Business and Business Environment.

Business and Business
Environment

Table of Contents

INTRODUCTION
Business environment is refers to the group of all institutions, individuals, customers’
needs and preferences, management, client’s suppliers, creation in technology, social trends,
economic change etc. All these activities influence the function of the organisation and how it
works directly or indirectly. These factors affect the business enterprise in external and internal
way and they also affect the overall performance and longer survival of the enterprise. It is the
factor that helps the manager of a company to understand the opportunities and threats present in
the business enterprise. Further this report explains the various types of structure and its legal
structure. It also explains the size and scope of the company. This project also explained the
relationship between functions with business structure and how they impact on the functions,
overall productivity of any organisation (Quinlan and et. al., 2019).
TASK 1
P1 Different types and purposes of organisation and its legal structure
Business environment is dynamic in nature that influences the operational objectives to
achieve the goal in the organisation. There are different kinds of organisation in business
environment which are as explained below.
Private sector- It refers to that sector which is run by any individual person or profit owned
companies which is not state controlled. This sector contains large market share of the nation
economy which is known as capitalist-based societies. Dyson is one of the privately-owned
leading company in UK, who manufactures household products like hand dryers, vacuum
cleaner, heaters, lights etc.
Purpose- Its purpose is to rigour- manufacture every Dyson technology model and earn more
and more profits. Improves the shipping efficiency and reducing the waste of the energy. To
make the offerings well known at global market and satisfy the market and customer’s
needs(Aithal, 2016).
Legal structure of private sector- Sole proprietors- It refers to that private sector business which are organised for to
provide tax benefits, decrease liability, modify operational efficiency to the sole owner or
an individual. This is mostly the small business and simple to organise in the nation like
UK.
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 Partnerships- It refers to that where responsibilities, profits and losses can be divided
into two or more persons who hold any business according to the arrangement of
partners. Here, every partner voluntary corporate their mutual interests. This includes
individuals, businesses, schools, interest- based organisations. The main motive of
partners is to complete the objective to earn higher revenues(Evans and et. al., 2017) .
 Limited Corporations- It is also known as Joint stock companies where individuals work
for common organisational structures that safeguards owners’ assets and expenses. Here,
the business directors are not liable for business debts. It is of two types i.e. public Ltd.
Company or private Ltd. Company.
Dyson come under the Limited corporations i.e. it is privately owned company that is run by a
family to earn maximum revenue by supplying innovative home and office appliances.
Public sector- It refers to that organisations which is controlled and owned by the government
and exist to give services to their country citizens. They include healthcare, education, and social
care, emergency services. Funding in this sector are raised by different methods like taxes, fees,
monetary transfer from other levels of government( federal and state government). National
Health Services is publicly established in UK that support healthcare in the country. It is
political accountable for UK government(Prajogo, 2016).
Purpose- The main purpose of public sector companies is to provide Products and
services for the welfare of the society. They usually run by the state government and raised funds
from taxes.
Legal structure of public sector company-
 Local government- It is that type of government which includes boyh county and
municipal government constitution. It is an authority to identify and execute measures
within a restricted area within the whole state.
 State Government- It defines to that government of the nation that shares the political
power with the national government. It contains some level of political monopoly or
directly control the federal government.
 Central government- It refers to that government which control the overall nation and
holds absolute supremacy. The central government have the power to control all other
government(Belás and et. al., 2015).
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National Health Services serves to Central Government. It takes all the decisions relating to the
Organisation and social welfare, most importantly community welfare.
Voluntary sector- It refers to that company whose main objective is to welfare and enrich
society. It is basically work called non- profit organisation with little government interventions.
Save the Children is one of the best NGO who work for improves children lives by supply
education, health care and economic opportunities.
Purpose- The primary intention is to create social welfare rather than profit earnings.
Legal structure of voluntary sector-
 Trust- It refers tom that structure where trustee caries out the business activities on behalf
of the Trust members. It is not a legal entity that may be an individual person or a
company . Here, the trustee has the legal right for the debts of the trust and also, they use
their capital to fulfil those debts.
 Unincorporated association- It is that business entity that is developed by an agreement
between a group of people who come together for a social welfare rather to make more
revenues(Demil and et. al., 2015).
Difference between Private, public and Voluntary sectors-
Basis Private sector Public sector Voluntary sector
Meaning It refers to that
company which is
fully control by the
private sector.
It defines the
organisation which is
in control of
government i.e. state,
local or central
government.
It refers to that
organisation which is
done for social welfare
without focus on the
profit earnings.
Purpose The main purpose is to
maximise its profits.
The objective is
welfare of society with
little profits.
