Managing Environmental Factors for Organizational Success

This assignment investigates the productivity and performance of organizations, emphasizing the impact of macro (e.g., political, economic) and micro (e.g., competitors, customers) environmental factors on organizational strategies. Students will analyze case studies from Marks & Spencer, NHS Choices, and British Red Cross to apply theoretical concepts, including the business environment framework by Mohamed (2015). The assignment aims to evaluate students' understanding of these factors in enhancing organizational performance.

BUSINESS AND BUSINESS ENVIRONMENT
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Executive summary
Business environment is referred as the internal and external factors of a business,
which might influence the organisational performance and productivity. A business
environment considers both the macro and micro factors of an organisation, which
includes the political, economical, legal, social, technological and environmental factors.
However, on the other hand, the micro factors include the internal factors of a business,
such as customers, suppliers, distributors and competitors, which can influence the
business decision in both positive and negative manner. In order to enhance the
productivity and business decisions, in a positive manner, the organisations need to
analyse the market and competitors in a proper manner. In terms of analysing the
market and competitors, SWOT analysis can help to identify the strengths weakness,
opportunities and threats of the organisation. Implementation of marketing strategy of
an organisation based on the analysis and considering business environmental; factors
can help to gain high customer satisfaction with a growth in upward direction.
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 3
P1 Legal structure, private and public voluntary organisational purposes.......................3
P2 Scope and size of organisation...................................................................................5
Organisational size and scope relation with organisational business objectives..........7
LO2.................................................................................................................................. 7
P3 Organisational functions in respect to their organisational structure and objectives...7
LO3.................................................................................................................................. 8
P4 Influence of macro environment on business.............................................................8
Micro environmental factor influence..........................................................................10
LO4................................................................................................................................ 11
P5 Internal and external analysis of organisation...........................................................11
SWOT analysis in M&S decision making....................................................................12
P6 Macro factors relation with organisational strength and weakness...........................12
Conclusion..................................................................................................................... 13
Reference List................................................................................................................ 15
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Introduction
In order to gain successful business in the current competitive market, business
performance of an organisation can be manipulated in a profitable manner. As different
business and organisations have their own business structure, market and strategies,
thus their strategy to enhance the business performance might differ from one business
to another. In addition to that, organisational success might be influenced through
different external and internal factors, related to business.
This discourse enlightens the purpose of different structure, types and organisations in
the marketplace. In addition to that this course study highlights on different
organisational functions, with considering the different determinants of an organisation.
On the other hand, this critique demonstrates the macro environmental factors, which
might influence the organisational performance. Both internal and external analysis of
organisation is discussed in the course study. In addition to that, this study analyses the
strength and weakness of organisation in relation to the macro factors. This discourse
has chosen the organisation, namely Marks and Spencer of UK.
LO1
P1 Legal structure, private and public voluntary organisational purposes
As different organisations have different structures based on the functions, products and
services of the organisations.
Public Sector Organisation
In the view of Prajogo (2016, p.245), public sector organisation, is considered as the
organisations, which are generally operated and regulated by the regulatory bodies and
government in order to provide the services for public. Purpose of the public services is
to provide help and services in order to gain social and public well-being through their
services. On the other hand, different public sector organisations provide different
services for public, such as, education, health, electricity, police services and others.
NHS is one of the public sector organisations from UK, which is mainly operated in
Scotland Wales and England. NHS provides healthcare services to the public, with
considering a minimal charge or free of services, based on the financial background of
the public users (NHS CHOICES, 2017).
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Private Sector Organisation
On the other hand, private sector organisations, such as Marks and Spencer, are
privately owned by the individuals in order to gain profit from business. The purpose of
private sector organisations is to deliver the products and services based on the
customer's demand and needs, in order to gain high number of profit. Marks and
Spencer have purpose of delivering retail products and service to their customers, with
approaching a high customer satisfaction (Marks and Spencer, 2017).
Voluntary Sector Organisation
Voluntary sector organisations are considered as the organisations, which provide the
services for public and social well-being. Voluntary organisations generally are
charitable organisations, which provide social services, irrespective of profit and
government owned. British Red Cross is one of the voluntary organisations, in UK. The
organisation has purpose of delivering help to the public and individuals, facing crisis in
nation or in overseas. The services of British Red Cross are focused on the voluntary
services, unity, humanity, neutrality and other such aspects (BritishRedCross, 2017).
Business structure complexities
Business structure and complexities vary on the organisational products, size, services,
subsidiaries and other factors. In the opinion of Belás et al. (2015, p.97), organisational
complexities arises with the increment in the interrelations of the organisation.
