Business and business environment INTRODUCTION 3 LO 1 3 P1 Difference types and scope of organisation 5 LO 2 6 P3 Relationship between different types of organisational functions and their link to bus

Business and business environment INTRODUCTION 3 LO 1 3 P1 Difference types and purpose of organisation 3 P2 Size and scope of different types of organisation 5 LO 2 6 P3 Relationship between different organisational functions and their link to organisational structure and objectives6 LO 3 8 P4 Positive and negative impact of macro environment upon business 8 LO 4 9 P5 Internal and external analysis in order to identify strengths and weaknesses of organisation9 P6 Interrelation of strengths and weaknesses with external macro factors 11

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Difference types and purpose of organisation...................................................................3
P2 Size and scope of different types of organisation.............................................................5
LO 2.................................................................................................................................................6
P3 Relationship between different organisational functions and their link to organisational
structure and objectives..........................................................................................................6
LO 3.................................................................................................................................................8
P4 Positive and negative impact of macro environment upon business.................................8
LO 4.................................................................................................................................................9
P5 Internal and external analysis in order to identify strengths and weaknesses of organisation
................................................................................................................................................9
P6 Interrelation of strengths and weaknesses with external macro factors..........................11
CONCLUSION..............................................................................................................................12

REFERENCES..............................................................................................................................13
INTRODUCTION
The process of making money by selling goods and services is called and known as
business. Business environment refers all the factors that influence business activities like social
factors, strength, weaknesses etc. Arcadia is the 2nd largest clothing retailer private limited
company in United Kingdom. It has more than 2000 outlets in shopping centre. This study shows
various types of organisation according to size and scope. The organisational functions play an
important role in achieving determined goals and impact on structure of company (Stiglitz and
Rosengard, 2015). It also shows about several external and internal factors such as: legal factors,
environmental factors, organisation's weakness, strengths that impact and affect activities and
decision-making process by leaders and managers. There is the interrelationship between the
external factors and internal factors that impact on business activity of company. This report also
shows the interrelationship between all the functions of company which work together and help
in achieving organisational goals in effective manner.
LO 1
P1 Difference types and purpose of organisation
An organisation consist of group of people with same purpose and try to achieve that
purpose. There are mainly three types of organisation that are sole proprietorship, partnership
and corporation that may be public private and voluntary organisation.
Public sector organisation: It refers organisation which is owned and funded by group
of people and by the government. The main aim of this type of organisation is to provide services
to people for instance, Tourist information centres.
Private sector organisation: Those organisations which are owned and funded by share
holders and private individuals. The main objective of this type of organisation is to make profit
and earn money by providing all the services which can satisfy their customers. Example: Merlin
entertainment and Arcadia group Ltd.
Voluntary sector organisation: This sector organisation are generally charitable sectors
and not a part of government. The purpose of this sector organisation is to serve people and
promote a particular point of view. Example: National trust.
Legal structure and background details of private sector organisation

Arcadia is a private British multinational company whose headquarter is in London. It
has more than 2500 outlets in the UK. It has many products like various clothes, accessories and
shoes. The vision of this type of organisation is to become leading provider in the global power
sector. Mission of this organisation is to increase sale of the company by attract most of the
customer with higher quality products. It has more than 1000 employees at its store. It focuses on
proving all the products according to needs and demands of the customers in order to increase
their sales and gain make value from their customers. It owns high street clothing retailer like
Dorothy, Burton, Evans etc.
Legal structure of public sector organisation
Tourist information centre is a public sector company who provides information related
location to their visitors. Vision of this type of organisation to share and make a unique network
among public and private sector. Mission of this type of organisation is to share valuable skills
and promote success (Phadermrod, Crowder and Wills, 2019).
Legal structure of voluntary sector organisation
National trust is voluntary sector organisation whose aim is to support voluntary actions.
Mission and objective of this organisation is to support the development of new projects in order
to enhance community actions.
Difference between profit, non-profit and non-governmental organisation
Non-profit organisation: Non-profit organisations are those organisations which may be
private or public with the purpose of not making profits or dividends. This type of organisations
earn money and surplus profits but money has to stay within the company and that are used for
the organisations purpose. Non-profit organisations include commercial trade unions and
industry boards.
Non-governmental organisation: Non-governmental organisations are those who work
for public and social welfare. Government depends on NGO for understanding people and day to
day work. This type of organisations or NGO can be formed by any members of the company.
They have more social background and formed by protesters in order to welfare of particular
group of people. They generally focus on resolving social issues like child labour, prostitution,
slavery etc. It covers wider area of operation comparatively non-profit organisations (Boateng,
Akamavi and Ndoro, 2016).

