P4 Positive and Negative Impact of macro environment on business operations

Business and business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Explain different types and purposes of organisation with their legal structures..................4
P2 Explain the size and scope of range of different types of organisations chosen for purpose.
.....................................................................................................................................................7
TASK 2..........................................................................................................................................10
P3 Explain relationship between different organisational functions and how they link to
organisational objectives and structures chosen for purpose....................................................10
TASK 3..........................................................................................................................................11
P4 Positive and Negative Impact of macro environment on business operations.....................11
TASK 4..........................................................................................................................................13
P5 Internal and external analysis of organisation and their strength and weaknesses..............13
P6 Interrelation of strength and weaknesses with external macro factors................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19

INTRODUCTION
Business and business environment is one of the important factor that focus on internal
and external factors in works and proceedings of business. In internal factors consist of
employees, expectation of consumers and demand with supply and clients etc.. In it consist of
many factors such as individuals, entities and many more factors that helps in achieve
organisational goals and objectives that affects their business performance and their profitability
and growth to survive for long period of time. Business and their factors depends on above
mentioned factors that highly depend on organisational success. This report is based on
Sainsbury which is a largest chain of supermarket in UK with 16.9% share of super market. It is
one of the large retailer and financial service provider that suffer from the Brexit referendum
with currency exchange rate that fluctuate between Euro and sterling. It also suffers from high
inflation rate and increased cost that impacts on their economic stability. This report is based on
different types and function of organisation and their purposes with their size and scope.
Further it explains about relationship between different functions with their objectives and
structures. It also includes interrelationship between micro and macro factors and their role in
organisational growth.
TASK 1
P1 Explain different types and purposes of organisation with their legal structures.
In business environment, there are different types of organisation that help in achieve
goals and objectives for growth and enhancement. Following are the types, purposes and legal
structure of different organisations.
Public sector organisations:
Public sector is an type of organisation which is owned and operated by the government
and their main purpose is to provide services to their citizens. Similar to voluntary organisation,
they do not seek to generate profit (Avramenko, 2012). Funds are raised from different sources
such as taxes, fees and financial transfers from different levels. Different government agencies in
worldwide use different methods to get funding through public services. To grab large
opportunities sometimes public sector organisations engage with private organisations by
outsourcing public private partnership for citizens (Ballard and et.al., 2012). There are three
levels in government that are federal government, regional government and local or municipal

government. In that report the chosen organisation in public sector is NHS that is national health
services. NHS is a publicly funded healthcare system of England and one of the four national
health services in each continent country in UK (Bharadwaj and et. al., 2013.). It has largest
leader in health care industry. NHS established in 1948 and it currently deals with 64.6 million
people in all over UK and 54.3 million only. It take care of 1 million patients in every 36 hours.
It has large scale of employees about 1.5 million people and top of the five largest workforce.
Legal structure of NHS:
it obtained an structured legal structure that are as follows:
The secretary of state for health and social care:
In NHS the secretary has the responsibility to take care of department of health and care.
It is accountable for strategic leadership for public health and social care in England.
The department of health and social care:
The DHSC department is responsible for getting strategic leadership and health and
social care department that supported by 23 agencies and public bodies.
NHS England:
It is an independent main body of government. Its main work is to set priorities and
direction for improvement in health and care of people in England (Craig and Campbell, 2012).
It is an commissioner that take care about primary care services with help of Gps, pharmacists
and dentists and military healthcare services.
Purposes:
The primary objective of national health services is to take care about needs and wants of
consumers and provide appropriate environment to protect their self interest.
Legal structure of public sector:
There are majorly three main levels of government in which
Federal government:
A federal government is a system of government that bifurcate power into larger central
government and local with regional governments. Its power resides in constitution and
responsible for maintaining supremacy in states and possess various powers and authorities.
NHS work under central government and resides supremacy in it.
State government:

