Impact of Macro Environment on Business Operations

This article discusses the impact of macro environment on business operations, including positive and negative effects. It explores the relationship between different organizational functions and their link to organizational objectives and structure. It also analyzes the size and scope of different types of organizations and describes the types and purposes of organizations. The article concludes with an analysis of the positive and negative impacts of the macro environment on business operations, supported by specific examples.

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
Main Body.......................................................................................................................................3
State various types and purpose of organisations: public, private, voluntary sectors and legal
structures.....................................................................................................................................3
Describe the size and scope of a range of different types of organisation .................................5
Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................7
Analyse the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................9
Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.........................................................................................................................10
Explain how strengths and weaknesses interrelate with external macro factors.......................11
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment plays an important in the performance of the business it
include external and internal factors and forces like competitors, customers,employees,
government, legal and technological, suppliers, political etc. business environment
helps in analysing the opportunities which helps in increasing the performance of the
organisation. To achieve the goals of the organisation various decision while
considering the business environment so that effective planning can take place in the
organisation. If the organisation will not perform according to the business environment
then it can affect the productivity of the business in the market. Organisation has to
innovate its services according the needs and requirement of the customers so that
profit of the business can be increased in the market. Business environment helps in
analysing the threat which can helps the business to perform effectively in the market. If
the performance of the business will be improved then it will helps the organisation to
gain competitive advantage in the market.
Tesco is the biggest supermarket chain in UK it was founded in 1919 by Jack Cohen its
headquarter in Welwyn garden City,UK . It provides various services to the business
which helps in increasing the profit of the business in the market. Tesco is in huge
demand by the customers in UK due to the services which its provides. It also provides
online services to the customers which helps in increasing the overall revenue of the
business. Tesco has variety of products such as clothing, furniture, toys, software,
petrol etc. which helps in increasing the revenue of the business in the market. In this
report it will be analysed how business environment affects the performance of the
organisation (Shtal, 2018).
Main Body
State various types and purpose of organisations: public, private, voluntary sectors and
legal structures.
Organisational structure is the concept which guide how various activities should
be performed to achieve the goals of the business. It also helps in determining the flow
of information between different levels of the company activities of the business can be
performed effectively. Organisations have different structure depending on which

managers and owners of the business have to take decisions. Below are the various
types of organisational structure:
 Public Organisation: these businesses are managed and managed by the
government these types of organisation has to perform its functions according to
the rules and regulation given the government. Main aim of these companies is
to provide best services to the society so that there needs and requirement can
be fulfilled effectively. Public organisations involves shelter, petrol, water
business etc. HSBC it is the largest bank of UK which comes under the public
organisation because it provides the financial services to the business (Frank,
2019).
 Private organisation: These organisation are run and owned by the individual
with the aim of increasing profit in the market. The main motive of theses
organisation is to increase its market share in the economy by developing the
services of the business which will also helps in increasing the profit of the
organisation. Legal structure of these organisation are as follows:
 sole traders: These are the people who run the organisation without any
partnership. The owner of the business use their own capital to carry out their
functions. They take their own decision without consulting with anyone. Sole
traders have to bear all the risk which is involved in the business so that profit of
the business cab be increased.
Partnership: In partnership profit, loss and all the risk of the organisation is
shared among the partners as mentioned in the contract BMW and Louis Vuitton are the
best examples of partnership firms.
 Private limited: these companies have limited number of shareholders to carry
out the function of the business they have limited numbers of shares which
cannot be sold to earn profit. These organisation does not involve public in
making their decision. Examples of private limited company are JCB and
walmart.
 Public limited: These are organisation which operates in the market with the aim
of developing and providing best services to the customers these organisation

