Analyzing Business Environment and Organisational Performance

The given assignment involves a comprehensive analysis of the business environment and organisational performance of a company (Sainsbury). It requires identifying the internal capabilities through SWOT analysis and determining the impact of external factors on these capabilities via PESTLE analysis. The management's ability to consider these external factors can lead to improved decision-making and the development of new strategies for achieving business goals. The assignment also touches upon the importance of interdepartmental support and guidance in a company, where various departments such as finance, marketing, HR, IT, etc., are interconnected and rely on each other's resources to achieve organisational objectives effectively.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Types and purposes of organisations...............................................................................3
P2: Size and scope of chosen organisations...........................................................................6
TASK2.............................................................................................................................................7
P3: Interrelation between organisational function and organisational objectives..................7
TASK 3..........................................................................................................................................10
P4: Positive and negative impacts of the macro environment on business operations........10
TASK 4..........................................................................................................................................12
P5: SWOT analysis for determining the strengths and weaknesses ....................................12
P6: Interrelation of strengths and weaknesses with external macro factors........................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business refers to the firms or organisation which are formed for making profit and
money by providing their products and services to the people or consumers. The environment of
the business refers to the surroundings or individual's behaviour at the work place. The business
environment in today's world is full of competition. The taken company in this assessment report
is Sainsbury which is a retail and financial provider firm having headquarter at London, United
Kingdom. The firm is employing around 186,900 employees in their 1415 stores worldwide and
also it is the 2nd largest retail chain of UK. In this report, different types of organisation along
with their objectives, organisational structure, scope etc. will be discussed. This report will
further determine the interrelation of various functions such as Marketing, finance, HR, logistics
etc. will be discussed. This report also analyse the various macro environmental factors such as
political, social, technological etc. by using the PESTLE analysis along with the identification of
internal capabilities using the SWOT analysis. In the last, the interrelation of strengths and
weakness with the PEST factors will also be discussed in this report.
TASK 1
P1: Types and purposes of organisations
There are various types of organisations which are present in the business world. These
organisations has their own scope and objectives for earning the money their way. The growth
and development of an economy of a nation depend upon these organisation as these are
providing their contribution in form of royalty and taxes (Adeoye and Elegunde, 2012). These
organisation along with their purpose and legal structure is given below:
Public organisations: In such type of organisations, the central government owns more
than 50 % shares and the remaining shares of these organisations are sold freely to the people.
These organisations are formed for the purpose of welfare of the people and these does not worry
about earning the profit as the losses of such companies are bear by the government of the
country. These organisations offers their services to the public of a country. These firms are
generally regulated by the government of a country in which the firm is operating. National
health services (NHS ) is also one of the public organisation in UK whose activities are
controlled by the government of the UK. NHS is operating in all the three sectors which are
primary, secondary and tertiary sector. The purpose and structure of NHS is discussed below:

Purpose:
 To offer the best and suitable health and medical care services to the patients and
consumers.
 To enhance the living standard along with the social and economical conditions of the
people living in UK by providing the health treatment and care at affordable prices. To enhance the structure of society by providing proper and appropriate quality of health
services to the public.
Legal structure: Local government: Local government is responsible for regulating and controlling a
small part of country, city or town.
 State government: The state government is responsible for controlling the state and for
implementing the laws in the states. This also provides the solutions for the issues of state
and of the people living in the state.
 Central government: The central government is responsible for controlling and
regulating the whole country. This government is also responsible for maintaining the
law order and to develop the country and its people.
Legal responsibilities
NHS is a health care firm who needs to follow the Health and Social care Act, 2012 in
providing their services to the customers. The new health care firms needs to follow this act and
also they needs to met the requirements of the government in order to operate without any
problem. Through this, the NHS can provide the equal treatment and care to the people without
any discrimination.
Private organisations: These types of organisations are regulated and controlled by the
individuals or group of individuals. The key people takes the decisions and implement the
strategies in these type or organisation (Cavalcante, Kesting and Ulhøi, 2011). Such types of
firms are formed for earning money and profit. The profit or money is earned by providing the
products to the people and in return takes the money. Sainsbury is also a private organisation
which is the 2nd largest retail chain in the UK. Sainsbury is operating in Tertiary sector. The
purpose and structure are discussed below:
Purpose:

