Impact of Changing Business Environment on Organizational Performance

This assignment requires analyzing the impact of a changing business environment on organizational performance. It involves reviewing various studies and research papers that explore the effects of environmental changes on businesses, such as HMT Watches Ltd., European life insurance companies, and sustainable business models. The assignment aims to provide a comprehensive understanding of how businesses adapt to and respond to changing environments, and what strategies can be employed to mitigate or capitalize on these changes.

Business and Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
LO1..................................................................................................................................................4
P1 Different types and purpose of organization..........................................................................4
P2 Size and scope of different types of organization ..................................................................5
P3 Structure and functions...........................................................................................................7
REFERENCES ............................................................................................................................10

INTRODUCTION
This study is based on business and business environment. Business is related
to buying and selling of products and services by fulfilling the demand of customers to
generate profits. Business environment consist of those factors which have their
influence on working of organization. Marks and Spencer will be included in this
assignment to perform various tasks of this project. Marks and Spencer are a public
limited company involved in retail business of clothing, home appliances etc. It is
serving its products and services in all over the regions. This assignment will include
different types of organization and their size and scope. This study will include
organization structure and functions within the organization. This assignment will
provide analysis of Pestle to identify impact of macro – environmental factors on UK
retail sector. This task will also apply Swot and porter’s five forces in order to identify
how they influence decision- making of supermarket.
LO1
P1 Different types and purpose of organization
There are different types of organization which includes public sector, private
sector and voluntary organization.
Public sector: It is a firm which provide various products and services to public to
satisfy their wants. This organization is established for the welfare of public and not for
generating revenues by selling their products and services. Public sector organization is
controlled by government. This organization is providing various services to public and it
is a not for profit organization. public sector organization are funded by various
government organization and from various tax collected by the government to perform
its various activities. The main purpose of this organization is to provide public goods
and governmental services such as military, police, infrastructure such as roads,
bridges, tunnel etc. it also includes Public transportation, public education etc
(Chattopadhyay and Bhawsar, 2017). This organization is owned and governed as per
the rules and regulation of state and central government. Marks and spencer is a public

limited company which provide various products and services to public to satisfy their
demands.
Private company: Private sector organizations are owned and controlled by
individuals or group of individuals. This sector companies provides different types of
product and services in order to fulfil the demands of customers. This organization
provide products and services in order to generate profit to grow their business. Private
sector organization are free from the control of government. Private sector contributes in
the growth of economy by providing their various products and services in market.
Private sector organization is run by individual and they have taxes to government in
order to perform their activities (Eling and Schaper, 2017). Private sector organization
main purpose is to make profits by selling their products in market. Private sector
organization have separate legal entity from their owner. For example, B&M retailer is a
private company providing its various products and services in UK.
Voluntary sector: The voluntary sector organization consist of group of
individuals that comes together by forming an agreement for a common purpose. This
sector is a nonprofit organization and also non-governmental firm. Voluntary sector
provides various services such as charity etc. Voluntary sector main purpose is to serve
public and create social impact rather than generating profits. Voluntary sector gets its
funding from grants, donation etc. in order to fulfill their mission (Jaakkola and et.al.,
2016). The legal structure used by voluntary sector consist of an unincorporated
association, a trust and a company limited by guarantee. Foe example, the Cancer
research UK is involved in voluntary sector which is providing its services to create a
social impact and they are working as nonprofit organizations.
P2 Size and scope of different types of organization
The size and scope of different types of organization can be identified by
differentiating between small size, medium size, micro and large size enterprises.
Micro – size enterprise: Micro size enterprise consist of those firm which are
employing workers not more than 9. They are very small businesses carried on by one
or two persons. These organization main motive is to earn money to provide a good life

to their family members. The main purpose of this organization is to provide customers
with products and services to earn profit.
Small and Medium -size enterprises: Small enterprises consist of business
which are employing workers not more than 100. whereas medium size enterprises
consist of those which are employs workers more than 100 but less than 1000.
Large size enterprises: Large size enterprises are those that employs more than
5000 employees to perform various operation of organization and have a turnover more
than a certain limit to be consider as large size organization. Marks and spencer is
public limited company that is employing workers more than 5000 and it is a large size
enterprise operating its activities indifferent countries.
There are three types of organization which includes sole proprietorship,
partnership and corporation. Sole proprietor is a small business with one owner that
produces only a single unit of product or produce a specific product (Kubasek, Brennan
and Browne, 2016). Sole proprietor have unlimited liablity for any claim of business. For
example tea shop etc. The scope of this enterprise is limited to local boundaries.
Partnership involves is larger in size than sole properitor. Partnership is formed
with minimum of two person and can have multiple partners. In partnership the profits
are shared between partners at the end of financial year.
Corporation comes under large sized enterprises. They have unlimited owners
due to stock ownership and transfer liability. The scope of this enterprise is wide as
they can perform various activities internationally. Corporations provide their products
and services globally to increase its market share and profitability .
The scope of small and medium sized organization is limited to domestic
boundaries whereas large size firm are operating their business in different countries to
attract more customers towards the brand in order to increase their market share to
achieve their business goals to have profitability (Padmanand and et.al., 2016). Marks
and Spencer are providing their products in different countries in order to increase its
market share and generate more profits. Marks and Spencer is the leading organization
in UK involved in retail business and it is a large size enterprise and its scope is to

