Business and Business Environment Report

This report examines the concept of business and its environment, using WALMART as a case study. It analyzes different types and purposes of business organizations, their size and scope, and the relationship between organizational functions, structure, and objectives. The report also analyzes the impact of PESTLE analysis on WALMART's business environment.

Business and
Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of business organisations.....................................................1
P2 Size and scope of business organisations..........................................................................2
TASK 2............................................................................................................................................4
P3 Relationship between various organisational functions with structure and objectives.....4
TASK 3............................................................................................................................................5
Covered in PPT.......................................................................................................................5
TASK 4............................................................................................................................................5
Covered in PPT.......................................................................................................................5

INTRODUCTION
The term business and business environment plays a vital role in influencing business
decisions in direct and indirect manner. It involves several factors, i.e. internal and external that
has a vast impact on working activities of the company. An effective manager is able to
determine future threats and opportunities for business associations and also evaluate the
environment (Chetwood and et. al., 2014). The present assignment is based upon WALMART;
its a leading retail corporation which operates a chain of grocery stores and hypermarkets. Apart
from this, the report will be described types and purpose of business organisations with their
legal structure. Positive and Negative impact of PESTLE analysis is also going to be described.
TASK 1
P1 Different types and purpose of business organisations
On the basis of size and purpose, business organisations are classified into three different
parts, such as -
Public sector organisations – These sector are considered as vital or critical pillar to
strength of a country's economy. Public sectors enterprises are started in order to fabricate
infrastructure for attaining economic growth and development (Crane and Matten, 2016). Such
organisations are implemented, managed and controlled by central government of UK having
100% in it.
For example – DCMS (department for digital, cultural, media and sport) is UK
government organisation which is responsible for managing cultural and sport in England. In
context of media, DCMS provide internet and broadcasting services.
Legal structure
 Departmental management – These undertakings are wholly dependent upon government
and its associated bodies for finance. State and local treasury provides finances where
surplus money is deposited in treasury.
 Public corporation – These sectors are created by a specific aim of state and central
government. A public sector corporation has a separate legal entity to attain specific
purpose. They can also raise loans separately (Gharajedaghi, 2011).
Private sector organisations - These associations are defined those firms in which factors
of production is owned by an individual and by the group of persons with an aim of profit
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maximisation. Private sector is focused on creating new and innovative products thus to high
customer satisfaction.
For example – WALMART is leading chain of grocery and retail products area severed
worldwide; the firm was founded in 1962. As of January, 2016 company has 12000 stores in 28
countries.
Legal structure
 Sole proprietor – It is one of the simplest form of organisations which requires minimum
capital for start up. In sole proprietor business, profits and business incomes are personal
income of owner and they are liable for all profits and taxes within organisation (Gilboy,
2016).
 Partnership – Its a business in which two or more respondents are equally liable for all
profits and losses. In partnership, members invest their money as per the terms and
conditions of partnership deed.
Voluntary sector organisation – These sectors are usually comprised with an aim to
benefit and enrich society thus to improve their living standards. Voluntary sectors focuses on
delivering qualitative and value added services to people for their growth and development.
For example – Wellcome trust is a biomedical charity that is based in London. The firm
was founded in 1936 with an aim to fund research activities for improving animal and human
health.
Legal structure
 Trusts – It governed and controlled by a trust deed which sets out aims and objectives of
a charity (Kian Chong, Shafaghi and Leing Tan, 2011).
 Industrial and Provident Society (IPS) – An IPS is a society that is developed by an
industry or business for benefits of a local community.
P2 Size and scope of business organisations
On the basis of size and scope business entities are classified into three parts, such as -
Large business
organisations
These are those organisations which operates at wide contrast and
having global market presence. For example – WALMART is largest
organisation in terms of revenues that is approximately, US$500 billion.
The main purpose of large business associations is to accomplish high
sustainability and improve brand image over the world.
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These businesses employs more than 1000 employees as in
WALMART 2.3 million are presently working Worldwide.
The main objective of the company is to retain its sustainability among
customers by winning their hearts and provide them something different
(Kaufmann, Kraay and Mastruzzi, 2011).
WALMART is having a share of 34.5% in global retailing industry of
UK.
Medium business
organisations
These firms are occupied with an aim to expand business at global level
through increasing the number of customers and gain high market share.
Along with this, medium business organisations are employed more
