Business and Business Environment

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of various forms of organisation .............................................1
Analyse how the structure, size and scope linked to the organisational objectives....................4
Provide a critical analysis of complexities of different type of business structure.....................4
P2 Explain the size and scope of a range of different types of organisations.............................5
Discuss the scope of operations in terms trading, providing services looking at national and
international ..............................................................................................................................6
TASK 2 ...........................................................................................................................................6
P3 Explain the relationship between different organisational functions and how they are
related with organisational structure...........................................................................................6
TASK 3............................................................................................................................................9
P4 Identify the positive and negative impacts the macro environment has upon business
operations....................................................................................................................................9
TASK 4..........................................................................................................................................10
P5 Conduct internal analysis ....................................................................................................10
P6 Interrelate strength and weakness with external macro factors...........................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business is define as an entity which is engaged in industrial, professional and
commercial activities. Business environment can be represented by the surrounding of the
organisation and all the internal and external factors which have huge impact on the performance
of the business. The consideration of all these factors is essential by an organisation while taking
their decisions so as to operate all the business activities without any crisis or hurdles. This is the
most powerful determinant for the firm as with the help this they can determine all current
market trends so which enables them to make their decision in a most appropriate manner in
order to acquire leading position in the marketplace. This following assignment is based on
Sainsbury's organisation which is the second largest chain of supermarkets in UK and formed in
1869 by John James Sainsbury. This file will cover about the different type of organisations on
the basis of their size, scope and purpose. In addition to this, interconnection between various
business function of an organisation, PESTE and SWOT analysis of the firm along with the
strength and weaknesses of all the external factors will discuss in this report.
TASK 1
P1 Different types and purpose of various forms of organisation
Business environment is aggregation of various internal and external factors which lead
the huge impact on productivity and profitability of the business organisation. In the present
working environment, various types of organisational forms are existing like public, private and
voluntary (Calabrese and et. Al, 2018). All these are different from the each other in various
aspects which are explain here in detailing manner:
Private Organisation\ profit organisations
In is refer to an individual, partnership, association, corporation and agency which is
operating their business activities in order to earn higher profitability. This us very diverse sector
which is not operated and owned by government but this is considered a big part of various
economics. Herein, the selection organisation in private sector is Sainsbury's which purpose and
legal structure is as follow:
Purpose
The main purpose of this organisation is to provide great food at affordable price so that
they can attain higher market recognition and sustainability.
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Legal Structure
 Sole proprietorship- In this structure, a single personal is liable for operating all the
activities and also responsible for taking risk, profit and loss.
 Partnership- This is establish by aggregating two or more people who are sharing all the
responsibilities, management and also sharing profit and loss as per their conditions in
partnership agreement (Avramenko, 2012).
 Private Limited companies- This is formation in which all shareholders have limited
liability and legal protections but this is applied on them as per their ownership and
definite restrictions. All these restrictions are define in company's regulation which are
regulated in terms to prevent ant kind of bias.
Therefore, it can be identified that Sainsbury's is included in private limited companies as
because they are regulated by company law and their main motive is to capture a big market
share by offering a range of products and services in marketplace.
Size- This is a huge organisation as it is working with almost 1,86,900 employees and
600 supermarkets and 800 convenience outlets. All these have great contribution in achieving
organisational goals and objectives.
Structure: as because of large size Sainsbury's has considered hierarchical structure
which allows management to effectively control on their employees.
Scope- By offering a range of products to their customers at affordable price they are able
to make their higher scope in market which enables them to attain their goals of achieve higher
profitability and sustainability.
Objectives- The main objective of Sainsbury's is to become first choice of the customers
for delivering products and services of best quality so that higher satisfaction and competitive
advantage from the marketplace (Chaltegger, Lüdeke-Freund and Hansen, 2012).
Public sector company/ non-profit company
This kind of organisations are mainly concern for providing social service to the people
so as to insist them to live a better life. This type of organisations are included in local, state and
national government as because minimum 51% of share is hold by government. For their funds
they are highly depended on donations, taxes and fees. Herein, the selected organisation is
National Health Care which gives their main focus on rendering appropriate medical services to
society.
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Purpose
NHS is mainly concern for providing efficient medical facilities and detected all
inequalities form the medical services with the no profit aim.
