P4. Negative and Positive influence of macro environment on business activities

Business and Business
environment
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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1 ............................................................................................................................................1
P.1 Various types and purpose of organizations ...................................................................1
P.2 Scope and size of different types of organizations ..........................................................3
P3 Link between functions and objectives of organization ...................................................6
P4. Negative and Positive influence of macro environment on business activities...............8
P5. Internal and external factors which can determine strengths and weakness .................10
P6. Interrelationship of strengths and weaknesses with external factors of macro environment
..............................................................................................................................................11
CONCLUSION..............................................................................................................................14
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1

INTRODUCTION
Business environment includes internal and external factors which can affect the
company. It can influence positively or negatively. It is essential that company evaluates
business environment so that it can make changes in plans and policies. Through this it can
easily survive in market. Hence it can earn more revenues and it can enhance market share. Thus
it can increase their reputation in minds of public and in market. Assignment discusses about AC
cars limited which is auto mobile manufacturer. It was found in 1901 in England. Project
explains about various types, size and scope of various organizations. It further discusses about
the interrelationship of different functions in company and their relation with organizational
structure. It also explains about various examples to prove positive or negative of macron
environment on operations of business and internal strengths and weaknesses of particular
businesses and their relationship with macro factors (Adeoye and Elegunde ,2012).
TASK1
P.1 Various types and purpose of organizations
There are various types of firms and they have different objectives. Some have profit
earning and other only focuses on giving benefits to society. There are three types of
organizations such as private, public and voluntary organizations. There are various firms which
are described below:
Private sector organization:
These are the firms which are directly controlled and monitored by private persons. There
is less interference of government in operations and activities of private company. They produce
and deliver good quality of items to customers so that they can earn more revenues. Through this
it can increase satisfaction level among all customers. They include distinct and unique activities
in their items so that they can attract many users and can more profits ion minimum time. For
example Marks and Spencer which is discount chain. It has operation's in various countries and
has approximately 10000 stores in different regions.
Functions of firm:
To deliver high quality of goods: It main objective to provide superior quality of goods to
various customers. Through this it can increase satisfaction of various customers.
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To enhance activities of business: Another objective is to continuously modify all activities and
operations of business so that it can produce different and unique products. Through this it can
earn more revenues and can enhance market share.
Transparency: It discloses all crucial documents and reports to all stakeholders. Through this it
can generate trust and faith among people and other members on company (Al-Debei and Avison
,2010).
Types of firms:
Partnership: It is a company which is started by 2 or more individuals. Profits and losses are
shared between all partners in their business. Main aim is to earn more revenues. Further, all the
terms and conditions related to profit sharing, capital contribution and working hours are fixed in
partnership deeds.
Sole trader: It is started by a single person. Profits and losses are shared by single individual
only. They take all decisions related to company. They are responsible for all activities and task
performed in business.
Limited companies: They are of of 2 types that is limited by share and limited by guarantee
which discuss below:-
Limited by guarantee:- Under this case member are liable up-to the guarantee they have given in
respect of equity share.
Limited by share:- Under this equity share holders are liable to the extend of unpaid value of
shares.
Public sector firms:
They are controlled by the government. All activities and tasks are supervised and
monitored by Govt. bodies. For example NHS is health care firm.
Types of public organizations:
Central government: It is institution which helps in regulating and controlling all
activities and tasks in nations. For example tax collection printing of currency etc.
State government: This Govt. helps in controlling all issues and activities related to a
particular state. They create various strategies and policies related to education sector and thus
all people can become aware about crucial things.
Local government: This give helps in monitoring various task and problems related to
local areas or regions. It has less power as compared to state and central govt.
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Functions of firm:
Corporate social responsibility: It's main aim is providing various benefits to people and
society. Through this it can increase their image in many nations.
Stakeholder objectives: It's main aim is to fulfil all needs and wants of all stakeholders
such a employees,manager,customer ,suppliers etc. Through this it can maintain unique image in
front in minds of public and in market.
