Business Environment and Organization

The assignment discusses the importance of understanding the business environment and organisational structure in achieving organisational targets. It highlights different types of departments within an organisation, such as marketing, finance, operational, and human resource, and how their combined efforts contribute to organisational success. The document also references relevant literature on business simulation, business model dynamics, and corporate social responsibility.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure. .1
P2 Size and scope of different organisations..............................................................................5
TASK 2............................................................................................................................................6
P3 Interrelation between different organisational departments and their link to objectives.......6
TASK 3............................................................................................................................................9
P4 Positive and Negative impact of macro-environmental factors.............................................9
TASK 4..........................................................................................................................................10
P5 SWOT analysis of organisation for identification of strength and weaknesses...................10
TASK 5..........................................................................................................................................11
P6 Interrelation of strength and weaknesses with macro-environmental factors......................11
CONCLUSION..............................................................................................................................12

INTRODUCTION
There are different types of organisations are working in business environment. All the
organisation have their different objectives according to their nature and legal structure. As per
their nature such organisations are classified as public, private and voluntary. To attain success in
their operations, management of all the organisations is need to consider the macro-
environmental factors. Such different factors are named as political, economical, social,
technological, legal and environmental etc. It provides the opportunity to manager is to formulate
new strategies and business plan which helps accomplishment of organisational objectives.
PESTLE analysis is the effective tool which helps in removal of their weaknesses and improves
their strength regarding satisfaction of the different demands of customers. M&S is British
multinational retailer in London (Avramenko, 2012 ).
In the present report explain about, Different types of organisation like public, private ,
voluntary and their legal structure, Size and scope of different types of organisation, relationship
between different organisational functions and its link with organisational objectives and
structure. Also, through PESTLE analysis evaluate the positive and negative impact of external
environmental factors, application of the tool of SWOT analysis to identify strength and
weaknesses and interrelation of strength and weaknesses with external macro-environmental
factors.
TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
M&S is multinational retail organisation which serves their business activities in all over
the world. It was founded in 1884 in UK. This organisation is deals in diversified products which
includes clothing, home products and luxury food products. The total number of which are
possess by this organisation within UK are 979. There are many competitors are persist in market
which deals in retail sector and have significant impact upon their business activities. The major
competitors which prevail in market includes ASDA and Tesco.
Introduction

M&S, NHS and Oxfam are three different sector organisation. In this part, their purpose
and legal structure is defined with respect to their different advantages and disadvantages.
Difference between For profit, Not-for-profit and Non-government organisation
For profit Not-for-profit Non-government
organisation
The main aim of such
organisation is to earn large
number of profits
Their main is to provide their
business activities for the
development of economy of
country
They provide their business
activities to provide benefit to
society
Such organisations are known
as private
These companies are called
public
These organisation are known
as NGO
For ex. M&S For ex. NHS For ex. Oxfam
In business environment, organisation are classified into three different sectors such are
known as private, public and voluntary. All the different sectors have their different purpose and
legal structure which is need to fulfil for performance of their business functions. All such
different sectors are defined below:
Private sector
It is important part of economy which is run by the private individuals or group for the
purpose of earning huge amount of profits for the purpose of satisfaction of the requirements of
their different stakeholders (Bovee, Thill and Raina, 2016). Upon the business operations of
private organisations, there is no control of governmental authorities. Still there are many
restrictions are imposed by state authorities which directs the business activities of organisations
which are comes under the purview of private sector.
M&S is multinational retailer which deals in diversified products such as clothing, home
products and luxury food products. This organisation is founded in 1884 in UK. This
organisation has more than 979 stores in UK from which 615 indulge in the business activity
regarding selling of food products.
Purpose of M&S
 The main purpose of M&S is to become multi-channel retailer and attains sustainability
in their operations internationally

