Business and Environment: Key Features and Importance

This assignment provides an overview of the business environment, including its key features, importance, and objectives. It also explores Porter's model, which is a strategic framework for understanding business competition and success. The assignment highlights the significance of business environment in shaping corporate social responsibility (CSR) and sustainable entrepreneurship. It covers various aspects, such as CEO personality, strategic flexibility, and firm performance, as well as government and entrepreneurship in transition economies. The summary also touches on business model innovation through trial-and-error learning and RFID adoption in manufacturing industries.

Business and Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Different type and purposes of organisations and their legal structure.................................4
P2 Size and scope of different type of organisations..................................................................6
TASK 2............................................................................................................................................7
P3 Relationship between different organisational functions and their link with organisational
objectives.....................................................................................................................................7
M1 ..............................................................................................................................................8
M2...............................................................................................................................................9
TASK 3............................................................................................................................................9
P4 Positive and negative impact of macro-environment on business operations.......................9
TASK 4..........................................................................................................................................11
P5 Internal analysis of organisation to identify their strengths and weaknesses......................11
P6 Interrelation of strength and weaknesses with external factors...........................................12
M3&M4.....................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment includes both internal and external factors which affects the
operations of company. It is the duty of the management of company has to consider all such
factors to effectively achieve their objectives. Internal factor includes customer demand,
suppliers, market size etc. and external factor includes political, social, economical,
technological etc. M&S is multinational retailer company which provides clothes, home
products and luxury food products (Bos‐Brouwers, 2010).
In the present report explain about, different type and purpose of such organisations and
their legal structure, size and scope of different type of organisations and relationship between
different organisational functions to achieve desired targets. Here also define about, positive and
negative impact of macro-environment on business activities and internal and external analysis
of organisation to evaluate their strength and weaknesses.

TASK 1
P1 Different type and purposes of organisations and their legal structure
There are three type of organisation which operate their functions called public, private
and voluntary. All these organisations have their different functions and legal structures. This is
the duty of the management of company has to comply with all rules and regulations which are
framed for such organisations to run their business activities ( Charter, 2017). These three
different type of organisations are described below:
Public organisation
This is the main part of economy which mainly provides governmental services. On such
organisations government has control on their functions. The services which are mainly provides
under this sector includes military, police, health care, public education etc.
National Health services is public company which provides free medical services to poor
people of UK. The main aim of this company is no one is deprived from basic medical services.
Purpose of NHS
 To provide free medical services to the individual of UK
 To build economy of UK more stronger in world.
 To work for the benefit of society.
Legal structure of public company
Legal structure of public company is described below:
 Central government: central and state government departments are included.
 State government: Activities of state government and functions provide by state
agencies are included.
 Local government: This includes about administration of public companies.
Advantages and disadvantages
Advantages Disadvantages
This provides the opportunities to grow
economy of country
There are many restrictions are put by the
government of country
It contributes in development of basic facilities
in country
They have to take prior permission of
government before operating their transactions.

Private organisation
These organisations are mainly owned by non-governmental organisations, small number
of shareholders or company members which are not allowed to trade its stock to general public
on stock market exchanges (CHUANG and Liao, 2010).
M&S is multinational retailer company which provides home products, luxury food items
etc. The main purpose of company is to earn higher profit form their business activities.
Purpose of M&S
 To earn higher profit for the benefit of stakeholders
 To expand their business activities worldwide
Legal structure of private company
Legal structure of private company is described below:
 Partnership: This includes companies which are formed by two or more persons to earn
higher profits by mutually sharing all expenses and liabilities.
 Sole trader: This includes about a company is start by single person called owner. Such
person have unlimited liability towards the activities of company and have full
responsibility of all transactions.
 Limited companies: These companies are formed by shareholders and all the activities
are managed by them.
Advantages and disadvantages
Advantages Disadvantages
The work for earning higher profit These companies are not allowed to invite
public to subscribe their shares
Government has not control on the activities of
such company
They are not working for the benefit of society
Voluntary organisation
This includes such companies which are formed for the benefit of society. Such
companies are also called non profit organisation which provides their services for benefit of
people not to earn profits.