 To provide the best quality products to the consumers in order to enhance their
satisfaction.
 To achieve more market share in the UK by providing a wide range of products at
affordable prices. To enhance the brand recognition and brand image of the firm by implementing best and
ethical work practices at the workplace.
Legal structure Partnership: It is a formal agreement in which two ore more parties coordinate with each
other for achieving their shared goals and to earn money. Sainsbury can comes in
partnership with Aimia for providing advertising opportunities to all the stores of firms. Sole trader: In this type, single individual is responsible for regulating the company and
also the individuals is responsible for profit and loss. Sainsbury can partners with Netto
of Denmark for providing the products to people in Denmark at low prices.
 Small and medium size enterprise: These firms are independent in which less than 250
employees works and the revenue is also less than $ 5 million. Sainsbury can partners
with Wellworth to provide the quality based products to consumers for their improved
experience by using the good supply chain management of Wellworth.
Legal responsibilities
The private firms such as Sainsbury needs to submit the annual reports of the company to
the company House in UK. If any modifications are necessary in the report then they should be
conveyed to the company house, UK. The owners of such businesses needs to act in the favour
of their stakeholders for obtaining sustainability in the market. The management and owners
needs to follow the laws and regulations associated with the employment in order to protect the
right of employees.
Voluntary organisation: In this type of organisations, individuals or group of individuals
comes together for uplifting the society. The employees in these organisations works as a
volunteer for the society (Erasmus, Strydom and Rudansky-Kloppers, 2016). The taken firm for
this is Oxfam who is supporting the people or victims of natural or man-made disasters.
Purpose
 To enhance the condition of people suffering from natural disasters.
 To improve the economic conditions of the society

 To create a poverty free society.
Legal structure
 Trust: In this type or firms, 3 parties are includes i.e. donors, trustees and beneficiaries.
These are formed for the purpose of providing the financial support to the people so that
they can achieve what they desires.
 Association: It refers to the group of individuals who came together for a shared purpose
or goals.
Legal responsibilities
These firms such as Oxfam needs to do the registration under the Charities Act, 2011.
These firms are also called as limited by guarantee. In these organisations, members or
employees does not have any right to take share of profit. If such organisations are closed, then
their assets are used by the other voluntary or non profit organisations.
P2: Size and scope of chosen organisations
There are mainly three types of organisation such as private, public and voluntary.
Examples of these organisations are Sainsbury, NHS and Oxfam. All these organisation has
different size and scope which are determine as under:
Sainsbury(Private)
Size and Scope: Sainsbury is the private supermarket chain in the United Kingdom. It
was founded by John James Sainsbury in 1869. The retail organisation has total of 186,900
worker's who are located in various region of the United Kingdom such as Holborn, London,
EC1 etc. The scope of a company lies with expansion or enlargement of their business functions
and operations at the international level. Therefore, company provide large range of product or
services which has biggest scope in current as well as future also.
Product and services: Tesco mainly specialise in selling in different areas such as
retailing of toys, clothing, electronics, financial services, software, telecoms, and internet
services.
Objectives: Main and foremost objective of Sainsbury is to retain customer's for long
time by providing quality products and services.
Oxfam (Voluntary)
Size and Scope: Oxfam is an independent charitable organisation which is founded in
1942 and lead by Oxfam international. Company has largest scope because it deals in different

