TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 TASK 1............................................................................................................................................1 P1 Types, size and scope of organisation.............................................................................1 P2 Explaining size and scope of different type of organisation............................................3 TASK 2............................................................................................................................................4 P3. Relationship with different type of organisational functions and these are linking with organisational objectives and structure..................................................................................4 TASK 3...........................................................................................................................................7 P4. Identification of positive and negative impacts of macro environment on business......7 TASK 4...........................................................................................................................................9 P5 Internal and external analysis of Lego..............................................................................9 P6 Strengths and weakness are interrelationship with external and macro factors..............11 CONCLUSION..............................................................................................................................13 REFERENCES.............................................................................................................................14 .......................................................................................................................................................16
INTRODUCTION Business Environment refers to internal and external factors which affect the functions of business operations. Business consists of macro and microenvironmentin which one is controllable by entity itself and other is not controllable in any of the situations of business. In this report, an entity is givenwhich are public, private and voluntary.Organisations are Lego, UNICEF and Bank of England. UNICEF is organisation which helps in saving and improving lives of children. Bank of England helps in regulating financial stability of United Kingdom. Legois dealing with plastic bricksand toys.This report covers different types and purposes of above cited entity.Further, it covers the size and scope of organisations. Lastly, it covers the relationship with different types ofstructurefunctions which link toorganisational objectives. TASK 1 P1 Types, size and scope of organisation There are three types of organisation which are working in different sectors; some of them are private, public and voluntary organisation for business. Private company- it is a company which is privately owned. Stock of this entity is not traded in public exchanges but organisation in hands of private ownership. Thereare very few investors which are doing investment in private company.In this type of company most entities have to raise money from outside.This type of company focusses on profit making. Main objective of company is to increase capability of worker. This entity is based in Billund Denmark. Lego is doing business of colourful interlocking of plastic bricks which consists of gears, mini figures and many parts. It is used in integrating pieces for vehicles, buildings and working robots of business (Smith, 2017). There are many types of company under this sole trader, partnership and many more.Purpose of business is to earn profit which are the most important for business. Advantage - This focuses on serving of people with the motive to earn profits. Disadvantage- This sector only focuses on profit making which is necessary for survival of an entity. Sole trader- this type of business individual has own responsibilities of making decisions and performing tasks for firms. It is one of the simplest way to start a new business. In UK 1
person is responsible for keeping of records which records sales and incurred expenses. Owner of business has all legal responsibilities of business operations. Person has control over assets and liabilities of business and use it owns by nature of business operations. Advantage–An individual has no needs to take approval of owner and can take decisions independently. Disadvantage– Here, anowner had an unlimited liability of business which makes risky situation to go wrong. Partnership-in this business there can two or more than two partners.This entity comes under Partnership Act. Every partnership business has to register its business under this act.In the profits, capital structure is also decided by partnership agreement.Person invest money in proportion which is decided by business. Advantage- Here, both risk and profits are divided by business so burden is not on an individual. Dis advantage–Here, the person has a limited liability which makes situationsrisky (Sila, 2015). Public sector-In this type of business, the entire control is of the government. This company trade in open market of business with shares are buy by diverse of investors. Company can raise its funds by different offerings like selling of new shares in market. Bank of England comes under public sector which is operating in Central Bank, UK. It is one of the eight banks which are responsible for issue of bank notes in England and Wales. This bank was private earlier and after that, it became nationalised. Purpose of public sector entities is to serve people and profit is secondary motive. Legal structure of entity is responsible to the local government. Advantage-In this type of business, raising of funds is quite easy which is helpful for business operations. Disadvantage-Here,anownerhasnocontroloverbusinessbecausemajority interference is from the government. Voluntary Organisations-this type of business is focusses on uplifting society not on profit.Main purpose of business is to make social impact on society. It is not for earning profits but for raising of society. It is one of the ways by which entity can contribute towards society. 2