Oxfam is provides their services to remove poverty from society. Many local committees
are worked with this company to provide food relief to the peoples of country and provides help
to British government to remove poverty.
Purpose of Oxfam
 To remove poverty from country and for the benefit of society
 To provide food relief to needy peoples.
Advantages and Disadvantages
Advantages Disadvantages
They work for the benefit of society Not working for earning profits
Provides help to government to increase
livelihood of people
They have to take licence from government has
to follow strict regulations
Legal structure of voluntary organisation
 Limited by guarantee: Such companies are not required to add the name Ltd. Or pvt Ltd
behind the name. Such organisation have their own legal personality and liable for all
contracts in which they enter with another party.
 Trust: It is easy to form in comparison to non profitable organisation. They are required
formation of trust deed in formation of such company and provide their functions. Trusts
are not entertain as legal entity.
P2 Size and scope of different type of organisations
Size and scope of the activities of different organisations is defined below:
NHS
 Size of NHS: National Health Services is public company which provides free medical
services to the poor persons of UK. The main aim of company is to provides basic
medical facilities free of cost. It provides their services also in England, Scotland, Wales,
Ireland etc. This will be large company because it employees 1.6 million people which
have combine budget of £ 136.7 billion (Drucker, 2017).
 Scope of NHS: NHS provides their services in UK, England, Wales, Scotland, Ireland
etc. They provide free medical services to the general public. NHS provides free
prescriptions, optical services and dental services. The main aim of company is to

provide free medical facilities to increase their standard of living and no one is deprived
from basic medical facilities.
M&S
 Size of M&S: M&S is multinational company which provides home products and luxury
food products. They have more than 979 stores across UK in which they have only 615
stores which only sell food products. M&S provides their products and services world
wide and have 454 international stores which helps the company to serves their services.
The annual profit earned by company is £ 115.7 million and total number of employees
which works to operate their functions are 84939.
 Scope of M&S: M&S is multinational company which provides their products and
services worldwide. They have 979 stores in UK and 454 international stores which
serves their products and services worldwide. This provides their products and services of
luxury food items, home products and clothing.
Oxfam
 Size of Oxfam: Oxfam is non profit organisation which is established in Oxford,
England. The main aim of company is to remove poverty and provide food relief to poor
people of country. They provides their services in all over the world. For this purpose
they takes the help of many local committees (Du, Bhattacharya and Sen, 2010).
 Scope of Oxfam: The main of this voluntary organisation is to remove poverty from
society. For this purpose they provide different services like poverty eradication, disaster
relief, advocacy, policy research, pro-migration. They also provide food relief with the
help of local committees between poor peoples.
TASK 2
P3 Relationship between different organisational functions and their link with organisational
objectives
There are many functions have to perform by different departments to achieve common
goals. All these different departments have their own importance in organisation and have
different functions to properly operate activities of company. All these different departments are
interlinked to each other and contributes in accomplishment of common goals of company.
Different departments of M&S and their relation to achieve their targets is described below:

 Human resource department: The main aim of this department is to appoint the
workforce in company as per the requirement of effectively operate the activities of
company. Such function is related to all department like operational, finance etc. As
without qualified workforce effects their working. Overall responsibility of this
department is to manage the activities and employees of company and guide them
towards the accomplishment of organisational objectives. This department has link with
all departments of company as helps in workforce planning and provide adequate number
of staff members which effectively management the activities of M&S. This helps in
achievement of the objective like support in expansion activities, effective management
of employees etc.
 Finance department: This department of M&S has responsibility of making budgets for
other departments of company and allocate funds as per their requirements. This helps the
operational and marketing department of company to operate their functions. The main
aim of this department is to manage the funds of company in such manner that it fulfil all
the demands of other departments and achieve organisational targets within stipulated
time (Hallin, Holm and Sharma, 2011). This department has link with production and
marketing department. This identifies the need of funds of both departments and provide
adequate financial resources which helps in effective completion of their tasks. Marketing
department easily advertise about the products and attract the large number of customers
which helps in accomplishment of target of profitability.
 Marketing department: For marketing activities of M&S they requires to have proper
workforce to mange their wide functions which is undertake by HR department of
company. They required adequate funds which provide by finance department to use
various tools of advertisement and promotion of their products in worldwide. Such
department has the functions of determination of consumer demands and competitors top
make better plans. Their suggestion provides the help to produce the goods as per the
preferences of customers and improves the quality. This department has direct link with
production department. Marketing department has the responsibility to make research
about the demand of customers regarding their products. This helps the production
department to optimum utilisation of their given resources satisfy their different

