Business and Business Environment Report

This report analyzes the business environment, focusing on different types of organizations and their purposes. It examines Marks & Spencer, a leading retailer, through SWOT and PESTLE frameworks, highlighting its strengths, weaknesses, opportunities, and threats. The report also explores the relationship between organizational functions and their impact on business objectives.

Business and Business
Environment

Table of Contents
INTRODUCTION ........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1 Different types and purpose of organizations .....................................................................................3
P2 Size and scope of a range of different type of organizations...............................................................4
TASK 2..........................................................................................................................................................6
P3 Relationship between different organizational functions and their link to organizational objectives
and structure .............................................................................................................................................6
TASK 3..........................................................................................................................................................7
P4 Positive and negative impacts the macro environment has on business operations ...........................7
TASK 4..........................................................................................................................................................9
P5 Internal and external analysis of organizations in order to identify strength and weakness .............9
P6 Strengths and weakness interrelated with external macro factors for the company .........................10
CONCLUSION............................................................................................................................................11
REFERENCE...............................................................................................................................................12
Books and Journals.................................................................................................................................12

INTRODUCTION
It is an effect of all internal and external factors which influence the business. It should
keep in mind that both the internal and external factors of business affect each other. There are
different types of organizations in which some of them are: Public, Private and Voluntary
(NGO’s). The private organizations have its stake in private hands, public organizations have its
stake in government and the voluntary organization doesn’t have any business purpose.
Although, it can be in the hands of public or private (Botha, Kourie and Snyman, 2014). All of
the organizations contribute to the world economy and hence contribute to the growth of
international business environment. The effect of these organizations in business environment is
discussed here:
TASK 1
P1 Different types and purpose of organizations
Private:
In private sector organization here, Marks and Spencer is taken into consideration. It is a
retailer in United Kingdom and headquartered in London, with over 1380 stores around the
world. It operates ion two segments: UK and Internationally. The UK segment includes the UK
retail business and the international business includes of Marks and Spencer’s own business in
Ireland, Europe and Asia. It deliver its own food brand, clothing and home products in its stores
and online. It delivers its products in UK and internationally. The company serves
approximately 300 full-line stores and websites, M&S.com.
M&S follows a flat organizational structure; this type of structure has a limited number of
management between the higher and the lower authorities. This structure is followed by
organizations to develop decision-making power to the employees. The company communicates
with its stakeholders like customers, community, government and etc. This communication is
very much requires attention because these external factors are the dependency of the company.
Public:
In public sector organization here, Bank of England is taken into consideration. It is the
apex bank of United Kingdom and headquartered in London. It is the bank on which most of the
central bank’s structure is based. It is established in 1694 having world’s eight oldest bank. It
was nationalized in 1946. It became an independent public organization in 1998 holding all the

stakes by treasury solicitor. It also regulates the issue of bank notes in Scotland and northern
Ireland. The bank has the responsibility of maintaining the monetary policy.
Voluntary:
In the voluntary organizations here, Save The Children is taken into consideration. It is an
international non government organization which is regulating in developing countries. It
promotes itself in protecting children’s rights, providing help and support to the children who are
in trouble.
To become the emergency response agency worldwide by improving response capacity so that
they can deliver their best (Deasy and et. al., 2016)
P2 Size and scope of a range of different type of organizations
Public:
Bank has the power of giving orders to committee, if the action will be in the interest of
the community but thus orders must have been signed by the parliament within 28 days. As a
central bank, it does not allow the consumers to open any type of account in it (Hair and et.
al.,2015). But it allows the consumers to change their bank notes if they were torn. The bank is
mainly dealing in two sectors of which Monetary Policy and asset purchase facility. Monetary
policy has some specific purposes such as confidence in the currency and price stability. Apart
from that, the bank also responsible for inflation and different types of rates of interest for the
public and the industries. The bank acts as the bank of government and it also maintain the
consolidated fund of government. It also manages the country’s foreign exchanges and the gold
reserves. It also acts as the bank of the banks, lender to the last resort. The mission of the bank is
to promote the good of the people by maintaining the monetary and the financial stability. The
bank is viewing in the aim of maintaining the stability of currency and the monetary policy and
regulating the other banks. The legal structure of the bank is bureaucratic. This structure follows
how a single person is responsible for regulating an organization. That is what exactly happened
to the bank. The stake holders of the bank are the government and the bank itself.
Legal structure of public sector:
There are three governments to which public organization are accountable viz central
government, state government, and local government.
 Central government is the head and single government which operates the whole
country.

