Understanding Business Environment & PESTLE

This assignment requires students to examine the crucial role of both internal and external factors in shaping a company's success. It delves into the concept of the business environment, highlighting key aspects that influence organizational strategy and operations. A core focus is placed on understanding the PESTLE analysis framework – a powerful tool for evaluating political, economic, social, technological, legal, and environmental influences on businesses. Students will apply this framework to analyze real-world scenarios and demonstrate their ability to identify trends and potential challenges within the dynamic business landscape.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Covered in PPT......................................................................................................................1
P2 Covered in PPT......................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organizational functions......................................................1
TASK 3............................................................................................................................................4
P4 Positive and negative impact of macro environment.............................................................4
TASK 4............................................................................................................................................7
P5 Internal and external environment of organization................................................................7
P6 Strength and weaknesses interrelate with external macro factors.........................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is a combination of various elements which impact on the overall
performance of company. It includes internal and external environment that influence business
activities in an effective manner in order to achieve organizational goals and objectives. All these
factors may be controllable and non-controllable by company so that it is more important for a
firm to keeping in mind of all the factors before implementing business activities so that it aid in
achieving setted targets (Bai and Sarkis, 2010). Present report is based on McDonald's which is
a American restaurant that delivers their products and services in all around the world. The main
and important responsibility of this company is to satisfy customers’ needs and demands by
providing quality foods.. In this report, various types of organizations and their legal structure as
well as purposes are mentioned. It also defines the interrelationship between various
organizational functions which assist in achieving success. Along with this, strengths and
weaknesses are mentioned and their interrelation with macro factors is discussed in their
assignment.
TASK 1
P1 Covered in PPT
P2 Covered in PPT
TASK 2
P3 Relationship between different organizational functions
Every organization execute their activities by different level in order to achieve its goals
and objective in appropriate way. So that it is essential for the McDonald's to perform their
whole activities in effective manner so that they can able to maintain their productivity as well as
performance. For this there are some important function which aid in evaluating effective
relationship with them: Design and production: Make and design final products and service is more important
for the company to attract large number of customers towards its products. To motivating
and influencing of customers demand effective and creating design is more important
(Brinckmann, Grichnik and Kapsa, 2010). It s main and important feature of McDonald's
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to attract more and more customers by providing creatine and best products and service
according to their taste and culture. Human resource function: It define the number of employees those work on the
business organization and contribute in its success. Employees are back bone of the
McDonald's because they produce quality products according to customers needs and
demand and provide them effectively to attain higher satisfaction by them. Cites
company is more popular in market by delivering better quality of products to its
customers (Bryman and Bell,2015). They include experiences and skilled employees in
their operational process so that they aid in achieving competitive advantage from its
rival and also capture large market share. The main purpose of human resources function
is to maintain all the records of hiring and recruiting peoples which assist in handling all
the performance issues in appropriate manner. This is important process of the business
to increase the overall productivity of the company as well as its employees so that attain
higher success in better way. It is more important for this department to deliver all
relevant information to its staff members to take better decision in order to achieve
desirable results and also improve their goodwill at marketplace. Finance function: Enough fund is more important for the every business organization to
run their activities inappropriate manner. It is important duty of finance department to
maintain their financial budget to measure the effectiveness of the company. McDonald's
required lot of funds to operate their activities because they execute at large level. So that
it is main duty of this department to provide enough funds in order to serve their services
at marketplace effectively (Drucker, 2017). They spend lots of financial funds at
promotional activities so that fund is more important. With out fund Cited firm can not
able to execute their process in appropriate manner and faced more problems. It is
important duty of manager of the company to allocate required fund to all the division to
improve overall performance of the company and also impact on overall success of the
firm. Marketing and sales function: It is very crucial for the firm because it define customers
needs and demands. It also make quality products to its customers to achieve better
satisfaction level by them. This function include various promotional tools and
techniques in their advertising activities to increase the awareness of the customers
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towards its product and its brand image. Marketing and sale function contribute in overall
all success of the firm by delivering top quality of production at affordable price. That
main purpose of this function to increase sale of the company (Dües, Tan and Lim, 2013).
They undertake various researches to evaluate as well as collect all the relevant
information to take better decision about its promotional activities. On the other hand sale
function of the company define the best efforts to maintain effective marketing function
which assist in increasing loyalty of the customers towards its products and company.
