Business and The Business Environment

This document provides an in-depth analysis of the business environment and its impact on performance and productivity. It covers different types of organizations, their purpose, legal structures, and interrelationship between organizational functions. It also explores the positive and negative impact of macro environment on Arcadia Group and provides a PESTLE analysis of Arcadia and BBC.

Business and The Business
Environment

Table of Content
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Different types of organization purpose along with legal structures..........................................3
Different types of organisations size and scope..........................................................................4
Interrelationship between Organisational functions....................................................................6
PART 2............................................................................................................................................7
Positive and negative impact of macro environment..................................................................7
Internal and external analysis of company................................................................................10
Interrelation of Strength with External macro factors of Arcadia.............................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment means the macro and micro factors that affects a business
performance and productivity. Business environment plays a significant role in the growth of a
business. The chosen firm for this report is Arcadia which is a multinational retail firm in UK.
The organisation provides fashionable clothing with high quality material to their customers. The
study will explain different types of organisations and it will further present the size and scope of
the same. It will present the relationship between different organisational functions and analyse
the link between organisation structure with firm's objective. The report will also discuss about
the macro factors using model in which both positive and negative impacts has been considered.
Along with this it will evaluate the internal environment of the organisation and examine the
relationship with external factors as well.
PART 1
Different types of organization purpose along with legal structures
Public Sector Organizations: Those organisations which are completely owned and
controlled by government either central or state government or both. All the business and
organisation which are accountable to government. They funded directly by the government and
tend to supply public services. These organisations are operating at four levels i.e. international,
national, regional, and local level. For example, BBC is public organisation in UK.
Purpose: The main purpose of this sector is to provide the best service at any cost. It
helps the government to enforce control on trade and industries for equitable distribution of good
and services (Bala and et.al., 2020). Main motive of these organizations are providing better
public services i.e. (essential and infrastructural services) rather than making profits. These
enterprises are creating a good infrastructure for economic growth and development, by
improving financial performance of PSUs.
Legal Structure: Public sector organisations are incorporated under companies act 2013
or 1956 and follow the rules and regulations of the Act. Government organizations are legal
entity after incorporation they can hold assets and properties in its own name.
Private Sector Organizations: Those organisations which are completely owned and
operate by private individuals. These business organizations are operating only for profit
maximizations. This sector employs workers through individual business owners, corporations or

other non- government agencies. In private sectors there is no state participation and independent
management exist. For example, Arcadia is a Private sector organisation of UK.
Purpose: Main purpose of this organisation is to reduce budgetary deficient in India.
Helps the government to retrench the public expenditures. It also helps in enhance the economic
growth of the country. The main Aim of this sector is to profit and sales maximisation and create
a brand loyalty and monopoly in the market.
Legal Structure: private sector organizations are legal entity and has its own rights
which are separate from its owners. This sector includes sole proprietorship, partnership, limited
partnerships etc.
Voluntary Sector Organisations: Those organisations whose primary purpose is to
create social impacts rather than making profits. This type of sectors runs independently without
any control of government neither local nor national. Voluntary sector includes charities,
foundations, social welfare advocacy and community groups. For example, Oxfam
Purpose: The main aim of this sector is to full fill the needs of the society and work
towards enrich societies and create social wealth (Christensen, Lægreid and Røvik, 2020). They
work only for social welfare and cover a diverse range of roles from social care, advice. The
main function of this group is to identifying the needs of individuals groups communities and
initiates programmes and projects for meet out the needs of them.
Legal structure: there are 3 main legal structure used by these groups; an unincorporated
association, a trust, and a company limited by guarantee and charitable incorporated
organisations. This type of organizations run by an unpaid management committee for non-
profit.
Different types of organisations size and scope
Basis Public (BBC) Private (Arcadia) Voluntary(Oxfam)
Size BBC is the oldest public service
broadcaster in the world in which
more than 22000 employees
working. It provides 10 national
radio stations, 40 local radio
stations and an extensive website.
Arcadia group had
more than 2500
outlets in the UK and
several hundred
franchises in other
countries. The group
Oxfam is a global
organization with a
massive reach and had
5000 employees who used
the services of 23000
volunteers. The size of