Legal Structure
 Central government- In this, main emphasis on formulating rules, regulations and
policies for national level organisations.
 State government- Herein, board of members are liable for making all the policies for
state level organisations (Hillary, 2017).
 Local government- In order to operate all the activities of local level some authorised
person are responsible for it.
Hence, it can be depicted that due to operating all the functions at national level NHS is
comes under the control of central government.
Size- As the main objective of NHS is to makes world a better place. For which, they are
employing almost 1.5 billion who are working for giving their best efforts in order to improve
medical care of the people from the globe.
Structure: Due to the large size of the organisation they have adopted hierarchical
structure as it consider long chain of command from top manager to bottom subordinates.
Scope- Due to offering a range of medical services like optical care, dental care etc. to
their patients without making any kind of profit they are able to increase their scope in economy.
Objectives- As the main objective of NHS is to provide a better heath to the people so
that they can live a healthier and happier life. For this, they render fair, sustainable and
improved services to their patients (Nofal and Yusof, 2013).
Voluntary Organisation/ Non-governmental organisation
This is also known as common interest association as because in this all individuals
comes under an agreement mostly voluntarily in terms to attain a specific purpose. For
controlling and monitoring this type of organisations trustee and board of members are
responsible. Herein, Oxfam organisation is considered in this category, this organisation is
confederation of 19 independent charitable organisation whose main motive is to eliminate
global poverty.
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Legal structure :
 Trust : This is the unity of some of people who are liable to conduct all the activities in
order to lead the organisation in higher position. Unincorporated Association : The main focus of these associations on protecting
society from any type of ephemeral aspects (Raziq and Maulabakhsh, 2015).
Size- As main aim of Oxfam is to remove global poverty which is able for them only due
to their huge size which can determined its 19 forms and 22000 volunteers.
Scope- This organisation is operating across the world in terms to minimising inequalities
from economy and take assurance to properly utilise all the resource so that all issue like natural
disaster, economy crisis etc. can be solved in an ease manner.
Structure: Due to the global working organisation they are considering geographical and
flat structure so as to make proper coordination among all the business forms.
Objectives- The main objective of Oxfam is to develop lasting solution to the unfairness
of poverty and to make the world secure and free form poverty.
Analyse how the structure, size and scope linked to the organisational objectives
These all components have huge relationship with organisational objectives which can be
pertained by that if an organisation determined higher targets for their business then they requires
to have an appropriate structure, size and scope. As Sainsbiry's is huge in size because of their a
rang of employees and stores so that it is necessary for them to consider flat structure in their
organisation so that they can make proper coordination among all the employees and can
influence their behaviour in an effective manner. Additionally, an organisation is also determined
its objectives as per their scope. For instance, if a firm is targeting international customers then
they will set their objectives as per it (Tho and Trang, 2015).
Provide a critical analysis of complexities of different type of business structure
In the today's marketplace, each organisation plays an important role but each of them is
also consist some complexities. Like private organisation is free from government interference
and able to attain higher profitability but they always have risk to face failure. Other, public
organisation is able to attain marker scope but the major complexities of them are no profit,
government intuitions etc (Weiss, 2014).
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P2 Explain the size and scope of a range of different types of organisations.
In the present economy, various type of organisations like micro, small, medium-size and
large are existing which are different from each other in every aspect which can be ascertained
by following points:
Basis Large
organisation
Medium-size
Organisation
Small
Organisation
Micro enterprise
Definition Large
organisations
refers to those
who are operating
their business
activities at
multinational
level. For
example, M&S
which is
undertaking its
operations in
more than one
nation.
This kind of
business firms are
conducting their
operations in
more than one
areas of a
country. For
instance, Captify
is operating their
media related
operations across
UK.
. Like Austin
Frazer, which is a
recruiting
consultancy firm
and operating
their business at
small area of
market. Small
organisations are
operating their
activities at small
scale. For
example,
This kind of
enterprise are
smaller than the
small businesses.
For example,
Issoria which is a
business
management
consultant.
Market and profit
share
As they are
operating at
global level due
to which they are
able to cover a
huge market place
to earn higher
profitability.