 Administration function: This function include various type of issues and conflicts
which arise in organizational activities. All these resolves by the top management and
provide better direction to its employee to face complex situation effective way. When
the company operate their process at large level so that they face many problems which
considered by this department to take best decision in order to find better solution in
order to achieve its goals and objectives in appropriate time period (Gardner and Laskin,
2011).
All these functions are more important for McDonald's to increase their market share and
take competitive place at marketplace. In this coordination is more important for achieving
desirable results in appropriate way.
Organizational structure of McDonald's: Structure is more important part of the
business which assist in arranging al the relationship with other in effective manner. It define
various information about the company. In organization various structure are define which aid in
increasing the overall effectiveness of the firm so that it is more important for the McDonald's to
use appropriate structures in order to get higher success at marketplace. In recent time company
follow divisional organizational structure to increase their efficiency and effectiveness in it
operational process (Kolk and Van Tulder, 2010). In this type of structure it arranged all the
function according to their geographical area. It is based on its employees performance,
formation of groups. One of the main advantage of this structure is to monitor and evaluation all
the functions on daily basis so that they achieve competitive advantage from its rival.
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(Source: Business & Management, 2013 )
Organizational structure of Burger king: In this structure of this company there are
various changes are available which is done by the cites firm in effective manner. It define the
composition in its activities in order to get its targets in various ways. In today's business
environment various changes are there so that it is main responsibility of the company to do
effective and necessary modifications in their process so that they can easily resolve all the
conflicts which arise in business activities at the time of performing (Kotler, 2011). They also
reform effective activities in their process which contribute in improving performance of the
company and also capture larger market share form its rival. Global centralisation is one of the
best benefit in this organizational structure.
TASK 3
P4 Positive and negative impact of macro environment
Macro environment is a condition which exist in out side of the business and that is not
controllable by the company. It include GDP rates, employment spending, fiscal policy and
many more elements which affect the overall performance of the business. All thee factors are
influence the decision making process of the firm (Kuckertz and Wagner, 2010). It also known
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Illustration 1: Business and Management

by external environment of the company that affect the whole process of strategy formulation. It
is more important for the company to evaluate the all factors of macro environment before
expanding their activities. For this McDonald's used PESTLE analysis to formulate their
business policies which are as follows:
Illustration 2: PESTLE analysis
(Source: Jim, 2017)
 Political factors: In this factors the government formed various rules and regulation to
maintain the economy and its value of currency in appropriate manner. So that it is more
important every organization follows all the rules in their operation process to reduce
conflicts. Some time these setted rules create unnecessary problems in company function.
This factors affect the performance of the McDonald's because it include taxes which
impact of in operational function of the business that define their products and service in
market with tax rate (Malhotra and Temponi, 2010). So that they charge some extra price
to its products from customers. Some time political factors influence the healthfulness of
the products.
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 Economic factors: This factors is related to the income level of the public which decide
their purchasing power in the marketplace. It also influence wages, inflation, deflation,
loan rate which affect the operational function of the McDonald's. In this if people have
high level of income so that they increase company sale and who have lower income will
decrease the sale as well as its profitability of the company. Social factors: This factors are affect the operation process of the company in negative
and positive way. It include life style of person, habits market trends and other social
elements all these affect the sales of the company (Mishra and Suar, 2010). Changing in
customers taste and market trends drive its sales up of low because now days customers
are health conscious so that it is more important for the McDonald's to add some items
which suits their taste. For this manager of the company undertake various researches to
evaluate the customers needs and wants after that provide quality products to them in
order to achieve customers loyalty towards it company as well as its services. Technological factors: It define various methods and approaches which is used by the
McDonald's in their operational process to produce quality products. Best and effective
technology assist in increasing brand image of the company by producing variety
products in marketplace with more efficiency. It also assist in attracting large number of
customers toward its products and service. McDonald's use various promotional activities
to promote their appropriate information about its outlets in order to invite more and
more services users. In this tools they use various media like internet, print media and
many more tools which aid in influencing customers needs. Environment factors: Various activities and operational process of the company affect
the environment in negative manner because some time its process and techniques
increase the pollution which harm for the nation and its environment. Under this
government authorities made some rules and regulation to save the environment. It is
more important for the company to use best raw material for introducing its products
according to customers taste and preferences (Oliveira and Martins,2011). These process
assist in reducing the chance of arising conflicts and also affect positively in the
environment. All these process should be used by the company in ethical manner to
maintain friendly environment.