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UNICEF comes under this type of organisation(Schaltegger and Wagner, 2017).These organisations protectchildren, ensuring thatchildare working in safe environment, nutrition, safe drinking water, educationetc.Legal structure of this entity is set by constitutions of UK. There are three main legal structure of which are unincorporated Associations, Trust, company limited by guarantee. This entity has great scope because this is done for developing under privileged children and giving them their basic rights. Advantages - This organisation focuses on improving and uplifting of children which are below the mentioned age group. Disadvantage - Raising of funds is very much difficult in such type of organisation. Charitable Organisations- this type of organisation focuses on uplifting of people and not making profit. Main objective of this is social wellbeing. Country to country laws for charitable organisation varies like tax which affects cited entity adversely. Advantage -An entity serves poor people to provide them nutrition, education to children. Disadvantage-Raising of funds is very difficult because mostly, people neglect this type of entity. P2 Explaining size and scope of different type of organisation. Size and scope of different type entities are explained below: Public sector- in this type of entity, size depends on which type of business entity is doing and employee and employer are operating its business. Scope of public company is expanding its business to serve people not for earning profit. It is one way by which entity is providing quality of services to people which will increase ability of workers. Objective of an entity is working for earning of profit and helping company to serve customers in better way. Private Sector- scope of business is to earn profit and increase its sales which will result in maximising customer base cited company. Size of business depends upon which type of business it carries. It can be large, medium, small enterprise whose main motive is to earn profits. Objective of an entity is to earn profit which makes people to attract towards product as well as entity. 3
Voluntary Organisation- scope of an organisation is to serve people who are under privileged. This also looks after education, health, working environment of children. Size of an companydepends on funds raised byentity(Savrul ,Incekara and Sener, 2014).If fund is raise by business is more which help in expand its operations in area. Sole trader- scope of business is very limited because no company has guaranteed of ongoing running of business. This company is responsible for taking its decisions by own. They have to maintain working of organisation. Size of entity depends working of employees but generally it is of small size. Partnership-size of business depends upon partners working in entity and how they are managing their business. Scope of business is to manage its working with partners. Risks is also divided between partnerswhich is not burden on oneself.It is one of the ways to connect the stakeholders of business which facilitate in running of business smoothly. TASK 2 P3. Relationship with different type of organisational functions and these are linking with organisational objectives and structure There are different types of functions which are used in all organisations. Some of them are finance, marketing, information technology, research and development, human resource managementetc. These are discussed below: Finance- in this department, budgets are decided for particular section of business. Expenses which are incurred by entity is also monitored (Reim, Parida and Örtqvist, 2015). In this type of business, all things are monitored and according to this, the budget of particular department is decided. This function of organisation is related to other functions of organisation. This department is one which decides how much fund is allocated to which department according to demand of goods and services. Objective of every company is to serve customers according to their demands of products and for fulfilling demand of goods in the market place, there is requirement for funds which help in making goods. It is one of the ways by which an entity is restricting its expenses for running of business smoothly. Objectives of Bank of England is to serve people with financial stability of 4
business. For this purpose, an entity is making keen observations in business to attain stability in market (Kolk, 2016). Objectives of Lego is to earn profit and selling quality products to its customers. Objectives of UNICEF is to serve people for their upliftment and growth especially from underprivileged sections. Objectives of Bank of England is to smoothly run the financial stability of region. Marketing- this function relates not only to selling of goods which are made by company but it has its wide scope. This includes use of various promotional efforts for selling of goods like advertisements on TV, social media and many more till product is sold to last consumer. It also consists of market research, product development and making of marketing plan. Objective of Lego is to earn profits and for accomplishing objectives of an entity, it is planning to increase sales. It will maximise its customer base of an entity. if lego is selling its products with help of lot of promotional efforts and help entity in earning of profit. this will increase it brand value of entity.In this voluntary organisation promote its entity through campaigns whivh help in reaching of objective of uplifting of children. Human Resource Management- This function is associated with resolving issues of employees and looking for development of them.This functions are also responsiblefor training of employees, appointing, removing, maintaining long term relationship within office. Objective of company is to increase profits and this function helps in retention of employees.With retention and satisfied employees, productivity of workers increase which result in growth of company.in all organisation there is need of humans for doing work. in Lego appoint new humans resource which help in performing of work on timely manner. in bank of England human resource help in running of business smoothly which ultimately help in serving of people. Research and Development-This functions of an entity focuses on making new products or improve the old ones. This function is closely related with marketing which make sure that customer is getting products of their desire. By doing this type of activity, survival chances of any product also get increase in market place. For fulfilling of objective,priority is to research before making of product and it will increase chances of endurance of product. More goods are stable in market more it will be profitable for organisation(Jones, Wicks and Freeman, 5