can purchase and sell their shares to increase the profit of the business. In these
organisation various individual are involved while making the decision.
 Voluntary organisations: These organisation performs their activities with the
motive of providing social welfare to the economy. These organisation generate
their income and capital from various sources like banks, money lenders etc.
below is the legal structure which is followed by the organisation.
Trust: it is the association which is made up of contractual bodies, shareholders etc. it
involves various group of individuals to manage the association (Niemimaa, 2019).
Every organisation has to operate its business as per the legal structure so that
performance of the business cannot get affected. Various organisation use different
types of legal structure which helps in the growth of the business in the market so that
performance of the business cannot get affected. Legal structure helps in analysing the
legal responsibilities of the business growth of the business cannot get affected. There
are four types of legal structure: partnership, sole proprietorship, corporation, limited
liability. Every structure has different liability and income, taxes which will be implied in
the business.
Describe the size and scope of a range of different types of organisation
The organisation is having many employees and they are helping them in
improving performance. The employees of the organisation are helping them in
expanding the business. The type of organisation will help the organisation in giving the
products. The organisation are private limited, public limited and voluntary
organisations.
Private limited organisations- The private organisations are owned and operated
by the owners and they are working for achieving the goals. They have the employees
who are helping the organisation in having the factors that will improve the performance.
Tesco is the private organisation of UK and they are having the products like food,
cosmetics, consumer good and households.
Mission- The mission of Tesco is to become one of the largess supermarket chain in UK
and giving the serviettes to the customers.

Vision- The vision of Tesco is to have the customers around the world and they are
focusing on improving performance.
Objective- The Tesco is having the objectives that is focusing on giving the products to
the customers at the affordable prices.
Size- Tesco is having 500000 employees and they are having 3000 stores across the
world.
Structure- The organisation is having the hierarchy when the employees are connected
with the organisations and they will help them in giving the products.
The public limited organisation- The public limited organisation are having the
share of customers in the organisation. They are involved in the decisions making of the
organisation and they are helping the customers. For example, HSBC is the public
limited organisation and is the largest financial services of UK.
 Mission- The mission of the HSBC is to give the financial services to the
customers and they are personal loans and debit cards (Madonsela, 2017).
 Vision- The vision of the HSBC is to help the customers by giving them financial
services.
 Size- The organisation is one of the largest financial services of the UK by having
3500 companies in 65 countries.
 Structure- HSBC is the secured organisation where the decisions are taken by
the employees who are helping them in improving performance.
Voluntary organisation- The voluntary organisation are the organisations that are
helping the people of the countries. They are working for helping the people who are
affected by the organisation. For example, NHS is the voluntary organisation of UK.
 Mission- The NHS is the organisation who are giving the health services to the
people who want the affordable healthcare.
 Vision- The vision of NHS is to give the healthcare services to the customers that
will help them in improving the performance.

 Size- The NHS is having 300 employees and volunteers that are helping the
people in getting the healthcare.
 Structure- The organisation is having the employees that will help them in
improving the performance (Pucihar, 2019).
The organisation is having the employees who are helping them in achieving
success. The employees will help the customers in giving the products that are
important for the organisation.
Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In order to increase the profit of the business analysing the functions of the
company is very important so that resources of the business can be utilised effectively.
In Tesco there are various department which are connected with each other.
 Finance and marketing department: Finance department of the organisation
helps in providing funds to the marketing department so that activities of the
marketing department can be performed effectively. It helps in achieving the
goals of the business without funds company cannot perform its activities in the
business. Marketing department helps in promoting the products and services of
the business so that demand of the company can be increased in the market.
There are various tools which are used by the marketing department to promote
the services of the business like advertising, events, social media, direct selling
etc. for this marketing department requires funds to perform this activities so that
goals of the business can be achieved effectively.
 HR and marketing department: Human resource department helps in increasing
the productivity of the business so that objectives of the organisation can be
achieved effectively. Hr helps in managing the employees in the organisation by
making the rules and regulation for the employees so that proper working
environment can be provided to them can growth of the business can also
increase. Human resource department provides training and development
programmes to the employees so that proper guidance can be provided to the
employees which helps in enhancing the performance of the employees. These

