Impact of Business Environment on Organizations

This assignment examines the profound influence of the business environment on organizations. It delves into various aspects of the business environment, such as technological advancements, competitive pressures, and regulatory frameworks, and analyzes how these factors impact organizational operations, growth, and overall success. The assignment also explores strategies that organizations can implement to effectively navigate a constantly evolving business landscape.

Business and
Business
Environment

Contents
TASK 1....................................................................................................................................................3
P1 Various types and purpose of enterprises....................................................................................3
P2 Scope and size of different organisations.....................................................................................5
TASK 2....................................................................................................................................................5
P3 Relationship between various functions of an enterprise and its link with objectives and
structure of firm................................................................................................................................5
TASK 3....................................................................................................................................................5
P4 Negative and positive impact of macro environment upon business actions and operations......5
TASK 4....................................................................................................................................................6
P5 External and internal analysis of firm to identify its strengths and weakness..............................6
P6 Interrelation of strengths and weakness with macro environment elements..............................7
CONCLUSION.........................................................................................................................................8
REFERENCES..........................................................................................................................................9

INTRODUCTION
In today’s modern era, it is important for individual to examine all the factors which
exist in business. Basically, business environment is set of combination of internal and
external factors which largely affect the overall operational activities of the company in both
positive and negative manner. Thus, it is vital for manager to managing as well as assessing
both factors before implementing any kind of strategies and procedures within the business
organization. With the help of this firm attain set goals and objectives in appropriate period of
time which directly contribute in enhancing the productivity level of the company at market
place (Business Environment. 2017). Along with this, it also includes entire factors like
change in technologies, government and many more. All these larger affect the entire
business activities. Thus, by assessing all these firm easily attain better performance level.
With the help of company serve quality products and services to its customers. If any kind of
variation are occurred, then it largely affects the decision. By assessing this manager easily
maintain positive brand image at market place. Current report is based on Nestle, is famous
food company which operate number of outlets in across the world. This report discussed
about various type of business organization with their purpose. Along with this, various
organizational function and its structure is also mentioned in this project.
TASK 1
P1 Various types and purpose of enterprises
Various types of business organization operate their operational activities with their
specific purpose. By this, company easily attain their set goals and goals in appropriate way.
Along with this, business also having their legal structure in which firm operate their
activities accordingly. Every business defines their objectives which is differ from each other
as company attain better results. In addition of this are divide in various types such as private,
public and voluntary in which all types of firm set their own objectives for attaining better
success at market place. In this government also play important role in establishing their rules
and regulations for providing better support to companies. Thus there are some following
types of business and their legal structure:
Private business organization: When private individuals operate their business with the aim
of maximizing profitability level of the company. These type of company does not registered
share. Along with this, they operate their business for enhancing profitability level at market
place by delivering quality services to their customers. The best example of private business
is Nestle, is biggest food company, as they offer quality services to their customers as per
their needs and wants. With the help of this they improve their performance level and at the
same time also create string customers base.
Purpose of company: Under this, the main purpose of Nestle is to manufacturing
quality services to their customers for attaining higher success at market. In addition of this,

