P3 Interrelationship between different organization departments

Business and Business
Environment

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Purpose and types of organization.........................................................................................3
P2. Scope and size of each business organization.......................................................................5
P3 Interrelationship between different organization departments...............................................6
P4 PESTLE analysis....................................................................................................................7
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses............................................................................................................8
CONCLUSION..............................................................................................................................11

INTRODUCTION
Business environment refers to the surrounding of an organization which consists of
internal and external factors like supplier, customers, investors, technological, political, and legal
and many more factors. In order to run business smoothly analysis of business environment is
must so as to get to know which factor can affect the organization in order to overcome it. To
understand the concept of business environment John Levis Partnership company has been taken
into consideration. It is an employee owned UK Company which operates with departmental
stores, supermarkets and with other retail related activities. In this assignment a brief focus is
given on the purpose and legal structure of an organization and the size and scope of different
types of organization. In addition to this how different function of an organization are interlinked
with each other are also explained in this file. Moreover different macro factor which can affect
the organization working environment is also mentioned in this report. Lastly a SWOT analysis
has also been done and how the strength and weakness of the company are interrelated with
macro external factor also explained in this assignment.
TASK 1
P1. Purpose and types of organization
There are different types of organizations which carry out their different operational
activities in different country in order to earn revenue. Each organization exists for some specific
purpose (Apăvăloaie, E. I., 2014). There are specifically three types or organization namely
public, private and voluntary and each posses their own legal structure. Types and purpose of
different types of organization are explained below:
Private Company:
Private companies are those companies which are carried out under private supervision.
The government does not make any kind of interference in this type of companies. The prime
aim of this company is to earn maximum profit and to increase he market share value
John Lewis Partnership Company is one of the examples of private company which was
founded in 1929 at London (Botha, Kourie, and Snyman, 2014). The company carried out it
business in diversified areas like in clothing sector, jewelry sector and cosmetics sector. There
are around 90000 employees working under this organization.
Purpose of private company
 To earn maximum profit
 To boost up the strong financial position in the marketplace
 To create brand awareness all around the world

.
Legal structure of private companies
Partnership:
Partnership is the formal agreement between the partners in order to operate, manage and
control the operational activities of the business all together. In this type of legal structure
partners share equal profit and loss among each other.
Sole Proprietorship:
This is the type of legal structure in which the business is carried out by single person
known as sole proprietor. He himself is liable for the profit and loss of the company.
Limited companies:
It is the company whose owners are legally liable for its depts. Only to the extent of
amount invested by the partners.
Public Company:
The company which are governed and regulated by the government are known as public
company the governing body has full control over this types of companies Education institution,
health care institution are considered as public companies (Cai, and Yang, 2014).
One of the examples of public company is National Health Services (NHS) organization
which specifically renders free medical services especially to the poor and needy. It is one of the
largest health care services in all around the world.
Purpose of public company To render free medical services to the needy people
 One of the important purpose of this company is to provide prevention measures from
several diseases by creating awareness about different types of diseases..
 To render free medical camp services in order to promote better health of the people
Legal structure of public company
Central government:
It is the government which is liable for monitoring and accessing the activities within the central
government department.
State Government:

This type of government are also known as federal government who shares their political
power with the national government and are liable for effective operation of the agencies which
are carried out by the state government (Epifanova, T. and et. al., 2015).
Local Government:
This type of government is liable to control the activities within the district level, smaller
than state level.
Voluntary Company:
In order to render free cost service to the society this types of companies are created and
the main purpose of this company is to render social welfare services without any return. As this
types of companies are more concerned about the society rather than to earn profit (Grosanu, A.
and et. al., 2015).
One of the examples of voluntary organization is Oxfam which render free medical
services to the needy people. In addition to this company also helps those poor’s which are
Purpose of voluntary company To reduce poverty life of the people so than they can leave joyful life
 To render education facilities to those children who family cannot afford it.
 To render assistance to the people those who are affected by natural disaster.
P2. Scope and size of each business organization
Every business organization has their own scope and size which depends upon sector in
which the company carried out different operational activity. Size and scope of private company
(John Lewis Partnership), public company (National Health Service) and voluntary company
(Oxfam Company) are explained below:-
John Lewis Partnership (Private Company):-
Size
In John Lewis Partnership Company there are around 90000 employees who are working
to accomplish organization aims and objective within the specified period time schedule. It
specifically deals in retail jewelry, clothing and with cosmetic products. In addition to this
company has earned its revenue around 10 billion during the fiscal year 2017-2018.
Scope
The scope of this company is too large as it deals in different sector of the industry. Like
the company deals in super market, jewelry, cosmetic and retail market. The company has
segregated into different market area so as to increases market share. In addition to this company
has also started its business by launching different footwear products at a reasonable price sp that