functions of Hr departments helps marketing department to promote the products
and services of the business effectively because if proper training will be
provided to the employees it will help in developing the confidence of the
employees which will helps in promoting the products of the business to the
customers effectively by providing all the information related to the products and
services which organisation is providing (Seetharaman, 2020).
 HR and finance department: Human resource department and finance
department plays an important role in the growth in the business. Finance
departments helps in providing funds to the business to perform the activities of
the business where as Human resource department helps in recruiting the best
employee in the organisation and also helps in providing proper training to them
they can perform effectively in the business. Human resource department uses
various sources to recruit the best employees in the business. Finance
department helps in providing funds to the human resource department to
perform its activities which will perform helps in increasing the profit of the
business in the market.
 Sales and IT department: IT department helps in maintaining the services of the
computer system which is used by the organisation because every organisation
performs its activities with the helps computer system due to maintenance of the
system is very important. Sales department helps in increasing the profit of the
business by selling the product and services of the business to the customers.
Customers uses various online payment methods for purchasing the product of
the company for this software of the computer system should be updated so that
customers cannot face any issue while purchasing the product of the company.
IT department helps sales department by updating the software in the computer
system so that sales of the company can be done effectively.
These are the department of Tesco which is interrelated with each other which helps in
achieving the goals of the business in the market these department helps in increasing
the productivity of the business if the various department of the business are working in
a team then it will helps the business to achieve its objectives in short period of time.

Analyse the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
Macro environment involves inflation rate, spending, employment rate,fiscal and
monetary policy it is basically a condition which exist in the whole economy it is the set
of external forces which are not under the control of the business identifying the external
environment is very important it helps in analysing the opportunities and threats of the
company which helps in enhancing the performance of the business in the market. With
the helps of pestle analysis company can easily analyse the external environment and
perform its functions effectively.
PESTLE ANALYSIS
Pestle analysis helps in analysis the macro environment so that threats and
opportunities can be identified for the business. It is slightly time consuming because
collects all the data and information related to the market which helps in improving the
services of the business in the market. Pestle analysis helps Tesco in analysing the
macro environment so that business can achieve its goals effectively (Yang, 2017).
 Political factors: Due to Brexit it become difficult for the supermarket businesses
to import the products of the business from the other countries across the
geographical region. With the increase in the rate of foreign products it become
important for the organisation to convince the customers for the buying the profit
so that sell of the business can be increased and profit can be earned. This
political factors can provide negative impact on the growth of the company.
 Economical factors: As prices of the fuels are rising day by the day due to which
cost of production will also get increased which can affect the revenue of the
business. High fuel prices will also increase cost transportation in the economy
which can affect the profit of the company. Rise in the income will change the
demand of the customers because of which company has to develop its products
and services accordingly.
 Social factors: due to Covid-19 people are more into the healthy food items which
can affect the demand of junk and unhealthy food in the market. Company has to
innovate its services as per the needs and requirement of the business so that
growth of the business can the increased in the increased in the market most of

the supermarket provide junk food items which can affect the demand of the
company in the market.
 Technological factors: It plays an important role in maximising the profit of the
business in the market use of new technology helps in improving the services of
the business in the market. Artificial intelligence principle helps the company in
innovating its services so that best quality of product and services can be
provided to the customers (Aithal, 2017).
 Environmental factors: use if carbon footprint and plastic can affect the
environment sue to which growth of the economy can also get affected. It is
important for the organisation to use eco-friendly products so that economy
cannot get damaged and growth of the business can also take place.
 Legal factors: To perform the functions of the business it is important for the
organisation maintain legal aspects in the organisation with the help of contracts
and legal agreements which helps in increasing the profit of the business in the
market. It also helps in making healthier relationship with the insiders and
outsiders which increases the goodwill of the business in the market.
Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses.
Internal and external analyses of the business can be done by the helps of
SWOT analysis it stands for Strength, weakness, opportunities and threats. This is done
by the management of the organisation so that proper decision-making can take place.
With the helps of SWOT analysis company can easily perform its activities which will
help in increasing the profit of the business in the market.
 Strength: The internal abilities of Tesco is the biggest strength of the business
like financial turnover Tesco has recovered the losses which was occurred in the
year 2015 by providing best services to the customers In 2020 Tesco has earned
the operating profit of £1.9 billion which is huge achievement for the company.
Tesco has covered the large number of market share in the economy which
increased the profit of the company in the market. Tesco provides the innovative
services to the customers due to which its demand in the market is high as
compared to other businesses.

