Impact of Business Environment on Firms

This assignment examines the significant influence of the business environment on the success of firms. It requires an in-depth analysis of various factors, including legal regulations, technological advancements, socio-economic trends, and competitive landscape. Students are expected to explore how these factors impact firm operations, strategies, and ultimately, their overall performance. The assignment encourages critical thinking and application of relevant theories and frameworks to understand the complex interplay between the business environment and firm success.

Business and
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisation.........................................................................1
P2 Size and Scope of various types of organisation....................................................................3
TASK 2............................................................................................................................................5
P3 Relationship between various functions of organisation in respect to objectives..................5
TASK 3............................................................................................................................................6
P4 Positive and negative impact of macro environment upon business organisation.................6
TASK 4............................................................................................................................................8
P5 Internal and External analysis to strengths and weakness of organsisation...........................8
P6 Interrelation of Strength and weakness with external Macro factors.....................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Business environment includes different forms of organisation and components which
influence operations. Investors, management, suppliers, employees, customers and
competitors are various intrinsic components which directly influence functioning
of firm. Government, environment, social and technological are extrinsic elements
which indirectly affect business activities (Business environment. 2018). Present report is
based on Morrisons which is famous retail store headquarter in London. This assignment
specifies information about different types and purposes of organisation which have vary in
aspects of size, scope, structure and objectives. There are various functions which have
relationship between each other and help management achieve goals. Macro environment
components positive and negative impacts are acknowledged by seniors. Internal and external
analysis is conducted by administration to anticipate interrelation of strengths and weakness of
system with macro environment elements.
TASK 1
P1 Different types and purposes of organisation
Non-government and non-profit organisation are various companies which are
started and managed by individuals to deliver appropriate products and services in
market. It is essential that variety of things are provided in respect to demands of
people (Li and et. al., 2011).
Basis of
Comparison
NGO NPO For Profit
1

Meaning Non government
organisation are
enterprise which are
originated and regulated
by single persons to
provide variety of
products and services in
respect to needs and
demands of public.
Non-profit organisation
include firms which
deliver items in market
to accomplish
requirements of
customer. This help
executive generate
adequate revenue which
is invested in business.
Companies which are
started by individuals to
utilise funds and conduct
appropriate business
operations and deliver
appropriate things in
market to get good amount
of profit from business.
Area of
Operations
NGOs executes large
measure of activities.
Limited scale of
activities are conducted
by NPO.
Limited and large scale of
operations are executed by
firms.
Objectives Prime goal of this sector
is to develop and improve
society which help in
enhancement of economy
of nation.
Promote art, science
and commerce is main
aim of this sector.
Increase customer base and
sales which help
businessperson generate
large amount of revenue is
main purpose of
Morrisons.
Private organisation: This sector comprises firms which are monitored and regulate by
single person. Businessperson invests funds and has adequate resources to execute appropriate
activities and deliver items and services in respect to needs and demands of people. Morrisons is
private enterprise which provides different variety of food, home appliance and various other
products in their store. This helps public to purchase things in according to their taste and
preferences.
Purpose: Private organisations are firms which are owned and run by entrepreneur with
motive to gain appropriate revenue from business by using funds. Morrisons provides different
variety of products to accomplish requirements of people. This helps management to improve
market reputation and profitability (Vaiman, Sigurjonsson and Davidsson, 2011).
2

