Positive and Negative Impacts of Macro Environment on Operations of Enterprise

This report explores the positive and negative impacts of macro environment on the operations of an enterprise, using the case study of Dorchester Hotel. It discusses the effects of political, economic, social, technological, legal, and environmental factors on the business. The report also includes an internal and external analysis of the company to identify its strengths and weaknesses.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT............................................................................................................................1
TASK 2............................................................................................................................................1
Covered in PPT............................................................................................................................1
TASK 3............................................................................................................................................1
P4. Identification of positive along with negative impacts of macro environment on operations
of enterprise.................................................................................................................................1
TASK 4............................................................................................................................................4
P5. Internal along with external analysis of company for identifying strengths and weaknesses.
......................................................................................................................................................4
P6. Explanation of interrelations for strengths and weaknesses with external macro factors.....5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Collection of factors and forces that influences organisational functions and workings is
termed to business environment. It is characterised as multifaceted, difficult to understand,
changing continuously, unpredictable, and far reaching impacts. It assist companies in
understanding economic system, economic policy, market conditions and internal environment.
To understand the concept, The Dorchester company is taken that is one of 5 star hotel situated
in London, UK. It is well popularise for the offering luxury services and have prestigious
architect that attract wide tourists (Dorchester Hotel, 2020). The report demonstrates about
positive and negative impacts of macro environment on operations of entity. It also determines
internal strengths addition to weaknesses with application of SWOT Analysis and explanation of
their interrelationships to external macro factors.
TASK 1
Covered in PPT
TASK 2
Covered in PPT
TASK 3
P4. Identification of positive along with negative impacts of macro environment on operations of
enterprise.
Macro environment is stated to the conditions which exists within economy as whole but
not in particular region (ATWA, IBRAHIM and SALEH, 2017). The factors involved in it are
generally uncontrollable and impacts overall performance of enterprise. Organisation monitor as
well as forecast external influences by applying relevant framework. In context to Dorchester
Hotel, managers applies PESTLE framework for monitoring addition to forecasting external
influences so that they can eliminate any negative impacts and ensure smooth operations. The
framework assist administrators to scan extrinsic situations and identify opportunities for further
development and expansion. Following are impacts of the external factors in case with
Dorchester Hotel:
Political factor: It is all about activities concerned with political systems for managing
entire hospitality industry. The factor generally involves tariffs, taxation, trade policies and
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hence forth. In UK, the government is responsible to frame decisions for entire hospitality
industry.
Positive impact: Political environment of UK is stable and also fosters trade by making
relevant decisions. For instance, Brexit was the decision that impacted positively on Dorchester
Hotel as after the decision, the entity initiated trading with various hotels in other nations. This
increased its brand image and customer base through satisfying needs and demands for luxury
services of various tourists.
Negative impact: Dorchester Hotel is well popular hotel which has to restrict its trade
with European Unions after decision made by government of UK. This impacted negatively on
its operations as the entity was majorly performing for European Union tourists that was
excluded from the nation (Awadid and Nurcan, 2016). This impacted on operations and
decisions of the hotel in negative manner.
Economic factor: UK's economy is well developed together and oriented to market.
Industrial life cycle, demand and supply, interest rates and foreign exchange policies are some
economic factors whose impacts on Dorchester Hotel are the followings:
Positive impacts: Through offering heavy discounts to tourists assist managers of
Dorchester Hotel to attract mass population and serve them with luxury services which ensures
smooth flow of workings. With this, sales volume addition to profits are enhanced which shows
positive impacts on current operations of business (Crowley and Jordan, 2017).
Negative impacts: When there are some changes in the economical cycle such as
emergence of BRICS markets then it creates wide complexities for the business. In such
situation, administrators of Dorchester Hotel have to make modifications in product pricing as
well as borrowings from investors for operating activities. These all shows negative impacts as
changing strategies and implementing new ones hampers abilities for expansing operations.
Social factor: UK is the country in which attitudes, preferences, choices and demands of
populations changes very soon. It involves elements related to buying habits, population density,
education level and religion whose impacts on Dorchester Hotel are underneath:
Positive impact: When there is global shift in social powers then organisations have to
work accordingly. In case with Dorchester Hotel, it has diverse product line for hospitality
aspects and works with adoption of social technologies for grabbing attention of long distant
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audiences that impacts positively on wide operations that are performed to meet all customer
demands together with providing favourable experience (Gohar and Indulska, 2016).
Negative Impact: however, there are some situations in which managers of Dorchester
Hotel fails in managing alterations of customer demands then it creates complexities along with
impacts sales and operations negatively.