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2017).by this function only chances of survival of product or service of bank of England and lego will increase. this will help in reaching of goal of maximising of brand of image of entity. Information Technology- This function is the most important organisational function which helps in recording of transactions.By correct recording of organisation help in making appropriate analysis of profit. It facilitates firm in reviewing correct position of an entity. by improving in technological advancement and having knowledge about computershelp in reaching objective of earning of profit.It fulfil the objective of Lego which is helpful in reaching to new heights of success. This function helps in recording of transaction which help in gaining of profit for Lego, bank of England and Unisef. This is very basic objective of every entity. There are many structures of organisation which are suitable for entity. Some of them are as follows: Hierarchy structure- Lego company follows this organisational structure. Mostly all large organisations are following this type of organisational structure. Under this, there are three levels such as top, middle, and lower.Main power of organisation is with the top level which gives order to middle level and these orders are fulfilled by lower level. This type of structure in which people are recognised by their ranks and status. This structure is also followed by voluntary organisation which has same ranking. In this structure, there are Board of Directors, CEO and many directors which belong to different field.This also works the best in most of working environment(Hair Jr and et.al., 2015).Here, Lego must perform organisational functions like marketing of Lego in such a manner which aids in selling its products. Finance function of this entity is related to this because for receiving finance, it has to ask a higher authority. Divisional structure- This structure is followed by Bank of England and under this, functions of an organisation are divided on basis of location and speciality. It is helpful for large organisationsbecause they have various departments to look after in entity.This type of organisation has a control over daily operations of business but still they have to ask for higher authority before implementing any strategy or taking any decision. In this bank of England is has some organisational functions to perform some of them are human resource management which is managing its employees in such a manner so that retention of employees will be there. in 6
marketing of services of product which are offered to customers which help in by dividing of tasks in each manner. In voluntary organisation, there is following of divisional structure which supports in making products for performing its tasks. In marketing function of an entity aids in uplifting people. For this type of organisation, promotion for an entity must be done by campaigns. TASK 3 P4. Identification of positive and negative impacts of macro environment on business Impact of positive and negative macro factors on business operations is analysed by using of PESTLE Analysis. This helps in gaining competitive advantages of business. This facilitates company to run any business environment.It is use for business to impact of macro factors on business operations.This is a technique which is used by entity to know position of entity in market. Political Factors- Under this factor, it includes certain changes that is made by the government which will influence the economy of that country. Changes can be made by government on tariffs, tax, fiscal policy and many more. Lego is operating in UK which has a strong political stability of business. As this cited entity is operating in constriction business whichis offering services like making of plastic bricks and toys thatare easily assemble.This country has outsourced its production to other nations which has lower cost of production (Georgescu and Popescul, 2015). This is done for gaining competitive advantages from other firms. It is very complicated to control supply chain and intellectual property rights.The impact of Brexit is the freedom on selling of products in such type of market situation. Trading of an entity is to become stronger for nations. Bank of England impacted on changes on policies which affected the entire working.It has an adverse impact on changes in policies which has been prepared by the government. on Unisefpolitical instability affect very much on entity which impact on its operations. Economic Factors-this factor impacts directly on business. This includes inflation rate, saving rate, interest rate, foreign exchange rate and many more. Economic situation of nation is quite strong in UK which helps Lego to run business successfully. If inflation rate of company is high which affects it adversely and selling of product becomes low. At the time of inflation, pricesofallcommoditiesgoeshighwhichmakesentitytoremovepeople.Thishelps 7
