Business Environment Assignment - Sample

Business and
Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
Part 1:...........................................................................................................................................1
Part 2:...........................................................................................................................................4
ACTIVITY 2....................................................................................................................................5
Part 1:...........................................................................................................................................5
Part 2:...........................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is the process of analysing the internal and external factors that
may affect the organisation positively as well as negatively. In order to execute operational
activities companies should form effective strategies so that impact of such elements can be
reduced (Cook and Sirkkunen, 2013). The organisation which is selected for this project is KFC
(Kentucky Fried Chicken) founded by Colonel Harland Sanders in year 1952.
Various topics are discussed under this report such as different types of organisations
with their size and scope, demonstration on interrelationship with various functions within the
organisations and positive and negative impact of macro environment upon business.
Determination of internal strengths and weaknesses of businesses and their relation with macro
factors are also covered under this assignment.
ACTIVITY 1
Part 1:
In every country various types of organisations operate their business in order to achieve
predetermined goals. These are voluntary, private and public. In all these countries different
types of structures are followed which includes matrix, flat and tall. A brief description of such
companies is as follows:
Private: Such companies that does not offer their share to public are known as private
organisations. The securities of the entities does not traded of stock exchange of the country but
they do have shareholders. KFC (Kentucky Fried Chicken) is a private company which is a fast
food chain and operating business all around the world.
Public: All the business entities that offers its shares to the public are known as public
organisations. The ownership of such type of companies are shared with general people who
invests their money in the enterprise. H & M is a public company which is Swedish
multinational retail and clothing entity (Folke and Kåberger, 2013).
Voluntary: Such companies which are working for the betterment of society are known
as voluntary organisations. They only work for public their motive is not to earn profits. Oxfam
is also a type of this entity which is concerned with poverty removal activities.
Some of the essential information of such companies are as follows:
Basis KFC H & M Oxfam
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Background It was founded by
Colonel Harland
Sanders in year 1952.
It was founded by
Erling Persson in year
1947.
It is a voluntary
company which was
founded in year 1942
in Britain for the
purpose of social
welfare.
Size KFC is a large sized
company which is
operating its business
all around the world.
H & M is a large size
company because the
business is operated in
more than 60 countries
and having around
132000 employees.
Oxfam is a large sized
organisation in which
19 companies are
working together for
the betterment of
society.
Scope KFC has a broad scope
as it mainly deals in
chicken food items
that are preferable by
people.
Scope of H & M is
wide because it
operated business in
retail and clothing
sector in more than 60
nations.
Oxfam's scope can be
defined with the help
of its social activities
that are performed for
social welfare.
Vision To become the leading
integrated food
services group in the
world.
Vision of H & M is to
become the leader of
change in fashion
industry.
Vision of Oxfam is to
make the world
poverty free.
Mission To increase
profitability and
achieve sustainable
growth.
Mission of H & M is
to deliver best quality
clothing products to its
customers.
Mission of Oxfam is to
find appropriate ways
to remove poverty.
Business objective To capture larger
market share by
Main objective of the
company is to attract
Objective of Oxfam is
to remove injustice of
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attracting large
number of customers
with the help of tasty
food items.
large number of
customers and increase
profits.
poverty.
Legal structure In private sector, legal
structure can be
defined as sole trader,
partnership and
cooperatives and
limited company. KFC
is cooperative
organisation.
General government
and public
corporations are the
legal structure of
public sector. Central,
state and local
government are the
part of general
government. In H & M
public corporation
legal structure is
implemented.
In voluntary
organisations legal
structure can be
defined as
unincorporated
association, trust and
limited company.
Oxfam follows
unincorporated
association legal
structure.
Organisational
structure
In KFC matrix
organisational chart is
followed because it
operates business on
international level
(Weathington,
Cunningham and
Pittenger, 2012).
In H & M tall
organisational chart is
followed in order to
establish proper
hierarchy of
command.
In Oxfam flat
organisational chart is
followed as all the
members are free to
talk each other in the
organisation.
Stakeholders Government,
customers and
employees are the
stakeholders of KFC.
Customers,
employees,
shareholders, investors
are the stakeholders of
H & M.
Government, trustees
and volunteers are the
stakeholders of
Oxfam.
Products and services Various types of Fashionable cloths are Social welfare services
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chicken food items
such as honey BBQ,
hot wings etc. are
offered by KFC.
offered by H & M to
the customers.
are delivered by
Oxfam to general
public.
Part 2:
In KFC matrix organisational structure is followed which helps to conduct various
functions in appropriate manner. All the functions of KFC are described below:
Production: All the processes that are conducted by KFC to prepare food items are
considered as the part of this function. Matrix organisational structure of the company helps to
conduct all the functions in appropriate manner because it segregates all the departments and
their activities so that all of them can be conducted properly (Hofmann and Klinkenberg, 2013).