they also capture customer’s attention by serving them healthy and quality products. This will
aid in enhancing their productivity level (Apăvăloaie, 2014).
Legal structure: It include some effective term which is helps in operating various
activities I appropriate way.
 Partnership: Under this, various people are coming together for operating customer’s
activities. In this they sign partnership deed for sharing all the loss and profit with
each other. Along with this, all the decision is taken by all the partners in effective
way (Armstrong and et. al., 2015) .All partners are legally bound in which they share
all the profit and losses by mutual understanding. Basically the main advantage of this
term is to reduce any conflicts and issues among partners which may leads in attaining
better success.
 Sole proprietorship: Under this, one and single person established their business and
take all the decision for attaining better success at market place. Along with this, all
the profits and losses are share only one person who operate entire activities of the
business.
Public business organization: This type of business operates by legal authority in which
they formulate number of rules and regulation which may lead in improving overall
performance of the company at market place. In addition of this, they operate their business
with the aim of delivering better services to its customers. In this NHS is best example, which
operate in public sectors for proving quality services to its customers in order to attain heir
higher satisfaction level.
Purpose of business: The main purpose of NHS is to deliver better medical services
to its customers as per their needs and wants which may leads in attaining better success.
Along with this, company also use new and innovative ways to improve overall performance
of the company. This will contribute in increasing the satisfied customers within the business
organization.
Legal structure of company: It cover various elements which consider by the
company at time of operating their business activities in effective manner. All these are as
follows:
 Central government: In this, all the business activities are operating as per legal
authorities which control entire nation. With the help of this company easily manage
their activities.
 State government: Under this, activities are control by legal authorities who take helps
form central government for providing better support to the business organization.
 Local government: In this, entire activities of business is control by local authorities
whom develop better policies to enhance profitability level of the company at market
place.
Voluntary organization: These business operate their activities for providing better social
welfare with the aim of enhancing economic condition by proving better services. One of the
main aim of this type of companies is to enhance living standard of local people which
directly contribute in improving the economic condition of the nation. Along with this, it also
considers as a non-profit business organization because the main focus of these companies is

to provide better services to society to enhance their living standard. In addition of this, there
are some another features are as follows:
 The main contribution of this organization is to improve economic growth by
providing quality services to society (Baesens and et. al., 2014).
 Mainly voluntary organization work for betterment of society which directly impact
on society and its people in positive way.
Hence, the best example of voluntary is Oxfam, is famous non-profit organization which
operate their business for betterment of society. The main focus of this company is to remove
poverty within the economy by providing food and education to number of people. By this
firm easily enhance living standard of the people which directly contribute in improving
economic growth of the nation.
P2 Scope and size of different organisations
According to the current market environment there are different business organizations that
are present in the society. They are performing their task just to provide better services and
facilities to the people (Pinto, 2015). Therefore, all these firms differ from one another in
terms of size and structure. Apart from this, organizations can be further classified into three
different categories i.e. public, private and voluntary. In context with this report the
researcher has taken NHS, Nestle and Oxfam. Thus, to understand it in a better manner some
points are mentioned below:
Nestle
Size of Nestle: This Company is considered as one of the largest organization who has
expanded its business in around 180 nations and it is growing on a rapid speed. They
manufacture goods as per the needs and wants of customers. Therefore, for serving to
maximum people they are providing variety of products at a reasonable price so that every
person of the society can afford them. Thus, for this firm has hired eligible candidate along
with the new tools and technologies so that enterprise can gain maximum profits and
productivity. As the company is located in different location so, it is quite difficult for a
single person to perform. Henceforth, they are hiring ample number of employees for this
process. As a result it is giving them maximum profits.
Scope of Nestle: This company is making items that are different like food items,
baby food and many more. Through this, firm is trying to establish their business in more
effective manner. As a result Nestle is a renowned company and most of the people trust this
enterprise. Along with this, company has enabled themselves in sustaining in a better position
and as a result an increase of market shares at large number (Niemann-Struweg, 2014).
Mission: Most of the company establishes their organization with a main motive that
they provide excellent services to its clients so that loyalty can be sustained for a longer
period of time. Therefore, mission of Nestlé is to give superior quality products so as to grab
the attention of maximum number of people.
Vision: The basic vision of the nation is to provide excellent products along with
nutrition so that customers can maintain and live a healthy life.
NHS