organisation to work in any environment. Business of Lego is found challengingwhen there is hike in seasonal business cycle. This is very difficult for forecasting of sales.This group is very dynamic which could help in to high growth markets.in this Bank of england is affecting most by this factor like inflation rate of entity increases then whole working of entity will get affected. in Unisef economic factors are impact on international trade. if any nation restrict entity for supplying any type of services. Social Factors- This factor includes attitude, gender, taste and preference of people, buying habits, population growth and many more. Social factor impacts organisation which impacts entity in adverse way. Lego belongs to UK so before starting business, research is made for analysing of taste and preference of people living there. This helps entity in performing its business successfully. For running a successful business, there must be support of local people. Nowadays, there is trend of making presence of online business. So for attracting consumers, Lego has launched its multiplayer game named as "Lego Universe" in 2010 and "Lego World "in 2015.Cited entity has collaborated hands with UNICEF for improving children education, health and many more (Foss and Saebi, 2017).Bank of England social factor affects most likely when person does not know about bank then working of this will get affected, maintaining public relations is the most important which assists an entity to make brand value of customer.in Unisef support of people is very necessary which help in improving life of poor people. Technological Factor- This factor includes usage of the latest technology in business to make competitive advantage of firm. With help of use of technology in business can use innovative way to attract people.Using of new technology of business helps to finish work before time. It can be one way which entitycan support its business with good amount of revenue. Lego is taking advantages of internet presenceand placing its products on websites. This can help in selling of product of business at any time after closing of shop. It is helping of business to gain more of customer base which will increase its sale of cited in business.By making presence of business on internet has shortened gap between consumer and Lego.In this, Bank of England is doing its business with latest technology which helps in recording of details of entity. in this factor lots of entity helps to do work in smooth way. with use of latest technology help Unisef in raising its working and facilitate in improvement in society as well as entity. 8
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Legal Factors- Under this type of factor, it includes changes in any laws of business whichismadebythegovernment.Changesinlawslikehealthandsafety,equality, discrimination, labour laws, consumer laws and many more.One of ways by which entity is doing its business ethically.If Lego is doing its business by following rules and regulations which help in making a clear image in front of the society. This is helpingconcernto run businesssmoothly. Lego is doing its business but expiration of patents which help competitors to enter into market with limited knowledge (Evans and et.al., 2017). This can become obstacle in success of cited entity.Bank of England gets affected by changes made by the government which help in doing alterations which are prevailing in market and facilitate in remain up to date with market circumstances. changes in law affect Unisef in every aspect because whole working of entity will be effected. Environmental Factors- Under this factor, any business can perform its duties towards environment. It is helping Lego in making a good image in front of the society. Company is following its duties towards community by implementing CSR activities. This cited organisation makes Eco friendly non-poisonous plastic which is safe for children. By following this,most entity is doing so much for protecting environment.In Bank of England, following of all activities are used for preserving environment like CSR which help in development of society. TASK 4 P5 Internal and external analysis of Lego In Internal and external analysis refers to swot analysis which are used to determine strengths, weakness of Lego which helps in reviewing position of firm. It is one way by which Lego can know its true position. It helps in enhancing of strong points of company. This also facilitate entity for improving of weak points of cited company. This helps in grabbing of opportunities which will generate profit for organisation. It works best for entity which give chances of growing of business. Strengths Productionof different toysLego is making bricks which isdependent to varied set of permutation and combination.It is estimated by entity that this company is using eight to six bricks that could be employed to make 400 meter building with different combinations. 9
Form of creative expression- Lego is making more than a toy which develops skill of gross motor.Cited company is making such a creative toy which helps children learn while playing. It is helping an entity to attract buyers towards product. Variety of options-This entity is providing goods at such a wide range which gives options for people to purchase goods from this entity. By making variety of goods by company that gives options to consumer to makes people attract towards them. By selling variety of goods that help in increasing sales of entity.It will generate profit for entity. It is not just a game but it is an addiction for children who are using it. Tie up with film franchise-This entity has make a tie with Harry Potter which helps in attracting target audience.Its major target audience are children. This is such a huge platform for promoting products to mass audience.It is making product mainly for children. Multiple themes-This product which has lots of themes and licences gained by this entity. It is one way by which adults canrefresh its experience and memories. For children, it can be amazingand creative experience. Attention to detail-Detailing of product which makes aware about product to consumer which help in making of goods popular. If each of product detailing is there which help in selling of product in unique way. Weaknesses Expensive- Lego products are unaffordable because people of all income group can't afford it. lower class people can't buy these types of products. Cited entity is offering its products to higher class peoplewho possess status in society. Cost incurred in research and development- Lego is providing products which are selling it according to age of person. It is helping entity to make product long lasting survival. This entity has to make product which never repeat its design of product. It will increase cost of research entity (Belás and et.al., 2015). Cost of material- This entity is using high grade customised plastic which costs too much for entity. It is increasing costs of entity for making of products like bricks, toys and many more. Taste of consumer-Though Lego is making products which can be played by all age groups but not all children like these toys. There are only few of them which understand to play Lego toys. 10