It is a government of country that is division of federal government and shares power
and responsibilities of both federal and national government. It has autonomy and come under
direct control of federal government.
Local government:
It is also an another form of government that obeys vertical legal structure in which some
people resides at high position and others at lower positions (Hair Jr and et.al., 2015 ). In that at
middle level people are work largely in numbers and deals in different factors such as people,
organisation and their quality, performance and developments. Hence it is very important to
follow an legal structure to get desirable outcomes.
Private sector organisations:
Private sector is an important part of whole economy that is run or operated by an
individual and group of individuals for making profit. In private organisation the main motive is
to earn profit and is not operated by government (Hilton and Platt, 2013). In that report private
organisation is Sainsbury that is an second largest chain of supermarket in UK.
Purpose:
The main purpose of Sainsbury is to become best for the customers and help them to give
best quality life and give easier way of living. Hence their main motive is to serve their
consumers.
Legal structure of sainsbury:
The legal structure of Sainsbury is hierarchical rules and regulations should be pass
through a chain. Each level is responsible for the subordinate level. For example, the senior
manager is accountable for line manager and responsible for sales assistant to get desirable
outcomes.
Legal structure of private sector:
In legal structure of private sector consist of sole traders, partnership and private limited
company that majorly work to grab large share of profit.
Sole trader:
Sole trader is a type of business of private sector in which only an individual operates the
business with less finance and low risk. The main advantage that process to accomplish goals
and objectives at fast pace and avail all benefits solely.
Partnership:

Partnership is one of the important type of organisation in which two or more than two
associated to gain organisational goals and objectives. It has 2 to 20 members to gain effective
results.(Janita and Miranda, 2013).
Private limited company:
It is a type of joint stock company which owned and operated by family owner businesses
that operated by shareholders. In that stakeholders have definite vision and mission to achieve
desirable outcomes.
Voluntary organisation:
Voluntary is an group of individuals that connected with an bond or an agreement to
form a body to accomplish goals and objectives (Hilton and Platt, 2013). The common types of
voluntary organisation are trade unions, societies of learned, professional associations and
associates are main factors. In this report, the voluntary organisation is Oxfam.
Purpose of Oxfam:
Main motive of Oxfam is to give solution in context of poverty. Its main objective is to
take global participation to adopt major changes and secure future from the poverty.
Types of voluntary organisation:
There are main types of voluntary organisation that are as follows:
An unincorporated association:
it is an type of voluntary organisation that is mostly prefers by small organisations to
achieve short term goals and objectives. It is owned by low income people that are easy to set up.
A trust:
It is an another main type of voluntary organisation in that it works for common objective
. It creates a strong relationship in majorly three parties that are donors, trustees and
beneficiaries. Trust are non-democratic type of firms that have no membership. Oxfam come
under a trust.
Limited companies:
it is one of the most significant structure that deals in voluntary and managing staff and
contracts for funding.
Legal structure of Oxfam:
Oxfam has long chain of legal structure in which two tiers are available that are executive
board and supervisors exist in it. In members of board are at superior position and accountable

for appointing and dismissing the directors and other major positions. In executive board mainly
directors and their subordinate consist in it. They are responsible for preparing and organise
various works and activities to get desirable outcomes. It has long chain of hierarchy that
distribute roles and responsibilities ( Laudon and Traver, 2016). In case of oxfam they have
council of trustees that govern body and should be appoint by trustees to get desirable outcomes
by strong commitment and solving various issues and problems.
P2 Explain the size and scope of range of different types of organisations chosen for purpose.
Different organisation have vary in size, scope and their product base with vision and
mission to reach at desirable outcomes that are as follows:
Public sector: National health services.
Product and services Size and scope Vision and mission stakeholders
NHS is a large
organisation which
offers various services
like urgent and
emergency care,
hospitals, dentist,
pharmacies, mental
health services, sexual
health services and
optician care. National
health service is one of
the largest publicly
funded healthcare
system.
National health
services is a public
company that operates
in every sphere of UK
(J.R. and Cybercrime,
2011). It has wide
scope, by employees
that exceed than 1.5
million people that is
highest workforce and
approximately 54.3
million people and 1.2
million employ
workforce. It has
approximately
3,14,996 nurses and
150273 doctors that
provides services to
users. It has wide
Its mission is to
provide quality care to
every person every
day. Its vision is to
give better health, care
and better value to
people. The main
objective is to deliver
best services to their
consumer base to give
satisfactory services to
their consumer base
(Schaltegger, Lüdeke-
Freund and Hansen,
2012).
Stakeholders plays
major role in
organisational growth
and enhancement. In
context of NHS their
major stakeholders are
doctors, nurse and
their other staff
members.

