Analysis of Business Environment and Organizational Management

This assignment is a comprehensive analysis of the business environment and organizational management. It covers various aspects such as public-private partnerships, the economy of brain network organization, evolutionary approaches to understanding international business activity, and more. The assignment also includes a list of references from academic sources such as Journal of International Business Studies, Nature reviews, and others.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1 ..............................................................................................................................................1
P1 Types and purpose of organization...................................................................................1
P2 Size and scope of different types organization..................................................................2
P3 Relations among different organisational purpose, their link with structures and objectives
Task 2..........................................................................................................................................5
P4 Identify positive and negative impacts on macro environment.........................................5
P5 SWOT analysis of Marks and Spencer.............................................................................8
P6 Interrelationship with strength and weakness and external macro factors........................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is the sum of all external and internal factors which affects the working of
the business. Factors of the external environment not only affects the working of the organisation
but also it affect the internal factors. External factors includes political, social, technological and
economic. On other hand, internal factors includes the factors such as customers, employee’s,
competitors etc. Mark and Spencer is multinational retailer which deals in selling of clothes,
home products, luxury food products. It also deals in selling of the branded products. It is the
company which has deep knowledge of the concepts of business environment. In this report
explained about the purpose of private, public and voluntary organisation and their legal
structure, size and scope of private, public and voluntary sector, positive and negative impact of
macro environment on business operations, PESTLE and SWOT analysis.
Task 1
P1 Types and purpose of organization
There are mainly three types of organisation which are: private , public and voluntary.
Private sector: It covers the big sector in national economy and also not under the control of
government. But the government has certain power that it can impose some restrictions on
working of the companies of private sector. It works for development and earn high profit by
providing good services to customers.
The private enterprises are the part of national economy. It includes the personal and corporate
sector companies which are responsible for allocating the resources in economy.
Marks and Spenser is the private company ans its main purpose is to satisfy the needs of the
customer by providing them high quality of goods. The major products which are provided by
the company are food, accessories, clothing and home items. The main objectives of the
company are:
 To increase the profit level by giving good services
 To regain the highest position in field of clothing and food items.
 To increase the sales and goodwill of the company.
 To earn profit for investors and shareholders.
Legal structure of Private sector: It includes partnership, sole trader, limited companies and
cooperatives.
1

Partnership: It means joining of the two or more persons for the purpose of forming the
company to make profits. It is regulated by the partnership law.
Sole trader: It is the type of business which is controlled by the single person. In this
business there is no required to make the accounts.
Limited companies: These companies are operated by the shareholders. These firms are
managed by not more than 50 share holders.
Cooperatives: In this business all control is under the hands of members.
Public sector: public sector is the which part of the economy which provides the governmental
services. The composition of this sector varies with country but mainly it includes military,
police, infrastructure, public education etc. Public sector industries are providing Healthcare to
education, social care to housing facilities also. Public sector organisations are setup under
special acts and by parliament. For ex. NHS was established under National health service act,
1946.
Public sector companies are part of national economy which are providing basic goods and
services which are not provided by private companies. It includes national and local
governments, agencies and their charted bodies.
Requirement to setup public company are described below:
 There are at least minimum two shareholders
 To form public company required at least two directors
 Minimum authorised and allotted share capital of £50000 is required to setup public
company
 Public company have right to offer their shares to public for subscription
 A company is need to have certificate from Registrar of companies verifying share
capital requirement of company.
Kent county council is the big organisation which governs most of the county of Kent in
England. This council is mainly responsible for providing the public services such as education,
transport, emergency services etc. Objectives of the councils are:
 Its purpose is to provide the education
 To aware the general public
 To provide transport services
2