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 Legal factors: It include various rules and regulation which set by the government
authority to protect employees and citizens rights. It is more important for the
McDonald's to follows all the policies to make stable legal process in their functions. All
the regulations are more effective and concern for the company (Sheng, Zhou and Li,
2011). In this minimum wages law is a best example of this factors which define for
employee safety in appropriate manner.
All these are the important tools of business environment which exist in economy and
these are affect the business decision making process so that its is essential for the company to
evaluate it effectively in order to implement effective strategies in appropriate manner. This tools
assist for manager of the company to measure the affect of these elements on business activities
so that they easily achieve desirable goals and objectives in better manner.
TASK 4
P5 Internal and external environment of organization
Internal and external environment affect the commercials activities of a company in
various ways. So that is is more important for the fir to identify all the factors in appropriate
manner. It is more effective for the manager to achieving all the important information about all
the strength and weakness which exist in the business. This analysis assist to the top authority
that define all the activities which is used by its competitors and also provide best guidance to
the organization how take competitive advantage in appropriate manner (Wheelen and Hunger,
2011). For this company use effective strategies to attract large number of customers. There are
some points which define SWOT analysis of McDonald's:
Strength Weaknesses
 Positive brand image is one of the
biggest strength.
 They attain high level of profitability in
every years.
 Sustainable business approaches and
policies.
 Market diversification is also a strength
(Scherer and Palazzo, 2011).
 High employee turnover is biggest
weakness of the company.
 Unhealthy food is also a weakness on
the menu.
 Having low differentiation.
 Negative publicity in market.
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Opportunities Threats
 Expand their outlets in international
and local market.
 Provide home delivery of meals.
 Differentiation of product range.
 Improve their CSR activities in their
business.
 Health concern customers.
 Competitors are also a threat of the
company (Osterwalder and Pigneur,
2010).
 Fluctuations in currency.
By doing this company identify their performance and take better decision in their process top
achieve setted targets in appropriate manner.
P6 Strength and weaknesses interrelate with external macro factors
Both strength and weaknesses are internal of the company but it affect by the external
environment. Political and legal environment affect the customers needs and wants. So that it is
more important for the company to define interrelation among them which assist in generating
more revenue (Schaltegger and Burritt, 2010). There are some points which define
interrelationship between strength and weakness and external environment of McDonald's are as
follows:
Strength: The biggest strength of McDonald's to produce unique and features products for its
customers which aid in getting competitive advantage from its competitors. But it affect by the
business environment because the government define some changes rules and regulations which
control the economy and operation. For this it in necessary for the company to follow all the
polices and rules I their operation activities.
In this technology is external factor which affect the business operation process because
they use effective technology in their production process to make and introduce new and features
products to its customers. For this is more important for the McDonald's to timely update their
technologies to invite more and more customers over there.
On the other hand macro factors also include life style, market trends and customers
preferences which affect the performance of the company. All these factors consider by the
company manager to reduce all the negative impact on their operational process effectively.
Weakness: All the process and characteristic of company which negative affect the business
performance is called weakness (Macro Environment, 2017). It is more important for the
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manager to reduce negative impact which aid in achieving long term advantage. All the
weakness of the firm increase the negative impact which also define uncertainty. Some time
external factors helps in reducing the negative impact so that there are some important points
which aid in understanding relationship among them:
Government rules and regulation increase the negative impact as well as complex
situation to the company in the nation.
Economic condition of the country is also affect the business so that it should be stable so
that company increase its sales. In this change in the inflation and deflation rate largely affect the
business performance.
So that it is more important for the company to maintain its strength to run their activities
in appropriate manner (business environment, 2017). As per this it largely affect for the external
environment so that it is essential for the company to evaluate as well as analysis
interrelationship among strength and external environment.
CONCLUSION
From the above mentioned report, it can be concluded that business environment affect
the overall activities of the firm in positive and negative way so that it is more important for the
manager of the company to evaluate effectively before implementing its activities. It is more
important for the company to identify these factors and also measure the impact on its process.
Internal and external factors also analysis by the manager for evaluate strength and weakness of
the company. On the other hand organizational structure of McDonald's is also increase the
flexibility in operational function. So that coordination should be maintain in all the activities so
that manager of the company also maintain their product quality and also give loyalty and
satisfaction to its customers. Further study is based on external factors which is related to the
strength and weakness of the company so that it helps in taking appropriate decision about the
company and its products.
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REFERENCES
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