increase its market share by providing its product and services in different countries to
increase its brand image.
P3 Structure and functions
Basis Private (B&M) Public (M&S) Voluntary (cancer
research uk)
Structure The company
follows hierarchical
tall structure where
the employee are
connected in one
line and are divided
into functional units.
The executive of firm
are connected to
non executives
divisions.
The structure of M
&S is divisional
where the company
has segregated
hierarchical structure
into functional units
but according to job
role and
responsibility. It
enables easy
management of very
function and
employee have say
in decision making
process of company.
The firm has flat
structure where
volunteers can come
up and discuss own
findings and
researches on the
basis of which
decisions are made.

Size The is large leading
retailer with net
income of 144
million pound and
has employed 28000
staff and is spread
for more than 560
locations.
M &S is largest Plc
serving its services
across the globe and
have annual
turnover of 690.6
million pound with
84939 employees.
The company has
979 stores across
UK.
Cancer Research
UK's income was up
almost £129m in
2016 where 200
cancers are relied
on organization.
Scope The company offers
wide range of
products and
services and is
focused on
maintaining
innovation in
services to attract
consumers.
The company owns
high scope as it is
known as high street
organization of UK
serving variety of
good like, Food,
apparels, cosmetics,
etc. where company
is focused on price
and quality of
commodities to
make consumer
experience value
driven.
Scope is to create
cancer awareness
through quick
access and by
modernism health
care services.
Mission The mission of firm
is to sell top branded
products to
consumers at
sensational price
The mission of M &S
is to make high
quality products to
all shoppers by
setting unique
Mission is to serve
between and
appropriate health
services to maximize
well being and

(Smith, 2016). pricing. health.
Objective The objective of
B&M is to provide
exciting and fun
shopping experience
to shoppers by
enabling wide range
and fantastic value
commodities.
The ultimate
objective of M &S is
to manage
sustainable business
performance by
meeting
responsibility and
profitable growth.
The objective of
cancer research UK
is to act as voice by
creating awareness
of cancer to reduce
number of deaths.
Complexity of different structures:
 Transnational structure: The structure offers hybrid strategy between multi
domestic and global strategies where the firm needs to evaluate geographic
boundaries and structure which is wide a scope and is based on rapid fluctuation
in business environment (Botha, Kourie and Snyman, 2014).
 International structure: It is based on modernism approach and therefore the
company needs to operate within unpredictable and uncertain business situation
for which structure required flexibility.
 Global structure: It is based on three divisions that is product line, site and
network of business. However, communication and logistic management is the
biggest complexity of global business structure.
P4 PESTEL model for the assessment of the impact on UK retail sector
The effective PESTEL analysis will support a proper management of the
business activities in much effective and suitable manner. Its assists the organization to
identify its external macro environmental business factors. This will also help in proper
management of the operations and thus will also support a good growth of operations
and action plans in much suitable way. Looking at the condition of the retail market and

business organization working in this industry, the proper assessment of environmental
factors is very important and crucial for an organization. This will also support a good
growth of business organization in much effective way. The proper assessment of
Pestel analysis that will support an effective and suitable growth of a retail business
entity is as follows:
Political factors: Political factors help in a good growth and rise of a business
enterprise will support a proper management of business operations and action plans in
much effective manner. The political conditions of the country in which the organization
is operating will lay a very deep impact on overall development of firm. Besides this, a
political support will aid in an effective growth and development of the business
enterprise in a suitable manner. Thus, for a retail enterprise like Marks and Spencer,
managing the political issues and consideration is damn important. It will help the
business organization to carry out their business activities in much effective manner.
Economic Factors: A retail firm like Marks and Spencer will look after the effective
handling of financial factors and measures in much suitable way. As the major motto of
organization is to generate a decent amount of revenue or financial growth, the
management of the economic factor is very important for the firm (Apăvăloaie, 2014).
This will also help the organization to enhance the quality or effectiveness of operations
that are been set within a retail business enterprise. This will also improve overall
quality of operations and thus supports an effective meeting of its operational goals in
much effective manner.
Social factors: management of social factors is also an important factor that is required
to be taken in consideration by a retail enterprise. As the customers are the major part
of the social factors that are been taken in consideration by the firm, the business
operations of the organization is been managed in accordance to the retail activities that
is been taken in consideration by a business firm in much effective manner. This will
also support a good rise in maintaining of the organizations' customer base in much
suitable manner, improving its revenue and thus will support a good rise in business
activity and operations in much suitable manner.