Public organisation: This aspect includes enterprise which are managed and controlled
by state and central government. These firms are established by authorities to provide items and
services to people to fulfil their demands and needs.
Purpose: Regulator bodies execute activities for welfare of society by delivering appropriate
things in market to accomplish their requirements. Along this, employment opportunities are
increased which give chance to people to gain money for maintaining livelihood (Wack, 2017).
Voluntary: This tactic includes organisation which are started and established by
individuals to enhance and society and sections which are not developed. Business operations are
executed effectively which help person to solve difficulties and problems which are present in
market.
Purpose: These firms prime goal is to deliver adequate products and services to public.
This help individuals overcome issues of society by providing variety of things in respect to
needs and wants of people.
Legal structure: Each organisation functions in respect to conditions of market. Scope and area
of activities are dependable on amount of capital which influences business activities and
objectives achievement (Yu and Ramanathan, 2013).
Private organisation: This sector includes firms which are managed and controlled by
individual or group of persons to gain adequate profit from business. Morrisons is firm which
was started as sole trader and functioned as partnership enterprise. This help administration to set
up outlets in different places to have large customer base; thereby enhance sales and profitability.
This is legal structure of private enterprises which is stated below: Sole proprietorship: These are companies which are started by individual to utilise
money and deliver appropriate items to accomplish demands of people. Limited scales of
operations are conducted by entrepreneur as there is shortage of assets and money.
Hence, business activities are executed to generate adequate profit from business. Partnership: These are firms which are incorporated by two or more people which enter
into agreement. Partnership deed is signed by individuals to utilise resources and skills.
This helps them to have appropriate amount of funds available to operations effectively
(Chetwood and et. Al, 2014).
Public organisation: This tactic comprises firms which are regulated and by regulatory
bodies. Items and services are delivered for welfare of society and enhance conditions of country
3

by enhancing number of jobs and facilities. This form of structure is followed by public sector
enterprise which is as follows: State Government: These are organisation which are coordinated and managed by
authorities to improve state of nation and deliver appropriate things in market in respect
to demands of people.
 Local Government: This aspect includes firms which are set by regulatory bodies to
conduct appropriate business operations and deliver adequate items and services for
welfare of society (Zsambok and Klein, 2014).
P2 Size and Scope of various types of organisation
Every organisation varies with each other in aspects of size, scope, objective and structure.
In UK, micro, small, medium and large are various forms of firms. These enterprises deliver
variety of products and services in market to attain their goals and objectives.
Micro scale organisation: This segment comprises firms which are incorporated and regulated
by entrepreneur to generate adequate amount of profit from business. This helps individuals to
get financially secured and maintain their living standards. Funds and skills are invested by
person as there are very few members and limited resources available (Meiners, Ringleb and
Edwards, 2014).
Scope: Micro scale organisation conducts small operations which are executed by
individual to enhance their livelihood and don’t concentrate on economic development. This
sector firms increases employment opportunities; thereby take care of problems faced by nation.
Objective: Main aim of micro scale organisation is to deliver appropriate items and
services in market to gain adequate profit to manage business and become financially secured.
Small scale organisation: This sector comprises organisation which are set up by individual
to establish adequate business and generate profit. Market survey and research are used by
administration to anticipate demands of people and competitors offerings. These are aspects used
to design system and deliver appropriate things in market. Around 50 subordinates are present in
firm to conduct operations and fulfil demands of people.
Scope: Enhance state of economy and increase employment opportunities is tactics
followed by firm. Along this, management expand business and open new branches in different
nation to increase market reach and customers (Li and et. al., 2011). Small scale firm require to
4

have adequate resources that is funds, material and manpower so that business operations are
conducted properly.
Objective: Prime goal of small scale firms is to provide appropriate variety of products to
grab attention of large number of people and increase business to higher level. Management
implement appropriate tools and technologies in system to conduct operations effectively.
Medium scale organisation: This tactic comprises firms which have good image and
reputation in market. Management have capability and resources to enlarge business and open
divisions in different nations. This helps executive to enhance market reach and customer base
which benefit firm improve sales and profitability. Arround 250 members are present in such
organisation.
Scope: Enhance economy and GDP of UK by launching branches in different nations.
Export and import are organised by administration which help government to have monetary
benefits and funds availability. With online and offline tactics are tactic, medium scale
organisation have large market reach and customer base. This benefits management to generate
appropriate revenue and enhance sales volume.
Objective: This scale of organisation motive is to expand business and open outlets in
same city and various other nations to attract large number of people by providing them
appropriate things and services.
Large scale organisation: This aspect includes firms which have branches in different
nations. Different variety of products is provided by Morrisons to deliver things in respect to
needs and wants of people. Approx. 250 to 500 members are present in large scale enterprise to
execute appropriate business activities and provide adequate items to customers (Zeng, Li and
Duan, 2012).
Scope: Large scale firms’ aim is to sustain market position and reputation by delivering
innovative and creative items and services in market. It is essential that competitive advantage is
constructed by seniors to attract people by giving them adequate products. company even require
to have strong image and reputation in market.
Objective: Generate large amount of profit by providing large variety of products and
services. Enter into different market segments to attract people and make them purchase things in
according to their taste and preferences.
5

