Business and Business Environment

This report discusses various aspects of business environment and how they impact functioning of various type of organisation like public organisation, private organisation and voluntary organisation. In context with private organisation report discuss various aspects of BMW's micro and macro environment and those of Transport for London and Nation Trust in respectively in relation with private organisation and voluntary organisation.

Business and Business
Environment

Table of Contents
Business and Business Environment...............................................................................................1
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Purpose and Legal structure of different type of organisation...............................................3
P2 Size and Scope of organisations............................................................................................4
LO 2.................................................................................................................................................5
P3 Relationship between different Organisational Functions.....................................................5
LO 3.................................................................................................................................................6
P4 Impacts of Macro environment on BMW's operations..........................................................6
LO 4.................................................................................................................................................7
P5 Internal and External Analysis of BMW...............................................................................7
P6 Interrelation of Macro factors with Strength and Weakness.................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment refers to surroundings of a business in which business exist and
operate. This environment includes all those factors that affect functioning and growth of
organisation. This report discusses various aspects of business environment and how they impact
functioning of various type of organisation like public organisation, private organisation and
voluntary organisation. In context with private organisation report discuss various aspects of
BMW's micro and macro environment and those of Transport for London and Nation Trust in
respectively in relation with private organisation and voluntary organisation. Report discusses
purpose of these organisations' existence and their size and how different organisational
functions interrelate with each other and their impact on organisation structure along with
internal analysis of organisation and their impact on external environment.
LO 1
P1 Purpose and Legal structure of different type of organisation
Business organisation are of various type established with their own purpose but these
organisations are divided in main three types on the basis of common objectives. These are-
Private Organisation
Organisations that are established and run by private people who are owners of the
business and all the major decision related to the business are taken by owners of the
organisation. Purpose of this organisation in to increase their profitability and gain maximum
return on their monetary and non-monetary investments. This report discuss various aspects of
BMW, German multinational automotive company as a private organisation. Legal structure
which is also know as ownership structure legal structure of BMW is corporations (Elijayar and
et.al., 2017). Presently 50 percent stocks of the company are held by its owners Stefan Quandt
and Susanne Klatten and 50 percent stocks of the company are public float which are available to
public.
Public Organisation
Organisations that are owned and operated by government and provide services to public.
These organisations do not seek to earn and raise profit and funding of this type of organisations
is raised through fees and taxes. This report includes Transport of London as an public
organisation. TfL is a local government body which is responsible for transport in London,
England. This organisation's is a statutory organisation and legal status of the company is that it

is an executive agency within GLA, which refers to Greater London Authority. TfL is headed by
Mayor of London and Commissioner of Transport for London this is not operated with profit
motive and most of its budget is allocated from fares.
Voluntary organisation
Organisations that are established voluntarily by individuals without any profit motive
and main purpose of this type organisation is to address certain issue that are prevailing in
society (Cabral and et.al., 2019). This report discuss National Trust which operates with a
purpose to look after places of historic interest or natural beauty permanently for the benefit of
nation. National Trust is an independent charity and membership organisation for environmental
and heritage conservation in England, Wales and Northern Ireland. Legal structure of National
Trust is that it is an independent membership and non profit organisation and is headed by
president who is The Prince of Wales and director-general, Chairman. Being a membership
organisation motto of the organisation is that everyone is welcome to be a part and member of
the trust. Members are not paid and join trust because of their interest and concern for nature and
historical places.
P2 Size and Scope of organisations
BMW (Bayerische Motoren Werke)
German automotive company established in 7 march 1916 by Camillo Castiglioni, Franz
Josef Popp and Karl Rapp, BMW produces cars and motorcycles. In context of size of BMW it
operates worldwide and sales network of the company spread in 140 countries and all of the
functions of the company are performed by more than 130000 efficient employees. Scope of
BMW varies on the basis of services and products that are provided by the company. BMW is a
premium car and motorcycle producer and its scope is dependent on its brands that are BMW,
Mini, Rolls-Royce, BMW I, BMW X and in motorcycle BMW Motorrad. Along with this
company offers various other variables in cars (Gorman, 2019). Scope of the company also is
visible through their vision and mission that is to be the most successful premium manufacture in
the industry and BMW is leader in providing premium product and premium service for
individual mobility.
Transport for London (TfL)
With a budget of more than 11 billion pounds TfL is local government body of London
that look after transport in Greater London. TfL employs around 28000 employees. Functions of