 Earning of large number of profits
 Providence of high quality products for maintaining high level of customer trust
Legal structure of private organisation
 Sole proprietorship: It is such form of organisation which is owned and run by single
natural person and there is no legal distinction between the owner and enterprise. Such
owner of enterprise has total control over the operations of business and personally liable
for all debts.
 Partnership: It is an agreement between two or more parties to cooperate each other
regarding running and management of business organisation. Their main aim behind the
formation of partnership is to accomplish business targets for earning large number of
profits (Cavalcante, Kesting and Ulhøi, 2011).
 Limited companies: This will includes two type of organisation such as private and
public. The directors and shareholders of organisation have limited liability according to
their contribution in capital and unpaid amount of shares.
Advantages Disadvantages
Angel investor and venture capitalist funded
the private limited companies
High cost is involved in the process of
formation of organisation
Separate legal entity having life time existence High rate of taxation
 Cooperation: It is an association of persons which build the organisation voluntarily to
meet out their economic, social and cultural needs. This will includes non profit
community organisation.
Advantages Disadvantages
Easy to form this type of cooperative
companies
Limited amount of capital
All the members having the limited liability
within the organisation
Less motivation behind providence of their
business functions
Advantages and Disadvantages of private company

Advantages Disadvantages
Less intervention of government authorities No support of government
Limited liability of shareholders Many restrictions are imposed regarding
subscription of capital
Public sector
The public sector organisation is that part of economic system which is controlled by
national, state and local governments. Under this, includes such organisation which provides the
services regarding defence, healthcare etc.
NHS is public organisation which provides free basic medical facilities to the individuals
of society for development of their livelihood. Some other services are also provided like dental
and optical care.
Purpose of NHS
 Providence of basic medical facilities to poor individuals of society
 Helps in improving the living standard of individual
 Provide quality services which ensures maximum safety of health of individuals
Legal structure of public organisation
 Central government: It assists the functions provided by departments of central and state
authorities.
 State government: It assist the activities which are performed agencies under authority of
state government (Hair, 2015).
 Local government: Oversee the functions delivered by public organisation
Advantages and Disadvantages of Public company
Advantages Disadvantages
Provide functions for development of the
society at optimum level
Availability of limited amount of sources of
fund
Large number of resources are present Large amount of government intervention
Voluntary organisation

Such organisations are formed for removal of the issues which are present in society and
make the world better place to live. They are not working to earn profits and all the amounts are
used for development of society. For establishment of such kind of organisation, need to fulfil
the conditions which are provided by governmental authorities (Hamilton and Webster, 2015).
Oxfam is non profit organisation which provides their activities with the helps of
volunteers in all over the world. It was established in 1942 and different functions are provided
like removal of poverty, disaster relief, advocacy, policy research etc.
Purpose of Oxfam
 Development of the policies which contributes in removal of poverty
 Providence of educational programmes which improves their knowledge
 Provide functions which helps to bring reform in society in respect of poverty and
advocacy
Advantages and disadvantages of non profit organisation
Advantages Disadvantages
Development of overall country There is no guarantee regarding continuity of
such NGO
Availability of the support of large number of
individuals of society and governmental
authorities
Large number of conditions are imposed by
government for carrying their operations as
NGO
Conclusion
It has been observed from the above discussion that private organisation works for
earning huge amount of profits. Public organisation for the development of economy and
voluntary organisation for improving the living standard of individual.
P2 Size and scope of different organisations
Introduction
The organisations are also differentiate on the basis of their size and scope. This includes
description of the different size of organisations includes Micro, Small, Medium and large. All
the four types of organisations have different objectives. This question also includes about

interrelation between the concept of supply and demand (Karagiorgos, Drogalas and Giovanis,
2011).
Different types of organisation
There are different types of organisation which are working in business environment.
Such organisations are differentiate on the basis of size and scope. According to the size of
organisation, this can be classified into Micro, Small, Medium and Large. It is also observed
from analysis that according to the size of organisation their objectives are different. Such
different organisations are defined below:
Micro: It is very small organisation in which less than nine employees are working. Such
organisation having the turnover less than €2 million. For the purpose of establishment of such
kind of organisation there is need of less amount funds. In this majorly includes family business
which are formed by one or two persons.
Objectives of such organisation is also different in comparison to other businesses. Their
main aim is to survive in market for attaining quality in their products and services.
Small and medium: This will includes privately owned corporations, partnerships and
sole proprietorship in which less number of employees are working for the purpose of earning
large number of profits of profits. Such organisations are able to ascertain the support of
government in their business activities and taking the benefits for preferential tax policies. For
consideration of organisation as small and medium need to have the employees more than 50 but
less than 250. For ex., Rowlinson Knitwear is small organisation in which 70 employees are
working.
The objectives of such organisation is to attract large number of customers for
improvement of their sales and profitability.
Large: This includes all the organisation in which large number of employees are
working which are more than 250. For the purpose of establishment of such organisation need to
fulfil all the conditions provided by government. Large number of funds are required to operate
the business functions of large organisation as they provide their products and services in many
countries.
The main objective such kind of organisation is to expand their business operations for
attainment of large market share. For ex., M&S is large organisation which operates their
business function in many countries.