scope that it research
about other diseases
also to serve fierce
problems in better
manner.
Private sector (Sainsbury)
Products and services Size and scope Vision and mission stakeholders
It has large chain of
products and services
and large retail chain
that provides almost
all products such as
groceries, clothes,
furniture and many
more products consist
in their product line.
Sainsbury have large
chain of retailing with
over 600 supermarket
stores and get nearly
2,50,000 online orders
every week (Shenkar,
Luo and Chi, 2014).
It focus on upgrade
their own products of
3000 brands. It has
15,000+ own brands
that shows that it is
one of the large chain
of products. Scope of
Sainsbury concerned
with the market to sell
products and services.
It already in UK and
plan to expand in US.
Vision of Sainsbury is
to be the most trusted
retailer where people
love to work and shop.
In addition to acquire
talent , creativity and
diversity in their
colleagues to make
sure that consumer
avail best services at
the time of purchase
goods and services.
Their main objective is
to maximise sales with
increasing profit and
give best services to
their consumers
(Vitale, 2011).
mission statement of
sainsbury is to first
In main stakeholders
consist of individuals,
teams that help in
achieve their goals and
objective. Its main
stakeholders are
customers that helps in
enhance their market
base and maintain
their dignity into
market. Its another
stakeholders are
employees who give
their best efforts to
achieve goals and
objectives. The
another most
important stakeholders
are suppliers that
supply goods and raw

choice of consumers
for food to deliver best
products at
competitive price.
material to get
desirable outcomes.
Voluntary organisation (Oxfam)
Products and services Size and scope Vision and mission Stakeholders
Its main work is to
lessen the gap and
inequities that harm
the self-interest. They
working for alliances
with poor and
marginalised people
majorly for women to
give their rights and
duties.
Oxfam is a
multinational
organisation of 19
organisations that
working together in
more than 90 countries
with objective of
eradicating poverty to
give best lifestyle to
people (Weiss, 2014).
it has 20 independent
charitable trusts and
operated in almost 90
countries.
Its main vision and
mission is to ensure
that poor community
have equal
opportunity. It can be
possible by giving
equal wages, rights
and resources. They
work to resilience to
communities for
disasters and minimize
vulnerability for
women and children.
Their vision statement
is world without
poverty. Organisation
have to enjoy rights,
responsibilities by
treating values.
Stakeholders plays
very significant role in
organisational
development and
main stakeholders
consist of employees
or volunteers,
managers, donators
and in their external
stakeholders consist of
suppliers, partners,
government agencies
are key players that
majorly contributes in
organisational
development and
enhancement.

TASK 2
P3 Explain relationship between different organisational functions and how they link to
organisational objectives and structures chosen for purpose
To operate an organisation in well manner, sainsbury have to depend on various other
departments to get desirable outcomes. There are various departments such as human resource,
finance, marketing, Research and development and operations and production department that
totally rely on each other to get desirable results ( Werbach and Hunter, 2012). The close
relationship should be explained that are as follows:
Human resource management:
Human resource is one of the important department that helps in balancing various works
and activities by recruiting right kind of employees to achieve desirable outcomes. To get
effective results organisation have to communicate and deliver right kind of knowledge and
information to selected candidate so that they can give their best. Interviewers by accessing the
need and want of every department and accordingly select the best candidate which gives best
outcomes and results. By find out appropriate skills and talent from them and select out of them
so that they can grab sort of good employees. To grab information they have to collect
information from each and every corner of organisation and for that they choose hierarchical
system of distribution from top to bottom. All rules and procedures helps in gaining important
and desirable outcomes. There are close relationship among different departments such as
marketing department share information with HR department to recruit employees for marketing
department and accordingly they choose from them.
Marketing department:
Marketing department is one of the most important department for whole organisation
that helps in reach at large consumer base by evaluating needs and wants of consumer that help
in giving delighted experience to their consumers. Marketing department of Sainsbury access the
needs and demand of various departments and their potential buyers so that according to that
they can bring necessary changes (Wheelen and et. al., 2017). Marketing department takes
important information and insights from finance department and accordingly make budget and
pass it into to promote their products and services to enlarge business opportunities. In case of
Sainsbury they have large and separate marketing department which help them to access at large
consumer base and frame goods and services according to consumer choice and preferences