TfL are to manage various road routes and rail networks that are London Underground, London
Overground, Docklands Light Railway and TfL Rail. However national rail is not covered in
scope of TfL. But trams, buses, taxis, cycling provision and river services are included in scope
of TfL. Scope of TfL also includes for commissioning the construction of the new Crossrail line
jointly with national department for transport and franchising of its operation after it is
completed.
National Trust
National Trust completely known as national trust for places of Historic Interest or
Natural Beauty (Brudney, Prentice and Harris, 2018). Mainly scope of National Trust includes
working for the purpose for which this organisation have been established that is preservational
of historic places and those of natural beauty. But specifically scope of organisation works on
prevention of selling of inalienable land. National Trust owns 500 heritage property of 610,000
acres. This organisation is funded by membership subscription, entrance subscription and
revenue from gift shop and restaurants within its properties.
LO 2
P3 Relationship between different Organisational Functions
Organisational functions that are undertaken by organisation to achieve their objectives.
Functions performed in organisations differ on the basis of their nature and objectives. These
functions are more than then one in business organisations and their efficiency depends on
effectiveness of their linkages with other functions of the organisation. Effectiveness of
interrelations in organisations' functions bring desired result in context with individual functions.
Interrelation of functioning and their link with objectives and structure of organisation in one
such organisation is as follows-
Production Department- most important functional area in BMW this undertakes function of
converting raw material into finished goods of the company, for this reason it have to have
relation with sales department to know about the required quantity of production (Cacciolatti and
Lee, 2016). With HR to have best possible employees for production functioning and with
finance department to get adequate budget allocation for production.
Operations Department- This department undertakes responsibility to see that orders of the
customers are fulfilled in best way in terms of time. This covers managing production cycle and

fulfilling requirements of raw material for production. Most important relationship of operation
department is with production department and sales department.
Finance- Finance department manages finance of a company in terms of investment in various
activities mostly production, marketing and operations of the company. All the functional
department to fulfill their financial requirements have to maintain relationship and effectiveness
of investment and return (Martensen and Mouritsen, 2017). This can be said as linkage of
financial investment with non financial investments like efforts bring effectiveness in operations.
Sales- This is interdependent function in BMW, effectiveness of other function specially
production bring effectiveness in sales function and at the same increase in sales and demand of
the product brings effectiveness to other functions of the organisation as it gives rise to profit and
that contribute in effectiveness of other functions.
Link with organisational objectives and Structure-
organisational objectives and their fulfillment is an important purpose that insist
organisation to perform all these functions. Organisational objectives become basis for
performance of these functions and effectiveness of functions and interrelation brings completion
of organisational objectives.
Structure of BMW is closely related with its functions as structure of BMW is network
oriented and all the functions are divided on the basis of functions that are performed by the
company. All departments are independent but connect to each other interchangeably. Business
of the organisation maintains independent division and production specialization is key initiative
of organisation.
LO 3
P4 Impacts of Macro environment on BMW's operations
Macro environment refers to factors that are present in external environment and are
capable to affect operations of a company. These factors are political, economical, social,
technical, environmental and legal (Sharma and Syam, 2018). No organisation can avoid
influence of external factors on its operations including BMW. Effects of these factors increases
when organisation operate in more than one country and BMW being multinational company
operates worldwide making all these factors more influential. Impact of,
Political- Growing role of international agencies in international business and its management
have made it necessary to focus on this factor. Political factors have various impacts that are

negative and positive. For instace when company wants to expand its operation in other country
and political environment of that country restrict their entry. This instance known as negative
impact of the political factor.
Economical- international businesses have to consider economic condition of all the countries
where they are willing to operate. BMW is a premium vehicle company making its products
luxury and comparatively expensive than other companies' vehicles. Those countries whose
economic condition are positive like developed countries and spending pattern of people are
favourable then BMW have good scope in that country for profit in that country.
Social- BMW offers luxury vehicles and sale of its product is highly affected by perception of
people towards luxury and expensive goods (Sipho and Daniel, 2017). When perception of
people is positive and favourable for luxury goods BMW can easily expand and grow its
operations in that country.
Technological- technology have a key role to play in growth of all the companies specially of
automotive industry. Customer experience are entirely dependent on technological factor. This
requires organisation to keep moving with improved and latest technology. This sometimes is a
costly affair and incur a considerable amount for businesses.
Environmental- Sustainability of environment have become key consideration not only for few
international and national agencies but for every global citizen and that is why BMW have to
make products that do not harm environment in any negative manner then only it will be able to
gain desired profit.
LO 4
P5 Internal and External Analysis of BMW
Internal analysis refers to analysis of factors that exist in internal environment of business and
are affected by internal factors that are strength and weakness of business organisation
(Bharadwaj, 2018). External analysis of business refers to opportunities and threats that exist in
external environment. This analysis is as follows.
Internal Analysis of BMW - Key factors of internal analysis are,
Strength-
 Most valuable automotive brand of the world. Being a valuable brand and that too
globally is one of the biggest strength of BMW and company has take maximum