Technological Factor: with the improvement and advancement in technology, the firm
is required to take in consideration these factor to carry out its retail business
operations. Marks and Spencer will look after various business operations and activities
that will support a proper management of business organization (Lee and Klassen,
2016). The technological tools like social media, incorporating the online business
operations and activities will help the firm to enhance the quality of its activities and
action plan in much suitable manner. These factors are very important as they help the
organization to carry out their retail operations in much effective way.
Environmental factor: with the increase in the environmental concerns on the
worldwide level, the organization is required to look after the proper management of the
business as well as the environmental factors in much suitable and effective manner.
This will also support the good rise in customer and country goodwill towards the firm.
Marks and Spencer will see through the overall and proper placing of the business
operations and activities that will support a good and effective development of the
business organization or operations in much suitable manner. Besides this, it will
encourage the organization to develop environment friendly and more effective products
and services in much suitable manner.
Legal factors: the legal or constitutional obligations are required to be taken in the
consideration by the firm that will support the proper rise in business activities in much
suitable and effective manner. These legal obligations and considerations are required
to be taken by the firm will guide the organization to enhance the quality of business
activity and operations that will support the avoiding of any sort of legal obligation and
operations in much effective manner. This will improve the overall operations and
business activities in much effective manner.
P5 SWOT and Porter 5 force model
The suitable assessment of internal and external factors will help the
organization to enhance the quality of business activities in much effective way the
proper assessment of these factors will help the organization to enhance the quality of
business activities and operations in much effective manner (Hallward-Driemeier and

Pritchett, 2015). The proper assessment of this factor will support the good rise in the
business activities and thus will lead the firm to enhance the quality of business
operations and thus will lead to the proper growth of the firm. The SWOT and Porter 5
force model of the organization or retail sector as a whole is as follows:
Internal factors
SWOT Analysis
Strength Weakness
 Based on the case study, this can
be said that the retail sector is most
developing and effective sector or
industry, that has seen the highest
number of growth rate in recent
years (Evans and et.al., 2017).
 Besides this, as the retail sector is
customer oriented, the rise in
customer base help in improving
their sales.
 They support the proper
management of the business
activities and action plan that will
support a good growth of business
enterprise.
 The major weakness of the retail
sector and especially the firm like
Marks and Spencer is that they lack
the proper adoption of innovation
measures and thus supports a good
rise in growth and development of
the firm.
 Besides this, the lack of the proper
structure and thus improvement of
the business operations causes the
retail organizations and firms to see
a downfall that impacts their
operations in much effective way.
Opportunity Threat
 Looking at the present condition of
the operations in the retail
organization, the firm has a very
 The rise in competition in retail
sector is the major threat factor that
imply its negative impact on

good opportunity to improve its
work performance. This supports
the organization to enhance the
quality of business activities and
operations in much effective way.
 As the economic conditions around
the globe is improving and the
purchasing power of people is
increasing gradually, this has
created a positive environment and
operations in much effective way.
This has improved their profitability
and production to a greater extent.
operations and business activities in
much suitable and effective manner
(Saebi, Lien and Foss, 2017).
External factors
Portor's 5 force Analysis
Threat of New Entrants: It is the major factor that is been required to keep under
control in order to carry out the business operations in much effective way. As the
competition is increasing in the retail sector, Marks and Spencer is required to look after
the proper management of the business operations in much suitable and effective
manner (Zhang and et.al., 2016).
Threat of Substitution: this factor is required to be taken in consideration by the
organization to have a good position and sustainability within the market. As Marks and
Spencer is a well established retail firm, the chances of it getting substituted and
replaced is very low. However, the firm is required to look after these measures in much
effective and suitable manner to avoid any sort of adverse consequences and proper
decision making.

Bargaining power of Supplier: the firm is required to maintain a good and effective
relation with its suppliers in much effective way in order to carry out the business
activities and operations and decide the proper and effective pricing of the products and
services offered by the firm. It is very important to look after for maintaining the
profitability of the firm.
Bargaining power of Buyers: management of the bargaining or negotiation process
with their buyers in order to carry out the business operations and selling out their
products and services in much effective and significant manner for a proper and
effective growth of a business enterprise (Brannen, Piekkari and Tietze, 2017). In order
to maintain the revenue generation, this factor is required to be carried out.
Competitive rivalry: the rivalry or indifference that exists among various retail
organizations is required to be managed and maintained in much effective and suitable
manner in order to carry out the business operations. With the rise in many new retail
firms, it has become a considerable factor for Marks and Spencer.
CONCLUSION
On the basis of the assessment that is been carried out at the elected retail
enterprise, this can be said that the business is deeply dependent on the environment in
which it operates and thus is required to be maintained in much suitable way to
enhance the quality of business operations carried out within a retail enterprise. Various
types of firms are been discussed with their size and scope and structural functions.
Besides this, their mission and objective is been evaluated with assessment of various
complexities. Besides this, the internal and external environmental factors are been
taken in consideration using Pestle, SWOT and Porter 5 force assessment to identify
the impact of environment on the business activities and decision making.

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