Profit organisations: Those organisations which have the main motive of making and
earning profits are called profits organisation. Sole proprietorship, partnership and corporation
are the type of profit organisation. The capital is invested and contributed by the owner of the
company. In this type of organisation, profit is transferred to capital account.
P2 Size and scope of different types of organisation
According tom size and scope there are mainly three types of organisation that involves;
Small size, medium size and large size. Sole proprietorship, partnership and corporation.
Small size business: This size of organisation does not require huge investment. In this
type of industries large number of employees are employed.
Medium size organisation: In this type of organisation moderate no. of labour are
involved.
Large size business: These type of industries require huge investment for running
business activities. In this type of organisation women workers are not employed.
Sole proprietorship: It is a type of business that is owned and runned by one person.
The main advantage of this type of organisation is owner of the company makes all the decision
related business activities, growth. They are responsible for profit and loss that is generated by
business. They generally make one type of products and have all the liability for any claim.
Example: local grocery, single person art studio etc.
Partnership: It is also a type of business which is owned by two or more than two
people but less than 50. The main advantage of this type of organisation is funding and sharing
of losses among all the partners' basis of their shares and investment. Various partners brings
various style and skills that help them in increasing demands of their products (Mackintosh and
et.al., 2016). Example: Partners at John Lewis Prtnership.
Corporation: A corporation is an organisation that consists a group of people. It exists a
s separate entity and has all the legal rights. It is difficult to start and has limited liability. It can
raise money by selling its products and shares. Owners of these type of company and corporation
do not possess liability regards any claim against the business.

LO 2
P3 Relationship between different organisational functions and their link to organisational
structure and objectives
There are various functions that every organisation have to play such as: marketing,
production, human resource, sales, research etc. There is a link between all the organisational
functions and for that they have to work together in order to achieve organisational goals.
Sales and marketing functions:There is a close relationship and link between marketing
function and sales function. The main objective of marketing department is to collect information
and increase sales of the organisation, Whereas sales manager also want to maximize profits by
selling products and it can be done by those informations which marketing department collects
through research (Khan, Alam and Alam, 2015).
HRM and finance function: Finance function is to manage and control budget and
funds by controlling all the other activities. HR main functions are to hire and trained employees
and for this function it requires enough money so they are interrelated with each other. After
hiring the best employees HR require providing training to employees in order to do effective
work before given time. For doing this function it requires enough money which direly impact on
finance department as it increase the overall cost of company Hence it is important for them to
collaborate with each other.
Technology department and production functions: As Arcadia group company makes
unique products and accessories with the help of technology department and through mobile app
it provides the flexibility and opportunity to their customer in order to purchase products from
online and get home delivery which are interrelated with production department. Production
department focuses on producing products according to requirements of consumers.
Organisational structure of voluntary sector organisation
There are total 161,266 voluntary organisation in which 82,391 are micro, 52,815 are
small, 21,257 are medium and 4270 are large organisation. There are about 821,000 people work
in the UK in voluntary sector in which 66% of the employees are female and 20% of the
workforce has disability. The main functions which these sectors organisations play that involves
service delivery, campaigning and support group of people. Associations are the most common
form of unincorporated structure and this is favoured by new small groups. Associations exist
when the group of people work together in order to carry out an agreed object which should not

related to make profits. The main advantage of this type of structure is that it has more flexibility
as it is free from the statutory controls. The another main advantage of association and voluntary
sector is an unincorporated association is cheap to run and set up. On the other hand it has some
disadvantages also as they have no separate legal identity and personal liability. A national trust
follows the traditional structure for a charity. This trust is usually governed by a trust deed. Non-
profit volunteer organisations have hierarchical structure as they have board of directors,
members, committee and volunteers.
Organisational structure of private sector organisation
In private sector company they generally have various stakeholders such as: directors, officers,
share holders and managers that help and guide company in order to fulfilment of business
objectives. Arcadia group Ltd follows functional top sown hierarchy structure that reflects a
traditional business structure. This structure is followed by senior managers, middle managers
and so on. Arcadia company play many functions and so this structure have many departments
like IT department, marketing department, finance and other operations that are based on
functional role of employees in the company (Whitney, 2018).
This type of structure divides employees in group who possess similar skills and
specialization. So it is important for the company to build and concentrate on effective
communication among all the departments.
Impact on organisational structure and objectives
The organisational structure refers the relationship between all the functions of
organisation. It can be influenced by all the functions of the organisation as it distributes
responsibilities and adapt changes. Organisational functions and interrelationship of functions
impacts on structure in improving growth and satisfy all the needs of customers (Hair Jr and
et.al., 2015). Arcadia group follows and play major functions like finance, human resource,
technological, digital, supply chain, communication etc. These all the functions' help and impact
on the structure of this company as it follows hierarchical structure in which top managers gives
the instruction to head department of each functional unit and they guide their junior and