Objectives of the public organisations are to maximise social welfare. The following activities
defined below helps the company to achieve this objective:
 Economy: That it contributes in the economy of country by providing various job
opportunities and the services in budget.
 Efficiency: That they get good return on the money invested in different services.
 Effectiveness: That the organisation is able to deliver the products as per the standards set
by the company. This helps the company to maximise social welfare.
Legal structure:
State government: It includes the all departments related to the administration of central
and state agencies and local government.
 Central government: It includes the all departments of central and state government.
 Local government: It includes the all kinds of public administration.
Voluntary sector: Industries in this sector are not working for earning the profit. They are
working for the welfare of the society. It includes the industries like charitable trusts and NGO.
These companies are voluntary organisations established to pursue non profit making objectives
of members. These companies doesn't include political parties. These companies are not directed
by public authorities. The companies are formed for the purpose of charity are governed under
charities act,2011. But the some charity company operate under companies act, 2006.
Some purpose of these companies are:
 To provide the good advices to the society and work for the betterment.
 It also has the purpose to eliminate the all problems related to the society and provide
P2 Size and scope of different types organization
MARKS AND SPENCER- M&S is a British multinational retailer which is specialize in
selling of cloth, luxury food and home products. Initially,it enters into a long term relationship
with British manufacturers which help them to grow on global scale. Their operations are
expand now all over the world and gives them the highest quality rating to their product which
makes them unique from their competitors as well.
M&S follows the flat organizational structure which comprises with limited level of management
between administrative and front line management. They are including their staff in decision
making process. It makes employee to work with a positive attitude where they are authorized to
take decisions themselves and also leads to reduce the bureaucracy among the other employees.
3

Moreover they are focusing on all the sector of M& S, if one is falling they are trying to focus on
other sector which gradually increase the share of their business activity.
Size of Marks and Spencer
 The number of stores of M&S are 979 across the UK and 615 is selling food products
only. 454 international stores, 58 stores in India, 48 stores in Turkey, 37 in Russia, 27 in
Greece, 17 in Ireland, 14 in France, 11 in Poland, 6 in Hungary.
 The company is the first retailer which makes the profit over £ 1 billion.
KENT COUNTRY COUNCIL-
Size of Kent County Council
This is owned and managed by government body of England. It works as an upper tier to the
elected local government which is having 84 elected councillors. They are focusing on looking
after the public services in terms of education, transport, public safety, waste disposal, awareness
campaign etc. they are focusing on providing electoral equality for votes in local election
recommend that each counsellor represent the same number of electoral. .
Scope of Kent county council
The structure of such organisation consist of its council members only. The scope of their
structure is quite large due to its geographical extension. They are performing their operations in
the field of educating children and young employees where they can learn, grow and achieve
certain standards. Also they are trying to focusing on people who need care and support by
providing them Adult and Health care centres in the various parts of England. They tries to
focusing on safeguarding responsibilities for the people who needs help and support. Also they
play a major role in making Kent a better place to live where its government is focusing on its
growth keeping in mind environmental concern.
BIG CAT RESCUE-
Size of Big Cat Rescue:
It is an animal conservation charity which was established to save the cats from the extinction. It
helps to coordinate the management and the operations of Big Cat Sanctuary which enables to
look after the endangered species programme for cats. It has been spread over an area of 32
acres of grassland. They are providing housing 50 small and big cats by giving them excellent
breeding credentials.
Scope of Big Cat Rescue
4

There is no specific legal structure for such type of organisation. Such voluntary firms are
controlled by the charitable trust and have legal status as well. In such firms, volunteers are
restricted with the per day work limits which results in improving their excellence in the field of
knowledge, skills and experience. There is no level of hierarchy which volunteers have to follow
they can do the work according to their own will but one needs to finish its work according to the
provided limits. Their success lies in the adapted and flexible ,manner of working environment.
P3 Relations among different organisational purpose, their link with structures and objectives
Every organisation have different structures, aims and objectives to execute their work
and run operations. Mark & Spencer is a Ltd. company whose operations is in public sector and
have more than 1,20,000 employees who are engaged in clothing and food operations. They
provide services in reasonable rates. M&S administer food items & other services. It is beneficial
to execute all the activities in effective and planned manner. This is helpful in getting growth of
the business.
Every organisation implement their operations in a different way and accordingly
objectives and plans are decided in that manner. Acquiring effective working framework should
be beneficial so that efficient and effective results can be obtained as outcome so objectives can
be accomplished on time. Managers of Mark & Spencer should make sure that employees are
complying to rules and regulations so that effective results should be obtain and business can
accomplish growth.
Different types of organisations are as follows:
Organisation Objectives Structure
M&S In order to increase the
profitability of the business,
the main objective of the
business is related with
providing satisfying services.
The company has been
performing its business
activities since 1884. The main
objective of Mark & Spencer is
To maintain productivity and
positive working environment
at workplace, structures are
made which can be said as
plans. Mark & Spencer also
developed some structures
which defines the duties of the
employee very clearly towards
the company so that tasks can
5

