Business Environment and Organization Functions

The assignment discusses the concept of business environment and its importance in understanding organizational functions. It highlights the relevance of business research methods, corporate social responsibility, and business model innovation in achieving success. The document also touches upon the critical success factors for business process management and provides examples from various industries.

Business And
Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations and legal structures.......................................1
P2 Size and scope of a range of different types of organisation.................................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and their link to organisational
objectives and structure...............................................................................................................4
TASK 3............................................................................................................................................5
P4 Positive and negative impacts of the macro environment has upon business operations......5
TASK 4............................................................................................................................................7
P5 Internal and external analysis to identify strengths and weaknesses.....................................7
P6 Strengths and weaknesses identified interrelate with external macro factors........................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment connotes the various entities or factors that may be under or the
control of an organization. But they can impact on the company's functions and performance.
These aspects can include customers, competitors, suppliers, government, and the political,
social, legal, technology and so on. While working some of these elements can directly influence
the organisation rather other's can affect indirectly. The report underpins different kinds of
organisations along with purpose and legal structures, size and scope. It also comprises of
relationship between the functions, positive and negative impact of the macro environment,
internal and external analysis to recognise the strength and weaknesses. In addition it also
includes the strength and weaknesses of interrelated with external macro factors (Aterido,
Hallward and Pagés, 2011). The report is based on the Walmart Inc., which is one of the largest
discount retail stores in America and its headquarter is situated Bentonville, Arkansas in . The
retail chain was founded by Sam Walton in the year around 1962.
TASK 1
P1 Different types and purposes of organisations and legal structures.
A business organization is an institution which pursuits to gain the profit and generate the
revenue. There are different types of organizations that can be divided as private, public and
voluntary organizations and all of these has different purpose according to their service area. All
of these organisations is elaborated as below -
 Private Sector : Private sector organization can be run by an individual or a group that
can be family, friends and partners. The person who owe the business often have the
control over the business as well. These kinds of business are the most important part of
country's economy because it support and generates high revenue . Such businesses can
be any type such as large medium or small organisations. For example, Walmart is a
private firm that was established by Sam Walton approximately 56 years ago. The
business is controlled by Walton family and the heir of Walton family hold the fifty
percent shares of the organization. It is the largest private company which is run as a
multinational retail corporation that operates a chain of hypermarkets, discount
department stores and grocery stores (Bryman and Bell, 2015).
Purpose - The core purpose of the organization is to earn profit across the world through
attaining the high income and revenue.
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 Public Sector – Public sectors organization are accountable to the government of country
because they run and are controlled by the government of state. This kind of organization
kind can comprises health and education services, defence, legislation and companies etc.
National Health Service or NHS is a public funded national healthcare system and is the
largest single healthcare system across the globe. NHS is working under the Department
of Health and provides free healthcare to the English people (Carroll and Shabana, 2010).
Purpose – The major purpose of NHS is to provide the health check-ups to the people for
free of cost including the eye tests, dental care, prescriptions and aspects of long-term care.
 Voluntary – Voluntary organizations or unions or communities can be define as an
association of common interest where an agreement need to be signed between the people
and associations who are working for the well being of the society. These people are
known as volunteers and therefore, the individuals provide their support for the
betterment of the society. There are various voluntary institutions who works for the
environment, animal and human well fare for the same cause to help the bodies to
improve for a better future. For instance, Wellcome Trust is a biomedical research charity
based in London. The trust was originated in the year 1936 by the pharmaceutical
magnate Henry Wellcome who wanted to improve animal and human health by funding
research or investigations.
Purpose – The purpose of the Wellcome Trust is to achieve the prodigy amendments by
supporting to the bright minds of scientist and doctors who work for the sake of new
achievements of science that can improve the health of human body and animals too.
These are the different kinds of organizations that came in inception for distinct purposes
and they all running successfully in their field.
Type of legal structures
Sole proprietorship – This is the simplest way to regulate a firm with a minimum cost of
the start up. In this a one person owns and operates the company with the entire control. They
are responsible for the profit and loss and they are liable to face the risks. Profit and income is
held by the individual only and but they have to bare the unlimited liabilities such as the claims,
taxes and debts against the business (Charter, 2017).
Partnership – Partnership is a contract between two or more people as they provides the
capital to the firm along with the managerial resources. The partners works independent and hire
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the employees individually and they also borrow the money and operate the business. There are
some different liabilities of every partner in their field as one of them can have expertise in their
field that other may not have.
P2 Size and scope of a range of different types of organisation
As the organisations are working for the various purposes and in distinct fields so their
sizes and scope should be different according to their nature and functional area (Chesbrough,
2010). The size and scope of Walmart, NHS and Wellcome Trust is defined as below -
 Walmart : The firm is selling its products on discount and its core business is to sell the
food items in the grocery stores.
