BUSINESS AND BUSINESS ENVIRONMENT

Explore the types of organizations, their purposes, legal structures, and the impact of macro environment on business operations. Analyze BMW UK's internal and external factors, strengths, weaknesses, and interrelation with macro factors.

BUSINESS AND BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain different types and purpose of organizations, public, private and voluntary sectors
and legal structures......................................................................................................................1
P2 Explain the size and scope of a range of different types of organisations.............................3
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................4
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................7
P5 Conduct an internal and external analysis of BMW UK and a similar organization such as
BMW etc. in order to identify their strengths and weaknesses...................................................9
P6 Explain how strengths and weaknesses interrelated with the external macro factors..........10
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

LIST OF TABLES
Table 1: Size and scope range of different organizations................................................................3
Table 2: PESTLE analysis of BMW................................................................................................7

LIST OF FIGURES
Figure 1: BMW as private sector organization................................................................................1
Figure 2: NHS as public sector organization...................................................................................2
Figure 3: Three interrelated departments in the organization..........................................................6
Figure 4: Porter’s five force model analysis....................................................................................7
Figure 5: SWOT factors...................................................................................................................9

INTRODUCTION
There are various types of organization such as public, private or voluntary and all these
organizations have their scope, size, and structure to operate their business in this competitive
market. It is essential for the organization to identify their structure and scope in the market so
that they can efficiently make relevant strategies to achieve the benefits. This report will consider
the case of BMW organization which is one of the famous automobile organizations based in
Germany and provide new model cars to their customers on a regular basis. This report will
identify the scope, size, and structure of BMW, NHS and Red Cross organizations. The report
will identify the SWOT and PESTEL of BMW which shows their strengths and weaknesses
along with the external and internal factors that may affect their operations and functions.

TASK 1
P1 Explain different types and purpose of organizations, public, private and voluntary sectors
and legal structures
There are different types of organization that has distinct uniqueness and nature of achieving
competitive advantages in the market. Every organization has the diverse range that is divided as
per their structure which involves voluntary, public and private sector. Different legal structure,
scope, and size of the organization which is discussed as below:
Private sector organisation
Private sector organizations or business are managed and owned by some private owners only,
and they can be in the form of the partnership, sole traders or organization. This will fall under
the category of only profit-making organizations which is providing their quality of products and
services in the market (Johnson et al., 2017). These types of organizations can plan their
effective strategies to expand their business and gain competitive benefits also. The most suitable
example of private sector organization is BMW which is one of the leading automobile
organizations based in Germany.
Figure 1: BMW as private sector organization

Legal structure: A privately owned organization such as BMW can take a huge risk, and they
are mainly lying on their decision making by the owners only. BMW is one of the famous
automobile organizations which has very strong and long-term base of their customers and also
establish their productive positions in the market.
Purpose: The primary purpose of its formation is to optimize the profit and extend their brand
image in the competitive market by developing an efficient and strong relationship with their
internal and external stakeholders. They are dealing with providing most advanced featured and
stylish models of cars on the market.
Public sector organisation
Public sector organizations are mainly managed and controlled by the government, and it is
under the public ownership. Public sector organizations are free to deal in the stock exchange
market also. This ownership is divided into the public shares which may have an active presence
in the counter market (Bouckaert et al., 2016). These organizations are non-profit making
organizations whose primary purpose is to provide services to society for their welfare. NHS is
one of the leading organizations which fall under this category.
Figure 2: NHS as public sector organization
Legal structure: NHS is the public sector organization which is concerned with the healthcare
professional appointment which will provide the efficient services to their patients in the UK.
Strategies for leadership are also optimized in a more efficient manner which includes a choice
of selection to their patients in respect of treatment.

Purpose: NHS organization is mainly formed with the motive of promoting their health
awareness in the society (Van Dooren et al., 2016). This provides full support of their
professionals by giving comfort services to their patients.
Voluntary sector
Voluntary sector organizations are formed by the union trade or their groups that are mutually
entered in any agreement which acts as the volunteers to resolve any common issue. These are
the non-governmental organizations that work to improve the standards of their society.
Legal structure: They can follow the suitable structure in a legal way which optimizes the
resources for the organization benefits. They follow guidelines which are used for any target to
meet.
Purpose: There purpose is to protect and support the victims which are armed by the forces to
promote the sacrifice which are made by the nation (Ragsdell et al, 2014).
Structure, size, and scope of the business are directly connected with the objectives of the
organization and their operations. An organization that has efficient structure can set a high
target for their business to achieve. For satisfying the requirements of the customers, they can
create a suitable structure in their workplace. Employees also need to have proper knowledge
regarding their responsibilities and roles.
Business organizations need to set their objectives considering the scope and size. The
organization can set effective aim if the business can invest their funds in the projects to attain
high profits (Butler and Wilson, 2015). This statement can be explained by taking the example of
BMW which is the world largest automobile industry that has their objectives set by identifying
the customers and their expectations regarding vehicles. Business set their goals of operations by
reviewing the business scope in the market.
P2 Explain the size and scope of a range of different types of organisations
Following is the table which shows the scope and size of private, public and voluntary
organizations by taking an example of BMW, Red Cross and NHS:

Table 1: Size and scope range of different organizations
Range BMW Red Cross NHS
Type of
organization
BMW is the privately
owned organization which
is operated for achieving
high profits by offering
advance featured and stylish
cars in the market.
Red Cross is the voluntary
organization which is mainly
based on improving the
society and their standards.
NHS is the publicly
owned organization
which provides their
quality of services in the
medial and health care
form.
Scope of the
organizations
Scope of BMW is based on
enhancing the satisfaction
level of their customers.
Their main provision is to
provide quality of features
in their cars and effective
services to their customers.
This is based on spreading
dignity between the people
by providing risk
management and assistance
for people future benefits.
NHS have main scope o
improve the medial and
health conditions of the
UK people (Drucker,
2017).
Size of the
organization
BMW covers very large size
in the market as they have
many stores which provide
latest car models to their
customers. Number of
workers is associated with
them.
Red cross organization
serves their services in
various countries with the
15,000 of the volunteers who
take active participation.
NHS services are
divided between people
and provide services to
around 64 million of the
people in UK and
around 50 million in
Britain.
Structure of the
organization
BMW organization follow
flat structure to meet the
requirements of its
stakeholders and to attain
profits
They follow flexible
structure which keeps the
changes on the business as
per its situations (Forsythe
and Rieffer-Flanagan, 2016).
NHS organization
follow hierarchical
structure as it divided
the roles and
responsibilities equally.

P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure
There are different types of organization which follow the different organizational structure and
that cover roles and responsibilities. In the organization, there are various departments that
perform their functions which help the business to achieve their objectives. There are various
types of departments in BMW organization which are explained as follows:
Human resource department
BMW organization is employing around 125000 number of employee in all over the world.
Human resource department in BMW organization is concerned with the efficient recruitment,
training, and selection of the employees so that they can achieve their ultimate goals and
objectives (Camisón and Villar-López, 2014). Department of the Human resource is mainly
responsible for the development of the workforce in BMW. HR department provides enormous
advantages and benefits to their employees for enhancing the employees working capacity by
using various techniques and strategies for promoting their organizational scope in the market.
Marketing department
Marketing department plays a significant role in private sector organization as marketing is used
to promote their latest car models in the market and to attract their targeted customers. Marketing
manager of BMW organization examined the entire market of the customers to identify the
requirements and expectations of the customers to attain the adequate growth in this competitive
market (Feng.et.al., 2015). Marketing is the most effective process in the development and
growth of the business as the invest millions of their funds to conduct the market research to
attract a number of customers. This plays significant part in generating high revenue for BMW
which is consists of the services and products. BMW organization is following promotional and
campaigns techniques to promote their latest car models and its services in the market.
Finance department

Finance department plays an active role in the functions of BMW because this department is
responsible for managing the funds and budgets and financial issues of the organization. This
department overviews the commercial operations of the business as it is responsible for
maintaining long-term growth in this competitive environment. The finance department is used
to manage all types of risk in the organization which is faced by them during their business
operations (von Rosenstiel et al., 2015). BMW structure is comprised of the various department,
and they are playing their roles and responsibilities. This organization has its primary purpose of
offering new technology and advance features in their new models and quality of services to its
customers.
Figure 3: Three interrelated departments in the organization
All these departments are interrelated with each other because they are working for a common
goal which is related to achieve the organizational goals. Production, sales, marketing, finance,
etc. are the departments who are working together to attain the objective of their organization.
There is a connection between these departments and its functions which help the organization to
under the lacking areas efficiently and then effective make strategies to overcome the issues
(Fernando, 2011). Following are the advantages and disadvantages of this interrelationship
between these department functions for the organization:
Advantages and disadvantages
Human resource department
Marketing department
Finance department