Size of NHS: This organization provides services to citizens as it comes under public
sector. Health and safety, medical facilities come under this and they work for the betterment
of the citizens. They give facilities in number of places and countries as well so that they can
take proper care of people in such areas as well so that people can live a healthy life.
Scope of NHS: The main focus and scope of this organization is to provide better
medical facilities in such areas where public cannot afford the basic facilities. Through this
initiative they are trying to give a healthy life to every individual. Therefore, it is gradually
increased their image in front of the people and because of this, people are showing faith in
this organization (Moroni, Arruda and Araujo, 2015).
Mission: NHS is having one basic mission that is to provide excellent services to
large number of people so that they can live a healthy life.
Vision: Organizations’ vision is to see a healthy environment where all the people are
happy other than this, they want that NHS provides and deliver best quality of services to its
clients as per the medical facilities they need.
Oxfam
Size of Oxfam: This is a charitable trust that works for the betterment of the society
and an individual. They mainly work in order to enhance the standard of people so that they
can interact with everybody in the society. Apart from this, they provide better job
opportunities to a person so that they can contribute some of their money in the growth of the
economy. Therefore, their main aim is to eradicate poverty so that everyone is treated
equally.
Scope of Oxfam: The main aim of the organization is to give better facilities so that
they can maintain a better economy and help the needy people.
Mission: Mission of Oxfam is to develop the nation so as to enhance the standard of
living.
Stakeholders
It is considered as one of the main and important concept that is essential for most of
the organization to be considered so that company can gain maximum benefits. It helps the
company in performing the task according to the resources that are available to them it, will
gradually increase the sales and profitability of the company. Therefore, to get effective
results it important that they Nestle incorporate these strategies for attaining better position at
market area.
TASK 2
P3 Relationship between various functions of an enterprise and its link with objectives and
structure of firm
Every organization that is present in the market area has different structure of operating
the business in an effective manner. Therefore, Nestle has incorporated various methods and
they are delivering their products to its end consumers in an appropriate way. This is assisting
them in gaining maximum benefits so that they can sustain in the market area for a longer

period of time. As company is operating its business at global level that is why they are
manufacturing goods as per the needs and wants of consumers (Menychtas and et. al., 2014).
Various departments play their important role so as to conduct the business operations in an
effective manner. Henceforth, by giving superior quality services they are trying to attract
more and more people towards their organization. Some of the crucial departments are given
below:
Human Resource Department: This is considered as one of the important element of
an organization as their main responsibility is to hire eligible candidates who can help the
organization in accomplishing the task in a better manner. Along with this, HR department
try to give better training programmers through which employees can upgrade their skills and
knowledge. It assists them in thinking of the problems solved by imaginary.
Research and development: Before introducing any new products it is necessary that
managers of Nestle must consider all the factors that can have an impact on business
operations in an appropriately. For this organization tries to implement new tools and
technologies in order to get competitive advancement at the market area (Klapper, Love and
Randall, 2015). The basic medium of communication has been used in this assignment i.e.
questionnaire and interview. Therefore, every department wants to work in a proper manner
so that they can evaluate the overall performance.
Sales and marketing: In this present scenario there are various methods that company
can adopt in order to increase their sales and productivity. Nestle is using all the current
trending tools and machineries so that they can manufacture goods as per the needs and wants
of its consumers. For example, company is using online and offline process for selling their
commodities and for the process of marketing they are using social media, internet and many
more.
Finance: To run a business in an effective manner it is important that firm has
adequate amount of money so that can buy or implement new technologies. Therefore,
finance is considered as an important element for example if the wants to buy raw material
for converting them into final goods it is essential that they have ample money, it will help
the company in gaining maximum benefits in specific period of time.
Organizational structure:
Function based: In this sector, most of the organization perform different activities so
that company can gain their targets and objectives in certain period of time. Furthermore, this
includes the department of Human Resource, production and etc., therefore, different
department play their individual roles and responsibility.
Geographical based: As Nestle has expanded its business in different regions so this
factor is helping them in operating their business in an effective manner. They are performing
their task according to the choices and preferences of a particular region and it is assisting
them in increasing their productivity and sales in a better way.
Product based: Under this, the segmentation is done on the basis of quality of the
product that is to be delivered by the company to its customers. For example: food items for
babies, children and adults.