 The state government is divided according to the state and have accountable to the state
owned companies.
 In the end local government is locally owned structure in which it is accountable in local
premise.
The Bank of England is accountable to central government.
Private:
M&S company opened its first store in Kabul, Afghanistan in 1960. In 1973, it has
expanded into Canada, and at one time it has forty-seven stores. But till 1999 only 38 shops were
remained. It has many stores across nations. The company has wide scope in different sections of
the services it provides to its customers. Some of them are core shops, M&S Food hall,
Hospitality, Home stores, Outlet stores and online services. From the above sectors in which
company is dealing it can be assumed that company has wide scope in different sections of the
society. It has food range, it provides hospital facility, it has home stores to deliver products at
home, it has outlet stores to customers who wants to purchase their products from market. In
spite of all that it has online stores also which allows customers to purchase their products
online.
The company has its mission of providing quality accessible to others. The mission
statement is known for providing the information about the concern of administration and what
they are thinking of it. This company has a vision of providing quality, service, invention, and
trust. The business objective of the organization is to recover its leading vesture and forte
nutrients. The company is aiming at its basic factors and things for which they have opened it.
The company provides its customers the service for which they are looking for the company
(Wetherly, 2014).
Legal structure of Private sector:
Private companies are often family business which are owned by shareholders. These
have also three types of structures such as:
 Partnership: In this structure a company is operated in partnership with 2 or more
partners.
 Limited company: These companies have shareholders which helps the company in
gaining funds.

 Sole proprietary: This type of company has single owner who is responsible for its
business activities.
M&S is accountable to its shareholders and group of individuals.
Voluntary:
Save the children It was established in United Kingdom in 1919. The main aim of the
company is to improve the lives of the children through better education, health caring and
opportunities related to economics. Apart from this, it also provides help for the children in
natural disasters, wars and other conflicts. The members of this NGO are 29 which are serving
across several nations. In spite of that it is also working in 120 countries with its alliances. This
organization promotes policy changes to promote more rights to the children. This organization
is totally influenced by the UN Declaration of Rights of the Child. There are many campaigns
run by this NGO. Some of the campaigns are Rewrite the future, every one Campaign, Every
beat matters and If London were Syria (Apăvăloaie, 2014). All members of this alliance are
bound by the International save The children alliance By Laws. This law includes child
protection law and conduct. The save the children website allows four keys towards which the
member organizations should follow.
1. To secure quality education for children affected by arms.
2. To improve the presence in countries having strategic importance.
To create more voice for children.
Legal structure of Voluntary sector:
These are the companies which are run by trust and association. These are:
 Association: These have associated with people and organization in order to promote
public interest.
 Trust: These are the group of individuals which organize the whole trust.
Save the children is also accountable to its trust followed by its trustee.
TASK 2
P3 Relationship between different organizational functions and their link to organizational
objectives and structure
The functional organizational structure is a type in which organization is divided into
smaller segments of specializations areas such as finance, marketing, management, operation etc.
These functions allow great efficiency as key specializations of employees are divided