Voluntary organizations:
Their main objective is to provide different benefits to people living in society. Thus it
performs all activities which helps in welfare of individuals and there is growth of society. For
example Oxfam firm performs different activities so that it can decrease poverty from country.
Company provides food facility to poor people and thus it can strange all their needs.
Functions of firm:
Reduce poverty: It provides food to all poor people and thus reduce poverty from their country.
Development of society: It provides food to people and thus it leads to growth and development
of society.
Increasing living standard of people:- The aim of voluntary company is to provide goods and
services at affordable price which increase purchasing power and living standard of people.
P.2 Scope and size of different types of organizations
There are three types of firms which include consists of private, public and voluntary
firms. Size defines about the different areas through which firm is performing all activities.
Scope describes about the various tasks related to company (Aula ,2010). As company is
performing different tasks so due to this it has different scope and size that is described below:
Marks and Spencer:
Size: It is a discount chain that is operated in many nations. It has headquarters in
Germany. It is performing all operations in approximately 1000 stores and in many nations.
Turnover is around £50 billion. Approximately 160000 people are working in company. It
provides superior quality of products to all users. Thus it can increase the satisfaction level of all
users and thus it can earn more revenues and can enhance the market share. Hence it can easily
increase the level of productivity.
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Scope: Various products are delivered by the company to potential users. Thus helps in
fulfilling all requirements of all customers. It delivers products such as beverages, food and
sanitary items, household items etc. to various users.
NHS
Size: It is performing it's tasks on large scale. It is operated in different nations. It has
approximately of 470 organizations operated in many nations. It has around 2200 non executives
in England. Thus it has approximately of £902 million. It has around 9974 managers and 10934
doctors which can provide effective and efficient services to all patients. Through this it can earn
more profits and can enhance the market share. Hence it can maintain good image in various
nations. Thus as a result it helps in widening and expansion of business in less time.
Scope: It helps in treating around 1 million patients in every 36 hours. It has 60% more
operations and activities as compared to last years. It has around 16.252m admission of hospitals.
There is around 507784 patients which are provided independent providers so that they get good
treatment. Appropriately 90.6% patients are given treatment are discharged from hospitals.
Oxfam:
Size: It consists of different charitable institutions which can provide different service to all
people. All activities are related to related of all people living in the society. It has approximately
of around 12000 shops approximately which is operated in many nations. It has approx 20000
volunteers who are working for Oxfam company. Company has around £22 million. There are
100 approximately special books musics etc. Thus it can provide food and necessary items to
different people. Thus it can earn more revenues.
Scope: It delivers services such as decreasing of poverty,disaster relief and activities related to
pro migration, advocacy and researching of policies. Through volunteers it can provide food to
different people (Bill Pasmore , S. V. P. and CMC ,2010).
Large scale company: It is the company who have many employees. Thus it has huge
resources. For example Marks and Spencer is the big firm.
Medium scale company: It is the company which lies between the large and small
company. Thus as a result they can also attract customers. For example talent plus is a medium
scale company.
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Small business: It is the company which have less resources and have less other
resources. For example For example professional placement resources is a small firm.
Private company: It is the company which runs privately and do not have any govt
interference. For example Marks and Spencer is a private firm.
Public: It is a firm which do not runs privately and it has government interference. For
example NHS is a public firm.
Profit: They are firms which only runs for profit. They do not run for social purpose. For
example for example Thomas cooks is travel firm which us a profit firm.
Not for profit firm: It is the firm which do not runs for the profit. For example Naya
Savera is an NGO etc.
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P3 Link between functions and objectives of organization
Inter- relation between various departments of company
There are many changes taking place in business and it is essential to do activities in an
effective way. Various possibilities are there and they are due to change in external factors, AC
car limited has to change their plans. There are many factors which are getting changing policies.
It is important to make activities which help in performing actions n better and effective way.
There are many departments in AC car Limited so it is essential to perform activities in better
and effective way. There are many divisions so actions mus be plan as per requirement and there
must not be collation in activities. Finance, accounts, operations, sales and marketing,
production, etc. are departments which are effective for growth of company. In AC Car Limited,
there is requirement of factors which help in achieving task in better and effective way. Joint
efforts of various departments help in performing task in better and efficient manner and this can
be performed in appropriate manner.