Customer based: In this, the nature and behaviour of consumers are considered so
that company can manufacture products according to the needs and wants of customers so as
to increase their productivity and sales (Huang-Horowitz, 2015).
TASK 3
P4 Negative and positive impact of macro environment upon business actions and operations
Every business wants to operate their business at larger scale with the purpose of attaining
better success. As Nestle is biggest and famous company which operate their business at
global level. Along with this they also serve quality services to its customers as per their
needs and wants in order to attain their higher satisfaction. With the help of this firm enhance
their profitability level at market place. Along with this, it is also important for business
organization to all the factors of business environment that largely impact on the overall
performance level of the company. In this macro environment define different elements such
as political, legal, environment and many more. All these largely affect the entire business
activities. So that it is prime duty of manager to consider all these at the time of implementing
effective policies and procedures. With the help of this company attain positive outcomes in
order to increase overall profitability level at market place (Bah and Fang, 2015). In this
context, all these elements of macro environment with its positive and negative impact are as
follows:
 Political factors: For attaining higher success at market place it is important for
business organization to effectively evaluate as well as examine political factors
because it directly affect the overall performance of the company. Due to instability in
politics, it negatively impacts on company in which firm reduce their brand image at
market place. In this it is important for Nestle to follow all the rules and regulation
formulate by government authorities in order to maintain their positive brand image at
market place.
 Legal factors: Every nation has formulated number of acts and legislation for
betterment of the economy. So that for attaining better success it is important for
organization to follow all the legislation in effective manner. With the help of this
form enhance their ethical work environment at workplace which directly contribute
in overall success of the company.
 Social factors: This type of factors play vital role in enhancing overall performance
level of the company because it includes customers taste, attitude, culture, age and so
on towards the company products and services. Thus it is important for company to
effectively understand social factors before producing products and services. As a
biggest company, Nestle serve their variety g products and services as per customers
taste and requirement. This will help in attaining better success at market place. It
directly contributes in positive brand image in customer’s mind which may leads in
increasing profitability of the company in effective way.
 Technological factors: As per today’s market, new and innovative technologies are
rapidly take place. Thus it is important for company to implement advanced
technologies within their process for producing quality services for their customers. In
context of Nestle, they also use new technologies within their activities to capture
larger market share form its rivals by creating strong customers base (Botha, Kourie
and Snyman, 2014).

 Economic factors: Economy of the nation play important role because it defines
various rates such as inflation, deflation rate, tax rate and many more. All these are
directly affect the overall business and its activities. Thus it is important for manager
of Nestle to effectively examine and implement in order to maintain their positive
performance at market place. In case, if inflation rate is high then it largely affects the
customers purchasing decision in negative manner which reduce the profitability level
of the company.
 Environmental factors: For grabbing customer’s attention, it is important for Nestle
to use eco-friendly tools and techniques for promoting their services in front of
customers which may leads in attaining better results. In addition of this, company
also optimum use of available resources in order to reduce the wastage which directly
contribute in enhancing the performance level at market place.
TASK 4
P5 External and internal analysis of firm to identify its strengths and weakness
One of the important tool which helps in identification of the strengths, weaknesses,
opportunities and threats within the organisation is SWOT analysis. Such information is
further used by the management to direct their employees and remove their weaknesses. It
helps the organisation to grab the future opportunities to enhance their profitability. SWOT
analysis of Nestle is defined below:
Strengths
 High brand image: Nestle is big brand and customers have trust over their products.
Due to application of the innovative technology in their operations they produce good
quality food items according to requirements which are provided by government. It
helps the organisation to grab the trust of customer and improves their overall
goodwill in market.
 Large work force: Around 340000 employees are working overall in the world in
satisfaction of the different needs of customers according to their preferences.
 R&D: Around 21 R&D of Nestle are setup in whole world provides the functions
regarding checking up of the quality of food items (Botha, A., Kourie, D. and
Snyman, R., 2014).
Weaknesses
 Maggie controversy: One of the major weaknesses which are ascertained that
Maggie controversy in India which has huge impact upon profit and brand image.
 Brand structure: All the products are coming under one brand name. Due to having
their diversified product line, it is difficult for the organisation to manage branding of
products effectively (Cascio, W., 2018).
Opportunities
 Expansion in rural areas: It is observed that Nestle has good distribution system
which helps to attract the customers of rural areas also.

