
serve to corporations and top notch net worth individuals and families. Its causes – its main
purpose is to serve clients and become the most trusted financial partner, preserving and
expanding their asset. Their trust is continue by supplying exceptional services tailored
according to every individual clients needs.
Voluntary organisation are known as the non-profit organisation, independently work from
the state or government although may receives state funding, but manage without depiction
from the government. The World Bank clarifies two groups of NGOs namely advocacy or
operational NGOs. Operational NGOs works towards the implementation of development based
projects; while advocacy NGOs task towards promoting as definite cause. Legal structure – the
three main legal structure used by this groups; a trust, a company which is limited by guarantee
and an unincorporated Association (R , R.K and Brudney, 2018). The Red cross is quite
different from other charitable institution grow during the second half of the 19th century in two
respects, the global aspirations and the permanent nature of the institution found on the basis
the resolutions adopted at the Geneva conference of October 1863 which actually gave birth to
Red cross. Main purpose- it will provide the assistance to the victims of the disasters , health
crises and the armed conflicts all over the world.
P2.Different types of organisation in respect to the size and scope.
Basis Micro organisation Small organisation Medium organisation
Meaning When the numbers of
employees is nearly
very low and the
turnover is particularly
very less.
In this business the
numbers of employees
is low but nearly high
compare to micro
level. The NTIB is
connect with the local
In this organisation,
the strength of
employees is large as
compared to micro or
small. The Red Cross,
Northern Trust

teams but perform in
global business in
order to fulfil the
needs of local people.
Investment Bank and
Sainsbury are fall
under this category
and have a large
management team.
Size When the numbers of
employees is less than
10 and with the
turnover of less than
EUR 2 million.
When the numbers of
employees is less than
50 and with the
turnover of less than
EUR 10 million.
In this organisation,
the number of
employees should be
less than 250 and
turnover does not
exceed 50 million. The
Red cross is might be
reaching 150 million
people every year
through its 189
member. Sainsbury is
the second largest food
chain in the UK
market with nearly
employees in lacs.
Scope The market is supplied
goods and services
limits to it local
people.
The market is nearly a
bit large as compared
to micro. The NTIB
serves the local people
.
The products and
services is supplied
domestic or
international both. The
Red cross is the world
largest humanitarian
network and have
worldwide scope. The
Sainsbury has almost
thousands of stores

worldwide.
Profit share Profit share of this
organisation is nearly
very low. The Red
cross is not run with
the aim to run profit.
They generates the
average income level.
Income generation is
high in this business.
The income generation
is high in the NTIB.
The net profit of
Sainsbury might be
200 million.
The sole proprietorship is a legal set up where it is owned and managed by the single person
and the owner of the business is not legally separate from the its business and personally liable
for all the aspects of business. Sole proprietorships are not difficult to set up or require very less
investment.
The partnership are business enterprises that are managed and owned by more than two parties.
The association between the parties is governed by a deed of partnership that defines the scope
and structure of this business (Alfordand Greve, 2017). In partnerships the owner has unlimited
liability and are personally liable for the debt of the business. The advantage of this business is
that they are able to share the responsibility that are not be done in sole proprietorship.
The limited companies are the separate legal entity and have their own legal status therefore
they are different from their owners. In the UK, these companies are integrated as a 'legal person'
at companies house and they are assigned a unique company number. The companies should
have constitution that will assist the shareholders and directors to regulate their relationship.
There are two main types limited companies; public or private.
P3. The organisational function and their connection with business objectives and structure.
The business organisation consists of several types of department or functions such as Human
resource,marketing, finances department etc. Its essential to have an appreciation of the purpose
and activities of these department so that the role of management accounting in the organisation
is thoroughly understood (Melewar and Skinner, 2018).
HR and marketing of NSIB works together to achieve the similar objectives in respect with
different audiences. HR is responsible for employer branding while Marketing is accountable for