Production Department- There is requirement of proper production strategies so there
will not be under and over stock. It is effective with proper and applied manner. In AC Car
Limited there are various factors which can be effective for growth. There is requirement of
funds for production, plans and machinery so they have to contact with finance department.
Sales and marketing Department- Sales and marketing department have significant role
in growth and development of AC Car Limited. They analyze market and take acts as per
requirement. There are many competitors so it is essential to know them and frame strategies
accordingly. Marketing manager has to attract more and more activities through which sales
increases. To achieve it successfully, it is essential that marketing department must have
complete knowledge about product and services (Brannon ,2010).
Human Resource Department- HR department is one who deals with employees pf
organization. In AC Car Limited there are many employees so it is important to take care of them
so targets can be achieved in better way. Human resource department has to take care of
monetary an d non monetary benefits of company and motivate them to give best results. This
helps in growth of company.
Finance Department- This is the most important department which keeps record of each
and every aspect of money related aspect. There are possibilities that due to change in
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technology, they have to set budget and then take actions. They keeps all the records related to
accounts which can be used for showing financial position of organization.
Finance with purchase and sale: In this finance department has to receive adequate
funds from all sources. Thus as a result purchase department can take good quality of material
and can purchase any product. Thus sales department can also deliver superior quality of goods
to various users.
Accounting with sales, purchase and investment: Accounting department helps in
calculating all expenses and profits. Thus they can easily enhance their services. Through
calculation of accounting function sales department can easily invest in profitable activities and
can enhance their profits.
HRM with all other departments: Through recruiting of educated candidates by HR
department all departments can run smoothly and successfully. Thus as a result finance
department can easily take finance. All educated and competent staff members can easily
perform all activities in proper manner and can create good quality of products. Hence they can
deliver superior quality of goods to all users.
Organizational Structure
Functional based- This is the structure which work as per functions assign to
departments. There are possibilities of duplication of activities which proves to be increment of
cost and wastage of time.
Consumer based- There are many types of customer in company, so to give utmost
satisfaction company perform activities as per requirement of workers. This is fruit6ful through
performing activities in better way. There will be increment in profits of AC Car Limited.
Product based- There are various types of product which AC Car Limited serves. So they
might prefer to divide organization on this basis. This helps in increasing sales and more
emphasis on customized services.
Geography based- AC Car Limited has outlets in various parts of country and there is
difference in their demands also. So it is essential to analyses which product is preferable at what
place.
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P4. Negative and Positive influence of macro environment on business activities
AC cars limited is performing all operations and activities in different nations. So hence
all factors related to macro environment can influence activities and operations of AC cars
limited. It can influence in negative as well as positive manner. Sop hence m,manager can create
different strategies and policies to deal with the changes. Through this it can easily achieve the
objectives and goals. Positive or negative affect of external factors are explained below:
Political factors: There are different political factors which can affect operations and task
of Ac cares limited. Govt. legislations and rules, taxes, excise duties and stabilization of Govt.
can influence company's operations in positive or negative manner. So hence manager faces
many problem and create policies to deal with the changes.
Positive impact: Govt. has created different legislations which can affect tasks related to
company. For example Govt. made a rule to deposit all taxes before 31st march. So hence with
audit they have to deposit all taxes before that date. Through this they can run their activities and
tasks very successfully and smoothly.
Negative impact: Through strict rules sometimes it can affect on task and operations of
business. For example they have increase taxes in cars so hence they have to pay more taxes as
compared to last years and it results in reduction of profits of company.
Economic factors: There are various economic factors which can influence activities and
task of company. It can be growth rate,inflation and deflation,income and cash flow which can
influence positively or negatively on operation of business.
Positive impact: If there is deflation then company provides goods at cheaper rate. Thus
it can attract many users. Hence firm can earn more revenues.
Negative impact: Countries who had high inflation rate can affect can affect profits of
company. Through this it cannot capture more consumers (Cantwell , Dunning and
Lundan ,2010).