The main purpose is
the society welfare
without earning any
profits.
Legal structure It includes sole
proprietorship,
It involves Local, state
and central
It includes trust and
unincorporated
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partnership and limited
company.
government. structure.
Supply of good and
services
It supplies mixture of
products offerings like
medicines, financial
products, IT, support
services etc.
They supply those
goods and services
that faces the market
failure and the
merchandise cannot
provide. It involves
national defence,
sanitation, schools, fire
protection etc.
This sector fulfils the
society welfare needs
by providing
education, health
services to the needy
peoples.
P2 Size and scope of different types of organisation
The Size and scope of every types of organisation is different that are explained below.
Difference between micro, small, medium and large enterprise-
Basis Micro
enterprise
Small enterprise Medium enterprise Large enterprise
Meaning It refers to
that venture
that sells
product
offering to a
local area or
market. It
contains less
than 10
employees.
It refers to that
where number of
employees are
between 10 and 50.
It refers to that
where number of
employees are
between 50 and 250.
1. It refers to
that where
numbers of
employees
are above
250.
Market share The market
share in this
In this the share in The medium
enterprise focus on
The main aim is to
capture more market
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is about to
nil.
the market is low. market share less
than large venture.
share.
sustainability It majorly
focusses on
the survival
of the
business
only.
It extent is somewhat
high in this also
because they are
small size.
They will also focus
on the sustainability
but less than micro
and small enterprise.
They do not focus on
sustainability
because they already
capture the large
market.
Profit share
and growth
It contains
low profits
and doesn't
focus on
growth.
It contains low profit
but more than micro
enterprise.
It contains profits
and growth larger
than small and
micro.
It majorly focus on
the maximization of
profits and growth.
Private sector-
Size and scope- The number of employees in Dyson is more than 12000 all over the
world and generate 4.4 billion revenue. It contains over 1000 engineers internationally. It deals
in multiple household appliances which covers a large market share (Bah and Fang, 2015). This
shows it’s a large organization that contains 50% of market share in the UK. It sustain for the
very long period of time. The major scope of the private sector company Dyson is that it expand
their business in various other sectors that helps in earning more profits.
Public sector-
Size and Scope- National health company having approx 1.4 million employees all over
the world. It annual budget is 134 billion. It provides various services like in- patient care,
healthcare and dentistry. It covers the 9.6 % of the gross domestic products and survived many
years to protect the needy people. Scope of this sector is very large to provide the helps in all
over the world.
Voluntary sector-
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Size and Scope- Save the children is a NGO that works for rights of children. It contains
1,73,000 individual supporters and which active for hundred years. It presents in around 120
countries all over the world. It covers a large market share in the UK and sustain for around 100
years (Save the Children, 2020). voluntary sector scope is very large as they spread in all over
the country with a maximum share.
TASK 2
P3 Relationship between different organisation functions and link with its objectives and
structure
In context of Dyson, this report explains the interrelationship between various
organisational function that are explained below(Newell and et. al., 2016).
Marketing and finance- This is the important relationship for Dyson company where
finance department provide the budget and funds to the marketing manager, so that they spend
the money on promoting the products offerings efficiently without much wastage of monetary
value. Here, the finance manager properly makes the budget for advertising and give to the
marketing manager to promote their goods and services efficiently and earns more profitability.
They both work for a profit maximisation. Where one tries to save money for future uncertainties
and other spend more money to attract numerous customers and earns mo0re revenue(Berger
and et. al., 2015).\
Production and Research & Development department- In context of Dyson, the
research & development department play an important role to find an innovative technology that
is used to make products that a company offers to its customers for longer survival of the
organisation. Here, these departments work a team to grow their business. R&D department give
the proper and whole information to the production manager to make a product very innovatively
and creatively that attracts numbers of customers and capture the large market share.
Organisational structure of the company
Organisational structure is refers to the activities includes coordination, supervision and
the task allocation which are directly towards the achieving the goal of the company.
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Divisional structure- it refers to that structure where every division contains all the
necessary information according to their work. In Dyson manager proceed the information as per
the need of the departments this will create a effective communication in the company.
Functional structure- It refers to the bureaucratic structure where the firm divides the
work according to the specialisation(Shehu and Mahmood, 2015). in the respected company
Dyson, manager divides the work as per the skills of an individuals. It main objective is to
achieve the task on a giving time.