nations such as They are based in: Australia, Belgium, Brazil, Canada, Denmark, France,
Germany, Great Britain, India, Italy, Mexico, Hong Kong, Ireland, The Netherlands, South
Africa, Spain New Zealand, Quebec, and the United States.
Product and services: Oxfam works on fair trade, trade justice, education, debt and aid,
health, HIV/AIDS, gender equality, democracy and human rights, conflict and natural disasters
and climate change.
Objectives: Their objective was to work with each other for greater influence on the
global stage to reduce injustice and poverty.
NHS (Public)
Size and Scope: NHS is a national healthcare system and largest single-payer healthcare
in the world. In the NHS, 50 doctors and 100 nurses are actually work. The NHS in Scotland,
Northern Ireland and Wales employs 161,415; 66,000 and 84,000 people respectively. Therefore,
scope of NHS is also biggest which will help them in expanding their business operations
internationally. In England NHS deals with over one million patients every thirty six hours. It
covers everything, considering antenatal screening, regular screenings (such as the national
health system Health Check), treatments for transplants, long-term conditions, emergency
treatment, end-of-life care etc.
Product and services: The NHS gives the majority of healthcare in England, considering
primary care, long-term healthcare, in-patient care, ophthalmology and dentistry.
Objectives: Main objective of NHS is to enhance the environment for staff and patients.
Another objective of an organisation is to give benefits for the welfare of staff and patients as
well as also provide health education for patients.
Therefore, all organisation has different size, scope, products and services which will
help them in achieving business success and growth within given time duration.
TASK2
P3: Interrelation between organisational function and organisational objectives
Sainsbury is a big retail chain in UK which has several department who are working with
their full capabilities for attaining the desired organisational goals and objectives. These
department are needs support from each other for performing their role in an effective way.
These departments needs help from other departments for ensuring that they has the required

resources for doing their departmental work. The interrelation of these departments is discussed
below:
Illustration 1: Organisational Chart of Sainsbury
Marketing: The marketing department promotes and advertises the product or services of
a organisation. For these promotion and advertisements, this department needs talented
individuals which are provided by the HR department (Gupta, 2013). Also this department needs
funds for promotion and other activities which are provided by the finance department. With the
help of talented individuals and promotional tools, marketing department can carry out their
work in an effective manner for raising the organisational profit.
Human Resource: HR department provides the required workers to the organisation by
hiring talented and skilled people. For hiring the candidates, HR department needs help from
marketing department for advertising the job vacancies. Also HR department needs money for
the salary and other activities which are provided by the finance department. Through these help
from marketing and finance, HR department can hire potential candidates who can perform their
role with the required accuracy for achieving the organisational goals.
Production: The production department manufactures the products and services. This
department needs help from marketing department for determining the taste and preference of
the customers in order to develop improved products (Shenkar, Luo and Chi, 2014). Also this
department needs help from HR department for hiring the candidates who can work on
machines. The production department also needs help from finance department for purchasing
the machines. Through this help from other departments, the production department can produce
quality based products which will assist the firm in raising the organisational profit.

Logistics: The logistics department handles the supply and distribution system for
delivering the products. They needs help from the finance department for purchasing the
machinery and for delivering the product to customers. Also this department needs help from the
marketing department for determining the suitable suppliers who can transport the products
without any problems.
Finance: This department is responsible for handling the funds, transactions and for
preparing the financial report. This department needs help from the HR department for getting
the suitable candidates who has the knowledge of maintaining financial report and transactions.
Through these people, the finance department can perform their duty without any problem.
IT: IT department handles and installs the equipments and devices in the various
department and functions of organisation. They needs help from the finance department for
buying the equipments, devices and software which must be installed in business operations.
Also the HR department provides the employees to this department based on their technical skills
(Hamilton and Webster, 2018). Through the help from finance and HR department, the IT
department can perform their work without any problem.
Sainsbury is also considering the two types of organisational structures to be adopted in
their business operations as the firm is both food retailer and financial service provider. The first
structure is functional structure or bureaucratic organizational structure. In this structure, the firm
is broken down into departments such as marketing, production, finance and logistics etc.
Through this structure, Sainsbury can operates as financial service provider by segmenting the
operations into departments which is also helpful in monitoring the business performance in an
effective manner. The firm is considering the matrix structure for operating as a food retailer.
This structure is used for dividing the employees in superiors, divisions or departments. These
employees has multiple role and responsibilities such as employees can work both in sales and
customer service simultaneously when adopted this structure.