Social factors:
All values, age, religion and lifestyle can affect positively or negatively. Thus as a result
it can affect in positive or in negative manner. These factors are important for company so that it
can make necessary changes as soon as possible.
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Positive impact: Through increasing demand of online technologies and sites by many
people firm put more emphasis on the use of different technologies and sites which provides
different information regarding company. Hence through use of technologies and tools it can
affect operations and thus it can earn more revenues.
Negative impact: Sometimes there is lack of education in company. Due to it firm cannot
goods according to quality of goods.
Technological factors:
There are different technologies and machines through which firm can gain more profits.
It can also impact positively or negatively.
Positive impact: Firm can adopt recent technologies such as use of different social sites
and techniques in internet through which company can easily promote their products. Hence it
can earn more revenues.
Negative influence: Sometimes company can use outdated technologies in operations of
business so hence it can affect profits. Thus it has to use latest technologies so that it can survive
in market.
Environment factors: It has keep environment clean so that there are no diseases and
firm can provide hygienic products.
Positive impact: Firm follows all regulations of environment. It tries to avoid use of
chemicals and tries to reduce pollution. Thus it can enhance the image of brand.
Negative impact: Sometimes it do not follows rules of environment. Hence it cannot
maintain good image on front of all people.
Legal factors: There are various factors which can affect positive or negatively to
operations of business. Thus it can affect positively or negatively.
Positive impact: Company has to abide all legislations which are create by Govt. Thus it
can easily survive in market.
Negative impact: If firm do not follow all legislations and rules then it cannot run their
operations and task successfully and smoothly.
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P5. Internal and external factors which can determine strengths and weakness
There is SWOT analysis which can identify the strengths and weakness of internal and
external factors (Cassell and Blake , 2012). Through this it can improve the weakness and can
enhance its strength. Through this it can improve weak points and can maintain competitive
advantage over other firms. Hence it can gain more revenues. Thus SWOT is very important so
that they can maintain good image and firm can easily survive in market.
Below is explanation of SWOT analysis of AC cars limited:
Strengths Weakness
 Main objective is to increase the level
of satisfaction among all users. So
hence it provides different and unique
products to various users. Thus it can
enhance their sales and revenues.
 It can adopt latest and recent
technologies in their process related to
production such as MSR etc. Through
this it can increase the image and
reputation in market as well as among
all customers.
 It has good image in front of all users
and in different countries such as U.K.
 There are different products which are
unique and different through which it
can give strong competition to other
companies.
 Its objective is to increase their sales
and profits and thus it can generate
more sales.
 It is using latest and recent technologies
 It has limited market share as there is
strong and huge competition.
 It has strong competition and due to
this it faces many issues and problems.
Hence as a result it has to create many
plans and policies so that it can easily
survive in market.
 It has high maintenance cost due to this
it can earn less profits. Thus it cannot
attract many users.
 It do not have any control over
emerging economics.
 Due to less customers sometimes there
is not earning of much revenues which
can affect their operations.
 Due to increasing of maintenance cost
it can reduce sales as well revenues of
firm.
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through which it can attract many
consumers in less time.
Opportunities
 Through creation and production of
various cars it can attract many users
and this a great opportunity for
company to enhance the market share.
 It has different augmented skills and
capabilities through which it can
produce different and unique cars in the
business.
 It holds different and unique position
among all users and thus it can earn
more revenues. Hence it can maintain
strong position in the market.
 It has opportunity to capture many
recent tools and ways through which it
can give strong competition to other
firms.
 Further company must focus to expand
their business in rural areas through
inventing such car model which is
cheaper and good in standard quality
also.
Threats
 Due to green cars it has reduces
demand of these cars. So hence there is
reduction in sales and profits of
company.
 Due to increasing of competitors it can
affect the market share. Thus it can
reduce profits.
 Due to different rules and regulations in
environment it can put negative affect
on company. Thus as a result it can
reduce the sales of firm.
 Through reduction of sales it cannot
maintain good image in market. So
hence it has to create strong plans and
policies so that it can survive in market.