to provide range of luxury food
in reasonable prices and
preserve their services so that
no customer go empty handed.
Firm wants to create good
image in the customer's mind
and values the amount paid by
the customer and provided
services accordingly.
be implemented and
completed on time in effective
and efficient manner.
Aldi The firm formulate their
objectives for a short period of
time as the company believe to
implement different types of
strategies. They give time
based tasks to the employees
and ensure that the tasks
should be completed on time.
The main aim of the firm is to
provide best quality of
products and services to its
customers without being made
any compromise.
ALDI produce quality
products and try to maintain
good relations with the
customers. Managers focuses
to maintain long haul relations
with the clients and customers
and pay attention towards the
quality of the products to
accomplish the objectives of
the company.
Kent county council The main objective is to
provide the public services for
the welfare of society. It gives
the services related to
education, transport, strategic
planning, emergency services,
public safety etc.
It is the council gives most of
the county of Kent in England.
It has 84 elected councillors.
The chief officers of the
council are responsible for the
day to day running activities.
Big Cat Rescue It is animal charity company It has been spread in 32 acres
6

which helps the animals and
rescue the cats. It has been
established to save the cats.
and proving 50 small and big
cats breeding credentials.
Task 2
P4 Identify positive and negative impacts on macro environment
Marks and Spencer is one of UK's leading retailers of clothes, food, home products and
financial services. M&S is having record of success and profitability since its establishment
with its innovative, quality products and reasonable price which offers customers value for their
money (Bullmore and Sporns, 2012). Analysing external forces and factors will assist M&S in
identifying the changing environment and planning how to meet such changes, and being ahead
of the competitors in the adaptation to the new environment and the response to the market
demands. Macro environment is based on PESTLE analysis
It includes political, economical, social, technical, legal and environmental factors that affects
the business.
Macro environment and its impact on M&S:
 Political- European Committee decision to allow independent trade among themselves
and other countries under foreign trade regulations, forced companies to import their
products over time easier than before. Government sets strict rules for health & safety
standards like hazard identification, risk assessment and control.
Positive impact-It will result in quality improvement and price control. This could help in
building goodwill and attain consumer trust.
Negative impact- Due to this, M&S competitors took advantage of its higher cost structure. It
also faced allegation of neglecting health and safety regulations.
 Economical- Nowadays, economic conditions are very uncertain and it affects mostly the
retail sales, as people are not able to spend too much on expensive clothes and other
luxuries.
Positive impact- Because of this M&S will start focussing on manufacturing products for those
who are having low income (Cantwell, Dunning and Lundan, 2010). This will make the
company to achieve competitive advantages.
7

Negative impact- Due to this this company has closed its many stores and had a job cut of 2%. It
has been hit adversely by the recession.
 Social- Social factors keeps on changing day by day. Consumer purchases are influenced
by cultural, social, personal and psychological characteristics. Currently, cheap clothing
industry is on boost and captured the marketplace. People are not ready to spend too
much money on clothes. They wants to have different ranges of prices of clothes.
Positive impact- It will help the company to know the tastes and preferences of consumers and
bring change in product line to increase the sale. It will also help in adopting new trends.
Negative impact- This company failed to meet consumers expectations and keep its
manufacturing updated as per the trend.
 Technological - Technology is important factor in the retail market. Companies need to
manage their brands (Iskanius, Page and Anbuudayasankar, 2010). Most of the brand
marketers spends huge amounts on advertising to create brand awareness. Marks &
Spencer continuously communicate to consumers through advertising. They also have
Celebrity endorser Myleen Class as Face of their company who appears on the
advertisements on TV and also on their website. Their website is also very attracting
with bright colours and easy for user. It also keeps on updating constantly with new
M&S brands.
Positive impacts- M&S is doing well in meeting technological advancements. As a result of
that, its sales are increased and brand awareness is also enhancing day by day.
Negative impact- Since it is spending a heavy amount on technology and advertising it is
resulting in less focus on improving product line and innovations.
 Legal - Legislations always keeps on changing. Marks and Spencer keeps itself updated
every year and they keep themselves up to date with new laws or legislations and Health
& Safety issues. Marks & Spencer invites business changes, tax changes, & products
changes to the business amongst many other things. It also invites methods that are
needed to be changed (Klapper, Lewin and Delgado, 2011)."Fair Packaging and
Labelling Act (1996) - Provided for the regulation of packaging and labelling of
consumer goods requires that manufacturers mentions what the package contains, who
made it, and how much it contains".
8