preferences. This helps in achieve the objective of improved market share, competitive
advantage, higher sales etc.
Organisational structure
There are four type of organisation structure mainly which are described below:
 Function based: This includes to divide the organisation on the basis of purpose of their
functions. In this organisation is divide as human resource department, marketing
department, sales department etc.
 Geography based: Large companies operates their functions in wide geographical area.
For this purpose they have to divide the activities of company on the basis of area, this
helps to determine the demands of customers of different area and satisfied them
according to their choice of product and services.
 Product based: This includes to divide the organisation on the basis of their products
which are provide by them. For ex. m&S provides clothing, home products and food
products. So, organisation is divide into these three structure.
 Consumer based: This includes about divide the structure of company on the basis of
the preferences of their customers to meet their demands.
M1
There is huge role of size, structure and scope of organisation in achievement of their
objectives. Their contribution in achievement of objectives is described below:
NHS is public company provides their services worldwide. To effectively serve their
services to community their is need to large number of employees. The main aim is to remove
provide medical services free of cost. For this purpose they provides all services like free
prescription, dental services, optical services etc. This helps to achieve their ultimate objectives.
M&S is private company which have large number of stores world wide. To manage their
activities large number of employees are working and to handle them different departments are
working. This helps to achieve their targets (Nadkarni and Herrmann, 2010).
Oxfam is voluntary organisation and main aim is to remove poverty from society. Large
number of volunteers helps them to achieve their targets to serves their services worldwide.
M2
Different advantages and disadvantages of interrelationship among the different functions
of company is described below:

Advantages Disadvantages
The interrelation among different department
helps them to effective operate their functions.
Mistake of one department effects the ability of
different departments of company to provide
their functions effectively.
Interrelation provides support of different
departments in accomplishment of common
goals.
This will make the work more complex and
time consuming.
TASK 3
P4 Positive and negative impact of macro-environment on business operations
Macro-environment includes the factors like political, economical, social, technological,
legal and environmental. All these factors have great impact on the business operations of
company. These factors have positive and negative impact on the activities of M&S. It is the
duty of management of M&S has to consider the effects of such factors which are described
below:
Political factor: This includes about the stability of government, rules and regulation
made by them for operation of the business of private sector. All these factors have positive and
negative impact on the performance of M&S.
 Positive impact: If the government of country is stable and provide linnet rules for
operation of business in private sector, then it helps M&S has to effectively implement
the policies to achieve their desired targets.
 Negative impact: Due to instability of government, management of M&S has to give
more focus on their activities which reduces their efficiency to meet the different
demands of their customers.
Economical factor: This includes about economic condition of country, cash flow,
situation of inflation and recession etc (Russo and Perrini, 2010).
 Positive impact: If there is good economic condition and level of income of persons in
country then creates more demand which helps to increase their operations and
profitability.

 Negative impact: If the economic situation is not good and have situation of recession
affects the demand and government polices which have direct impact on performance of
M&S.
Social factor: This includes about age, occupation, consumer behaviour etc. all these
factors have impact on M&S.
 Positive impact: If the consumer behaviour is matched to product and services provide
by M&S, helps to achieve their targets
 Negative impact: If the products provide by M&S is not as per the preference of
customer then it reduces their operations in such country.
Technological factor: This includes advance technologies, methods, processes and
techniques which effect the working of M&S.
 Positive impact: M&S has required to adopt such technological changes to increase
quality of their products and meet customers demands easily.
 Negative impact: This will increase the cost of operations of M&S because they have to
provides training to their employees.
Legal factors: This includes about copyrights, patent etc. which have to follow by M&S,
otherwise it effects their working.
 Positive impact: Management of M&S has to consider copyrights and patents to improve
their image and goodwill in market.
 Negative impact: If management has not consider such legal requirements then they
have to pay legal penalties which damages their image.
Environmental factor: This includes about the pollution and working for society etc.
This will affects the M&S.
 Positive impact: If M&S has effective disposal system of wastage and pollution control
system then it improves their image. The CSR activities of M&S helps to attain the
loyalty of society.
 Negative impact: If M&S not not fulfils these regulations then they have to face
criticism form society which affects their profitability (Schaltegger and Wagner, 2011).

TASK 4
P5 Internal analysis of organisation to identify their strengths and weaknesses
Internal analysis includes SWOT analysis of the activities of company. This helps the
company to identify their strengths and weaknesses. So, internal analysis of two organisation is
described below:
SWOT analysis of NHS
Strengths: There are many strengths of the activities of NHS. It is a public company
which provides free medical services for the benefit of society. Other strength is described
below:
 large number of employees are working for the operations of company effectively.
 It is public company which have support of government in funding their activities.
Weaknesses: The main weaknesses of NHS is to consider all the regulation provide by
government in performance of their functions.
 Consider all the regulation provide by government in operation of their activities.
 Take prior permission of government authorities before finalisation of any new project.
Opportunities: There are many opportunities to NHS to provide more beneficial services
for welfare of society.
 To provides their services worldwide effectively with large amount of funding and
employees.
 To capture large market share because of their CSR activities
Threats: There are many threats are faced by NHS which are described below:
 They provide their services worldwide, so, they have to follow the regulations of
different governments which affects their efficiency.
 External factors available in business environment also effects the working of company
also affects their working.
SWOT analysis of M&S
Strengths
 The main strength of company is their brand value. There is high recognition of their
products in market (Sekaran and Bougie, 2016).
 Another strength of company is wide variety of product provide by them. This will
satisfies the demands of different customers.