The size shows public companies
are large in operations , which
makes them widely expanded
among working operations
effectively.
is working with more
than 13000
employees.
Headquarter in
London, England, and
UK. Size factor
shows private firms
are wide in
operations, with
skilled employees in
workforce.
voluntary company is
limited, where employees
are also less among
operations.
Scope  BBC stated ambition to
expand BBC online news at
local, national, and
international level.
 BBC create its own suite of
local news services across
the breadth of the UK's
community
 BBC's national online news
services is rapidly
expanding
 wide scope
In future Arcadia
group focus on to
grow the business and
stay competitive in
the market. Mainly
more focus on
innovations and new
fashion footprint
plans.
Limited scope
In future Oxfam also
works on trade justice,
gender equality,
democracy and human
rights across regions,
from local to the global
market.\
Limited scope
Objecti
ves
 Its mission is to promoting
education and learnings.
 Stimulating creativity and
cultural excellence and
highest quality output
services.
 Sustaining citizenship and
 Main
objective if
this group is
integrity,
quality, and
speed.
 This group
 The main aim of
Oxfam is to create
lasting solutions to
the injustice of
poverty
 Development: they

civil society.
 Providing impartial news
and information to help
people in understand the
world
believe that
loyal
customers
relationship
will be the
reason of our
success.
 Right product,
right time,
right place,
with the best
quality is the
basic motto of
the group.
want to help
country in
disaster; and
undertake the
tough situations by
providing good
supply of food and
water.
 They want to
communicate with
public so that
everyone knows
what Oxfam aims
are and what are
their expectations.
Product
and
services
BBC news provides Ten national
TV channels, regional TV
programs, an internet TV services.
Online, offerings news and
information in 42 plus languages.
Arcadia brand
majorly deals in
shoes, clothing and
accessories. Major
brands of this group
is Burton-Dorothy,
PerkinsEvansMiss,
Selfridge outfit
Topman Topshop
Wallis.
Oxfam is an international
NGO which works on
trade justice, fair trade,
education, livelihood,
gender equality, conflicts
and natural disaster.
s

Interrelationship between Organisational functions
Finance and Marketing: Both the departments working simultaneously for increase
market share. Finance manager understand the functions of the marketing departments then only
they create a profitable relationship (Clausen, Demircioglu and Alsos,2020). Finance is focused
on revenue, expenses, and increase the overall health of the organisations. Marketing is
responsible for organisations profitability by keeping customers and promoting its product and
services.
Marketing and Production: marketing find out what people wants and the accurate
prediction of sales forecast for each product. Production capabilities determines the number of
product which can be marketed at what features and price.
Research and Development with Marketing: R & D can be masters of the art of
possibility while marketing have mastery in what customer actually needed and willing to pay
for (Kaiser and Beimenbetov, 2020). They both are truly focused on understanding and acting on
customer’s needs, it makes their jobs easier and result in more productivity.
Selling and Marketing: Marketing develops a relationship between a large customer’s
base and the products or services of the business. Sales person address the specific needs of the
customer and provides a solution to them.
PART 2
Positive and negative impact of macro environment
PESTLE analysis of Arcadia Group
PESTLE analysis helps company to identify economic factors that can influence its way
of working. It evaluates political, economic, social, technological, legal and environmental
elements that affect its performance of business. Arcadia group is one of the biggest retail outlet
that get impacted by these factors of macro environment. These analysis helps company to
identify its internal and external strength and weakness of organization.
Political factors
Political factors influence the stability and profitability of organization. Political elements
such as changing government norms and condition relating to respective industry highly
determinant of stability of business (Çitilci and Akbalık, 2020). Reducing value of currency due
to Brexit vote is another element. For example- increasing in cost of production of Arcadia group