Threats
 High competition: There are many local and well known organisations which
provide different food items. This will have adverse impact upon their customer base
and market share.
 Strict government laws: There are many strict laws are provided by government for
maintaining optimum quality of food items which ensures high safety of the health of
customers. This will affect the production capacity and increases their cost of
production.
P6 Interrelation of strengths and weakness with macro environment elements
SWOT and PESTLE are two effective tools which are used by the organization for
making their business operations more effective and efficient by taking use of their different
strengths. Nestle is global organization which operated their business functions in many
countries. Through SWOT analysis, management of organization ascertains their different
strengths, weaknesses, future opportunities and threats. On the other hand, PESTLE analysis
helps in identification of the impact of different macro-environmental factors upon the
business activities. It is observed that there is huge relation between both. It helps the
organization is to use their strength to reduce the adverse impact of external factor or removal
of weaknesses through attaining the positive impact of factors which are present in business
environment. It provides the opportunity to the management of organization to formulate
effective business plans and strategies for accomplishment of their desired objectives within
stipulated period of time. So, the interrelation between external macro factors with the
strengths and weaknesses of organization is ascertained form the points which are mentioned
below:
Political factors: There are many rules and regulations are provided by government of
country which is needed to follow by organization while providing their business functions.
Due to having the business by Nestle in many countries it has huge impact upon their
business capabilities. The different factors which are included in this are stability of
government, tax policies, import-export policy etc.
 Strength: Nestle has their major production and sales from four major developed
nations where political condition is stable. This will consider as the strength of
organization is to earn large number of profits (Congleton, Hölzel and Lazar, 2015).
 Weaknesses: Nestle has their businesses in more than 190 countries so, it is difficult
for management to understand all the laws in more optimum manner.
Economic factors: At provides the information regarding the economic condition which is
present in nations. This can be determined through noticing different factors like flow of
cash, level of income of individuals, inflation or deflation etc. So, for minimization of risk
Nestle need to plan their functions.
 Strength: The economic condition in Asia is much better which helps Nestle to attain
huge amount of benefits. It provides opportunities that use such funds in other
countries to ensure that high amount of sales is generated (Cai and Yang, 2014).

 Weaknesses: Change of interest rates and level of income has direct impact upon the
sales and profits figure of organization that it has negative impact upon the buying
behaviour of customers.
Social factors: This will include factors which are related to the individuals of society like
age, behaviour, level of education etc. For attraction of large number of customers need to
oversee all these factors.
 Strength: Nestle provides diversified range of products according to the needs of
customers. It helps to enhance their goodwill.
 Weaknesses: There are issues are identified related to quality of product for ex.
Controversy of Maggie happens in India.
Technological factors: One of the important factors which helps the organization to improve
the quality of products through use of innovate technology of production of different food
items. There are many changes are occurred is technologies now days which need to adopt by
Nestle to attain objectives.
 Strength: Application of the innovate technology not only helps in production of
optimum quality products but also contributes efforts in satisfaction of the large
demand of customers. It provides the opportunity regarding improvement of the
overall performance of organization. Through this large number of benefits are
gathered by organization like competitive advantage, high market share, large number
of profitability etc.
 Weaknesses: It is difficult process to implement new technology in organization.
There are large number of issues are faced by the employees while using such
technologies which results in increase of cost of production (Doh, McGuire and
Ozaki, 2015).
CONCLUSION
From the above mentioned report, it can be concluded that business environment stated
as an effective combination to internal and external factors which directly affect the overall
business activities in positive and negative manner. In this manager is responsible for
effectively asses as well as examine both factors for reducing the chances of arising nay kind
of negative impact. With the help of this company enhance their performance level at market
place and at the same time also capture larger market share form its rivals. This will also
assist manager at the time of taking any kind of decision. Along with this various function of
organization also aid in establishing positive brand image by operating entire activities.

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