Industry: It is refers as production of the goods and services related to that in an
economy. The source of revenue is the indicator which helps in identification of its relevant
industry. If the organisation earns profit from large number of sources then it is considered that
working in different industries (Kolk, 2016).
Supply: This includes about the amount of good and service which is available in market
for the consumption by buyer at specified price.
Demand: This can be understood from the concept that willingness of buyer to pay the
price for the purchase of specific good or service.
In retail sector, there is huge relation between the concept of supply and demand. If the
demand in market is high of their products then to need to supply more products.
Conclusion
It has been observed from the above analysis that there is direct relation between supply
and demand. According to the size of organisation there is difference in their objectives.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
Introduction
The main departments which performs their functions in M&S includes marketing,
finance, human resource and operations. Their functions provides support to other department is
to accomplish their tasks effectively. Collective efforts of all departments helps in achievement
of organisational objectives. Here, also define about organisational structure and five common
business objectives.
Different types of department and their interrelation
M&S is multinational retailer which provides their products and services globally.
Behind the success of M&S, there is huge role is played by major departments like marketing,
finance, Human resource and operations. Role of such departments and their interrelation is
understood from the following points which defined below:
 Operation: The main department of organisation is to optimally utilise the given
resources for providence of quality products to their end customers. They have the duty is
to evaluate the information provided by marketing department to assess the demand of
their different products in different market segments. It helps to manage their operations

according to their demand and preferences for their optimum satisfaction. To bring
efficiency in their operations, depends upon HR department is to appoint skilful
employee which improves their capability regarding use of innovative technology
( Nishitani and et. al., 2012).
 Finance: The main role of this department is to assess the requirement of fund by
different departments for performance of their functions. They have the responsibility is
to raise the funds through use of different sources and effectively allocate to different
departments for improvement of their overall efficiency. For guidance of the employee’s
of different department they prepares budget which helps in appraisal of the actual
performance of employees and develop plans which contributes to meet such set
standards.
 Marketing: This department of organisation provides the function regarding promotion
and advertisement of their products of organisation for attraction of the large number of
customers. They have the responsibility is to conduct research which helps to assess the
competitors which prevail in market and strategies which are adopted by them. The
function of this department assist other departments like operation is to accomplish their
goals in more efficient manner. Similarly, it has direct link with finance department.
Allocation of adequate amount of funds helps in use of modern tools of promotion which
spread awareness among the individuals of society.
 Human resource: This department has the role within the organisation regarding
planning about workforce and management of overall employees in effective manner.
The different functions which are provided by this department includes recruitment and
selection of employees, appraisal of performance, determination of remuneration, training
and development etc. In interrelation to other departments it helps in appointment of
skilful employees which have knowledges regarding their fields and helps in
accomplishment of tasks within stipulated period of time. They also build the training and
development programmes which motivates the employees to perform hard in organisation
and to attain higher position in organisation.
Five common business objectives