due to change in value of money. The weaker currency value of UK also affects positively and
negatively both.
Economic Factors
Economic factors such as inflation rate, foreign exchange rate, saving rate, relationship
between two countries decide the demand and investment in economy. Interference of
government in cross boarders highly affect the performance of firm. Economic growth rate,
labour cost in other countries etc. are some example of economic macro factors that affect the
Arcadia group.
Social Factors
social and culture factors impact the business environment. Belief and attitude of people
are greater influencer of sales of any company. Demographic, educational, cultural belief,
structure of society and leisure interest change the efficient working of Arcadia group. For
example- In UK retail sector is growing rapidly as standard of living of people of UK has
increased that gives opportunity of increment of sales of Arcadia.
Technological Factor
Technology is fast disturbing element of any industry. Adoption of advanced technology
gives strength to business process (Zambrano and et.al.,2020). For example, E-commerce
platform has increased sales of Arcadia as compared to traditional sales method. It not only gives
ease of promotion and marketing to company but also improves the turnover of company. Thus
technological elements business to improve production, reduction in cost of production, reaching
higher market share, and connection to potential customers of brand.
Legal Factors
Legal factors like changing standards, law and legislation relating to industry effect the
organisation to change structure of working. Labour laws, ethical trading standard and health and
safety measures are some important factors that can affect retail industry. Arcadia need to follow
all these major factors like employment law, data protection to ensure efficient flow of
company's transaction in economy.
Environmental Factors
Different types of industries have different standard of environmental as their norms.
Company in textile industry is not expected to spoil environment in extent level (Matovic, 2020).

The company should conduct its all procedures in such manner that does not harm the
environment.
Pestle analysis of BBC
Political factor:
It is deal with political stability of the country and BBC is highly influenced by the royal
charter and is controlled by the British government. But firm's chairman assures its news on the
basis on public interest and honesty. It is critically evaluated that BBC is influences by the
changing laws and political policies as the government of Britain controls the licenced fee paid
by the British households opting such continuous changes can affect its brand image.
Economic factor:
In 1890's British market went under changes in trends and economy. Also, BBC's
economic structure was moving under radical changes with the dominance of public. Moreover,
it decided to make modification in the organisational structure in order to deal with the political,
economic and environmental changes (Achinas and et.al., 2019). Thus, shifting to
decentralization of organisation has proved to be the survival factor for the firm.
Social factor:
BBC has maintained its honesty and accuracy in broadcasting of news from the time of
second world war. This has resulted in the growth of no. of viewers and also the decentralization
helped it reducing the intervention of the bureaucracy. On contrary side, it has been targeted
many times for the discontinuation of public funds but it proved itself as a worthy recipient of
the funds.
Technological factor:
During the time of cold war in the 1980s there were drastic and dynamic changes
occurred in terms of technology. Internet was a powerful tool used by the American defence to
transfer messages regarding the atomic bombs etc. In such situation John Brit, the director
general of BBC took the initiative to take the channel online and it’s also further implemented
various technologies such as BPR. However, it is critically evaluated that use of new technology
such as internet it leads to cybercrime and company can lose its important data because it can be
misused by the third party which in turn leads to negative impact as well.
Legal factor:

BBC is an organisation that is very much influenced by the government and bureaucracy.
But it manages itself as self-directed and self-regulated organisation and also complied with
defined laws such that Employment law, equality act etc. But it is critically evaluated that the
legal issues for BBC is that it still is dependent on the government, as the broad of governors
decides the licenced fees (External factors, 2021). It is also argued by the critics that BBC is not
even given the whole fees as some amount is kept by the government for other purposes.
Environmental factor:
BBC has environmental concern. It is helping the globe to protect the environment such
as use of disposal cups is not allowed in the BBC office, use of energy saving lighting,
preserving rainwater for harvesting, centralization on recycling of waste etc. are some preventive
measures taken by BBC. It is critically evaluated that if company doesn't implicit sustainability
act that such will create adverse impact on the BBC image.
The above analysis has explained in depth analysis that bexit as political change has
impacted political strength, where BBC with diverse international market positioning will have
to focus on new strategies. Economic strength of policies have impact on BBC, where
innovative business practices should be implemented as per dynamic economic parameters .
Social factors such as dynamic preferences of customers should be focused on strategically, for
competitive diversity and technology factors such as best machinery must be implemented to
evolve on further domains imperatively . Legal factors such as strong legal policies must be
adhered to be focused on new smart innovation scenarios actively, and environmental policies
as analysed plays crucial role . Positive impact of macro environment upon business operations
is worked on progressively heading on best competent scenarios, using the best innovation to
enhance competitive positioning.
Internal and external analysis of company
SWOT analysis of Arcadia group
This analysis helps company to assess its internal strength and weakness and grab external
opportunity and tackle with threat of external environment. Internal environment is
controllable by organization and external environment are uncontrollable.
Strength