Research and development: Market research and process of collecting customer's data
are considered as the part of research and development functions. All of them are executed
properly in KFC with the help of matrix structure of the company because an appropriate chain
of command is followed under this constitution. It helps the staff members to communicate in a
proper hierarchy and complete their work in effective manner.
Marketing: In order to establish a positive image in the mind of customers, marketing
functions are conducted. With the help of matrix organisational structure all the activities that are
related to it are operated effectively because the manager of KFC holds the chain of command
and keep track record of the work which is done by employees.
Accounting and finance: The activities that are related to recording to monetary values
are the part of such functions in which managers try to enhance financial performance of the
company. These are operated appropriately with the help of matrix structure because proper
hierarchy of control is implemented under this constitution in KFC.
Human resource management: The process of controlling and managing the human
resource of the company is considered as this function. All the activities under it are conducted
properly with the help of matrix organisational structure because it provides clear articulation of
the objectives of all the projects whether they are proposed or running.
All the above described functions of KFC are carried out in matrix organisational
structure in appropriate manner because it helps to establish a proper chain of command and
hierarchy in which activities are operated in a proper way.
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Matrix structure: In KFC matrix organisational structure is followed which helps to
achieve organisational objectives by establishing a particular chain of command and hierarchy.
As the main objective of KFC is to capture large market share and this structure helps to achieve
it by segregating the work in different departments according to the activities. Advantages and
disadvantages of this structure are as follows:
Advantages: It can help to train managers to become effective leaders by guiding them
to control their teams.
Disadvantages: It increases complexities and also create conflicts among employees
because employees can report different leaders.
Tall organisational structure: In this type of structure top level leader takes and
manager takes the important decisions regarding operational strategy. So it is helpful to achieve
the objectives of H & M because work can be perform as per the requirement of company.
Advantage: The main advantage of this structure is that, it maintain a strong chain of
command from the top level of organisation which is help to communicate relevant information
to all employees. As a result all workers perform their roles and duties to achieve the objectives
of H & M.
Disadvantage: The line of comminations is longer as a result relevant information does
not communicate to all employees.
Flat organisational structure: Flat organisational structure has an organisational
structure with few or no levels of middle management among staffs and executives. As a result
relevant information has communicate to all persons which is helpful to achieve the objectives of
Oxfam's.
Advantage: It is helpful to removes excess layers of management & improve the
communication and coordination among workers as a result work can be perform as per the need
of company which is helpful to achieve the objectives of Oxfam.
Disadvantages: Workers does not follow the instructions properly and behave causally
as a result targets can be accomplish within stipulated time period.
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ACTIVITY 2
Part 1:
There are various types of internal as well as external factors that may leave positive or
negative impacts on the business. In order to analyse macro environment organisations may
conduct PESTLE analysis. For KFC it is as follows:
PESTLE analysis: It is a combination of six external factors that may affect business
activities favourably or unfavourably (PESTLE analysis, 2018). In order to achieve higher
sustainability it is very important to focus on all of them. For KFC PESTLE analysis is as
follows:
(Source: PESTLE analysis, 2018)
Political: There are various types of factors such as government policies, internal
political issues, corruption etc. that are considered as the part of political forces. For KFC it is
very important to focus on all of them so that business can be executed in appropriate manner.
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Illustration 1: PESTLE analysis, 2018

 Positive: Political parties in UK support such businesses that helps to grow the economy
it is a positive impact of such factors on because it helps to operate business appropriately
(Storey, 2016).
 Negative: According to nutritionists KFC is selling unhealthy food items and also
claimed that the food should be banned by the company. It has affected the business
because the political parties were required to take strict action against the company due to
force of public (Khilji, 2012).
Economic: Taxation, inflation, industry growth, interest and economy trends are the part
of such factors that are required to be analysed by KFC in order to execute operational activities
in appropriate manner. These factors affects the availability of capital, purchasing power of
people, exports and imports because if all of them fluctuates then it leave impact of these
elements. Whenever inflation rate increases or decreases then organisations such as KFC get
influenced because it affect buying capacity of customers and affect the interest rates of export
and import.
 Positive: Contribution of KFC towards ending unemployment is very high which helps it
to sustain in market effectively.
 Negative: Due to slow economic growth of the country KFC also have to suffer with the
problem of low profitability (Loshin, 2012).
Social: Work ethic, cultural taboos and lifestyle trends are the part of these factors and
for KFC it is very important to focus on them so that issues related to them can be resolved.
 Positive: KFC delivers food in different countries according to their culture which is a
positive factors for the organisation.
 Negative: NGOs focus on unethical treatment of animals which affect business on KFC
as it serves non vegetarian food items.
Technological: Research, innovation, information, technology legislation etc. are the part
of technological factors that should be assessed by KFC so that it can operate its business
appropriately.
 Positive: KFC is using location targeting technique in order to lure other company's
customers and the company has got success in this process. A new ordering and payment
app is also launched by KFC which helps it to reach maximum number of customers.
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 Negative: Technology changes with time and if company is not able to adapt the latest
one then it may leave negative impact on the organisation (Makkonen, Aarikka-Stenroos
and Olkkonen, 2012).