Positive impact- M&S started focussing more on packaging and other health related issues
after implementation of new law. Packaging helps in protecting the product from its production
stage till it is used by the customer. It also prevents product wastage, includes important
instructions and information about ingredients and helps the product look more attractive.
Negative impact- Due to this overall cost of company has increased and their focus has been
shifted more towards packaging instead of quality of product.
 Environmental- Current environmental climate related issues are being promoted daily
on the television, in magazines and newspapers and on the radio (Munteanu and et. al.,
2010). Every company, industries and organizations are having pressure to change their
methods when it comes to the materials they use in production. Marks & Spencer have
established their own Green Policy named "Plan A". The chief executive of this
company states that it is called by this name as there is no "Plan B". Marks & Spencer has
recently announced a five-year plan to work harder to become a carbon neutral, zero-
waste-to-landfill, ethical-trading, sustainable-sourcing, health-promoting business.
Positive impact- As a result of this, M&S has improved its brand image and goodwill even
when it comes to be a eco-friendly company.
Negative impact- It has also increased the cost of company since they are using expensive
technologies which contributes less in polluting the environment.
P5 SWOT analysis of Marks and Spencer
Marks and Spencer is among the highly recognizable brand in globe world and has great
brand value, founded by sir Michael marks and Thomson Spencer and engaged in selling luxury
food products and clothing. The strength and weakness of the company are mentioned below:
STRENGTHS-
Strength of a firm are their resources which used for developing competitive advantage in
the market such as make strong brand of products, maintain good reputation, effective channels
for distributes goods information etc. Marks and Spencer is one of the oldest public limited
company established in the year 1884. It is specialises in food luxury and home products. It is
one of the highly recognized brand and has around 1000 stores in various countries (Armstrong
and Taylor, 2014). It has different variety of products available with them and thus the firm
9

gained huge success over the years. They have strong brand image among mind of customers and
also they maintain international presence in all world the world.
WEAKNESSES-
The deficiency of some strength are known as weakness. It includes weak brand image,
lack of promotional activities, poor quality of goods, large amount of structure, poor distribution
channels which provide product among customers and some other. There are different types of
brands are available in market which is full of competition. Managing of stores in different
countries is one of the major challenge for the organisation. Protecting and maintaining the value
of brand is leading challenge and company lacks in the same, thus creating the weakness in the
business. Poor policy for returning capital which are invested in the gaining high cost amount.
OPPORTUNITY
It is external environmental factor which show some new opportunities for making profit
and high growth level of company. There are certain examples of these opportunities such as
expand in new market, eliminate all international barriers, lack of regulation and power among
competitors and other factors. Expansion of business can be one of the biggest opportunity for
marks and Spencer , for example – Dealing among the diversified class of people in India and
china. Segmentation is also one of the best example for opportunity available to any company.
Identification of different new technologies and proper implementation can be the opportunity
for marks and Spencer. They have lack of segmentation of clothes and other products and waste
more space in store area.
THREATS
Threats refers to that factors which affect on business operations and its functions. There
are some example of threats which includes increasing range of similar goods, large number of
trade barriers, change in customers demand and wants and some other fear for firm. For any
organisation, growing competition is the biggest challenge. Presence of different competitors in
market and not able to maintain brand value is the threat for the firm. Also exposing to different
political, legal and tax policies of various countries where business is operating is the threat
(Billis, 2010). Thus the company needs to appoint a separate team to handle its threats and
10