As discussed above the role of different departments in m&S helps in achievement of
their different business objectives. The five common objectives for which M&S provides their
diversified business operations are defined below:
 Survival: One of the basic objective of all organisation is to attain sustainability in their
operations which helps in their long term survival in market. In this regard, operational
department of M&S frame many strategies and plans as per the requirement of their
different segment of customers which assist the employees to bring innovation in their
operations to satisfy their needs (Osterwalder and Pigneur, 2010).
 Increasing sales: This is another important objective of M&S is to improve their sales
figure which helps to grab large market share. In this regard, main role is performed by
the marketing department is to effectively use promotional and advertisement techniques
which helps in attraction of customers of their competitors also.
 Maximizing profit: M&S is private organisation which work with aim of earning huge
amount of profits. To achieve this objective, need to ascertain collective efforts of all
departments. Marketing department helps to improve sales, operation department helps in
reduction of production cost, finance department through effective allocation of funds
etc.
 Satisfaction of customers: It can be achieved with the help of good quality products
which is hand of operation department.
 Growth: Main role is played by HR department in the growth aspect of M&S through
formulation of different strategies.
Organisational structure
 Function-based: Divide the structure on the basis of different departments for ex.,
marketing, finance etc.
 Geography based: Segmentation of structure as per different target markets.
 Product based: Deciding up the structure of organisation according to their diversified
offerings. For ex., M&S, clothings, home products, food etc.
 Consumer based: Structure of organisation is segmented on the basis of consumer
demand and behaviour.
Conclusion

It is observed that different departmental functions are interrelated to each other which
contributes in achievement of organisational five common organisational objectives defined
above.
TASK 3
P4 Positive and Negative impact of macro-environmental factors
Introduction
PESTLE analysis helps in identification of the factors which are present in business
environment. It provides opportunity to the management of M&S is to ascertain the positive and
negative impact of all such factors upon business operations.
PESTLE analysis
M&S is the British multinational company which do business in the retail sector and have
over 800 outlets throughout the globe. However, there are more than 30 nations where the
company have their operations. This is the largest clothing retail segment chain in the UK and
also engaged in the retail sector. Many of the its local stores offer clothing and food, and since
the year 2000 M&S have introduced to enhance their projects into diverse range of the tools and
technologies. Here, PESTLE analysis of the organisation helps out to know about the positive
and negative aspects of the organisation. Here are mentioned hereunder:
Political Factors: Government fixes various rules and regulation for organisation to
follow by these health and safety standards like- planning for the risk determination, risk
knowing and risk control. If the organisations do not follows the standards then in that case,
M&S will be liable to pay penalty (Osterwalder and Pigneur, 2010).
 Positive: Having major operations in UK where government is stable which helps to
attain positive impact upon business.
 Negative: There are many restrictions are imposed on import and export after exit from
EU which has negative impact upon their business.
Economical Factors: Now, economic outlook is highly not fixed and this is highly to
affect retail sales, as citizens do not required to have spare cash in order to spend on the retail
clothing.
 Positive: If the economical situation of country is good then it helps in expansion of
business operations.

 Negative: Low level of income of individuals decrease the demand of product which has
negative impact.
Sociological factors: In the past year's society has varied. M&S is rendering to
expanding its organisation's brand. For responding to the existing affordable clothing industry
supermarkets which have highly enhanced over the past few years caught up along with fashion
trends.
 Positive: M&S provides good quality clothes which helps to attain the trust of customers.
 Negative: Frequent changes in current trends has negative impact upon business
Technological Factors: This is the crucial in the retail market. Organisations must
handle their brands efficiently. It helps the retail organisation like M&S through adoption of new
technology is to strength their security, risk and compliance. In the present scenario, there is
huge increase in the amount of cyber breaches which dangers customer data and credit card
records. It helps in supervision of regulatory aspects which ensures higher safety. If not adopted
such technologies then it will creates negative impact upon their business (Business
Environment. 2018.).
 Positive: Use of new technology helps in improvement of the quality of product and
productivity
 Negative: This will results in increase of cost of production and price of clothes which
has negative impact upon their sales.
Legal factors: This includes all regulatory aspects related to intellectual property rights
which are need to follow by organisation while providing business functions. In this regard,
many tools are provided like trademark, copy right and patent. It is the duty of management of
M&S is not breach any of the rights related to such aspects in any country otherwise, it has
negative impact upon their business operations and which lowers down their productivity and
profitability. This will also helps in securing of their new inventions and innovations and
improve their image in between the clients and customers. This will provides the opportunity to
expand their business operations successfully for attaining higher market share (Pikka, Iskanius
and Page, 2011).
 Positive: Fulfilment of these frameworks helps in building their brand image.
 Negative: If the organisation not paying attention then have to face legal prosecutions.