Legal: Tax regulations, employment laws, consumer protection etc. are the part of legal
factors. It is vital for KFC to take all of them in to consideration at the time of formulation of
strategies so that business can be executed with no interference of legal parties.
 Positive: KFC follows all the laws that are implemented by the government that helps it
to operate business effectively.
 Negative: Government policies changes frequently and it is not possible for the
organisations to make changes in their strategies at that time. If KFC is not able to coop
with them then legal actions can be taken by government (McCormick, 2013).
Environmental: Ecological regulations, sustainability and impact of adverse weather are
the part of environmental factors. For KFC it is vital to focus on all of them so that operational
activities can be conducted appropriately.
 Positive: KFC buy packaging paper from a company which supports the deforestation
which leaves a positive impact on the organisation as a positive image can be established
in the mind of customers with the help of it.
 Negative: Some of the NGOs are strictly against the non vegetarian food and they want
that KFC should be banned which is a negative impact of such factors.
All the above described negative impacts can be reduced by formulating appropriate
strategies and finding ways to deal with them in appropriate manner (Palo and Tähtinen, 2013).
Part 2:
Internal environment: It is also known as macro environment in which such factors are
analysed that may affect the organisation internally. For this purpose business entities use SWOT
analysis. For KFC it is as follows:
SWOT analysis: It is a combination of four different aspects that helps to form
appropriate strategies for the business. For KFC all the elements of SWOT analysis are as
follows:
Strengths Weaknesses
 KFC is the second best world wide  The organisation have untrustworthy
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brand of fast food which is preferred by
customers.
 KFC is the leader in the market of
chicken food items (Vom Brocke,
Seidel and Recker, 2012).
suppliers which is not good for KFC.
 Employee turnover in KFC is very high
because workers think that the pay
scale in the company is very low.
Opportunities Threats
 KFC can make some experiments with
food items to be in the mind of
customers.
 Business can be expanded by KFC
geographically.
 Food trends and preferences of
customers changes with time hence it
may affect sales of KFC in future.
 There are end number of competitors in
the market which are willing to capture
the market share of KFC.
Strengths and weaknesses can be converted in to opportunities by KFC by focusing on
them. As it is second best world wide brand of fast food which is preferred by customers so the
organisation may plan to do some experiments with items that are offered by it in order to attract
large number of clients. As employee turnover of KFC is very high so providing best
compensation can be used as an opportunity to deal with this weaknesses. It will help to increase
retention rate of workers and increase overall profitability of the business entity (Sangari and
Razmi, 2015).
CONCLUSION
From the above project report it has been concluded that business environment consist
various types of factors that may leave negative as well as positive impact The best way to
analyse such elements is to conduct PESTLE and SWOT analysis. Both of them may help to
identify the issues and then form effective strategies to deal with them. There are various types
of organisations such as private, public and voluntary. All of them are using different
organisational structure such as matrix, tall and flat that help to carry out functions like
production, marketing, human resource management etc.
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REFERENCES
Books and Journals:\
Cook, C. and Sirkkunen, E., 2013. What’s in a niche? Exploring the business model of online
journalism. Journal of Media Business Studies. 10(4). pp.63-82.
Folke, C. and Kåberger, T. eds., 2013. Linking the natural environment and the economy: essays
from the Eco-Eco Group (Vol. 1). Springer Science & Business Media.
Hofmann, M. and Klinkenberg, R. eds., 2013. RapidMiner: Data mining use cases and business
analytics applications. CRC Press.
Khilji, S. E., 2012. Editor's perspective: does South Asia matter? Rethinking South Asia as
relevant in international business research. South Asian Journal of Global Business
Research, 1(1), pp.8-21.
Loshin, D., 2012. Business intelligence: the savvy manager's guide. Newnes.
Makkonen, H., Aarikka-Stenroos, L. and Olkkonen, R., 2012. Narrative approach in business
network process research—Implications for theory and methodology. Industrial
Marketing Management. 41(2) pp.287-299.
McCormick, J., 2013. British politics and the environment. Routledge.
Palo, T. and Tähtinen, J., 2013. Networked business model development for emerging
technology-based services. Industrial Marketing Management. 42(5). pp.773-782.
Sangari, M.S. and Razmi, J., 2015. Business intelligence competence, agile capabilities, and
agile performance in supply chain: An empirical study. The International Journal of
Logistics Management. 26(2). pp.356-380.
Storey, D. J., 2016. Understanding the small business sector. Routledge.
Vom Brocke, J., Seidel, S. and Recker, J. eds., 2012. Green business process management:
towards the sustainable enterprise. Springer Science & Business Media.
Weathington, B. L., Cunningham, C. J. and Pittenger, D. J., 2012. Understanding business
research. John Wiley & Sons.
Online
PESTLE analysis. 2018. [Online]. Available through:
<https://www.pinterest.com/pin/448811919110292959/>
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