 Relationship between employee in the organization help to manage the cooperation and
coordination.
 Functions of each department help to increase the profit level by collecting information’s
from different sources.
 It will enhance the competitive spirit between the departments which may cause internal
conflicts.
 Awareness about the roles and responsibilities sometimes become major issue between
the departments.
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
There are different types of factors that will put a positive and negative impact on the operations
and functions of the business. To understand the effect of these factors on the business, BMW
organization is using Porter's five force model analysis in their business. There are various
negative and positive factors of BMW business which are discussed as follows:
Figure 4: Porter’s five force model analysis
Threats of new entry in the market
There are various new entries in the market which create massive competition in the market for
BMW as they are the primary threats to the existing organization. There is high pressure on the
organization to enhance their competition level in the automobile industries. This pressure is

created to overcome the products cost and develop strategies to change their market for the
customers. This will create a negative impact on the BMW business.
Bargaining power of their customers
Increase in the demand of the customers regarding products and services will create massive
competition in the market. Customer expectations and wants of the high quality of car models is
increased day by day but at the affordable price (Goetsch and Davis, 2014). This will bring the
bargaining power of the customers which is enhanced by the availing that in an efficient manner
and attractive discount offers to the customers.
Bargaining power of the supplier
The supplier also plays an active role in the operations of BMW. Profit in the organization is
decreasing by the dominating nature of their suppliers in this automobile industry. Supplier of
the organization has the power to negotiate in the price of the product and demand for the high
cost of BMW products. Because of increased bargaining power of the supplier, the growth of
BMW gets decreased regarding the profit.
Rivalry in the market
There is very high and effective competition in the market of an automobile which enhances the
issues for BMW also. This rivalry factor also affects the market scope of BMW regarding the
profit and growth. The organization is facing immense competition in the market to achieve their
long-term growth (Miyake and Friedman, 2012).
Threat from their substitute
There is a massive reduction in the BMW profit because when any new product or substitute
product launched in the market, then it will reduce the demand for the existing product in the
market. Because of the substitute cars in the market are launched then it reduces the need for
BMW cars also which is not a good sign for their business in future.
PESTLE analysis is the concept used for marketing which helps the organization to understand
the changes in the business environment. These factors are affecting the operations of BMW so it

is crucial that these factors must be examined to attain the competitive benefits. Following is the
PESTLE analysis of BMW (Sarma, 2014).
Table 2: PESTLE analysis of BMW
Factors Affect on BMW business
Political Political factors are the actions and motives of the government that affect
the daily functions of the organization. Due to change government
legislation it will definitely put negative impact on the business. Political
factor of BMW as very vase influence. Worldwide network of BMW is
the backbone for their growth in the market. BMW group has 17
production forces in around six countries.
Economic In most of the cases the set policies of government over the level of the
taxation and the expenditure in the country put major impact on the
economic condition of the organization. Regulations and legislation
cover laws that influence the employment, trading tax, consumer
protection and health and safety at the workplace.
Social Culture of the business operates in the country play important role for the
socio-culture of the organization. This will cover the behaviour, nature
and attitude of the people working with them. BMW has very positive
culture in their workplace.
Technology They are providing new and advance technologies in their new models
which enhance their relationship with the customers. BMW groups invest
their funds in the technology factor.
Legal There are some reasons which are important for the legal forces in the
business environment. This is the reason for organization to produce law
quality of products and services.
Environmental They consider the environmental factors also which help them to reduce
their internal as well as external conflicts.

P5 Conduct an internal and external analysis of BMW UK and a similar organization such as
BMW etc. in order to identify their strengths and weaknesses
To identify the strengths and weaknesses of BMW, it is essential that organization should
conduct SWOT analysis. SWOT analysis is the process which is used to examine strength and
weaknesses and issues of the organization in this changed business environment. SWOT analysis
helps BMW to identify the factors which affect the operations of the business directly or
indirectly.
Figure 5: SWOT factors
Table 3: BMW SWOT analysis
Strengths BMW is one of the most valuable
automobile brands in the entire world. BMW organization is the
geographically diversified in the
revenue streams. They have perfect excellent and
engineering driving experiences. Competent in electric and hybrid cars. They have clear strategies to attain their
future trends and challenges.
Weaknesses
 They have poor and weak automotive
brand portfolio along with the little
differentiation in product.
 They have increasing debt level in the
market (SWOT analysis of BMW,
2018).