customer can easily purchased it off. Thus, the company has segmented its market area into
different sector so as to achieve the competitive advantages in the market.
NHS (Private Company):
Size:-
It is one of the largest public company which is situated in United Kingdom. In this
company there are approx. 1.6 billion workers who are working to achieve the target, aims and
objectives of an organization. In addition to this main purpose of the company is to render free
medical service to the poor and needy people of the society.
Scope:-
The scope of this company is that it rends a free medical, dental and optical care services all
around the world (Khan, and Quaddus, 2015). In addition to this the company has also come up
with good idea like to render free medical camp facilities for the needy people so that can get
regular check up of their help.
Oxfam (Voluntary services):
Size:-
This company mainly includes 20 charitable trusts who are working to carry out the
main objective of the company. The objective of the company is that to render social welfare
service to the society. Moreover this company was founded in 1920 by the volunteer so as to
supply free service to the society.
Scope:-
The overall scope of the Oxfam volunteer company is to protect and render healthy life to
the needy and poor people of the society. In addition to this the company planning to performs
various other social activities like disaster relief, immigration and policy research.
P3 Interrelationship between different organization departments
John Lewis Partnership Company which is specifically carried out to earn maximum
profit by acquiring large number of market share. In order to attain the objective it is necessary
that each departmental function must communicate and coordinate with each other. The entire
department has their respective goals and objective but they are totally related to one common
goal of the organization (Savrul, and Sener, 2014). Thus, the interrelationship of different
department of an organization is explained below:-
 Marketing and human resource department: - It’s the prime responsibility of human
resource department to recruit and select skilled and well educated candidate for the
marketing department. As the skilled candidate can easily contribute towards the

achievement of John Lewis Company aims and objectives. Thus it can be said that there
is a interrelationship between marketing and HR department.
 Marketing and research and development department:- In order to achieve successful
strategy it’s the prime responsibility of research and development department to make an
analysis about the changes taking places in the customer taste and preferences pattern. In
addition to this R&D department should also identify and analyze the competitor strategy
so that accordingly John Lewis Company marketing department can adopt. Thus, it will
help in attracting more number of customers towards their products and services.
 Marketing and finance department:- In order to carry out marketing activity
successfully it is essential for the marketing department of John Lewis Company to Have
enough of funds. This is so because the marketing department can make investment to
promote products and services through various channels. Thus, it will help in influencing
more number of customers to purchase their products and services. Therefore it can be
said that there is an interrelationship between marketing and finance department.
P4 PESTLE analysis
In order to accomplish organizational goals and objective on specified time period it is
important to determine the impact of external environment on the various operational activities
of a organization. So John Lewis Partnership Company has taken into consideration PESTLE
analysis so as to analyze the impact of macro external environment upon the organization:-
 Political: - This factor refers to those external factors upon which the government have
regulation and control like discrimination law, data protection law, environmental law,
tax policy, health and safety law etc. one of the positive impact of this factors is that
stable nature of the government has render various opportunity to the John Lewis by
implementing various strategies (Smith, B., 2016). Whereas, the negative impact is that
the exit of British from the European contrary has effected in various operational activity
of the John Lewis Partnership company.
 Economical: - Economy factor specially include interest rate, government policy, tax
policy and labor cost. One of the positive impacts of this factor upon John Lewis
Company is that it can helps to expand the company easily if the country have good
economic flow. Whereas, the negative impact of this factor is that there is a slow
recovery from economic recession.
 Technological: - In modern era there take place advancement in the technology
specifically in those technologies which are used by the different organization. If the John
Lewis partnership company adopts the changes taking place in the technology then it will
lead in the development of brand image of the company which is one of the positive
impacts of this factor upon the organization (Sodeyfi, S., 2016). Whereas, if the company
does not takes such changes into consideration then it will hamper the image of the
organization and will result in decrease in the profitability ratio of an organization.

 Social: - This factor refers to those factors which keep on changing due to the changes
the social culture, rules, norms and religious. If the John Lewis partnership company will
adopt the changes in taking place in the societal cultural values then it will help in
attracting more number of customers toward their organization it is one of the positive
impact of this factor upon John Lewis Company.
 Legal: - This factor refers to the legal laws and norms which are implemented by the
governemnt. If the company takes into consideration such changes in the government
laws like equality act, minimum wages act etc then it will helps in retaining employee in
the company and will result in increasing the productivity level of an organization.
Whereas, if the company does not accept such laws they carry out their own laws then it
may lead to employee turnover which is one of the negative impact of this factor upon
John Lewis Partnership Company.
 Environment: - This factor refers to the surrounding. If the John Lewis partnership
company produces products and services taking into consideration eco friendly
environment then it will help in attracting more number to customers towards their goods
and services. Whereas if the company does not takes ecofriendly concept then it will
negatively impact on business as it will lead to decrease in the productivity and
profitability ratio of the company.
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses
Internal and external analysis are meant for understanding the various factors such as
environment, technological, political etc. which generally effects business and its revenue on the
greater extent (Maula, and Murray, 2017). Internal analysis consists of the SWOT discussion
which is basically perform in order to understand company's potential to continue business for
longer period. Whereas external environment involves PESTLE analysis. In context with John
Lewis & partnership, which is the leading British garments retail store, it is required to analysis
their business in two parts: External and internal. The whole discussion is as follows:
External: External analysis involves political, environmental, social and technological
factors (PEST). Detailed explanation for John Lewis & partnership are as follow:
Political: Currently, John Lewis & partnership is operating their business in almost 12
countries including Asia, Africa, and Australia etc. They are facing various political issues such
as tax rates, political instability, legislation issue, unemployment etc. mainly in Africa. They are
completely working on this with their full potential to overcome with this issue.
Economical: High labor costs, profit sustaining and cost recovery are some common
major economic factors which can influence business of John Lewis & partnership in both
positive and negative ways (Moroni, Arruda, and Araujo, 2015). These factors can either