Transnational Company: This aspect defines firms which have branches in
more than one nation. For this, management require to have adequate resources that
is funds, material and workforce to conduct appropriate business activities.
TASK 2
P3 Relationship between various functions of organisation in respect to objectives
Every organisation has different functions such as HR, finance, R&D, production, marketing
and sales to execute adequate operations and achieve goals and objectives. This is description of
various departments which are stated beneath:
Human resource department: Employer responsibility is to conduct recruitment,
selection, compensation, training and development practices. In Morrisons, staff members are
distributed in segments in according to their skills and knowledge. This helps firm deliver
appropriate items and services to customers (Sekaran and Bougie 2016). In order to maximising
business productivity, HR department conducts hiring session for which finance division provide
adequate funds and services. Through this, HR division spend money in promoting employment
opportunities by provide job description through advertisement. Through this, they both division
works for enhancing business productivity for attaining business goals and objectives.
Finance department: This unit includes duties which are performed by management to
formulate financial statements that is profit & loss and balance sheet. These aspects benefit
administration to have complete information about income and expenses of Morrisons. Every
department are provided adequate funds to execute activities properly. For managing information
and data of business financial services, organisation needs to having skilled and capable
candidate. For this, HR division provides their effective services in order to hiring capable
employees who provide quality services towards business goals and objectives.
Research and development department: Market survey is tool which helps management
to acknowledge needs and wants of people. Morrisons is retail store which provide different
variety of items and keeps on modifying products in respect to demands of public. This division
having a interrelationship with finance division who provide appropriate funds for business
research and development services.
Production department: Organisation requires providing different products and services
in market to fulfil demands of people. It is essential that appropriate items are manufactured and
6

available in Morrisons store. Along this, management require to have complete information
about taste and preference of customers. This department is interrelated with marketing division
who provide appropriate information to production division about producing appropriate
products services on the basis of customer's requirement and need.
Marketing department: Marketing plan is constructed by superiors of Morrisons to frame
appropriate objective and strategies in respect to pricing, promotion and distribution. This helps
company to attract people by informing them about different variety of items and services.
Online advertising, sales promotion, social media and personal selling are various techniques
used by management to establish competitive advantage; thereby position firm higher than
competitors (Saleem, 2017). Research and development department provides information to
marketing division about target market and audience as well who are interest in business
services. After this, marketing division promote their products in those markets as well as
gathering information related to customer's requirement and need.
Sales department: Different promotion techniques are used by seniorsof Morrisons to
inform people about products. This makes it easier for salespeople to grab attention of people
and make them purchase things in according to their demands and requirements. In all these
practices, marketing division working with sales department to selling business goods and
services in target market. All these aspects assist in maximising business profitability and growth
effectively.
Therefore, these are various units which have interconnection with each other and help
Morrisons to have adequate manpower and funds available to execute appropriate activities.
Different varieties of products are provided by company in respect to taste and preference of
people. This benefits company to improve sales volume and profitability.
Organisation structure: Functional, divisional, flat and matrix are different types of structure
which are adopted by organisation in respect to their objectives and resources. This helps
executive to design system and conduct appropriate business operations. Staff members are
distributed and provide duties in according to their skills and abilities. This benefit firm deliver
adequate things and services in market in respect to taste and preferences of people (Tayur,
Ganeshan and Magazine, 2012).
Morrisons followed functional organisation structure which helps administration to
coordinate and manage activities effectively. HR, finance, operation, R&D, marketing and sales
7