Technological factors: Business concerns in UK adopts latest, advanced technologies
along with fosters automations within current techniques. In addition to this, new technologies
are also adopted that offers best solutions to some of the problems and strengthens organisational
workings. Some of the impacts within operations of Dorchester Hotel are the followings:
Positive Impacts: Dorchester Hotel managers generally invests more money in analysing
technologies whose adoption provide faster outcomes. Moreover, with adoption of cyber
security, the company is able to protect its computer systems and eradicates damages for
hardware (Ifinedo, Pyke and Anwar, 2018). Along with this, search engine optimisation helps the
hotel managers to communicate with wide distant audiences and informs all manpower that
results in smoothly executing operations, building effective and stable relations with extrinsic
people and acquiring expansion opportunities which leads to positive impacts on all of the
operations of institution.
Negative Impacts: When company faces frequent technological changes then it adds huge
costs and this impacts negatively on profits. In case with Dorchester Hotel, digital technologies
or revolutions changes the ways people as well as entity work together. This creates huge issues
to manage workings among the both that impacts negatively towards current operations of the
hotel.
Legal factors: Within UK, political systems are the sole authority which governs
legislations for the whole nation. It includes trademark registration, employment laws and other
legislations.
Positive impacts: It is the responsibility of managers of Dorchester Hotel to ensure that
all the legislations are complianced while performing workings. The institution follows all the
governed legislations and also works performs activities ethically which helps it to gain
recognition for the government along with various grants for solving social issues that leads in
positive impacts ion operational efficiencies (Jin and Hurd, 2018).
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Negative Impacts: In various cases, Dorchester Hotel fails in adhering legislations
because of which huge penalties, fines and even controversies are faced that impacted on its
operations negatively. When political system gates information about non compliances of laws
by some company then they cancels licences and this hampers business sustainability and
implementing the operations as determined.
Environmental factors: In UK, population and political system focuses on protecting
aspects of environment as well as building eco friendly environment in entire country (Leonidou
and et.al., 2017). Its impacts on Dorchester Hotel are below:
Positive impact: The management team of Dorchester Hotel works on initiating various
programmes in relevance to reducing wastage as well as recycling food scraps so to reduce
carbon footprints. Along with this, it also uses all its resources optimally that shows positive
impacts on whole operations of company through managing available and scare resources in
present era.
Negative impact: When drastic changes occurs in environment of UK, then it reduces
tourists of Dorchester Hotel because oh which its various operations are hampered to execute
actions. This will create negative impacts of operations as company have to manage workings
even if no tourists arrives in its hotel.
TASK 4
P5. Internal along with external analysis of company for identifying strengths and weaknesses.
Internal analysis: exploration about competency, resources and viability is said to
internal analysis. It assist in identification of various aspects including strengths, weaknesses,
opportunities addition to threats of a business concern (Lüdeke-Freund and et.al., 2017). It is
basically done for examining about organisational internal environment so assessing advantages
and resources from market. SWOT analysis is the major tool which helps in internal analysis of
firm. When SWOT analysis is conducted, managers identifies strengths along with weaknesses
of institution. Following is SWOT analysis of Dorchester Hotel:
Strengths Weaknesses
 Dorchester Hotel is leading brand in
UK's Hospitality industry that provides
 The hotel has high prices that are not
affordable by middle class and lower
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variants of luxury services in market.
 The company focuses on innovation in
its procedures as well as systems so to
ensure total worth of money paid by
customers.
 It has diversified, experienced and
qualified employees along with
accredited professions performing in
different teams.
class segment because of which it failed
in various mergers and acquisitions also
(Peltola and et.al., 2016).
 Dorchester Hotel has centralised
decision making and lacks sharing
ideas from employees.
 The duration it takes in producing
along with selling its services is
generally high against competitors.
Opportunities Threats
 Presently, internet users are increasing
all around world. So, Dorchester Hotel
has opportunity to offer services at
discounts so to expand presence online
and satisfying middle and lower income
segments for tourism commodities.
 By adopting various technologies, it
can reduce its time in manufacturing
and selling products with wide
population (Ramanathan and et.al.,
2017).
 The fierce competition in hospitality
industry is major threat for Dorchester
Hotel.
 New entrants are expanding their
business which restricts market shares
of the hotel and increases chances to
lose wide customers.
 Substitute products for tourists are al;so
increasing constantly which puts
pressure on improvising existing
product line of the hotel.
P6. Explanation of interrelations for strengths and weaknesses with external macro factors.