TASK 3
P4: Positive and negative impacts of the macro environment on business operations
Illustration 2: What is a PESTLE analysis
Source: What is a PESTLE analysis. 2015
Pestle analysis is used by the organisations for determining the impact of macro
environmental factors on the business operations of the firm. Sainsbury is also using the Pestle
analysis for determining this impact. After leaving the European Union, Britain has changed
their various laws and regulations which leads to high inflation rates, changed policies etc. which
are influencing the operations and activities of the business firms. The Pestle analysis along with
its factors is discussed below:
Political: Political factors talk about how much government intervention is there in any
companies in the form of labour law,foreign trade policy, environmental law etc. Due to the exit
from EU, the political conditions in the country is ascertain which can negatively impact the firm
as the firm had take over the Argos and Argos’s dollar-priced imports hike up prices in the
catalogues. Whereas after the Brexit, the firm is following the changes in the laws and
regulations which can positively impact the business operations of company as the policies are
developed by considering the laws.
Economical: Economical factors shows the effect of economic growth, inflation,
deflation, per capita income, GDP etc. on the company. Due to the food price inflation and years

of economic crises, the customers have become price conscious which is negatively impacting
the sales of products provided by the Sainsbury (Hillary, 2017). But the firm has a wide range
of products which are provided at affordable rates, due to this the firm has maintained their profit
as well as revenue which is a positive impact.
Social: Social factors are tradition,culture,belief and how all of these impacting the
company. After leaving of Britain from the EU, amount of money spent by the customers is
decreasing which is negatively impacting the firm as the sales is also decreasing. Whereas the
company has maintained their wide products range due to which the customers are still
purchasing the products from Sainsbury which is positively impacting the revenue.
Technological: Technology is the biggest factor that affect the company. Because
technology keeps on updating and keeps on creating a cut throat competition in the market.
Sainsbury’s has implemented technology in their business functions such as online food
shopping and click-and-collect services through which customers can order the products online
and collect them from the stores of company. This is positively impacting the company in
improving the sales and profit. Whereas due to the Brexit, the government has implemented new
laws for the firms and as a result of this, some of the stores of Sainsbury does not get the latest
technology which is negatively impacting the brand image of firm in those stores.
Environmental: Environmental factors include pollution, scarcity of resources, etc.
Sainsbury is trying to reduce the wastage of resources in the business operations by taking the
initiatives and by collaborating with the partners which is positively impacting the brand image
of the company (Reed and et. al., 2013). Due to the strict regulations from the UK government
after the Brexit, the operations and brand image of firm is negatively impacting as the energy
consumption and wastage is high in the stores of Sainsbury.
Legal: Legal factors include health and safety, rights and laws, equality, labelling,product
safety,packaging quality etc. The firm is following the employment laws which was developed
by the governments due to the Brexit which is helpful for the firm in getting the support from
government and improving the brand image of firm. Whereas the firm is importing products
from the EU countries and new laws are implemented by the government for the import and
export which is negatively impacting the brand image and profit of the firm in market.

TASK 4
P5: SWOT analysis for determining the strengths and weaknesses
Illustration 3: SWOT analysis
Source: SWOT analysis. 2016
SWOT stands for strength,weakness,opportunity and threats. It is the tool to analyse the
internal as well as external environment. Two of them(strength & weakness) are used to analyse
internal environment and the other two(opportunities & threats) represent the external
environment. Sainsbury is also using the SWOT analysis for determining their internal
capabilities as discussed below:
Strengths Weaknesses
 The company has taken over the Argos
and providing their products online
with the help of delivery services of
Argos. Due to this the sales of company
is increasing.
 The firm is operating more than 1200
stores and the firm is also one of
biggest clothing retailers which is a
major strength for the company.
 The firm has a wide range of quality
 The company has stores in UK only
which limits their customers to the local
market and business growth.
 The firm changes the prices of their
products in a timely manner due to
which the firm is loosing its value
perception and the customers are
moving towards the other firms.
 Due to the high inflation, sales of the
firm is decreasing which is negatively