Size – Walmart has approximately 11,718 stores and clubs which are placed in 28
countries across the world according to the information till January 2018. The clubs and stores
are running with over 59 names in different countries such as Walmart in United States and
Canada, Walmart de México y Centroamérica in Mexico and Central America, Asda in the
United Kingdom, Seiyu Group in Japan, and Best Price in India and wholly owned operations in
Argentina, Chile, Brazil, and Canada. In the year 2018, the company has generated over US$500
billion revenue and listed in the Fortune Global 500.
Scope – The firm is seeking to grow with technology as the customer are more friendly
with the e – commerce websites. Thus, the Walmart has step into the smart shopping carts,
wearable tracking devices, in – store inventory trackers, drone assistance, block chain ledger that
can work for the customer satisfaction and bring more profit. The mission of the Walmart is to
assist people save money so they can live better and its objective is to grow in domestic and
international market. The stakeholders of the company are the investors, customers and
suppliers, employees and owner (Commander and Svejnar, 2011).
 National Health Service – NHS is a healthcare system which provides healthcare to the
British residents.
Size – NHS has several institutions that are running as NHS acute trusts administer
hospitals, treatment centres and specialist care in around 1,600 NHS hospitals, ambulance
services trusts, care trusts, providing both health and social care services, mental health trusts,
particularize in managing and treating mental illness. According to the 2017 data there was
approximately 1.18 million staff in the NHS England including the 34,260 nurses.
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Scope – NHS is seeking for the new of funding from which it help the people as much as
possible through providing them healthcare. NHS established with a mission to provide better
healthcare services to the needy people. It stakeholders are the various organisations are operated
under it, employees, government and so on (Craig and Campbell, 2012).
 Wellcome Trust : Wellcome Trust is a biomedical research that provides research
facilities for the care of animal and human well being.
Size – The Wellcome Trust has around 2,057 employees and it has an endowment of £23.2
billion which makes it the second largest biomedical research charitable foundation in the world.
Scope – It is putting effort to maximise the potential research that can improve the health of
human through the innovations. Its mission is to support scientists and researchers to amend the
health. The scientists, researcher, employees and people are the stakeholders of this organisation.
As all of these organizations are working in different sectors and they have distinct sizes and
scope where they can see the opportunities they can perform well in order to grow and gain the
profit.
TASK 2
P3 Relationship between different organisational functions and their link to organisational
objectives and structure.
Every company has different functions and operations that leads to make a firm
successful. There are various functions in Walmart that work to attain objectives and goals. It
can be define as Walmart has three level structure such as the top level, middle level and lower
level. The top level can be define as the owner or CEO of the company who is running and
controlling the organization. The middle level refers as the administration or management of the
firm who is operating the firm on a specific path that goes towards the success with their
subordinates and employees who are working under them. These employees refers to the low
level of an organization structure (Dahan, And et. al., 2010). Walmart follows this organization
structure but to achieve the goals and objectives of the firm all of these has to work in
cooperation that help to reach towards the goals. The management has several functions that are
interrelated and can be define as -
Marketing department – Marketing department is used to encourage the customers to
enhance the purchasing through a variety of promotional activities. The marketing section
promote the products and services that are specifically offering by Walmart on the discount rates.
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For an example, it can organize a promotional campaign that promotes the products that are
going to launch by Walmart and for this it needs employees that can support the campaign. After
analysing the needs of employees the marketing manager will go the HR management that hires
the employees and give them tasks to meet the objectives (Drucker, 2017).
Finance department – The finance department calculates the profit and loss of the business but
in case it need the account manager then it informs about the requirement then staff will be
recruited by the HR professionals. On the other side, the marketing manager needs funds too
invest in the the campaign that are also provided by the finance department.
Production and inventory – According to the market requirement the production and inventory
supplies the goods in the store after getting the information by marketing section. To provide the
specific information about the product demand the marketing keeps a close watch on current
trends and then it informs the production and inventory to deliver the goods.
Human resource management – Human resource management recruits the task force when it is
needed. The marketing, finance, production departments can send the information to the HR
officer in order to hire the workers.
TASK 3
P4 Positive and negative impacts of the macro environment has upon business operations.
The macro environment can impact on the business operations and these factors may
have positive and negative impact on the organization . The external environment consists of
PESTEL factors that is as follows -
Political Factors – The political factors includes the policies and rules that are
established by the country. These policies can be impose in the form of tax and Walmart to the
pay the tax to run a business (Fernando, 2011).
Positive – If the country has a stable tax rate that means there is an opportunity to run a
business successfully and that will surely increase in sales as in the United States.
Negative – On the other side, the changing tax rates can increase the expenses of
Walmart and that can decrease the profit such as in Canada.
Economic Factors – Economic factors can directly impact on the profit of Walmart such
as the currency rate change. If the currency rate changes in the developed country then it can
earn profit (Hamilton and Webster, 2015).
Positive – The currency change rate can bring the profit in terms of increased sales.
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Negative – In developing countries labour cost can be increased and this is a loss for
Walmart as it needs to pay high wages.
Social Factors – Social trends changes the way of business because it influences the
buying behaviour of customers that also impacts on the brand profitability.