Innovation of products, satisfaction to customers, strong distribution network, efficient,
good return on capital, strong brand portfolio and effective cash flow are some strengths of
Arcadia.
Weakness
structure of organisation is not competitive, lack of integration of firm with culture,
inventory days are high, Usage of outdated technology and lack of marketing of products are
some weakness of internal environment of Arcadia. It can be improved by adoption of
advanced technology and effective promotion of brand.
Opportunity
Increase in purchasing power of customers, decrease in cost of transportation, opening of
new markets, and new taxation policy provide opportunity for Arcadia business for
expansion of business units and sales of products.
Threats
New technology developed by competitors, storage of skilled labour force and high pay by
competitors to employees is the biggest threat to Arcadia company. Effective measures
should be taken to improve the performance of business.
Swot analysis of BBC
Strength:
 BBC has a old reputation in the broadcast industry in has earned peoples trust and faith. It
is flourishingly working from the last few years (Swot analysis of BBC, 2020).
 It has provided largest broadcast service worldwide with around 23,000 employees. It has
a big brand image. Modern technology has also been a reason for its growth. It is not only limited to radio
and television but also perform online coverage (Febrian and et.al., 2017). Its continuous
progressing strategies have helped it in giving tough competition to the competitors.
Weaknesses:
 It is said that it provides bias news. Also digs out sensitive issues in the world that leads
to controversy later on.
 BBC have high operating cost whereas the other competitors make it at low cost this is its
major weakness.

Opportunities:
 It has come up with good joint strategies and satellite channels that have increased the
rate of opportunities.
 It was earlier considered as a serious new channel but today it broadcast programmes
regarding kids, fashion, entrainment etc. such have increase opportunities and also it
covers global events. It is working every day to come up with new and try to find what people like. It is also
working on its weakness.
Threats:
 It has threat from the newly emerging domestic channels (Sarsby, 2016).
 It has threat from the other growing news channels that carry low cost operations such as
CNN.
Interrelation of Strength with External macro factors of Arcadia
Satisfaction of customers is the biggest strength of company that is due to favourable
social external factor. Arcadia plays important role in understanding taste and preference of
customers that help it to obtain customer satisfaction. Strong distribution network is related with
economical macro factor. Low cost of transportation and easy availability of labour force in
international market due to good relations with other nations helps it to achieve favourable
economic environment (Kemp, Maclean and Moyo, 2021). Innovation of products is outcome of
adoption of changing circumstances of technological environment. Advanced technology helps
company to get more production in less time. As it is very essential for every industry to cope up
with changing surrounding situations. Effective return on investment is one of the important
strength that make the company to retain stable, it makes company maintain its goodwill strong
in political external environment. Having portfolio of different brands makes company diversify.
This strength help company to easily deal with legal environment as changing norms related to
one brand will not affect the profitability of other brands. These are some strength that help
company to sustain in macro environment. Organization need to improve its strength so that it
can make its organization able to stand strongly without facing any issues.
There are several weaknesses of organization that make company unstable and
uncompetitive in industry. In such situation company need to take essential actions to improve its
strategies to tackle with controllable factors and also try to minimize risk that can be hazardous

for smooth functioning of Arcadia (Pereira and et.al., 2021). Non-competitive Structure of
company is the biggest weakness of firm that can lead in unstable running of Arcadia in
economic environment. Every organization should have competitive structure of system so that it
can easily adapt technological and legal changes. These play vital role for success of retail
industry (Vlados, 2019). Lack of promotion of products and services pull down all efforts of
organization. As it is effective for Arcadia that customers recognize it's all types of products and
services so that it sale can increase and high profitability can be achieved. Efficacious marketing
of brands aid company to obtain favourable socio-cultural environment.
CONCLUSION
It has been concluded from the above report that business environment plays an
important role in the growth and success of a firm. The report summarizes the different types of
organisation such as public, private and voluntary structure etc. The study also concluded the
relationship between different functions of an organisation such as the relation between finance
and HRM department, Marketing and production department etc. it also concludes their link
between each other to meet organisational objective. By, summing up the study it has been
demonstrating the positive and negative impacts that macro environment creates on the business
operations carried out Arcadia. At last the report conclude the internal factors such as strength
and weakness of the firm and its inter-relation with the external macro factors such as the pestle
analysis of Arcadia.
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