Due to the
operating at
national level,
this type of
organisations are
able to cover a
small market
share and less
profitability as
compare to large
As because of
conducting all the
business
operations at
small scale this
kind of
organisations are
not able to attain
higher
profitability as
Micro
organisations are
able to cover a
very small part of
market due to
which
profitability of
them is also very
less.
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organisations well as market
share.
Growth and
Sustainability
Due to huge
investment,
chances of their
growth and
sustainability are
higher.
As compare to
operate at
national level
they are not able
to take the
advantage of
global
opportunities
which reduce
their succession
and sustainability
chances.
They are
operating only in
limited area due
to which they are
not able to stay
ahead from large
and medium-size
firms on the basis
of growth and
sustainability.
Investment of this
kind of
organisations are
very lower which
hinder the
chances of their
growth and attain
sustainability.
Discuss the scope of operations in terms trading, providing services looking at national and
international
Scope of operation within the organisation in term so trading is higher as it is related to
the activities of operation management which is mainly concern for adopting effective methods
or process for manufacturing goods and services so as to meet the demand and needs of the
national as well as international people. As the organisation like Sainsbury's is operating their
activities at global level which enables them to reflect the scope of operations in achieving their
goals and objectives of meet the requirements of diverse customers by providing a range of
quality products and services to them by embracing designs, planning, performance
improvement, control and monitor activities.
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TASK 2
P3 Explain the relationship between different organisational functions and how they are related
with organisational structure
Different types of organisational structure:
Organisational structure define that how all the activities like coordination, allocation,
supervision and delegation are undertaken within the organisation. As due to the increasing
demand of products and services each organisation is giving their focus on acquiring the best
talented employees within the firm. In this aspect, they are mainly concern for adopting an
effective structure as various types of organisational structure are available. Some of them are as
follow:
Hierarchical organisational structure: It is most suitable in condition when various
departments are working together as because it provide great link between the top level
management to the subordinates (Vitale, 2012).
Flat organisational structure: This allows direct communication between the
management and employees which enables a from to attain best outcomes from employees.
In regard to Sainsbuiry's they are following hierarchical structure due to their large size as
it helps them to motivate and encourage their employee to do higher efforts by coordinating with
them in a proper manner which helps them to get higher productivity and profitability.
Explain how size and scope of operations can influence an organisation’s structure:
It is essential for an organisation to adopt the organisational structure as per their size and
scope so as to attain goals and objectives on time. As because size and scope have huge influence
on the structure of the organisation. For example, Sainsbury's is operating their activities at
international or global level due to which their size is very huge as well as their scope is very
high as because they are offering a range of products and services to their customers at
affordable price. As because of their large size and huge scope they are majorly giving their
focus on adopting hierarchical structure so as to make proper coordination among all the
departments in an optimal manner.
Interrelationships between organisational functions
In a large organisation various departments are working which makes it essential to
operate all the activities of all departments in a coordinated manner so that objectives and goal of
the business can be attained appropriately. As Sainsbury's is a large business organisation due to
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which the interrelationship among all the departments will lead impact on their organisational
structure which can be determined by following points:
 Marketing and Finance department: Interrelationship among these departments is very
profitable for Sainsbury's as if finance department will provide adequate funds to
marketing department then it will help them in conducting all the activities like
advertising, researching, promoting, distributing etc. in an appropriate manner which
enables the organisation in achieving higher proficiency and profitability. The
interrelatedness has merits and demerits for the organisation for example, if the finance
department will provide time to time funds to marketing department then they can carry
out all the activities significantly which results higher profitability of the business. Other,
it can also lead negative impact like if marketing division will not able to sufficient funds
for marketing then overall success of the business will go in downfall position
(Schaltegger, Lüdeke-Freund and Hansen, 2012).
 Marketing and human resource department: Marketing department within the
Sainsbury's organisation also help HR department by giving its huge contribution in
appointing best candidates within organisation by doing the advertisement for the vacant
position so as to attract a range of talented candidates towards the organisation. This
relation has various merits for the business as it allows them to employ best candidates
which give their huge contribution in achieving the organisational goals and objectives.
But this has also some demerits for example, in case if the marketing department will not
give their best efforts in attracting potential candidates towards vacant position then it
will direct lead the negative impact on the delay or insufficiency in getting best
outcomes.