based products which assist the firm in
improving the customer base. The
customer base of company is high and
increasing due to the quality of the
products.
 Also the company is using the
technology such as online food
shopping, social media marketing and
click-and-collect services which is
increasing the customer satisfaction.
impacting the profits and is considered
as weakness.
 Also in some of the stores, the
technology is not updated which leads
to consumption of energy and this is
negatively impacting the brand image
of the firm.
Opportunities Threats
 The customers of UK are moving
towards the healthy eating habits which
provides the opportunities to the firm in
improving the quality of food products.
 The population of UK is ageing due to
which firm needs to focus on attracting
these people by designing the products
keeping the needs off these customers
in mind.
 Company can collaborate with the other
stores for increasing the customer base
and profit of the firm which is an
opportunity.
 Tesco has spotted the lowered value
perception of the Sainsbury due to
which Tesco is getting the competitive
advantage.
 Uncertainty due to the Brexit is
affecting the customers which
ultimately impacts the business of
Sainsbury.
 Also the competitors such as Aldi and
Tesco are providing their products at
discounted prices which is a threat for
the company.
P6: Interrelation of strengths and weaknesses with external macro factors
The interrelation of strengths and weakness of the firm is discussed below:
Political: The strength of Sainsbury is that the firm has developed the strategies for their
business operations by considering the impact of Brexit on foreign trade policy etc. which is
positively impacting the firm in achieving their objective in an effective manner (Hilton and

Platt, 2013). Whereas the firm is one of biggest clothing retailers in UK and as a result of this,
the sales and profit of the firm is increasing. The weakness however is that company has stores in
UK only which limits their customers base and business growth.
Economical: The economic conditions of the UK is ascertain due to the Brexit. The
inflation rate is also high in UK, due to which the sales of the firm is decreasing which is
negatively impacting the profits (Moutinho, 2011). The strength is that the company has taken
over the Argos and providing their products online with the help of delivery services of Argos.
Due to this the sales of company is increasing as the products are provided at discounts to the
consumers.
Social: The Brexit has influenced the consumers interest for shopping and the customers
are also becoming price conscious. Due to this, the company is providing their products at low
prices to the consumers which is improving the sales due to the low prices and quality based
products. Also due to the price change, the firm is loosing its value perception and the customers
are moving away from the products of the firm. The firm needs to change their policies for
achieving the desired goals in an effective manner.
Technological: The major strength of the Sainsbury in technology is that the firm has
implemented technology in their business activities such as online food shopping and click-and-
collect services for their consumers and this is improving the profit and sales which are
predetermined objectives of the company. Also due to this the management can take decisions in
an improved manner as the predetermined objectives are met. Whereas the weakness is that the
in some of the stores of company, the new technology are not implemented yet which is
negatively impacting the company as the energy consumption in these stores is high. The
company needs to take new decisions for these stores so that these can also achieve their
objectives.
With the help of above done SWOT analysis and interrelation of strengths and weakness
with the macro environmental factors, Sainsbury can determine the impact of political, social,
technological and economical factors on the internal capabilities of the firm. By determining this
impact, the management of the Sainsbury can take better and improved decisions for
accomplishing the pre determined objectives and goals of the organisation (Kew and Stredwick,
2017). Also the firm can improve the sales and profit by considering the weakness which can be

further converted into opportunities for enhancing the business efficiency and performance of the
business operations and of the firm.
CONCLUSION
From the above discussed report, it has been concluded that there are mainly three types
of organisation i.e. public, private and voluntary whose organisational structure along with the
scope and objectives differs with each other. The various departments of firms needs support and
guidance from each other for effectively performing their work. The departments such as
finance, marketing, HR, IT etc. are interrelated with each other and they needs resources which
are provided by other departments in order to achieve the organisational goals and objectives in
an effective manner. The management can use the SWOT and PESTLE analysis for determining
the internal capabilities and the impact of external factors on the internal capabilities. BY
considering the impact of external factors on the internal capabilities, management of the firm
can take improved decisions and develop new strategies for accomplishing the business goals.

REFERENCES
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