business branding of NSIB. It promotes the business and particularly target the audiences
together and manage to save the time as it brings more productivity in the business. Conversely,
it might be possible that the time or effort may not yield a fruitful return as its become more
complex process for the NTIB team.
Finances and marketing function in NTIB is closely interrelates with each other as its
important with the marketing team to manage its cost beforehand as its may requires new
investment or make specific hires so if marketing team realize the strategy next year than they
should tight up with finance team (Grandia and Voncken, 2019). Its equally imperative for the
finance team to understand the planned work that the marketing team perform in order to fulfil
the requirement of the organisation. The drawbacks for the connection between the two team
might occur because the marketing cost huge money and the company might ruin all the money
if they target the wrong audiences by using an unsuitable medium and it might become a serious
or expensive mistakes for both the marketing or finance team and then difficult to overcome such
expenses. The
Finance and the HR team is able to work together and understand each other's role but might
be critical for the NTIB (Moeller “and ET.al.”, 2018). As in all the organisation they are two
different areas of working or distinct functions to perform while the HR department focuses on
the human resource and consider it most important asset and on the other hand finance
department focuses on the financial planing but they can manage to work together as it bring
more efficiency in the workplace if both expertise or professionals implement or combine their
work. On the other hand, it might be possible in the NTIB that the conflicts or disputes arises in
the managerial role of both the team as there field of areas are different and the thought process
in managing work is also differ from each other.
Production or Marketing department also interrelates with each other role and assist in
managing their work as its essential for the marketing department to thoroughly examine the
market and then invest in the advertising of NTIB as its costly affair for the organisation while
the production team help them to find out about the availability of the products beforehand. At
the same time the organisation may face that the team might lack the co-relation among the team
member because there are no one to manage their work and all are individual perform their task.
The organisational structure -

Simple - this structure is generally very common to many business organisation and this does
not rely on the systems of the division of labour and particularly the business chart is also not
required.
Functional – In this type of structure the employee are divided into different department and
they perform their duties according the functional areas of the firms such as customer service,
human resources department, production,marketing or IT department.
Multi divisional – In this type the employees is distinguish according the geographic or product
areas. The NTIB for example, follows this structure where the department work according to
their role and task and follow their particular guidelines.
Matrix - Those organisation who work for the very short period of time in there projects are uses
this structure. The employees might be put in the various team to increase the efficiency or bring
the idea flow or creativity to the work.
P4.The impact of macro environment upon business operations positively or negatively
The Pestle analysis is the tool to identify the economic, social, political, technological,
environment or legal factors that could effect the organisation.
Political factors - in NTIB, the political factor may impact the profitability or increase the
chances of the survival of the business (Hartnell, C.A. “And et.al.”, 2019). Conversely, the
integrity of the politicians to take part in the corruption acts, as a result it may lead to possible
impeachments or might possibility of the resignations of the high government employees.
Economic factor- The interest rate of the country would impact on the borrowing and
investment ability of the individual and higher rate would result in higher investment that would
mean more development of the NTIB. While, the exchange rate might effect the profitability of
the NTIB, particularly if involve in the foreign trade therefore the stability of the currency also
essential as unstable currency may discontinue the foreign investors (Kim and Park ,2017). The
social factors – the impact of social factor is not only essential for the marketing aspect but also
for the operational aspects of the NTIB. An overall understanding of the buyers their lifestyles or
the education background would assist the company in designing the product and marketing
strategies that would lead a business into successful venture. The class classification among
population is nearly essential than NTIB would be unable to promote a quality goods to the
general public if the majority of the population is of lower class .

Technological factor – the effect of technology on the cost that most companies are having the
potential to increase or decrease the income greatly as a result the NTIB might be reinvest in the
research or development department or ensure sustainability over a long period of time. At the
same time it is also very easy to scatter the technology to the other business and also leading to
the other firms copying the methods of technology.
Environmental factor – the NTIB, the new customer, the knowledge and the armed with the
interest it brings will likely to provide its business to those companies where its view are more
practical specially about the environment in the sake of global warming (Queirós , Faria and
Almeida, 2017). On the other hand, the weather conditions may significantly affect the ability to
manage the transportation of the both the resources and may impact on the performance in NTIB.
Legal factor – the laws are imposed by the government to make sure that the employees are
protected and also safeguard that everybody is equally or fairly treated in the NTIB and laws are
also made to make sure the minimum level of quality or reasonable cost for the goods to keep
the buyers secure. Implementing the proper rules and regulations might be expensive for the
NTIB, but they have to involve in it, not only because of the law but also due to social
responsibility to other human beings and personal feelings of moral.
P5.The external or internal analysis of the company to identify strengths and weaknesses
SWOT analysis is the important tool for strategic planning that can be done by the Northern
Trust team to do contextual analysis of the organisation.
Strength –Northern Trust is one of the leading organisation, as it has numerous strength that
assist them to sustain in the market. It has the strong base of genuine supplier of finished
products thus enables the company to defeat from any supply chain bottlenecks and also have
successful track of recording the blossoming of new products – the innovation of the goods. The
NTIB has invested in maintaining a strong higher brand portfolio over the last few years. This
scheme can be extremely helpful if the organisation wants to increase its categories of new
goods. Moreover, the NTIB has built a accurate distribution channels that can reach majority of
its future market.
Weaknesses – those areas where the NTIB can bring improvement (Satalkina and Shpak, 2018) .
When the financial planning is not done accurately or efficiently, the asset ratios suggest that the
company can use the funds more efficiently than what they are doing currently. Additionally,
even when the NTIB is spending above the industry average on research or development, they