accordingly and this it helps to achieve organizational goal. There are many functions required to
operate an organization (business environment. 2018). These functions help the organization in
achieving their goal. All of these functions are interrelated to each other, so that they help in
achievement of goal. Some of the basic functions an organization performs are:
Financial Function:
These are the functions related to financial activities of an organization. Financial
functions are generally the management of financial activities of the organization. The task of
running an M&S store is broadly categories in different sections which are interrelated with each
other. The different departments are divided so that each department is doing its own work
efficiently. These functions are interrelated with each other as financial functions operates it
gives permission to other functions to operate.
Management Functions:
These are the functions related to management activities of an organization. These tar the
management of different resources such as human, finance and etc. the task of running an M&S
store is categorized into different sections which are interrelated with each other. In this function
management is divided into its own sections, so that all functions can work independently. As
this function operates it allows other function to operate like marketing etc (Savrul, Incekara, and
Sener, 2014).
Operations Functions:
It brings raw material and allows production process to make the goods which customer
needed. It also shares ideas of improving efficiency and cost cutting of the product. These are
the functions which are related to the operational activities such as doing a file and operations
which are in the office to develop other functions. In M&S, these functions are interrelated with
each other as operations and research department helps to operate in other sections such as
marketing, management, finance etc (Smith, 2016).
Marketing Functions:
Every product in market which is going to be delivering needs marketing. Without in the
knowledge of customers it is not possible to sell the product into its full efficiency. The
marketing concept includes the customer’s geographical needs and the area where the product is
going to deliver. The marketing always target a specific group of customers for which the
product is going to deliver. It helps to operate the other departments such as how much the

requirement of the product is? The marketing concept also helps to achieve the organizational
target.
Now, how these different sections are interrelated with each other is discussed with chart.
TASK 3
P4 Positive and negative impacts the macro environment has on business operations
In this report, a discussion is made on the macro factors which effect Marks and Spencer.
The factors which are included in this analysis are the political, environmental, sociological,
technological, environmental and legal factors (Deasy and et.al., 2015).
Political Factors
These factors include the influence of the government where the business is going to be
established. This factor is totally operated by the regulations of the government. The regulations
set by government could be Health & Safety regulations and other governmental policies which
affect the business. Here, the health & safety standards such as planning for hazard
identification, risk assessment and risk control are included (Deasy and et. al., 2015). Including
an example, this company is charged by British Standards as they didn’t follow the health and
safety regulations. Hence, a door fell on an employee while working.
Positive impact:
The company can run its business smoothly by following the guidelines of the
government.

Negative impact:
Different policies of government hindered the operation of business. This will affect its
productivity.
Economical Factors
This situation is concerned with the economic factors a country is facing in which
business is operating. By taking an example of such situation, Marks and Spencer have faced an
uncertain condition of economy as the retail sector in which the company is dealing doesn’t
remain so much market. The company mostly deals in the luxury items, and the people didn’t
have so much money to spend on these luxurious items. Since at the time of recession, company
allowed a discount of around 20% to compete itself with the recession. But sometimes the
economical factors make such condition that makes the market dull.
Positive impact:
The discounts offered to customers attract them to doors of M&S, hence increasing its
productivity.
Negative impact:
Economic instability decrease the production and hence it makes a harsh environment for
the company to operate its business.
Sociological factors:
This factors influence the business very much. In this factor the sociological factors such
as cultural, personnel, Psychological factors are included which affects the business in a serious
way. For example, once upon a time company wants to increase its business. For that company,
included food online to deliver to its customers. This was done to compete itself with the other
competitors. As a result of that the company’s supermarkets have increased in a large number
and help to achieve the business targets.
Positive impact:
This will fulfill the requirement of customers and attracts them to M&S.
Negative impact:
Major discretion in social factors increase diversity in handling the production which
creates complexity in business.
Technological factors:

Technology plays a crucial role in the increment of any business. In retail market
business, a company spends too much to expand its brand awareness. For Marks and Spencer, it
is very much necessary to communicate to its customers to create its brand image which they are
having. They have a celebrity star, Myleen Class to promote their clothing brands and
technology. They also have their website which is very much colorful, maintaining their brand
image.
Positive impact:
This will help the company in adopting recent technologies.
Negative impact:
Different technological change increase complexity in each level of organization.
Legal factors:
Laws and regulations are always changeable of every government. Therefore to pursue a
business efficiently, it is very much necessary to keep itself up to date to the laws and regulations
for Marks and Spencer (Cohen and Kietzmann, 2014). For example, a “Fair packaging and
Labeling Act (1996)” was introduced for packaging and labeling of consumer goods. This helps
to identify the content, quantity and producer of the goods to the customer.
Positive impact:
It helps the company in operating its business smoothly.
Negative impact:
Complex rules and regulations et by government hindered the progress of organization.
Environmental factors:
When it comes to the environment it has become necessary to manufacturing the goods as
they should not harm the environment at any cost. All companies and organizations are
pressurized to change the ways they are used to from past. Marks and Spencer has promoted
itself as a Green Policy holder and they call itself as “Plan A” because there is no other plan to
compromise with environment (Andersson, Forsgren and Holm, 2015).
Positive impact:
By following the guidelines of environmental laws help the company in protecting
environment.
Negative impact:

This effect also affect the business operations as the company has to change its policies
and prepare them according to environment.
TASK 4
P5 Internal and external analysis of organizations in order to identify strength and weakness
This analysis includes the internal and external factors which effects the company’s
working efficiency. In SWOT analysis Strength, Weakness, Opportunity, Threat is included.
Here, Marks & Spencer is taken into consideration for SWOT analysis.
Strength
 It provides strong offerings to customers having latest trends in clothing.
 It has strong online infrastructure which attracts customer.
 It has effective corporate social responsibility which creates goodwill in the minds of
customers. It has good focus on what is needed by the customers.
Weakness
 The company is not performing well financially.
 It’s too much reliability on UK market makes the company sensitive that any tough
economic situation can cost company.
 Future of this company is not expanding in other countries like China which can give it a
huge market. Recalling of the products frequently makes the confidence low among the customers.
Opportunity
 The company is planning to invest in Asian countries like China, India which can give it
a huge market because these countries have a huge population.
 The company’s online presence can boost its market.
 The can make changes to its clothing segment to launch something unique to attracts to
its customers. By simplifying their model of operation company can find a huge opportunity in market.
Threats
 Issue of Brexit could be a huge threat to this company.
 A tough competition in UK food sector can make harder for the company.
 A change of trends in the clothing sector could be a huge threat for this company.

P6 Strengths and weakness interrelated with external macro factors for the company
In this section, Pestle analysis is going to be done in comparison with SWOT.
Political
The political factors of Marks & Spencer include the governmental issues. The strength
of the political factors of the organization is the good stability of government in UK. While the
weakness of political factors is the Health and Safety issue which the company already suffered
in 2006, when a warehouse door fell over an employee (Botha, Kourie and Snyman, 2014).
Economical
These factors include the economic factors of the country in which the business is
trading. Since UK has a stable economy, M&S has its strength in it. While weakness is the
recession type issue which had suffered the company in last few years ago.
Sociological
Since M&S is operating its business in UK from a long time. Therefore it has good
knowledge of the sociological factors of the people. These factors doesn’t take too much time to
change therefore to rely on such market could be the weakness of M&S.
Technological
Technology plays an important role in the business exceeding. Since M&S has a great
impact of it over customers because it has covered itself in online market. But it has failed a time
to keep itself updated with the technological changes happened in UK.
Legal
Laws and regulations are always changeable. Since M&S always follows the rules and
regulations set by the UK administration but in other countries where it is operating itself,
following the regulations is not an easy (Wetherly, 2014).
Environmental
These factors include environment onto its priority. Although, M&S follows all the
guidelines of the authorities but in future what decisions are going to be made can increase
trouble for the organization (Apăvăloaie, 2014).
CONCLUSION
In this report, it can be concluded that how business environment affects the business.
Here three types of companies are taken into consideration public, private and voluntary. The
company here taken is Marks & Spencer and all the details of the company are discussed as

background details, products and services they supply, vision, mission, and objectives. Pestle
analysis of M&S is done with negative and positive impacts and relatively examples also shown
here. Apart from that, SWOT analysis is done with how it affects the decision making of the
organization. In the end, an interrelation is found with the strength and weakness of Pestle and
SWOT analysis.

REFERENCE
Books and Journals
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
Hair Jr, J. F. and et. al., 2015. Essentials of business research methods. Routledge.
Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance. 15. pp.951-958.
Deasy, S., and et. al., 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the
External Business Environment. In Global Perspectives on Contemporary Marketing
Education (pp. 47-64). IGI Global.
Deasy, S., and et. al., 2015. User interface for controlling use of a business environment on a
mobile device. U.S. Patent 8,954,050.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing
economy. Organization & Environment. 27(3). pp.279-296.
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420). Palgrave Macmillan, London.
Online
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