Opportunities Prices of fuel will be expected to be rise
in the future. They have high opportunity in the
increased demand of autonomous
vehicles. Weakening in the euro exchange rates. Frequencies and timing of any new
models release.
Threats
 Increase in the competitive market
around the worldwide in the automotive
market.
 Increase in the government policies and
regulations which raise the cost.
 Automotive market of US is poised
towards the slow down decline also.
P6 Explain how strengths and weaknesses interrelated with the external macro factors
BMW organization has firm relations with the external factors as the strengths and weaknesses
of the organization can be identified by using the internal as well as external factors. Growth and
sustainability of the organization have impact of their external factors. Following are some of the
examples related to the BMW under which strengths and weaknesses are considered:
BMW organization has strength in their number of employees and scope of the market because
this organization has some positive impact on the economy and politics on their business.
External factors in the organization are related to technology and economic advancement which
lead to the coverage or their strengths in the market (Brammer et al., 2012). Technology will be
used in their marketing process, customer services and selling process that make the organization
famous in the market and spread their brand awareness among the customers.
BMW organization has the strength in the affordable prices and high quality of services to their
customer because this organization has a positive impact on their external factors such as- social
and legal considerations. For example, proper management and taxation of their distribution
channel in BMW help to attain the cost reduction but active promotion and marketing help to
achieve strength in the quality of their products and services. BMW organization has some of the
weaknesses because of their external factors and that put impact on the practices of business. For
example, BMW has the shortcomings of their employee turnover which is implied because of the
environment and legal framework conditions (Craig and Campbell, 2012). BMW impact of the

environment on their services and employees support in the term of high experiences and
stability through employee turnover will also be increased.
So according to this, the impact of external and internal factors has created an impact on the
performance of the organization. External factors put the effect on BMW practices,
sustainability, and continuity which result in the form of weaknesses and strengths. With the help
of SWOT analysis, they can conduct efficient decision-making process for achieving the
sustainability and growth for considering their capabilities and strengths. The financial strength
of BMW enables the management for taking actions regarding new opportunities and scopes in
the market.

CONCLUSION
The environment of the business plays significant role in enhancing the brand image of the
organization in the market. With the help of above report, it is evaluated that decision-making
process has the active role in the organizational success. The above report taken the case study of
BMW organization who is one of the leading and moist most automobile industry in the market
and provide advanced featured and new models of cars to their customers. The above report
provides the PESTEL and SWOT analysis of BMW which shows its strengths and weaknesses
along with the external and internal factors that affect their performance or help them to achieve
high and sustainable growth in the market. The report has further discussed the role of the
internal and external factors that make or break the decision-making process in the organization
for the management team. BMW organization makes the effective and well-established strategies
for the organization success in their business operations and to attain the competitive advantages
in this automobile market.

REFERENCES
Books and Journals
Bouckaert, G., Peters, B.G. and Verhoest, K., 2016. Coordination of Public Sector
Organizations. Palgrave Macmillan.
Brammer, S., Hoejmose, S. and Marchant, K., 2012. Environmental management in SMEs in the
UK: practices, pressures and perceived benefits. Business Strategy and the
Environment, 21(7), pp.423-434.
Butler, R. and Wilson, D.C., 2015. Managing voluntary and non-profit organizations: Strategy
and structure. Routledge.
Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of
technological innovation capabilities and firm performance. Journal of business
research, 67(1), pp.2891-2902.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Feng, H., Morgan, N.A. and Rego, L.L., 2015, August. Marketing department power and firm
performance. American Marketing Association.
Fernando, A.C., 2011. Business environment.Pearson Education India.
Forsythe, D.P. and Rieffer-Flanagan, B.A., 2016. The International Committee of the Red Cross:
a neutral humanitarian actor (Vol. 117).Routledge.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper
Saddle River, NJ: pearson

Johnson, P.F., Leenders, M.R. and McCue, C., 2017. A comparison of purchasing’s
organizational roles and responsibilities in the public and private sector. Journal of
Public Procurement, 3(1), pp.57-74.
Miyake, A. and Friedman, N.P., 2012. The nature and organization of individual differences in
executive functions: Four general conclusions. Current directions in psychological
science, 21(1), pp.8-14.
Ragsdell, G., Espinet, E.O. and Norris, M., 2014. Knowledge management in the voluntary
sector: a focus on sharing project know-how and expertise. Knowledge Management
Research & Practice, 12(4), pp.351-361.
Sarma, K.A.D.J.J., 2014. Generation gaps revisited. Foundations of Genetic Algorithms 1993
(FOGA 2), 2, p.19.
Van Dooren, W. and Van de Walle, S. eds., 2016. Performance information in the public sector:
How it is used. Springer.
von Rosenstiel, D.P., Heuermann, D.F. and Hüsig, S., 2015. Why has the introduction of natural
gas vehicles failed in Germany?—Lessons on the role of market failure in markets for
alternative fuel vehicles. Energy Policy, 78, pp.91-101.
Online references
SWOT analysis of BMW, 2018 [Online] [Assessed through]
<https://www.strategicmanagementinsight.com/swot-analyses/bmw-swot-analysis.html>,
[Assessed on 25th January, 2018]