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P6. Interrelationship of strengths and weaknesses with external factors of macro environment
For determining interrelationship of strengths as well as weaknesses of AC Cars with
external macro factors, PESTLE analysis is applied by firm (CGA ,2010). It assists in
determining how these external factors influence activities and operations of business. It involves
legal, political, environmental, economical, social and technological factors. All these forces
influence operations of business in both negative as well as positive way.
PESTLE Analysis of AC Cars:
Political factors:
These factors involves change in tax rates, political stability in country, laws and
regulations etc. all these factors assist firm in both positive and negative way. These factors
generally deal with government regulations made for the sake of domestic people. Manager of
AC Cars should consider these factors as these may influence operations of business at
international level. They needs to monitor constantly all changes that takes place in external
environment regarding policies and rules of government in order to gain high competitive
advantage in market.
Economic factors:
Various variables are included in this such as exchange rates, inflation, deflation which
may influence overall productivity as well as profitability of company. Operations of AC Cars
influence in negative way by any change that takes place in interest rates. Managers of company
needs to consider these factors as their consideration influence operations and activities o0f
business in positive way. Further AC cars limited must also analyse the effect of inflation,
deflation and changing exchange rate otherwise it will negatively affect on the financial
performance of company.
Social factors:
Firm aims to produce such cars that attract large group of customers and makes them
happy by satisfying their needs. It also facilitates firm in maximizing its overall sales. Huge
employment opportunities are provided by AC Cars by expanding their operations at
international level. This also assist firm in increasing its market share. Moreover, they also
emphasize on rendering appropriate training to their employees. At the time when company is
planning to expand their business at global level and they need to understand the culture,
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sentiments and feeling of society on the basis of which they adopt such marketing strategies
which does not detrimental to the interest of costumers.
Technological factors:
It includes variables that are related to technology. AC Cars adopt latest technology for
manufacturing cars which provides them competitive advantage in market over their rivals.
Adoption of high end technology enables firm to manufacture superior quality cars that attracts
large group of customers. This influence activities and operations of business in positive way and
ensure optimum utilization of resources and help in increasing productivity as well as
profitability of AC Cars. Further, create new innovative methods and digitalise techniques at the
time of manufacturing cars that distinct their products from other rivalry. (Chavis , Klapper and
Love ,2011).
Environmental factors:
Whether, climate etc. are the variables that includes in environmental factors. These
factors influence practices of AC cars as the company perform their operations in many
countries. It is requires by firm to use such processes in manufacturing of cars that do not harm
environment in any way. They aims to produce fuel efficient cars so that environment can be
protected from pollution. It provides advantage to firm in market over their competitors and
helps in maintaining good brand image. Further use such manufacturing process and procedures
in their goods and service that leads to lesser carbon footprints and maintain sustainability of
business for longer period.
Legal factors:
This macro environment force is related to various laws and legislations which are
necessarily be followed by company. Adherence of these laws influence operations and activities
of business in negative way. So. Managers of AC Cars are required to apply the laws and rules
created by government in order to run their activities and operations in an effective and efficient
manner. This will help firm in attaining growth and maintaining sustainability in market for long
term basis and further ensure regarding the legal ethical practices in their working style that
maintain the decorum and harmony in organisation (Charter ,2017).
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CONCLUSION
Business environment consists of internal and external factors which can affect company.
It is crucial for company to evaluate these factors so that it can many necessary changes in plans
and strategies. Thus it can earn more revenues and can enhance the market share. It has different
types, scope and size of various organizations. Various functions are related to each other. They
are linked to organizational structure. Different examples which put negative as well as positive
impact on operations of business. Internal strengths and weakness and strength of particular
businesses and their relationship with macro factors. Apart from it, dynamic environment
modification has been coming at rapid fast speed therefore AC cars limited are require to
develop such digital and innovative techniques in that goods and services through which they
easily attract large audiences and satisfy their needs in optimum manner. Apart from PESTEL
analysis has been done through which they know their actual position in market and include such
methods in their organisation structure through which they gain competitive advantage over
competitors and enhance their market share and profitability also.
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