are various departments which are constituted by executive. These units advantage firm to
organise operations and deliver appropriate items to customers. Thus, company is able to
enhance market image and reputation by establishing competitive advantage over rival brands.
TASK 3
P4 Positive and negative impact of macro environment upon business organisation
PESTLE ANALYSIS: There are many factors which has to be considered by manager of
Morrison's to know impact of external as well as internal factors on business operations.
PESTLE is the techniques through which association can know what has to be done through
which changes can be done in effective way. There is positive as well as negative impact on
business operations. PESTLE analysis of Morrision's is as under (Vaiman, Sigurjonsson and
Davidsson, 2011) (Wack, 2017) (Yu and Ramanathan, 2013)-
Basis Positive aspects Negative Aspects
Political Morrisons has good image in
market, this is because they
keep eyes on government
norms through which targets
can be achieved and loyalty of
customer increase.
There is change in
governmental parties, so it is
essential to modify changes in
their actions. This affects
decision making power f
managers.
Economical This component is essential as
this helps to complete task in
effective and efficient manner.
Through raising funds business
activities are performed in
effective way. If finance is
ready then this helps to run
business operations in
effective way.
When there is less of amount
for arising funds then this
affects business operations
adversely. Business actions get
diverted and this affects
performance of business
operations. In case of shortage
of funds business operations
get affected.
Social Business runs in society, so it
is essential to make policies
Due to alterations in demand,
consumer has to make changes
8

according to it. This helps to
make good image in industry
and people are aware of name
in industry. It is essential to
analyse market and then this
helps to satisfy demand of
customer.
in their plans and policies due
to which this sounds t be costly
and this affects concentration
of employees (Chetwood and
et. Al, 2014).
Technology While using updated
technology, there is
requirement of policies which
are effective for making good
image in market. Employees
also remain satisfy as they
learn new techniques which
help them to be competent
with external forces.
Morrison's is the retail store, so
while using updated
technology such as fast billing,
packing system, etc. which
affects profits of company. It is
not possible for Morrison's to
accept every changes
happening in technology, so
this affects business
operations.
Legal Legal factor is one of the most
important which provide
satisfaction to internal as well
as external parties of
Morrison's. This helps to make
changes in policies which are
effective for growth of
association (Zsambok and
Klein, 2014).
As it is not possible for
company to work according to
changes in business operations.
This helps to make changes in
business operations and it is
essential to appoint some
expert personnel for this
purpose this is costly.
Environmental Morrison's works in society
and it is essential to make
changes in business operations
to provide satisfaction to
Due to change in business
environment activities of
company gets affected and this
affects business operations, so
9

workers. This is effective for
making changes in plans and
policies and helps to provide
satisfaction to society.
it is essential to make policies
through which changes has to
be accepted by managers of
Morrison's.
TASK 4
P5 Internal and External analysis to strengths and weakness of organsisation
SWOT analysis is tactic used by management of Morrisons to have complete information
about system potentialities. Strengths and weaknesses help seniors to design system and
implement appropriate tools and techniques to provide quality items and services to people.
Market opportunities and threats are identified by administration to provide products in respect
to market trends. This benefits company to establish competitive advantage and position firm
higher than rival brands (Türetken and et. al., 2011).
Strengths Weaknesses
 Morrisons is well known and
famous supermarket established in
London.
 Different variety of products and
various range things are available
in store to provide choice to
customers to purchase things in
respect to their taste and
preferences.
 Online websites help management
to have large customer base and
market reach.
 Large amount of funds and
manpower is required by
Morrisons to execute business
operations effectively.
 Customers require quality items
and services, so firm require
having skilled and competent staff
members.
Opportunities Threats
 Morrisons has large number of chances
to increase number of customers by
expanding outlet in different nations.
 ALDI, ASDA and TESCO are various
competitors of Morrisons.
 Management require providing
10

 Target new market segments and
provide different variety of products to
people.
appropriate items and services to
customers to satisfy their needs and
make them loyal towards firm.
P6 Interrelation of Strength and weakness with external Macro factors
PESTEL analysis is technique which helps management of Morrisons to have complete
information about market conditions and system abilities. Strengths are used by senior to utilise
market opportunities; while weaknesses are reduced to execute business activities in effective
manner. This is interrelation of external macro factors with strengths and weakness:
Strengths: These are various aspects which are beneficial for performance of firm which are
described below:
 Political factor: In UK, government has reduced taxation rates which help Morrisons to
utilise funds and deliver adequate things in market. Along this, management frame
strategies and policies in respect to authorities and function system legally (Crane and
Matten, 2016). Brexit benefits Morrisons, as imports becomes expensive and people visit
store to purchase things in according to their taste and preference. This enhance sales and
profitability; thereby give benefit to management to attract large number of people.
 Economic factor: UK has inflation which defines that public have adequate amount of
funds to buy appropriate items and services in according to their taste and preferences.
People have adequate money to purchase branded things in respect to their needs and
wants.
 Social factor: Morrisons provide different food items and many other products to fulfil
needs and requirements of people. This help administration enhance sales and
profitability. In UK, public have job opportunities which benefit them to have adequate
money to buy quality things and services. This helps Morrisons to have large customer
base which purchase products in according to their demands and requirements. Technological factor: Latest tools and techniques help Morrisons deliver quality things
and quick services to customers. Besides this, online websites benefit management to
enhance market reach and customer base (Gilboy, 2016). Internet and computer
technology are tactics which help management of Morrisons to provide quick services
and keep proper record of items available in stores.
11