employees for effective and efficient work. Thee is the relationship between employees and
organisational structure.
The main objective of any type of organisation is to provide the best services and attract
customers with higher quality products in order to maximize profits of the company. All the
functions work together with common aim is to achieve organisation objective as finance
department is concerned with cost and cash flow. All the major decisions are taken by managers
and leaders on the basis of cash flow and information which marketing and other functional
department provide them. Marketing department focus on the achieving and collecting the
necessary information which company requires fulfilling their objectives and these informations
are being provided to related department like sales and production department and with the help
of each others they try to achieving company' s goal and objective.
LO 3
P4 Positive and negative impact of macro environment upon business
There are some external environmental factors that impact on business in positive manner
and in negative manner that involves:
Social factors: Company like Arcadia group Ltd makes the products and goods on the
basis and requirement of customers. Changes in their needs and demands affect decision-making
process and business activities as less demand can decrease company's sales and increment in
demand can increase sales of the company. Widening wealth gap and increasing interest in
clothing retailing company are social factors of company which are opportunities as well as
threat for the company as it sales unique designs brands and accessories.
Economic factors: This external environmental factors affect the purchasing power of
customers. Economic factors include nature of economy, level of income, exchange rate,
inflation rates, interest rates and trade cycle which directly impact on business of Arcadia group
Ltd. Factors of this company impact and affects the buying power of the consumers that directly
effect the demand and supply model in the economy. Economy situations affect the condition of
employment in any country and the purchasing power of customers of Arcadia help in better
sales and profits of global brands.
Technological factors: Technological forces are changing rapidly and due to these
changes Arcadia company can improve their efficiency and way of processing. With the help of

improving and advance technology company can increase their sales which impact positively on
its decision-making process (Della Rocca and Butera, 2017). With the use of mobile apps and
mobile technology trends it can take an opportunity for its business as it helps them in improving
customer engagement and loyalty. On the other hand cybercrime is threat and impact in negative
manner on the company which it need to address this threat in order to expand and increase their
business.
Political factors: Political factors include all the policies and laws that government made
and that laws and policies impact on the business activities of Arcadia company. These policies
include government policy, labour law, foreign trade policy, tax policy which impact on the
company. In order to protect labour law and customers law company have to face many
problems as it is bound to fulfil all the needs of employees because sometimes employees take
undue advantages of these laws. For example, equal wages to all employees become the reason
of conflicts at workplace.
Legal factors: Most of the laws are interrelated with political factors and these consist
more specific laws like discrimination laws, health and safety law, patent and copyright law etc.
Arcadia group Ltd need to know all the factors and analyse what is legal and what is illegal in
order to trade ethically and successfully. Company trade globally and a market leader in retailer
and make unique clothes and accessories. It requires to aware of potential changes in legislation
which can impact on the business in the future.
Environmental factors: There are some environment factors that affects the business
processes like decision making process by leaders and managers. Some environmental factors
include climate change, weather. Company have to make clothes according to weather as it need
to make products jumper in unique designs in winter and stylish dress in summer. The changes in
climate also effect company in positive manner as well as in negative manner.
LO 4
P5 Internal and external analysis in order to identify strengths and weaknesses of organisation
Internal analysis of organisation shows strengths and weaknesses of company. Arcadia is
a private limited company which has some strengths and weaknesses that are:
Strengths:

 It has strength as it is a market leader with a worldwide presence.
 It has strong research and development unit which help them in increasing sales.
 It takes care of their employees.
 It has creative concepts about dress designs (Gürel and Tat, 2017).
Weaknesses:
 The main weakness of this company is it has only one promotion channel which is
the corporate website.
 Most of its customers are in Western Europe and North America.
 Its garment quality does not match the price.
 It has too many staff which are not educated enough about the merchandise.
Opportunities:
 It has good connection with famous designers.
 Arcadia group corporation has potential to franchise brand.
 It is developing market like internet.
Threats:
 It has the constant threat related new entries and competitors in home market.
 This corporation is a global retailer so it has to face many political problems.
Illustration 1: SWOT analysis
Sources: (SWOT analysis, 2012)

P6 Interrelation of strengths and weaknesses with external macro factors
There is an interrelationship between external environmental factors and internal factors
of an organisation.
Strengths of Arcadia group Ltd is it has innovative and creative concept of designs
related clothes and accessories and social factors like demands of customers help them in
increasing their sales with the help of making more innovative clothes or with the use of strength
company can satisfy their social factors (Fozer and et.al., 2017). It has another main strength that
it uses and have strong research and development department which focuses on promotion of
their products and provide employment to people that help in social economy.
The weakness of company is it has most of the staff which are note enough educated but
with the help of technology it can provide training and development programs which can
improve their which can make them perfect in merchandise. Training and development program
consume too much cost which can negative impact on business and decision-making process by
managers and leaders. The another weakness of this company that its products quality does not
match the price that does not satisfy the economic.
CONCLUSION
From the above study it has been concluded that macro and internal factors majorly effect
business activities and decision-making process by leaders and managers. Different types of
organisation according to scope and size have different aim like to earn money, to serve people.
Interrelationship between various functional departments work together in order to achieve same
and team goals. Interrelation of external factors and internal factors like social factors, economic
factors, political factors and the strengths, weaknesses and opportunities of the company impact
the business activities and help each others. Various functions also impacted on the
organisational structure and objectives of the company as all the functional departments worked
together Hence the support in achieving team goals in effective manner.

REFERENCES
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Fozer, D. and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
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Hair Jr, J.F. and et.al., 2015. Essentials of business research methods. Routledge.

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ONLINE
SWOT analysis. 2012. [Online]. Available through.
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