properly managing them. Major threat is that they face strong competitors and also change in
social and political environmental factors.
P6 Interrelationship with strength and weakness and external macro factors
Business environment has two factors which are internal and external that will directly
affects the company growth and development in effective manner. This will assist in analysing
strength and weakness of Marks and Spencer in the market. On the other hand external macro
factors such as political, social, economical, technological, legal and environmental. These are
those element which can be easily impact on business activities and functions in each manner.
This will help in increasing firm growth and development and also remove all barriers and errors
within an organisation. They try to achieve top position for their products and services which
support in expanding profitability and productivity properly (Bouckaert, Peters and Verhoest,
2016). There are some points which are discussed on external macro factors which assist in
identify strength and weaknesses: Political factors- Political factor help in maintaining stability in government and also
change legal structure which directly affect on businesses functions and its activities.
Taxation plans and policies are became weaknesses of company and it will reduces in
selling of products and services. There are various types of policies which are related to
tax and possibility for improve organisation strength in better manner. Economical factor- It is that factor which assist in identify growth of economy and also
analyse the rate of employment in better manner. This will also affect on inflation price
of country products and services and help in gaining customers trust. Marks and Spencer
try to increasing their growth rate for getting large number of profit ratio and it directly
affects government plans and policies which have to be satisfy firm demand and needs
regarding economical factors. Social factors- This is that factor which help in distributing different types of goods and
services among consumers and it affect on lifestyle of buyers. It is important for the
company is to promote new and latest products and services in the market place. By this
they will easily attracting large number of customers towards their innovative goods and
commodities. The main motive of research development is to analyse whole market
situations and try to identify buyers choice and preferences and if they earn money they
11

will make products according to the demand of customers regarding specific goods and
services. Technological factor- It is that factor which show the influence which affect on
technology and by this technologies are always change. Each and every methods and
techniques help in giving some strength and weaknesses to the firm (Brinkerhoff and
Brinkerhoff, 2011). If company can not adopt latest technology so it directly affects
business operations and functions. Environmental factor- This factor assist in identifying customer behaviour and attitude
towards specific products and services and also make restrictions and regulation for
reduce the level of wastage of material. It is that factor which help in reducing wastage of
resources and papers by the organisation. This will assist in expanding growth of
company.
 Legal factor- This factor directly affect on tax policy and directly impact employment
laws in effective manner. It is changes according to the growth of country. If government
are made new rules and regulation and it is appropriate for the firm then it will became
strength and if they develop not suitable laws and policies so that it will frame as
weaknesses.
CONCLUSION
As per the above mentioned report it can be concluded that business environment has two
factors that include internal and external factors which directly affects business operations and
functions. There are different organisation whose legal structure are discussed in study such as
private, public and voluntary. The firm will also analyse PESTLE and SWOT analysis.
12

REFERENCES
Books and journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Billis, D., 2010. Towards a theory of hybrid organizations. Hybrid Organizations and the Third
Sector. Basingstoke: Palgrave Macmillan. pp.46-69.
Bouckaert, G., Peters, B. G. and Verhoest, K., 2016. Coordination of Public Sector
Organizations. Palgrave Macmillan.
Brinkerhoff, D. W. and Brinkerhoff, J. M., 2011. Public–private partnerships: Perspectives on
purposes, publicness, and good governance. Public Administration and Development.
31(1). pp.2-14.
Bullmore, E. and Sporns, O., 2012. The economy of brain network organization. Nature reviews.
Neuroscience. 13(5). p.336.
Cantwell, J., Dunning, J. H. and Lundan, S. M., 2010. An evolutionary approach to
understanding international business activity: The co-evolution of MNEs and the
institutional environment. Journal of International Business Studies. 41(4). pp.567-586.
Iskanius, P., Page, T. and Anbuudayasankar, S. P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product
industry. International Journal of Electronic Customer Relationship Management. 4(4).
pp.395-414.
Klapper, L., Lewin, A. and Delgado, J. M. Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Munteanu, C. and et. al., 2010. An analysis of customer satisfaction in a higher education
context. International Journal of Public Sector Management. 23(2). pp.124-140.
Salamon, L. M., 2010. Putting the civil society sector on the economic map of the world. Annals
of Public and Cooperative Economics. 81(2). pp.167-210.
Schroeder, A., Minocha, S. and Schneider, C., 2010. The strengths, weaknesses, opportunities
and threats of using social software in higher and further education teaching and
learning. Journal of Computer Assisted Learning. 26(3). pp.159-174.
Scott, W. R. and Davis, G. F., 2015. Organizations and organizing: Rational, natural and open
systems perspectives. Routledge.
Sørensen, H. E., 2012. Business development. In Palgrave Encyclopedia of Strategic
Management. Macmillan Publishers Ltd.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Tiwana, A. and Konsynski, B., 2010. Complementarities between organizational IT architecture
and governance structure. Information Systems Research. 21(2). pp.288-304.
Wild, J. J., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
Online
The process of departmentalization. 2015. [Online]. Available
through:<https://www.ukessays.com/essays/business/the-process-of-
departmentalization-economics-essay.php>. [Accessed On 25th September 2017].
13