Weakness: These are various difficulties which Morrisons face are stated below:
 Political factor: Government makes improvements in laws and legislations which require
transformation in strategies and policies of Morrisons. This impacts on functionality of
system and performance of firm. Company image and reputation decline if management
don't make system function legally.
 Economic factor: Exchange rate fluctuations influence import and export of items from
one nation to another. This impacts on sales and profitability of Morrisons, as seniors
require to set up branches in different nations to attract large number of customers.
 Social factor: Morrisons require providing items in according to taste and preference of
people which changes in time. Thus, management require making modification in
products in respect to needs and wants of people (Gharajedaghi, 2011). Customers shift
to other brands, if they get superior product and facilities from another retail store.
 Technological factor: Online websites require proper maintenance and skilled members
to manage customers and their requests. Failure of transaction may impacts on reputation
and image of Morrisons. Trained and competent members are required by Morrisons to
deliver quality things and services to customers.
CONCLUSION
As per above report, it can be comprehended that business environment had different
forms of organisation. Private, public and voluntary are firms which differs with each other in
respect to size, scope, structure and objective. Micro, small, medium and large scales are various
enterprises which are present in market. Human resource, finance, production, marketing, sales,
research and development are various departments which help management conduct appropriate
business activities; thereby deliver things in market. PESTEL and SWOT analysis are techniques
used by administration to have complete information about internal and external components.
These tools helps organisation to have complete information about strengths and weaknesses of
system. Macro environment elements are anticipated to acknowledge opportunities and threats
present in market. Thus, strengths and weakness are interrelated with macro environment tactics.
12

REFERENCES
Books and Journals
Chetwood, M. K.,and et. Al, 2014. Transforming a legacy IT infrastructure into an on-demand
operating environment. U.S. Patent 8,775,232.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Gharajedaghi, J., 2011. Systems thinking: Managing chaos and complexity: A platform for
designing business architecture. Elsevier.
Gilboy, G. J., 2016. The myth behind China's miracle. In SEEKING CHANGES: The Economic
Development in Contemporary China (pp. 1-16).
Li, Q., and et. al., 2011. Towards the business–information technology alignment in cloud
computing environment: anapproach based on collaboration points and agents.
International Journal of Computer Integrated Manufacturing, 24(11) pp.1038-1057.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Saleem, M. A., 2017. The impact of socio-economic factors on small business success.
Geografia-Malaysian Journal of Society and Space. 8(1).
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain
management (Vol. 17). Springer Science & Business Media.
Türetken, O., and et. al., 2011, June. Enforcing compliance on business processes through the
use of patterns. In ECIS (p. 5).
Vaiman, V., Sigurjonsson, T. O. and Davidsson, P. A., 2011. Weak business culture as an
antecedent of economic crisis: The case of Iceland. Journal of Business Ethics. 98(2).
pp.259-272.
Wack, P., 2017. Shooting the rapids. Historical Evolution of Strategic Management, Volumes I
and II, 1, p.121.
Yu, W. and Ramanathan, R., 2013. Business environment, employee competencies and
operations strategy: anempirical study of retail firms in China. IMA Journal of
Management Mathematics. 24(2). pp.231-252.
Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing environment.
Information Technology and Management. 13(4). pp.297-310.
Zsambok, C.E. and Klein, G. eds., 2014. Naturalistic decision making. Psychology Press.
Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
13

14