As the numbers of stakeholders increases, with large varieties of products, services,
stores and other criterions. In the view of Welford (2013, p.42), a small business
possess les complexibility than the large multinational business organisations. Thus, in
terms of the organisations, NHS will have less complexity, as the organisation is
regulated under the UK regulatory body and have health care services at three different
locations of UK. However, the complexity might encounter based on the numbers and
types of health care services of the organisation.
On the other hand, in terms of M&S, the organisation has more complexity, as the
products of M&S possess different varieties and types with delivering the products at
different places at international market. Thus, M&S possess large complexities in their
organisation.
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British Red Cross will have less complexity in their organisation, in comparison to both
NHS and M&S, as the organisation has no such specific business structure and delivers
the services of help for the people in crisis only. On the other hand, as British Red
Cross is limited to their volunteers, people and the company, thus, it possesses less
complexity.
Organisational function interrelationship
Organisational functions needs to collaboratively work within the organisation, in order
to enhance organisational performance. In the view of Belás et al. (2014, p.26),
organisational success varies on the interrelationship and collaboration of different
functions of an organisation. On the other hand, in different public sector organisations,
such as healthcare, improper interrelationship between the organisations, might
influence the delivery of services.
In terms of NHS, all the functional departments work collaboratively in order to execute
proper flow of information, which help the other functional department to deliver proper
care services and treatment.
In terms of M&S, the organisation collaboratively works with their other functional areas
in order to gain customer satisfaction. In the view of Reynolds and Rohlin (2014, p.29),
proper interrelationship helps to deliver proper information and thus helps organisations
to enhance their productivity. If the market research will not collaboratively work with the
management department, the organisation might not be able to identify the customer’s
needs and demands, and thus cannot strategize their marketing strategy, which can
directly influence their market growth in a negative manner.
On the other hand, improper interrelationship between the volunteers and staffs of the
British Red Cross might not deliver proper information about the individuals who needs
helps and thus might hamper the services of organisation.
P2 Scope and size of organisation
As all of the three organisations deliver different products and services, thus the size
and scope for all of the organisations are different.
National Health Services
Size
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The NHS is considered as one of the large public sector in UK, with approximate
service delivery to the population of more than 120 Million people in UK. On the other
hand, more than 1.5 Million people are employed in NHS, where 150273 are doctors,
314955 nurses and physician of approx 40,584. On the other hand, in the legal terms,
the organisation considers the health and social care act 2012 and maintaining the
regulatory health acts and regulations of UK (NHS CHOICES, 2017).
Scope
As NHS provides the public services to a wide range of public and health care users
with operating their services at different branches in UK, thus the organisation has wide
scope in further, in relation to the organisational growth and service delivery.
Marks and Spencer
Size
M&S has approximately 84,940 employees with having online approaches and physical
stores at a global level. The organisation provides retails products to the customers with
having approximately 454 stores globally and 980 stores in the United Kingdom. The
organisation considers the business regulation and standard trade law with all other
business regulations (Marks and Spencer, 2017).
Scope
M&S have a wide scope of extending their business in other countries, where the
services are not exported. On the other hand, as vit has an advantage of strong
customer satisfaction, the organisation has a scope of venturing in other sector.
British Red Cross
Size
British Red Cross is charitable voluntary organisation in Uk, which possess more than
40,000 volunteer and approximately of 4000 staffs in their organisation. THe
organisation mainly captures the territories of Scotland, Northern Ireland, Southeast,
Wales, Northern England and Isle of Man (BritishRedCross, 2017).
Scope
As, the British Red Cross delivers, their services to, different territories and overseas,
thus it has a wider scope of approaching the individuals in crisis from different countries.
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In addition to that, the organisation can have scope of collaboration with other non-profit
organisations, in order to enhance their services.
Organisational size and scope relation with organisational business objectives
NHS
As the NHS possess an objective of delivering health care services to the public and
health care users from different places at a low based cost strategy, thus the wide
organisational structure and size of NHS can help to achieve the concerned objective.
With the growing time, NHS will have more wide range of health care professionals and
different other health care users, thus it can employ more employees and high skilled
healthcare professionals, in order to gain their organisational objectives.
Marks and Spencer
With clear organisational structure and large organisational size with different stores
internationally can help them to gain their organisational objective of gaining more
numbers of customers with high selling and revenue. On the other hand, high customer
satisfaction can also be gained with the delivering of quality products and services.