Environmental factors: It is the duty of all the organisation is to assess the negative
impact of their business operations upon environment. In this regard, M&S is need to develop
environment friendly and sustainable products which satisfies the requirements individuals of
society. They also need to formulate the strategies regarding reduction of adverse impact of their
business operations upon society which helps to align their interest with their functions. The
positive impact of all such activities is ascertained upon their sales and profitability. But if such
aspects are not fulfilled then it results in financial penalty from governmental authorities.
 Positive: It provides the opportunity to gather the support of society
 Negative: Diminished brand image in market and reduction in profitability and sales.
Conclusion
It has been observed from the above analysis that favourable conditions helps the M&S is
to accomplish their objectives and improves their profitability. But due to having their operations
in many countries also attains the negative impact is upon their business operations.
TASK 4
P5 SWOT analysis of organisation for identification of strength and weaknesses
Introduction
Here, management of M&D use the tool of SWOT analysis for the purpose of
identification of their strengths, weaknesses, opportunities and threats.
Strength
 Marks and Spencer is one of the largest multinational retailer industry deals in clothing,
home appliances and foods. It contributes 90% of revenues to the UK market.
 It has advanced technology and innovative ideas through which it keep innovate its
products
 It has large customer market across the globe. 35 million customers were recorded in
2017 across the globe.
 It has its online store through which it sell its products and services M&S has its own reliable CSR strategies which is centralised around customer
satisfaction and building society standard at next level (Pulver, 2012).
Weakness
 Organisational structure is not as flexible to adopt changes of domestic markets.

 There are many strong retail brands are existing in market which creates negative impact
upon their market share (Shigang, 2010.). As being a big brand M&S is need to protect their products from copying by outsiders
Opportunities
 Due to development of the existing technology, M&S has the opportunity is to develop
their own website which helps in promotion and higher number of sales of their products. There are large number of opportunities are available to enter into new market segments
which helps in improvement of their market share and profitability.
Threats
 There are many retail outlets are threat for M&S due to operation on discounted prices
 Existing governmental policies regarding retail sector
Conclusion
From the above analysis, it is ascertained that M&S has large number of strengths which
helps to grab the opportunities through optimum utilisation of their given resources. It
contributes in preparation of effective strategies fro removal of current weaknesses.
TASK 5
P6 Interrelation of strength and weaknesses with macro-environmental factors
Introduction
There is huge relation ascertained in between the strength and weakness of organisation
with external environmental factors. The different strengths of M&S helps to grab the external
opportunities which are available in market (Reinhardt and Stavins, 2010).
Interrelation of strength and weakness with external macro-environment factors
 Strength-opportunity strategy: One of the internal strength which is identified from the
SWOT analysis of M&S is that large number of funds are present with organisation
which helps to expand their operations in new country for attraction of new customers.
 Strength-Threats strategy: The main strength of M&S that it is well known brand and
provide good quality products which helps in removal of the threat of many other
retailers present in market.
 Weakness-Opportunity strategy: The external opportunity which is available is to
M&S is use online mode of business to expand their business operations and improves

sales figure which helps in removal of the weakness regarding low market share due to
involvement of local retailers (Reed and et. al., 2013).
 Weakness-threats strategy: The threat which is identified by the M&S is government
policies for retail sector. So, through adoption of effective approaches they have the
opportunity is to minimise the weakness regarding securing of their inventions and
innovation from copying by the outsiders. It provides the opportunity is to improve their
brand image.
Conclusion
From the above analysis, it is understand that strength of an organisation helps to grab the
opportunities which are present in external environment and also helps in removal of tehir
weaknesses to accomplish their desired objectives.
CONCLUSION
It has been concluded from the above report that organisations are classified into three
different types public, private and voluntary. The main aim of public organisation like NHS is to
work for the benefits of society. For private organisation like M&S has objective is to work for
earning large number of profits and on the other hand, voluntary organisation like Oxfam has the
aim is to removal of poverty from the country. Such organisation is not provide their business
functions for earning profits. There are different types of departments are working in
organisation like marketing, finance, operational, Human resource etc. and their functions are
interrelated to each other. Such combine efforts helps in achievement of organisational targets.

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