Thus, the interrelationship has huge significance for the organisation along with its
demerits. It has also huge impact on the organisational structure of Sainsbury's as in case all the
departments have relationship with each other then it will have both positive and negative impact
on structure. As interrelationship will increase innovation and flexibility within the organisation
as all the employees are well aware from the each department working system. But is has
negative impact also as because of this dependency among all the department will increase which
will hinder the organisational structure in a bad manner (Palo and Tähtinen, 2013).
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TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations
Macro environment refers to all the external of the business which have huge impact on
the performance of the business. The considering of all these factors is essential for the
organisation who are operating their business in retailing activities as it has huge impact on the
performance of the business. In this regard, PESTEL analysis can be used which will determine
the impact of these factors on UK retail sector.
Political factors: This define all the rules and regulations of the government which needs
to carry in business activities. This involves tax rate, trade policy, consumer protection etc.
Positive- The major effect on UK retail sector is that it will reduce the unfair trade by implying
boundaries. For example, if UK government will increase the tax rate then it will restrict retailing
companies to unnecessary purchase and can retain its national currency also.
Negative- It implied unnecessary boundaries for retail sector which enables all the industries
within this sector to operate their activities freely. For example, if the employment rate increase
then it will direct lead negative impact on overall cost (Janita and Miranda, 2013).
Economical factor- These factors are arising because of the changes in supply and
demand or because of the economy. This includes inflation rate, interest rate etc.
Positive- These factors have positive impact on the profitability of UK retail sector. For
example, in UK economy situation is stable and very strong which have huge beneficial for the
retail organisations like Sainsbury's.
Negative- In UK, if the inflation rate will increase or due to the economic recession then it will
lead the buying behaviour of customers in a negative manner which results decreased sales and
profitability of retailing industry.
Social factors: Changes in current market and customers perception have developed
several changes in retailing and shopping industry which can be identified by following points:
Positive: These factors helps the retail industry to operate their activities as per the social
awareness, career attitude and other aspects which will give them results as higher profitability
and sustainability.
Negative: It restrict retail sector succession due to higher dependency on customers for operating
activities.
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Technological Factor : New technology development and innovations have created a
huge place in retail sector which lead huge impact on the performance of them which can be
determined by following points:
Positive: By considering these factors retailing organisations like Saninsbiry's can operate all the
activities as per the current market trends.
Negative: Frequently change in technology also might increase the transportation cost of the UK
retail sector organisations (Chi, 2015).
Legal factor : It includes all those factors which is related to government laws which
needs to be considered by the organisations while operating their activities.
Positive- The UK retail is widely benefited by this as it will save them from manipulation and
other smuggling of the products and it will reduce the illegal trafficking of this industry products.
Negative- Continuously changes in these factors have direct lead the impact on proficiency and
profitability of this sector.
Environmental factor: In this, those factors are included which are incurring because of
biological changes like pollution, seasons and many other. The retail industry must consider this
laws so as to ensure safety to the rights of the customers and employees.
Positive- It will help the retailing sector in producing all the products which can lead the
positive impact on the performance and profitability of them.
Negative: This might hindrance growth of this sector as because it will ban to manufacture some
certain products.
TASK 4
P5 Conduct internal analysis
In order to operate all the business activities smoothly it is essential for management of
Sainsbury's to assess internal environment of the business. In this aspect, they can use SWOT
analysis which enables them to make their decisions by considering all the strengths,
weaknesses, opportunities and threats.
SWOT of Sainsbury's
Strength Weaknesses
 The major strength of Sainsbury's is
that it is the oldest supermarket chain in
The increment in food prices will direct lead
the negative impact on their pricing strategy.
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UK.
 They have strategic branding and
advertising methods through online
campaigns, TVCs etc.
 The another strength is that it has over
600 supermarkets and 800 convenience
stores in UK (Avramenko, 2012).
The profitableness and net coverage percent is
lower as comparison to their diligence average.
They are facing the issue of inventory and
supply chain management.
Opportunities Threat
 By making partnership with other
companies they can enter in emerging
markets.
 Expanding their business in Africa and
Asia will huge profitability to them.
 Development in rural areas is also a
huge opportunity for them.