Illustration 1: organisation structure of Dyson company
Here, the Dyson company follows a divisional structure. Divisional structure consists of various
activities around market, products, innovation and group of consumers. Because of this structure
every functional department properly do their work and support in organisation growth and
profitability. The communication can generally transfer within each department according to the
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need of the information. This structure determines the activities that operates and done in the
Dyson(Burton, Yamin and Young, 2016). Here, the CEO of the company connect with
president and commercial manager and give orders to them about their vision and mission and
the manager tranfers this information to different department in the organisation as per the
requirement which help in achieving the task on the giving time. The main objective to maintain
this strategy is smooth flow of work with effective communication in the company.
Organisation structure link with different functions of the organisation
Various functions of Dyson like marketing,finance, production and research and
development department they all are related to organisational structure of a company because
without any linkage they cannot work properly their task and the outcomes are in negative way.
In Dyson company, there is a divisional structure in which every functions can be divided
according to their divisions. Dyson is a large company having number of departments under it so
the organisation follow divisional structure. If the firm size is small in nature than the functional
structure follow in the company that is based on functions only in this activities are devided
according to the task it only be possible in small size firm. For large size firm divisional structure
is the best.
This function of management link to the objective of Dyson company objectives like if they want
to increase their sales by 10% and profit by 20% than it is very important for the company to link
the various functional departments. In this divisional structure helps in enhancing the
productivity of an employees it will helps in increasing the sales and profits of the business
enterprise.
TASK 3
P4 Positive and negative impact of macro environment on the business operations
Macro- environment is consists of external environment which influence organisation
decision making and also affect the overall performance and strategies. These factors include
pestle analysis that involves politics, economic, socio-culture, technological, legal and
environmental. In context of supermarkets, pestle analysis is the great factors to identify the
external opportunities and threats for the business.
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 Political factor- This factor affects the business of supermarket in UK and other
countries. This factor includes to what extent a government intervenes in the economy or
the industry. It involves political stability, corruption, foreign trade policy, tax policy and
trade restrictions.
Positive- UK is politically stable and it is favourable to the technological aspects this
will create the opportunity for supermarkets like ASDA to earn revenue in a good sense
while using various advanced technology in making the products (How political, legal and social
factors impact on Asda, 2020).
Negative- This factor negatively affects the ASDA sales as well as supply chain and the
cost that was incurred in manufacturing the offerings in a way that because of many
restrictions of government company cannot do international marketing. Environmental factor- This factor influences by the surrounding environment in which
business operates. This factor includes weather, location, change in climate etc. As
people who live in the society are very much aware of their environment. Because of
global warming supermarkets produce those offerings which reduce the wastage of
resources and recycling it(Ramdani and et. al., 2018).
Positive factor- It effect positively by using recycling schemes in the manufacturing process. It
reduces wastage and help saving the environment. It provides products related to cleaning this
will increase sales. In context of ASDA, manager use recycle schemes in making the products
that will eliminate the wastage in the resources. It will increase the profit for the firm.
Negative factor- It also affect negatively if the company cannot follow the rules of the
environment this will create global warming, polluted air etc. In ASDA, if manager does not
make a plan according to the environment than it will reduce the profits and harm the
environment of the community. Socio-cultural factor- In the current trend environment people more focus on their needs
and wants and then buy their products. According to this, supermarkets has an
opportunity to create more new design products which attracts more people to buy that
products.
Positive- in this ASDA use new technology to attract new and more customers and cover wide
area. The quality of products attracts the user because they are design according to society needs.
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Negative- it impacts negatively on the sales of the ASDA because it deals globally and if any
country consumers are not aware about the technology use than it is not good for the company
market.
 Technological factor- UK is one of the most advanced countries in terms of technology.
Here, business develops new technologies to offer best solutions for their customers.
ASDA is all about technology who provide best solutions to the problems of the user and
which is very creative. It also helps in increasing sales and growth of the company.
Positive – ASDA invests more in research and development department to analyse the
new technology this will generate more opportunity for the company and gain good brand
image of the organisation(Soundararajan, 2018).
Negative- ASDA use latest technology to produce their products, but there is rivalry
firm present in the market who also use those technology that will affect the profitability
of the supermarket. Legal factor- This factor includes legal laws that a company follows in which it operates.
Since supermarkets works globally and follows rules and regulations of the countries it
which it operates and sell their products legally in the market. It includes employment
laws, safety laws, trademark registration etc.
Positive – This factor influences a positive impact on the productivity and proficiency of the
ASDA because it follows a employment laws where every worker have equal right and fairly
pay according to their experience this will generate productivity and earns higher growth.
Negative- If these legal rules and regulations does not follow according to the nature laws than it
will negatively affect the market and rate of return of the organisation. In context of ASDA, if
manager does not follow the proper guidelines and not to follow the environment law than it
negatively impact the sales of the supermarket company ASDA. Economic factor- It includes interest rate, growth rate and exchange rate that will affect
the Supermarkets in various market. This factor influences by buyer who purchase
products. Organisation produce high- end products, if the customers purchase increase or
decrease this will affect the certain market(Kim, 2015).