 One of the strength of M&S is large number of outlets in UK and internationally. This
will boost their sales and profitability.
Weaknesses
 The weakness of M&S is there stores are not fashionable and trendy which effects their
ability to attract customers.
 Another weakness of M&S is works are done manually which increases their operational
cost.
Opportunities
 Due to have good brand image they have opportunity to expand the business activities.
 They have opportunity to capture large market share and attrct more customers due high
quality of their products.
Threats
 Main threat to M&S is large competition in market which affects the profitability of
company like Tesco, SainsBury etc.
 Their business depends upon stores and if something wrong happen it damages their
profitability.
P6 Interrelation of strength and weaknesses with external factors
External factors which are available in business environment becomes the strength and
weaknesses of company. This will depend upon the management of company how they consider
such external factors. Interrelation of strength and weaknesses of M&S with external factors are
defined below:
 Political: M&S provides their main activities in UK which have stable government and
have good level of income of peoples which increases the demand of their products. So,
it is the strength of M&S (Smallbone and et. al., 2010).
 Economical: Good economic condition, high cash flow becomes the strength of
company as it helps in increase the demand of their products and vice versa.
 Social: Old age and poor education becomes the weakness which affects the sales of
M&S. If persons have good education becomes the strength to increase their online sales
 Technological: Advancement of technology become the strength of company to
improve their quality. But it also has negative impact as it increase the operational cost
of operations of company.

 Legal: If all the legal regulations are fulfilled it becomes the strength of M&S otherwise
it is the weakness of company.
 Environmental: CSR activities of M&S are their strength and if not care about society
it becomes their weakness.
M3&M4
There is huge impact of PESTLE ans SWOT analysis on the decision making of the
management of company. This analysis helps the management of M&S to make the better
strategies and plans which improves their efficiency to perform their work and achieve their
desired targets effectively. This will helps the management of company to increase their sales
and profitability.
CONCLUSION
It has been concluded from the above report that, business environment has great impact
on the working of company. It is the duty of management of company to consider such factors
and improves their performance. Internal analysis about the activities of company helps to
identify their strengths, weaknesses, opportunities and threats. This helps to achieve their targets
effectively.

REFERENCES
Books and Journals
Bos‐Brouwers, H.E.J., 2010. Corporate sustainability and innovation in SMEs: evidence of
themes and activities in practice. Business strategy and the environment. 19(7). pp.417-
435.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
CHUANG, C.H. and Liao, H.U.I., 2010. Strategic human resource management in service
context: Taking care of business by taking care of employees and customers. Personnel
psychology. 63(1). pp.153-196.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Du, S., Bhattacharya, C.B. and Sen, S., 2010. Maximizing business returns to corporate social
responsibility (CSR): The role of CSR communication. International Journal of
Management Reviews. 12(1). pp.8-19.
Hallin, C., Holm, U. and Sharma, D.D., 2011. Embeddedness of innovation receivers in the
multinational corporation: Effects on business performance. International Business
Review. 20(3). pp.362-373.
Nadkarni, S. and Herrmann, P.O.L., 2010. CEO personality, strategic flexibility, and firm
performance: The case of the Indian business process outsourcing industry. Academy of
Management Journal. 53(5). pp.1050-1073.
Russo, A. and Perrini, F., 2010. Investigating stakeholder theory and social capital: CSR in large
firms and SMEs. Journal of Business ethics. 91(2). pp.207-221.
Schaltegger, S. and Wagner, M., 2011. Sustainable entrepreneurship and sustainability
innovation: categories and interactions. Business strategy and the environment. 20(4).
pp.222-237.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Smallbone, D., and et. al., 2010. Government and entrepreneurship in transition economies: the
case of small firms in business services in Ukraine. The Service Industries Journal.
30(5). pp.655-670.
Smith, W.K., Binns, A. and Tushman, M.L., 2010. Complex business models: Managing
strategic paradoxes simultaneously. Long range planning. 43(2). pp.448-461.
Sosna, M., Trevinyo-Rodríguez, R.N. and Velamuri, S.R., 2010. Business model innovation
through trial-and-error learning: The Naturhouse case. Long range planning. 43(2).
pp.383-407.
Teece, D.J., 2012. Dynamic capabilities: Routines versus entrepreneurial action. Journal of
Management Studies. 49(8). pp.1395-1401.
Wang, Y.M., Wang, Y.S. and Yang, Y.F., 2010. Understanding the determinants of RFID
adoption in the manufacturing industry. Technological forecasting and social change.
77(5). pp.803-815.
Online:
Business Environment. 2017[Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>