The interrelations among external macro factors to that of strengths and weaknesses of
Dorchester Hotel are underneath:
Basis of interrelations Strength Weakness
Political factor Political environment of UK is
fair and powerful which is a
strength for Dorchester Hotel to
carry forwards operations
When the political system
becomes unfair or gets changed
then for Dorchester Hotel, it is
weaknesses as it adds wide
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through understanding all the
regulations and amendments of
compliances without any issues
or complications (Szczepańska-
Woszczyna and Kurowska-
Pysz, 2016).
risks, uncertainties and even
becomes barrier for expanding
in other countries.
Economic factor In UK, purchasing powers of
customers determines work flow
of companies. In case with
Dorchester Hotel, managers
offers different services to
consumers after considering
their purchasing power which
acts as strength as it assist in
serving different people with
different income for gaining
revenues.
In UK, emergence of BRICS
market creates huge hurdles in
operations of firm and it is as
weaknesses for hospitality
company. Moreover, changes in
taxations and other economic
accepts hampers workings
towards leading to strategic
objectives.
Social factor Shift of population of UK for
the products and services
offered by entity helps in
achieving all the aims of
business. In case with
Dorchester Hotel, it offers
hospitality products and services
in innovative and attractive
manner is a strength as they
assist to strengthen the
experiences provided with wide
clients.
Within UK, attitude and
preferences of products rapidly
changes among population.
When Dorchester Hotel
managers are unable to work on
the rapid changing choices then
it creates weaknesses of it. This
hampers market image along
with decrease in customer base
due to fulfilment of demands
(Velychko and Liudmyla, 2017).
Technological factors Hospitality industry of UK is In UK, it is analysed that
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attaining developments with the
help of various technologies. In
association to Dorchester Hotel,
adoption of cyber security and
search engine optimisation are
strength for it as it assist in
protecting its internal systems
and making relations with
outside population.
technology changes fastly.
Periodical technological changes
are weakness for Dorchester
Hotel as it hampers efficiencies
of operations to ensure smooth
work flow.
CONCLUSION
The described report concludes business environment provide numerous opportunities to
company for operating smoothly and expanding internationally. Macro environment consists of
wide set of factors which influences development of company either in positive manner or in
negative manner. PESTLE analysis is applied for monitor external influences on internal
business operations. Internal analysis is done with applying SWOT Analysis to gain insights
about all the strengths and weaknesses of institution.
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REFERENCES
Books and Journals:
ATWA, S. M., IBRAHIM, M. G. and SALEH, A. M., 2017. Green business parks towards
sustainable cities. WIT Transactions on Ecology and the Environment. 214. pp.9-19.
Awadid, A. and Nurcan, S., 2016, June. Towards enhancing business process modeling
formalisms of EKD with consistency consideration. In 2016 IEEE Tenth International
Conference on Research Challenges in Information Science (RCIS). (pp. 1-12). IEEE.
Crowley, F. and Jordan, D., 2017. Does more competition increase business-level innovation?
Evidence from domestically focused firms in emerging economies. Economics of
Innovation and New Technology. 26(5). pp.477-488.
Gohar, S. R. and Indulska, M., 2016. Business process management: saving the planet?. arXiv
preprint arXiv:1606.02459.
Ifinedo, P., Pyke, J. and Anwar, A., 2018. Business undergraduates’ perceived use outcomes of
Moodle in a blended learning environment: The roles of usability factors and external
support. Telematics and Informatics. 35(1). pp.93-102.
Jin, H. and Hurd, F., 2018. Exploring the impact of digital platforms on SME
internationalization: New Zealand SMEs use of the Alibaba platform for Chinese
market entry. Journal of Asia-Pacific Business. 19(2). pp.72-95.
Leonidou, L. C. and et.al., 2017. Internal drivers and performance consequences of small firm
green business strategy: The moderating role of external forces. Journal of business
ethics. 140(3). pp.585-606.
Lüdeke-Freund, F. and et.al., 2017. Sustainability-oriented business model assessment—A
conceptual foundation. In Analytics, innovation, and excellence-driven enterprise
sustainability. (pp. 169-206). Palgrave Macmillan, New York.
Peltola, T. and et.al., 2016. Value capture in business ecosystems for municipal solid waste
management: Comparison between two local environments. Journal of cleaner
production. 137. pp.1270-1279.
Ramanathan, R. and et.al., 2017. Adoption of business analytics and impact on performance: a
qualitative study in retail. Production Planning & Control. 28(11-12). pp.985-998.
Szczepańska-Woszczyna, K. and Kurowska-Pysz, J., 2016. Sustainable business development
through leadership in SMEs. Ekonomia i Zarzadzanie. 8(3). pp.57-69.
Velychko, O. and Liudmyla, V., 2017. Logistical modelling of managerial decisions in social
and marketing business systems.
Online:
Dorchester Hotel. 2020. [Online]. Available through:
<https://www.dorchestercollection.com/en/london/the-dorchester/>
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