(Hilton and Platt, 2013). In Sainsbury all departments are closely connected with each other and
share their own objectives with others because in isolated manner they can not give their best and
that give important insights about structure of organisation so that information should be flow in
a right path. Marketing department inter related with finance department to pass the budget for
specific advertisement and promotions.
Research and development:
Research and development is one of the most important department that work for a
business to conduct innovation, taking new steps and bring improvements in products and
services with procedures to give delighted experience to their consumer base (Hillary, ed., 2017)
It is a chain of activities that helps in improving performance of products and services to develop
feature and quality in them. In case of Sainsbury they conduct through research before launching
a new product and services into the marketplace and evaluate each and every aspect such as
competitors analysis, key strengths and weaknesses with consumer base to deeply evaluate each
and every aspect so that important results should be accomplish. There is close relationship in
R&D with finance department to take permission that they have adequate budget to avail
particular opportunities.
TASK 3
P4 Positive and Negative Impact of macro environment on business operations
Political Factor: Sainsbury is a second largest chain of supermarkets that is UK based
company with high level of business performance and influenced by the political factor. Brexit
referendum influence Sainsbury's services with high competitive environment including
policies, foreign trade policy, stability or instability in the policy (Hillary, ed., 2017). An
organisation used to provide its products for different region of world. Therefore, in some
situations government policies can affect the activities of an organisation.
Positive: Political factors are helpful for Sainsbury's by making their operation legally or
ethically suitable, so that they do not get involved in any issue or problem.
Negative: Change in policies regarding import and export by UK government can be a
reason of huge loss in profitability of Sainsbury's.
Economical Factor: Economic factor is very much important for economic performance
of industry, these factors affected by Brexit referendum that includes in exchange rates, inflation

rates, interest rates, disposable income. UK has very good economy which helps Sainsbury's in
making their business at high level (Shenkar, Luo and Chi, 2014).
Positive: Rebates in different taxation policies by UK government help Sainsbury's to sell
itsproducts at minimum rates.
Negative: Increase in rates of interest and taxation can directly influence firm’s functions
in negative way.
Social Factor: social factor refers to cultural beliefs in a certain geographical area and
affected by Brexit referendum which includes in demographic characteristics, norms, customs
and values of the population within which the organization operates. It suffers from frequent
changes in taste and preferences affect their business. It will directly maximise their profitability
and market share in UK.
Positive: Social factors can help them in several ways, and also help in improving their
reputation in market and also help in improving their efficiency.
Negative: Sainsbury's has to follow CSR activities, and if they do not follow then it can
impact its goodwill.
Technological Factor: In current business, Technology is the most necessary factor for
an organisation. It refers to technology initiatives, the level of innovation, automation, research
and development activity. Some times Brexit referendum affects the company in order to
generate new technologies and the amount of technological awareness that a market have. So
these factor may affect decision to enter or not enter into certain industries. Sainsbury's has to
keep itself updated with various new technologies, so that it can perform well and also can
improve their efficiency of performance (Laudon and Traver, 2016).
Positive: technological advancement gives updation in their works and preceddings and
give better satisfaction to their consumer base.
Negative: Adaptation of new technology at very frequent arise problem of cost occurance
and need of huge training to employees.

Legal Factor: Sainsbury's is bounded with impact of Bitrex referendum legal issues
which includes in minimum wages policy, alcohol selling age legislations and discriminations
etc.
Positive: This factor of Sainsbury's helps in to create good legal policies and rules within
the organisation.
Negative: Many rules and regulations affect their work and behaviour with they affect on
their work and culture in negative manner.
Environmental Factor: In this factor, Sainsbury's company affected by the Brexit
referendum in which includes in ethical and social issues that is not good for an organisation. To
bond with consumers they have to build qualitative products that are essential for future
expansion. (Savrul, Incekara and Sener, 2014. ).
Positive: this is helpful in organisational context to make good relation with consumers
and enlarge their business opportunities.
Negative:sometimes eco friendly products and services affect their business proceedings
and takes huge cost but it is very necessary for economic growth and advancement.
TASK 4
P5 Internal and external analysis of organisation and their strength and weaknesses.
Strength Sainsbury's is one of the largest grocery store
business in UK with approx 150,000 workers.
It has a rich supply chain in all over Europe as
it imports large quantities of the products of
food in UK. The company is mainly popular
for its product quality. The organisation has
currently takeover of Argos that increase their
market base. The companies store usually
stocks around 30,000 product lines of which
approx 20% are their own label goods. The
company is also popular in sponsoring the
events such as Paralympics. This business

entity is listed on London stock exchange and
FTSE Index with 15.8% market share (Hair Jr
and et.al ., 2015).
Weaknesses In an organisation weaknesses should be look
as a sphere in which necessary improvements
should be require. So in the same way, the
weaknesses arises in market that the prices of
the Sainsbury's products are higher than the
similar products offered by their rivals. In may,
2017 the company dispatched the decrement of
8.2 % in annual profits. This results in the
number of contributing factors. In fact,
retailers in the UK are expected to have hard
times due to uncertainty produced by Brexit
(Cohen and Kietzmann, 2014.). Along with
this, the increment in prices of food products in
all over the world have impacted on the
company. Sainsbury's also have the stiff
competition in each of the segment of the retail
sector.
Opportunities The opportunities are those aspects in the
environment that surrounds the business on
which it can capitalize to increase its returns.
In the similar way, the biggest opportunities
for Sainsbury's is that they can expand their
business at domestic and international level.
The company can also grow their business in
the existing market such as moving in Europe,
Russia, China, India, etc. By exploring the
business in emergent market, the company can