 Weakness: every organisation has some weakness in the organisation which
affects the performance of the business in the market. Due to huge demand of
customers quality of the product which Tesco is providing is got affected due to
which it has received various complaints from the customers. As the demand of
the customers has been increased in the market Tesco has faced the shortage of
the products due to which profit of the business can also affected in the market to
avoid this situation Tesco has assured the customers regarding the stock of the
products so that demand of the company can be maintained.
 Opportunities: it provides various growth opportunities to the organisation which
helps in increasing the profit of the business in the market. Opportunities helps in
enhances the productivity of the business which increases the profit of the
business in the market. Due to rise in the unemployment rate supermarket is
chain which provides employment to the economy due to which profit of the
business also gets increased. As technologies are getting advanced it helps in
developing the innovating the services of the business which helps in providing
best services to the customers. Growth in the rural areas also provide
opportunities to the business to provide services in that areas because in rural
areas competition will also low it will helps in increasing the profit of the business
in the market (Bedi, 2019).
 Threats: these are the external factors which can affect the performance of the
business in the market. Tesco biggest competitor is sainsbury because it
provides variety of products to the customers which helps in increasing the profit
of the business in the market uses of new and innovative technologies by the
competitors can become a threat for Tesco.
SWOT analysis helps Tesco in analysing the factors which can affect the
business in positive or negative ways to increase the profit of the business Tesco has to
analyse opportunities which can helps the business in increasing its profit in the market.
Explain how strengths and weaknesses interrelate with external macro factors.
Strength and weaknesses of the organisation are related with the external factors
which can affect the performance of the business in the market. External environment
can affect the decision making process of the business with the helps of pestle and swot

analyses company can easily overcome from the challenges and enhance its
performance in the market. Strength is the internal ability of the organisation and
weakness is basically the failure of the business in the utilisation of the resources.
Analysing the external and internal factors helps in the business in taking best decision
which will further helps in increasing the profit of the company in the market. Macro
environment affect6s the performance of the business and these environment is not in
control of the organisation because of which analysing the macro environment is very
important (Hock-Doepgen, 2020).
BASIS Strength Weakness
Political factors
Analysing the political factors
helps in providing all the data
related to the trends, policies
and regulation which will helps
the business to perform
effectively in the market by
planning the best strategies.
Various policies which is
made by the government
can affect the performance
of the business in the
market.
Social factors Healthy relation with the
society helps in analysing the
needs and requirement of the
business due to which profit of
the business also gets increased.
Change in the taste of the
customers can affect the
profit of the business in
the market.
Economical factors
Due to inflation in the economy
helps in the growth to the
business by providing various
information which helps in
increasing the profit of the
business.
Different changes in the
economy can affect the
performance of the
business due to which
company has to analyse
the economic factors so
that growth of the business
cannot get affected.

Technological With the helps of technology
company can innovate its
services in the market by
providing best quality of
products and services to the
customers (Aithal, 2017).
Use of technology involve
huge amount of
investment which can
affect the financial
stability of the business.
CONCLUSION
From the above report it has been observed that business environment helps in
increasing the productivity of the business by analysing there strength and weakness
which will helps in improving the services of the business. Business environment
provides various opportunities will be helps in increasing the productivity of the business
in the market. In this report swot and pestle analysis has been done to analyse the
impact of business environment with the helps of these analysis company can analyses
the areas and perform its services accordingly so that growth of the business cannot get
affected. There are various types of organisation structure like private, voluntary and
public companies these organisation have separate legal structure which helps them to
perform effectively in the market. These organisation have their own objectives on the
basis of which they perform their activities. The aim and objectives of the business
helps in planning the strategies of the business which further helps in growth of the
business.

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