advantage of its strength and next step to strengthen this is that company maintain its
position in the world.
 Geographically Diversified revenue streams (SHTAL and et.al., 2018). This means that
BMW's revenue generation strategy is different on the basis of geographical area.
 Innovation and Technological Advancement.
 Diversified product portfolio.
 Plans for hybrid models. Hybrid model refers to vehicles that can be run on electricity
and natural gas.
Weakness-
 Little product differentiation.
 Inadequate strategic alliances.
 Cars recalled. Many vehicles of BMW were recalled due to technical issues faced by
companies.
External Analysis of BMW
Opportunities-
 Timing and frequency of new model release.
 Changing lifestyle and increasing orientation of customers for luxury and premium
vehicles.
 Market Expansion.
 Strategic alliances for the company with other national companies.
 Autonomous driving technology.
Threats-
 Rising problems related to fuel.
 Increasing competition.
 Price of its vehicles.
 Increasing government regulations.
P6 Interrelation of Macro factors with Strength and Weakness
Strengths and weakness of the company greatly impact the way company deals with
impact of macro factors (Do Quang, 2017). This is why they are interrelated. In context of BMW
their strength which is 'innovation and technological advancement' which make it possible for
company to deal with changes in technological environment of the company. This not only

allows company to deal with changes but company can also stay on forefront by its innovation
and technological advancement.
Geographically diversified revenue streams allows company to survive and grow in different
type of economic situations.
Most valuable brand, this strength allows company to grow in every kind of market with its own
social environment as no matter what are the perception of the society valuable and reputed
brands are required and desired by everyone.
In terms of weakness of and its interrelation with Macro environment then important weakness
that company have is that product have very differentiation and that make it difficult to stay and
grow in market where people are looking to have something which is not common or in other
terms which is exclusive. This is a big social factor that people want to have something which is
exclusive and only they have that product.
Other weakness of the company is cars recalled. This factor affected its image negatively in two
forms showing that company's technology is not efficient and ruined image of the brand have a
socially negative impact (Cao and Chen, 2019). Reason being this type of event easily change
perception of society about brands and it become difficult to win their trust again.
Inadequate alliances, alliances with the local brands make it easy for companies to deal with
local governments' rules and regulation and BMW's strategic alliances are inadequate saving it
from any kind of benefit that it can have in terms of political implications.
CONCLUSION
On the basis of this report it can be concluded that different type of organisation have
different purposes that members or owners of the organisation seeks to fulfil. Where private
organisations are working to earn and increase profit, only motive and purpose of voluntary
organisation is to address issues of the society and when it comes to public organisation they
seek to cater interest of the society. Functions that organisations undertake also differs on the
basis of their nature and this report included functions undertaken by BMW and their relation
with other functions. Analysis of macro environment and interrelation with internal and external
environment have also been performed in this report.

REFERENCES
Books and journals
Bharadwaj, A., 2018. Changing Dynamics of the Industry. In Environmental Regulations and
Innovation in Advanced Automobile Technologies. (pp. 11-21). Springer, Singapore.
Brudney, J. L., Prentice, C. R. and Harris, J. L., 2018. Beyond the comfort zone? County
government collaboration with private-sector organizations to deliver
services. International Journal of Public Administration. 41(16). pp.1374-1384.
Cabral, S and et.al., 2019. Value creation and value appropriation in public and nonprofit
organizations. Strategic Management Journal. 40(4). pp.465-475.
Cacciolatti, L. and Lee, S. H., 2016. Revisiting the relationship between marketing capabilities
and firm performance: The moderating role of market orientation, marketing strategy
and organisational power. Journal of Business Research. 69(12). pp.5597-5610.
Cao, H. and Chen, Z., 2019. The driving effect of internal and external environment on green
innovation strategy-The moderating role of top management’s environmental
awareness. Nankai Business Review International. 10(3). pp.342-361.
Damanpour, F., Sanchez‐Henriquez, F. and Chiu, H.H., 2018. Internal and external sources and
the adoption of innovations in organizations. British Journal of Management. 29(4).
pp.712-730.
Do Quang, H., 2017. Marketing SWOT Analysis of Rolls-Royce Motor Cars. (Doctoral
dissertation, Empire State College).
Elijayar, A and et.al., 2017. BMW 7 Series Marketing Plan.
Gorman, R.F., 2019. Private voluntary organizations as agents of development. Routledge.
Martensen, A. and Mouritsen, J., 2017. Prioritising marketing activities in different types of
marketing functions. Total Quality Management & Business Excellence. 28(11-12).
pp.1264-1284.
Sharma, A. and Syam, N., 2018. Sales and customer development: An agenda for inquiry.
Industrial Marketing Management. 69. pp.133-134.
SHTAL, T.V and et.al., 2018. Methods of analysis of the external environment of business
activities. Revista ESPACIOS. 39(12).
Sipho, M. S. and Daniel, T., 2017. External environmental considerations in the planning of
strategies of car dealerships. Environmental Economics. 8(1). p.83.
Online
SWOT analysis of BMW. 2019. [Online]. Available Through:
<https://strategicmanagementinsight.com/swot-analyses/bmw-swot-analysis.html>.