 Competition is biggest threat for them
as they have to face tough competition
from Tesco, Asda etc.
 Due to prone online platform they have
to face lower profitability.
 Rising prices of raw material in UK is
huge threat.
Porter five forces:
It is one one of the business model which was proposed by Michael Porter. It is mainly
used in the situation where company tries to find about the competition available in the market.
In context of of Sainsbury's, porter five forces will be one of the model which will help to
determine about the strength of a company and even current standing in the market which will
directly help them to obtain better result in future period of time. There are five different
component of this model which has been explained below in detail.
 Bargaining powers of the Buyers: It is the situation available in front of the company in
which it is necessary to understand that up to what extend the buyer can influence the
organisation. It is directly linked with number of factors such as products, fluctuation in
the preference of taste of product and many more. In context of Sainsbury's, it can be
easily said that bargaining power of the buyer is highly influenced because there are
number of other organization which provides the similar form of services at a reasonable
cost. For example: if sainburry will not provide product at reasonable amount of price
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then they can easily purchase it from other company such as TESCO, Mark & Spencer
and many more.
 Bargaining powers of the Suppliers : It is one of the force where it is needed to
determine about the power available with suppliers. In case of Sainsbury's, their
customers have very low bargaining power because there are number of suppliers who
are available at the moment who can supply the product to sainburry a very low price. It
is one of the reason that company gets additional opportunities to earn higher amount of
money.
 Threat of new entrants : In this respective force it is being checked that whether there is
any of the new company which is going to enter into the similar market or not as it can
directly affect the daily basis operations of a company. For example, in context of
Sainsbury's there is high threats of new entrants because business can be established at
low amount of capital as well (Calabrese and et. Al, 2018).
 Threat of substitute: This force easily help to find about the impact of any substitute
product which Sainburry sales on daily basis. There is high threats of substitute because
there is the possibility that other company can provide the alternate products at a low
price which can reduce the sale of a company significantly.
 Competitive Rivalry: It is the most important force among remaining other because I
directly influence the decision making ability of Sainsbury's. For example, in order to
reduce its impact, it is necessary for the company to determine about the services offered,
adopted and the price being taken to sale any product by other company. It will help them
to compete with the rivalries firm.
P6 Interrelate strength and weakness with external macro factors
In context of Sainsbury's, interrelationship of strengths and weaknesses with macro
factors is given below:
Political factor
Strength: It is related to government rules and regulations which needs to be considered
by Sainsbury's in order to attain business goals. In this regard, they tries to make partnership with
government confederations i.e. Climate Action Partnership which helps them to create bigger
opportunities for themselves in market and reduce the threats of business.
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Weakness :In case, if Sainsbury;s will denies to adopt all the rules of government then it
will lead negative impact on value and productivity (Vitale, 2012).
Economic Factor
Strength : In this regard, Sainsubury's has take an initiative to invest in that project which
will give the huge contribution in development of economy so as to improve it brand image or
value.
Weakness : In case, if Sainsbury's will not able to operate all the activities as per the
economy then it will reduce their succession chances in marketplace.
Social Factor
Strength: This represent that Sainsbury's organisation can attain higher success by
conducting their manufacturing operations as per the demand and expectations of customers.
Weakness: If they will not consider social factors then it will become threat for them to
operate their business activities in marketplace.
Technological Factor
Strength: In this aspect, Sainsbury's needs to give focus on adopting innovative
technologies in their manufacturing activities so as to attain higher competitive advantage and
profitability.
Weakness: If the Sainsbury's will not able to adopt innovative techniques in an
appropriate manner then the overall productivity and profitability also will affected in a negative
manner which will become a big threat for the organisation ton continue their manufacturing
operations (Nofal and Yusof, 2013).
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CONCLUSION
Form the above file, it can be understood that evaluation of business environment is
essential for an organisation in order to operate all the activities smoothly. In this regard, an
organisation can use the PESTEL and SWOT analysis so that they can determine the impact of
external and internal environment of the business. This will helps them in carrying all the
activities in a most significant manner so that desired objectives of the business can be attained
within a specific period of time.
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Online
SWOT analysis of Sainsbury. 2018. [Online]. Available Through;
<https://www.marketing91.com/swot-analysis-of-sainsbury/>
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