than 100 employees and having a turnover of 5 to 25 million dollars.
Level of scope in medium organisations is they are focused on
expanding business in international market for gaining high profitability
ratio.
Small business
organisations
Most of small businesses are established to earn money for livelihood.
Their owners are tend to become economically strong thus to improve
living standard of family (Li and et. al., 2011). There is about less 50
employees can work in small businesses and their annual turnover could
be less than 5 million dollars.
Transnational organisations – A TNC is a firm which operates in only one country and
does not consider another country as its national home. In order to obtain high competitive edge,
a transnational company enables to maintain a large degree of responsiveness to local markets by
providing there qualitative products and services.
Global and international organisations – These are the organisations which have
international membership, presence or scope in global markets. Due to globalisation, global
organisations are rapidly spreading over the world for profit maximisation and gain high
competitive edge (López-Gamero, Molina-Azorín and Claver-Cortés, 2011).
 Scarcity and choices – The term scarcity means demand of something is higher than its
supply and having not enough money to buy it. In businesses, scarcity occurs when there
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is insufficient resources to satisfy everyone's needs and wants. Apart from this, due to
scarcity choices of customers can be changed.
 Supply and demand – Its a backbone of market economy. Demand consists to determine
desired quantity of a product at marketplace whereas supply refers how effectively can
respond on demand of products,
 Income elasticity of demand evaluate the responsiveness towards quantity which is being
demanded by customers for a good or service; it occurs while changes in income of
people. As if customers income will change then products' demand will also getting
change.
TASK 2
P3 Relationship between various organisational functions with structure and objectives
Effective management of business functions helps to build a competitive framework for
an association and also supports firm to accomplish its goals and objectives.
Following is defined several functions of a corporate association, such as -
 Finance department – This department is liable for managing cash inflows and outflows
within organisation. Finance department prepare several financial statements, like –
balance sheets, income statement and trading and profit & loss account so as to determine
the amount which spends on all business processes (Meiners, Ringleb and Edwards,
2014).
 Human resource department – In WALMART, human resource division helps in
recruitment and selection of well skilled and qualified people who have enough
capabilities to do all tasks and activities in the best possible manner. HR managers also
develop plans for performance management as well as training and development of
employees. Marketing department – Most of the sales and profits of a company are based upon
effective marketing processes. Marketing and advertising help customers to know about
the offerings of the firm. The department always focused on how to improve brand value
of the company.
Various organisational structures are stated as under -
 Functional structure – In this organisation structure, each individual get instruction from
more than one superior; here staff specialists have rights to make any decision and give
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order to subordinates to do things. Along with this, functional organisations are classified
into several functions, such as – finance, marketing, production and so on; each functions
is performed by an expert .
 Matrix structure – Business organisations which occupies a multiple command system
and a structure as well, they also have related mechanisms, supported organisational
cultural and behaviour pattern. Along with this, matrix organisational structure is an
integration of vertical and horizontal lines of authority which can flow down and across. Divisional structure – In this organisation is classified on the basis of departments, i.e.
functional, project, product, geographic territory, combination approach and so on. Under
a Divisional structure, each unit operate its own activities, putting a command over its
resources and liable for amount spending on working activities and tasks.
Relationship between organisational functions and structures for accomplishing goals -
In a business association, like WALMART several departments worked together thus
perform effectively and gain benefits of competitive market. As if the firm follows matrix
organisational structure and it will be managed in proper manner so that there is less conflicts
and influctuation in working activities. Employees will enable to communicate with their
managers towards finding solutions of problems regarding production. Apart from this, if all
departments takes responsibilities of their operations; it results improving quality of products and
services. Therefore, WALMART will be able accomplish its goals and objectives as well as
obtain long term sustainability at market place.
TASK 3
Covered in PPT
TASK 4
Covered in PPT
CONCLUSION
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From the above mentioned business environment plays a vital role in growth and
diversification of a firm at marketplace. The report has stated size and scope of different business
organisations and how it helps to an economy. Various organisational functions, like- finance,
human resources and marketing must be managed in proper manner cause it improves quality of
work; it results WALMART can easily attain its goals and objectives in a certain time period.
Apart from this, positive and negative impact of PESTLE are described in order to determine
how such elements can affect business. An internal and external also has been conducted by
assessing strength, weaknesses, opportunities and threats of the firm.
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REFERENCES
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Gilboy, G. J., 2016. The myth behind China's miracle. In SEEKING CHANGES: The Economic
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