British Red Cross
As the British Red Cross do not possess specific organisational structure, however,
based on the care and services delivery through their volunteers, thus the organisation
might meet their objectives with collaborating them with other such voluntary
organisations, in order to help the people in crisis.
LO2
P3 Organisational functions in respect to their organisational structure and
objectives
Different business functions of an organisation include the functional areas of sales,
marketing, research, billing, production and other different key areas. On the other
hand, as Harrison (2013, p.69) has commented that, the organisational structure
includes all the functional areas in a chain in order to help the organisation to run on a
command which can help to enhance the organisational productivity. In addition to that,
the organisation needs to work collaboratively with all their functional areas in order to
enhance the organisational performance and growth. In terms of M&S, the functional
areas of organisation, works collaboratively in order to have proper flow of
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communication between different varieties of the organisation, which helps to deliver
effectiveness in the services of the organisation.
The market research functional area of M&S collaboratively works with the marketing
department, in order to deliver the information on the results of market research and
customers. From there, the marketing function of organisation collaboratively works with
the sales department, finance department and other working departments in order to
strategize the marketing strategy for their organisation, in order to deliver the customer
needs and demands based on the market trends and market research.
Collaborating work in M&S helps to place proper strategy with proper collaboration of
finance department, which helps to represent budget. On the other hand, the production
department helps to deal with the production requirement and human resource function
ensures the availability of proper resources. In addition to that, sales and advertising
function helps to promote the concerned products and services of M&S, and thus helps
the organisation to deliver the services in an effective manner.
However, as Mohamed (2015, p.174) has stated that, the interrelationship between
different functions of an organisation might have both advantage and disadvantage.
Interrelationship in M&S, between different functional areas can help to gain effective
service delivery through collaborative work of teams, which can help to gain
organisational objectives.
On the other hand, collaboration with different functional areas might get complex, as
different teams of different functional areas might create a situation of conflict through
difference in viewpoints and ideas.
In addition to that, influence of interrelationship might also have both advantage and
disadvantage on the organisational structure. The major advantage in M&S, with the
impact of interrelationship is that the organisation can gain their organisational goals
and objectives effectively with proper communication. On the other hand, it might create
a situation of unmanaged organisational workforce and structure.
LO3
P4 Influence of macro environment on business
Macro environmental factors are generally considered as the factors which can
influence the business externally. In the view of Wild et al. (2014, p.14), there are
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different macro environmental factors influence the business, in both e positive manner
and negative manner. The macro factors, which can influence the organisation, are:
Figure 1: Pestle
(Source: Created by learner)
Political
The political barriers such as trade barriers, tax and other territory barriers in a particular
region, might influence the organisational services of M&S. On the other hand, as M&S
do business globally, thus, the tariff barriers might also influence the organisation in
terms of restricting business in other areas due to the tariff taxes on raw materials.
On the other hand, the positive influence in terms of M&S can be with trade permit in
other regions. With the political permission of doing business in other regions can help
M&S to diversify their business.
Economical
In terms of economic, M&S can have negative influence based on the factors of
currency inflation, exchange, interest rates and economic growth. In the view of
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Forsgren and Johanson (2014, p.78), the transportation charge increment can
negatively influence the organisations.
However, on the other hand, if the currency rate of a country increases, where M&S do
business, then it can help the organisation to gain more revenue generation.
Social
Social influential factors include the population, interest rates, trends, and culture, age
and gender factors. If M&S will deliver products, which does not match with the cultural
value of a particular country or region, it might influence the sales and revenue of
organisation.
On the other hand, approaching and delivering the products and services based on the
trends, culture and customer’s perception can help organisation to increase their sales
and productivity.
Technological
In the view of Glavas and Mathews (2014, p.234), current business uses the advanced
technology in order to keep records and tracks of their [products and delivery services.
Approaching proper technology in order to track feedbacks, records and reviews from
customers can help M&S to deliver the products based on the customer needs and thus
can help them to gain an advantage of customer satisfaction with high sales.
On the other hand, improper management of technology database and records might
not identify the customer’s needs in short time and thus can influence the organisational
strategy of product delivery based on customer's needs.
Legal
In terms of legal factors, M&S follows the regulatory rules and regulations, which helps
them to gain an advantage of positive brand image and delivering their services in an
authorized manner with reference to fast deliveries.
On the other hand, other legal laws and regulations, which might restrict the business to
do business in other countries or restricts to have import from other countries, can
influence the business growth of M&S.