Opportunities Creative toys - As most families are nuclear in UK so that they are focussing on their children for developing their skills. Lego toys are providing creative and innovative products which help indeveloping motor skill and development of brain. Increase activity driven learning- This entity is making product which gives learning to school kids. These toys can be one way to teach them important concepts.Many of schools are choosing these products for teaching purpose. It is opportunity for toy maker to contact to schools to grab this opportunity. Cited company is making product which are used to teach children. Threats Substitution- As cited organisation products are very expensive which is not affordable by all income group people (Bah and Fang, 2015).So competitors are making similar products for grabbing a large market coverage. They will use material which is of low cost and products are sold at cheaper price. They are making products which are sold to all income group. It will make people to attract towards product. Imitative-There are lot of products and companies are making copy of products which are already made by Lego.They are using low quality plastic for making of stock which is making goods in such a low quality which is the biggest threat for any entity in market. It is one of the threats by which company is dealing with.It will make image down in front of consumer as well as market. P6 Strengths and weakness are interrelationship with external and macro factors Strengths and weaknesses of Lego are interrelated with macro factors (Apăvăloaie, 2014). For example, cited entity is providing product in wide range which gives option for buyers to select goods which is of own choice. It is making product in good quality which are useful for target audience. It is also useful for kids to learn something from toys. Political stability of UK is stable and strong enough which help in reaching new heights of success. Economic stability of UK is fine which help in selling of products in any of business environment. It is making entity to gain experience of every situation. It is one of the ways to gain popularity in market as well as world.For decision making it is necessarybring the 11
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political stability, it is very important to take decisions about products and stability of nation helps entity to run business operations smoothly. Social factors are affecting entity like gender, attitude, taste and preference of people, buying behaviour of people and many more. For considering this decision, firstly an entity has to research about likes and dislikes about consumers. It helps owner to make product according to that which help an entity to gain success and make good image in front of society.Decisions are made by entity according to the changing taste and preference of consumer. Cited entity is following all laws which are necessary for doing business in UK. It is helping entity for doing its business ethically. By implementing all laws help in satisfying employees which resultant in retention of employees. It is beneficial for entity and there will be no shortage of employees in any of situation. It is making product which helps children to develop motor and brain skills. Cited entity is following all types of activities which is necessary for preserving environment. This entity has alreadyimplementedinCSRactivitiesincompanywhichisimportantforentity.UK government is very strict related to protecting environment. For this, the government hasmade compulsory to implement the Environment Law 1990.It is helping an entity to protect environment while doing work. Taking care of environment is very important, it will help in making a good brand image in front of market and increase its recognition (Prajogo, 2016). Lego has also tied up with film franchise which help in attracting of target audience especially children of all age group. This step helps the organisation in strengthening their brand image. This further aid in increasing their revenues and profits. Lego has tied with Harry Potter film which is very much popular film and most people love to watch it. it is one of the ways to reach mass audience and sales of company is increased. It has multiple themes from which a child can get amazing experience from toys and adults that can refresh their memories again. It facilitates entity to gain attraction of lots of customers and make recognition in world. It is helping cited entity to gain lots of success and reach new heights of prosperity. The economic factor and influence greatly affects the internal decision making and planning process of Bank of England. With rapid growth and development of economy and frequently changing interest and inflation rates influence the management to develop and 12
enhance their existing strategy.Political factors affects the overall operations of UNICEF as political decision of one country highly influenced the decision of the organisation. CONCLUSION Business environment consisted of internal and externalfactors which prevailed in an entity. Internal factors which is controllable within entity but macro factors are not at all controllable within entity. From this report, it can be concluded that different types and purposes of organisation with its legal structure had played a significant role and is necessary. There are three types of company such as public, private and voluntary. It had also discussed size and scope of different types of organisation. Size of entity is depending upon nature and employees working there. This was also studied and discussed how positive and negative impacts of macro environment affect upon business. Under this, PESTLE Analysis of Lego company had been done in gaining competitive advantages from competitors. 13
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