are not be able to challenge the leading players in the business in terms of innovation. The
company is not sufficiently successful at firm with different work culture even though the NTIB
is successfully integrating with small firms it has its share of failure to combine firms with
different work culture.
Opportunities – the market development will conduct to dilution of competitors advantage and
than the NTIB will able to expand it competitiveness as compare to other competitors. Over the
years the company has made investment into the online platforms and increase new customer
from the digital platforms. As a result, this investment has open the gates of the new sales
channel for the NTIB and then in the future the company may leverage this opportunity by able
be understand it customer base and proving their needs with the help of big data analytics (Doyle
and Perez-Alaniz, 2017). The government green drive also opens an attainment of the NTIB
goods by the contractors of the federal or state government.
Threats – the shortage of skilled or qualified workforce in the global marketplace indicates a
threats to steady growth of income of NTIB on those markets. Increasing strength of regional
distributors also represent a threat in some of the market as the competition is paying bigger
margins to the local distributors. The company may face the lawsuits in various markets as there
are various laws and regulations that sustain and continuous fluctuations in relation with goods
standard in those markets. Expanding raw materials can probably become a cause of threat to the
profitability of the NTIB.
Th SWOT analysis of Sainsbury -
Strength – Sainsbury is one of the leading organisation and has strength to thrive in the market .
The company has successfully integrated in the various technology companies in the past years
and manage to maintain its operations and able to maintain an accurate supply chain. They also
have extremely successful training or learning equipments or programs.
Weaknesses – If talking about the innovation of Sainsbury it is not be able to compete with its
leading competitors in the marketplace even though they are manage to invest in the research or
development programmes but it not enough to able to sustain in the market and not be able meet
its demand and requirement of there potential customers.
Opportunities – The chances of enter in the new market ad bring more chances for the
Sainsbury as because of the government agreement and the adoption of the standard of the

technology or the free trade agreement . Digital channels also bring the market to enlarge their
product and services.
Threats – the profitability of the Sainsbury can be pose to threat if they are bringing the raw
materials. There are different liability in terms of the country or region and the company may
vulnerable to different liability claim if change in the policies in those markets.
P6.The weaknesses or strengths in relation with the external macro factor
Political– the political factor of NTIB may impact on the overall profit of the organisation that
consequently enable the company to sustain over a longer period of time and defeat the
competitors in the market. On the other hand, there might be possibility that the NTIB face the
sustain financial instability in the market place when the leading or qualified employees
resignation is occur because of the involvement in the corruption activities.
Economic – When the interest rate become high than the investment rate of NTIB is also
increases and they will be able to invest more in the new products and brings more growth.
Unlike it may affect the revenue generation of the company if exchange rate effect the
international market and the company may face the rejection in the market where culture is
distinct.
Social – if the NTIB carefully examine the customer demand or needs than the supplier of that
product become high and then company able to enlarge their market share. On the other hand,
when the company does not carefully classify the customer base in accordance with lower,
middle or high class than it might destroy the funds invested on research or development.
Technological – If the NTIB done its reinvestment in the advancement of the technology or
brings more innovation to the products than the chances of go through in this tough competition
becomes more high. It also very convenient that other firms might copy the technological
techniques of what they are doing currently than the company will unable to challenge their
competitive leader in the industry.
Environmental – NTIB can use the strategy to become more strong in terms of their brand name
if they able to convince the customers that they are more concern about the surroundings or
develop more genuine or cruelty free products. The performance of the organisation may
discontinue or can be halt in the way of transportation if the weather conditions become worse.
Legal factor – the laws and rules are made in order to protect the buyers rights or maintain the
minimum reasonable rate than it will NTIB to able to increase their categories of the products if

they able to maintain the laws and order. While in order to apply all the legal terms than it might
become costly affair for the NTIB and they face the financial loss.
CONCLUSION
It has been concluded that, the above report explains the size, scope, types along with the legal
structures of the NTIB, Red cross or the Sainsbury and the range of organisation with it size or
scope. The report also demonstrate the connection of the various organisational functions and
their relation with the organisational structure of NTIB. Additionally, the report elaborate the
positive or negative impacts of the Pestle or SWOT analysis or their influence on decision
making.

REFERENCES
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