increase or slow down profit making ability of the company. Prices of input are currently high in
international markets, so it would lead to cost burden.
Social: Now a day, consumers are shifting more towards online buying rather than offline
and physical purchasing of groceries and merchandise. This would be considered as drastic
change or shift in the customer response to business. For maintaining profit, John Lewis &
partnership needs to provide attractive offers, discounts on their products to survive their
business.
Technological: In today's scenario, when technology and its elements has put huge
impact on past running business, it is necessary for John Lewis & Partnership to work along with
growing scenario and trends. In this condition, company would start selling their products using
both online and offline to maintain liquidity and profit inflow in their organization.
Internal: These factors deal with strength, Weakness, Opportunities and Threat of an
organization. In Context with John Lewis & Partnership, senior executives of the company
should take whole assessment of SWOT analysis appropriately to achieve desired objectives and
goals:
Strength Weakness
One of the most leading retail stores of garments
in the entire United Kingdom with strong brand
image and extensive product range. Company has
over 35000 employees in their portfolio to
function company's business efficiently. The main
strength of this leading retail is wide range of
products with the best quality.
The range of products is limited to their own store
and supermarkets. There is no online presence, as
customers are attracting more towards online than
offline. High price is also the major weakness.
The major weakness could be high inflation rate,
where raw material becomes costly.
Opportunities Threat
In today's scenario, where customers are more
engaged towards an online platforms than offline.
It will help John Lewis to add customer for their
products. This leading retail has opportunity to
set-up hi-tech infrastructure such as On-display
and involving such as e-payment gateways at their
stores.
New entrants can be major threat for John Lewis,
as they are initially comes up with updated
technology. High price could be a threat. Old and
overrated resources would create trouble for
company to provide best quality of products to
their customers.

External factors and major weaknesses can result in decreasing way of profitability and
revenue to the John Lewis Partnership. It may result in the ineffective and poor decision making
which can create doubt on survival and sustaining of the company. It would result in low brand
image and new entrants would get the advantage of it (Niemann-Struweg, 2014). But, in the
positive way, it would make realize the actual potential of this company to offer best quality of
clothing’s to their customers at the affordable and realistic pricing. Hence, it will contribute
organization in further planning and proper decision making process.
P6 Explain how strengths and weaknesses interrelate with external macro factors
There is a adverse relationship between macro environment factors with strength and
weakness of the company. So, any change in the macro environment factors would either led to
positive change or negative impact on business activities or function. In context with John Lewis
Partnership, company also operates their business in both domestic and international market.
Hence, it is important for an organization to interrelate various external factors with strength and
weaknesses of the business policies are as follows:
Factors Strength Weakness
Political Stable government policies of UK have
been aid John Lewis to continue and run
their business for long and at global
level effectively.
If government could bring any change in
the trade policies such as export and
import, it will affect the profitability and
business operation of John Lewis.
Economical Sufficient income and earning of the
customer's can enhance the sales and
revenue of the John Lewis business and
operation.
High deflation of an economy can affect
the business of a John Lewis Partnership
such as low rate of pound sterling in the
UK.
Social Increasing demand of online shopping
would aid John Lewis Partnership to
offer best quality of the products and
add more customer to the business.
Continuous change in retail store
structure and demand of new style and
fashion can effect business of John Lewis
in the negative and loss making manner
Technological Electronic display, advance payment
system can make customer's shopping
experience easy and effective by
investing sufficient money on their
Such up-gradation requires huge money
and current time's resources. Also if
company needs to expand their business
completely over the online platform, they

stores up-gradation. needs to set-up the hi-tech infrastructure
and systems.
To gain competitive advantage, John Lewis must convert their weaknesses into their
major strength by continuous learning and implementation of plan and strategies. Investing in the
technology would results in accomplishment of goals and objectives.
CONCLUSION
From the above assignment overall it can be concluded that business environment plays
an important role in order to develop organization. The manager of the company should make an
analysis of internal and external factors that may impact both positively and negatively to the
different operational activities of an organization. In order to analyze the external environment
the company should consider PESTLE analysis so as known which factor impact a lot to the
organization. Moreover company should also identify the strength and weakness of an
organization and it can be analyzed with the help of SWOT analysis. Lastly, through this report it
can be concluded that strength and weakness of the company are directly interrelinked with the
macro external environment of an organization.

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