Positive – The customer can step in to the stores to get the quality goods as influence by
others.
Negative – Walmart does not use digital technology as the to promote its business on e –
commerce plate form so the buyers have less interaction with it.
Technology factors – In digital era it becomes necessary to adopt the technology for the
business. Walmart has automatic billing system so that the customer does not need to wait in
long queues. But it does not has e commerce websites that can attract more customers.
Positive – Walmart has website only in 11 countries that are gaining the high profit rate.
Negative – As it has lack of e – commerce website in other countries that's why it is not
getting the profit which can be easily capture by the adopting the technology.
Environment factors – The countries are aware about the environment and the citizens
are attracted towards the organisation that keeps the environment safe and clean. Walmart is
targetting to zero waste and better packaging that cannot harms the environment.
Positive – Walmart is getting reputation because of less energy consumption and waste.
Negative – If Walmart violate the environment rules then it can be seized.
Legal factors – The legal factor comprises of laws that has to be followed by Walmart in
order to sustain and run a business without any interruption (Klapper, Lewin and Delgado,
2011).
Positive – The lawsuits provides the rules to run a business in a systematic way.
Negative – Walmart has the faced the situations for labour force such as discrimination to
low wages.
The PESTEL is not a part of Walmart but has a significant impact on the business
through these factors.
TASK 4
P5 Internal and external analysis to identify strengths and weaknesses
The internal analysis of Walmart is defined using SWOT that stands for strength,
weaknesses, opportunities and threats. Walmart's internal factors that are used as its strength and
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weaknesses whereas the external factors states the opportunities and threats (Osterwalder and
Pigneur, 2010).
Internal analysis
Strength
 Walmart is the largest company in the world that generates highest revenue. It I also
world's largest private employer with more 2.3 million staff.
 It has international presence across the world with a joint venture with Cifra which it a
retail Mexican company.
 The organization is operating approximately 6,360 retail units in 27 countries outside the
U.S.
 Walmart is grew up in the domestic and international market with more than US$16
billion.
Weaknesses
 Walmart is recognised as a company which does not treat its employees in right way. It
hires the employees as a part timers rather than full time.
 It sells the products across several sectors such as clothing,, food, stationary but it is not
having the flexibility for some products that are focused by its competitors.
 Walmart is facing the competition in the North America against the stores such as Kmart
and other small retailers, primarily dollar stores that includes Family Dollar and Dollar
General that are established and easily competing with it (Scheer, 2012).
External analysis
Opportunities
 Walmart can grow in developing economy.
 It can follow the healthy lifestyle trend to stay in the market for long time.
Threats
 Walmart has large competition as it targetted by local and global firms.
 As it is a global retailer that it is exposed to political problems in which it is operating.
P6 Strengths and weaknesses identified interrelate with external macro factors
The strength and weaknesses of external macro factors can be stated as -
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Political – The political factors are those which are established by the government. The
government develops some policies and rules to operate a business in international market. These
government legislation can vary according to the market of the country (Shigang, 2010).
Strength – Walmart has opened more the stores in more than 59 countries with a stable
politics and globalization.
Weaknesses – Asia has a growing economy but still it opened only 23 retail units in India
and 439 units in China because of the Red Tape which is the biggest obstacle for foreign direct
investment.
Economical – Flourishing global economy is the best to operate a business at global
platform. Per capita income is also increased after the recession and it gives opportunities to
Walmart to expand the business.
Strength – After the recession the retail sector is growing and labour market will also
improved.
Weaknesses - Due to economic condition the competition will be increased with the
domestic and international brands.
Social – Social factors impacts upon the business as they drive the customers with the
influencing factors that changes their mind and thoughts about the brand.
Strength – It has a e -commerce websites in some countries to encourage the buying
behaviour of the people.
Weaknesses – Walmart is less visible to its customers and that stops them to shop from
the brand.
Technology – Walmart is using the technology for its stores in order to provide best
services to the customers (Trkman, 2010).
Strength – This is utilizing artificial intelligence and information technology which is the
key of improve customer shopping experiences.
Weaknesses – It has less visibility in developing countries due to lack of e – commerce
utilization.
CONCLUSION
The above report is based on business environment that is affected by the internal and
external factors which are not the part of an organization but has significant impact on the
organization operations. This report is comprises of private, public and voluntary organization
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that has different purpose to run a business. It also underpins interrelation of business functions
that supports to attain the goals and objectives of the organization.
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REFERENCES
Books and journals
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management
reviews.12(1). pp.85-105.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning. 43(2). pp.354-363.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Dahan, N.M. And et. al., 2010. Corporate-NGO collaboration: Co-creating new business models
for developing markets. Long range planning. 43(2). pp.326-342.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Fernando, A.C., 2011. Business environment. Pearson Education India.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
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.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Scheer, A.W., 2012. Business process engineering: reference models for industrial enterprises.
Springer Science & Business Media.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11), p.64.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management. 30(2). pp.125-134.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
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