Positive- if the country economy is good than it will increase the buying power of consumers
for ASDA. And the growth rate of the company is more than it will increase the business and its
sales.
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Negative- if the country in which ASDA operates, inflation rate is high than it will negatively
affect the buying power of the customers and also reduce the sales of the products .
TASK 4
P5 Internal and external analysis of organisation
ASDA is the company which is known for innovative ideas and best seller of the country.
Organisation strategy is to covers the whole market by its fragmented products. For this it
analysis their strategy internally and externally which are as follows.
SWOT analysis-
It is an easy framework that generate strategic solution from identify the situation. In this
strength and weaknesses are internally and opportunities and threats are external based(Noe and
et. al., 2015).
Strength Weaknesses
 ASDA creates a strong dealer
community where distributor not only
promote the products but also invest in
training the sales department to explain
the consumers about the products. It
creates a good culture in the company.
 They keep a proper track record of
developing innovative products.
 ASDA is not successful in combining
firm with different work culture this
will lead to decrease in the market
share of the company.
 Profitability and net contribution ratio
of the firm is below the average of the
industry and it will reduce the brand
image of the company.
Opportunities Threats
 Free transaction in cash provides a
good opportunity to the product
department because more cash in bank
provide the company to invest in new
techniques.
 New policy of tax creates an
 The major threat of ASDA is that is has
limited number of human resource
which decrease the profits for the
company.
 Highly profitable products are in
demand only on seasonal time this will
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opportunity for the supermarket to
significantly do their business.
lead to impact the profits.
Sainsbury is one of the leading groceries, clothing etc. store in the UK. To cover the
whole market and earns more profits they analysis the external and internal environment of the
company by using SWOT analysis.
Strength weaknesses
 They provide a high level of customer
satisfaction which helps in generating
the higher profits with longer
sustainability.
 Sainsbury have strong brand portfolio
which helps in expanding the business
globally.
 They spend lot of money on the
workforce which creates more expenses
in the training session.
 They need more investment in
technology sector because of the
current era demand.
Opportunities Threats
 Follow new fashion by the consumers
help them to create more new products
with unique features.
 They attract multiple people from
online source this will save the time
and money .
 Increase in raw products can pose a
threats to the company proficiency.
 More pay of the employees can reduce
the profits and increase the pressure of
the company.
P6 Interrelation of macro factor with strength and weakness of the organisation Political factor- This factor is favourable to the technology in for ASDA to use
innovative technology and provides guarantees for their purchased products that is
effectively link with government policies. It is a strength for the company because it
helps in providing the favourable technology in making and promoting the goods. It also
includes some weaknesses because involvement of government of country it reduces the
profit margin of the company.
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 Environmental factor- This factor is relate with the ASDA products and services like
they design the innovative product which is environment friendly and does not harm the
external environment in producing goods this is favourably connected to the company
culture. It is the strength of the company because in this they properly track the record of
there using technology so in future they easily identify it and it helps in smooth running
of business. The major weakness in this they not work according to the culture of the
company. Social- cultural factor- this factor is related to the opportunity and strength of the ASDA
where they solve regular problems of the customers and crate a loyal customer. This will
improve the brand image. The major weakness in this sector of pestle analysis is that is
there is limited number of workforce available in the company this affect the society
standard and their income. Technology factor- It is the important factor for the ASDA and it is related to the
strength of the company. In this it provides that products which make a life easier of the
buyers like organic foods that provides energy. Using advanced technology according to
the environment needs creates more investments this affect the profitability of business
and using new technology by firm takes the risk of attracting customers or not. Legal factor- this factor relates with the weakness of the ASDA in which the products
that a company produce is easily copied by the competitors and this will reduce the image
of the company(Pearson, 2017). It also includes strength like they protect their innovation
while using intellectual property right.
 Economic factor- this factor is relate to the weakness of the ASDA company where they
charge high price for their products and because of bad economic condition it will affect
the company sales. Adopting change and new technology makes more investment this
will affect the sales of the company.
CONCLUSION
From this preceding report, it is to be concluded that business environment is very
dynamic in nature that includes different types of organisation like private sector, public sector
and voluntary sector with their legal structure. Because of this report, it has to be identified that
every organisation has its own market share, growth and sustainability. Moreover, this project
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analyses the internal and external trend to create more opportunities and reduce threat which
increases its profitability and efficiency of the company.
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REFERENCES
Books & journal
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