also get the opportunity of having plenty of
labour at cheap cost. Sainsbury's can enter into
emerging market by partnership or joint
venture to explore these in new markets. The
self checkout machines could help the
company in enhancing its sales. It opens the
companies stores are open for 24 hours
(Charter, 2017).
Threats The factors in the environment which can be
harmful for the growth such as degradation,
erosion etc. of the business are to be
considered as threat of the organisation. In
today's time, the increasing globalization
presents a challenge as well as an opportunity
for Sainsbury's. As like all the companies,
Sainsbury's is also facing the same threat of
fierce competition, There are many
competitors of Sainsbury's such as Tesco,
ASDA, Aldi, etc. are giving stiff competition
to the company and providing the similar
products to the customers at low rate.
P6 Interrelation of strength and weaknesses with external macro factors
In an organisation micro and macro factors plays major role in organisational growth and
enhancement to gain profitability that are as follows:
Political factors:
Political factors consist with new rules and regulation while operate in different
countries such as in case of sainsbury due to Brexit referendum and currency exchange rates
affect their business operations and functions (Groebner and et.al ., 2013).
Strength:

In case of Sainsbury they obeys different rules and regulation that are imposed by UK
government so they also helps in smooth functioning of proceedings and works. Political factors
influence their works and proceedings but government helps in intervention in smooth
functioning.
Weaknesses:
In case of Sainsbury when they face recessions and inflation that emphasise to them in
changing their rules and regulation and internal structure of organisation. When they follow
different rules and regulations they face many problems to cooperate with them.
Social factors:
In social factors consist of changing taste and preferences of consumers and accordingly
they have to add features and important attributes in their products (Belás and et.al ., 2015).
Strength:
In that aspect it can enlarge business opportunities and reach at every sphere of market.
Social factors helps in keep keep updating according to consumer requirement that helps in build
consumer loyalty.
weaknesses:
Satisfy needs and wants of every consumer is very difficult for Sainsbury and it takes
huge cost. Sainsbury faces problem related to frequent adaptation of changes in taste and
preferences.
legal factors:
Sainsbury legally bounded with Brexit by taxes and policies and high inflation rates.
Strength:
To obey all these rules and regulation brings harmony and regulatory in organisation.
Legal factors gives good atmosphere and motivation because organisation take care about needs
and wants of their employees.
Weaknesses:
it is one of the problem in front of Sainsbury to deal with various regulations
simultaneously that hinders their self interest. To deal with various regulations sometimes create
chaos in organisation and affect their business.
Technological factor:

technological advancement is very necessary for every business advancement and growth
for that Sainsbury adopt kind of new technology for advance goods and services.
Strength:
It better satisfy consumer needs and demand and helps in beat large consumer base that
are essential for economic growth (Zeng and Duan, 2012.). technological advancements is one
important factor for enhance their living behaviour and build them loyal consumers.
Weaknesses:
for adaptation of advance technology need to invest huge money and training and
development to the employees.
economic factor:
In economic factors consist of various taxes, credit terms and rate of interest that directly
affects on their business.
Strength:
Fluctuations in environment and various credit terms that levied on Sainsbury that affect
on business but reductions should be given by government because it helps in economic growth.
It also works as a strength to strong their economic conditions and stability into market.
Weaknesses:
economic fluctuations leads towards huge loss and economic degradation of company.
environmental factor:
Sainsbury is an strong market base company and pace towards adaptation of eco friendly
products and services while operating in UK market.
Strength:
It helps in enhance their Image in front of market and their consumers that lead towards
growth and enhancement. Environmental factors build strong and loyal consumers in case of
Sainsbury.
Weaknesses:
When Sainsbury try to ignore the eco friendly products and services it creates serious dis
agreement for company and leads toward huge loss.
CONCLUSION
From the above report it has been concluded that Business and business environment is
one of the important aspect to reach at desirable goals and objectives. Better results should be

obtained by evaluating internal and external atmosphere of business which is an important aspect
in case of business. There are majorly three types of organisations that plays major role to
achieve goals and objectives that are public, private and voluntary organisations. It helps in
growth and enhancement which have their own legal structure and roles with responsibilities for
smooth functioning. To grab knowledge and information while expand market base, organisation
have to evaluate internal and external environment to exploit business opportunities.

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