Environmental
Other environmental factors, such as maintenance of environmental well-being can help
M&S to gain positive brand image and environmental sustainability. M&S approaches
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corporate social responsibility in order to gain positive brand image and maintain
sustainability of environment.
On the other hand, using non-eco friendly products might restrict M&S in terms of
regulation and thus can influence the organisational growth with a negative curve.
Micro environmental factor influence
Apart from the macro environmental factors, different micro environmental factors might
influence the business of M&S in different manners such as:
Figure 2: Micro Environment Factors
(Source: Created by learner)
Suppliers
In the view of Blanco and Cohen (2017, p.142), suppliers helps to provide the raw
materials for the manufacturing and production of products. However, if the suppliers
will shift towards the rivals, M&S will not get proper amount of raw resources and thus
will lose their customers and marketplace.
On the other hand, proper resource delivery by the suppliers can help to fulfill the
demands of customers and thus to gain customer satisfaction and customer loyalty.
Customers
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M&S needs to maintain strong relationship with the customers, in order to gain high
customer retention and brand loyalty, which ultimately can help to gain high revenue
generation.
On the other hand, as Hamilton and Webster (2015, p.63) has stated that improper
communication might influence the relationship with the customers and thus it needs to
be properly approached by the organisations. Approaching effective communication can
help M&S to maintain strong relationship with their customers and thus to identify their
needs, which can help to gain customer satisfaction through adding the features in the
products and services.
Rivals
Having rivals of M&S can help them to gain competitive advantage through proper
market research and competitor analysis.
On the other hand, the rivals might create pressure in terms of capturing strong market
position and delivering more variable products to their customers.
LO4
P5 Internal and external analysis of organisation
In order to analyse the internal and external factors of M&S, SWOT analysis can be
approached.
Strength
M&S do their business in an international
level, with large numbers of physical
stores.
M&S provides the option of online
shopping to their customers
It provides different varieties of services
and products
M&S has strong customer satisfaction
M&S has strong brand image
Weakness
High competition among the rivals
M&S needs proper security of their brand,
as it has a strong brand image, thus it can
be misused by other competitors
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Opportunities
As M&S provides online shopping, thus, it
can develop their shopping website
On the other hand, other different market
segments can be approached
Threats
Competitors might create a situation of
threat for M&S with providing high
discount priced products
As M&S have to business internationally,
thus, political macro factors might threat
them
SWOT analysis in M&S decision making
The strengths of international business with providing varieties of services and gaining
strong brand image can help them to promote their products in an easy manner with
approaching a large numbers of customers. On the other hand, the weakness of high
competition and brand security might influence their sales decision, which needs to be
approached with placing discounts and offers and thus scan help to gain high revenue
generation. Opportunities of website development can help them to attract customers
and thus to gain customer retention with high sales. On the other hand, threats of M&S
might influence the customer retention, as the customers will shift towards more
discounted products and services.
P6 Macro factors relation with organisational strength and weakness
Macro Environment Factors Strengths and weakness
Legal, political and economical change of
factors based on regulation
If the strategic plan of M&S will not
implement the legal, political and
economical factors, it might face barriers
in regulation their business, as they do
their business internationally.
On the other hand, proper maintenance of
legal, political and economical factors can
help to gain positive brand image and
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thus high customer retention.
Technological Factors Approach of advanced technology with
adding proper innovation in terms of
products and services can help to gain
customer satisfaction. Proper handling of
technological databases can also help to
identify the customer’s needs and
feedbacks.
On the other hand, improper
management of technology might
influence the strategic factors of M&S.
Cultural and social factors Maintaining of social and cultural factors
can help M&S to deliver and strategies
their products based on the customer's
culture, preference and trends.
On the other hand, improper
implementation of cultural and social
factors might influence the sales and
market growth of M&S.
Environment Maintenance of sustainability of
environmental factors can help M&S to
gain strong brand image and well-being of
environment and social.
On the other hand, mismanagement of
environmental factors might face legal
and environmental issues, which might
influence the brand image.
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Conclusion
The above study has demonstrated that, the organisations needs to maintain effective
strategy in terms of gaining proper market growth and position. On the other hand,
different organisation has different structure and size. In addition to that, complexity
might encounter based on the size and structure of organisation. Different functional
areas need to work collaboratively in order to maintain enhance the productivity and
performance of organisation.
In addition to that, different macro and micro environmental factors influences the
organisational decision. Thus, in order to gain effective organisational performance,
proper implementation and approach of strategies based on considering the business
determinants needs to be done.
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