Business and Business Environment INTRODUCTION 1 Task 11 P1 Different Types of Organisations

Size and scope of different types of organisations3 M1 Size, scope and structure of different organization link to business objectives 5 D1 Complexity of different business 5 TASK 25 P3 Relationship of different organisational function and their link to organisational objectives and structure 5 M2 Advantages and disadvantages of interrelationship 8 TASK 38 P4 Impacts of macro environment upon business8 M3 Application of PESTLE 10 TASK 410 P5 Internal and external analysis 10 P6 Interrelation of strength and weaknesses

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Different type and purpose.....................................................................................................1
P2. Size and scope of different types of organisations................................................................3
M1 Size, scope and structure of different organization link to business objectives....................5
D1 Complexity of different business...........................................................................................5
TASK 2............................................................................................................................................5
P3 Relationship of different organisational function and their link to organisational objectives
and structure.................................................................................................................................5
M2 Advantages and disadvantages of interrelationship..............................................................8
TASK 3............................................................................................................................................8
P4 Impacts of macro environment upon business........................................................................8
M3 Application of PESTLE.......................................................................................................10
TASK 4..........................................................................................................................................10
P5 Internal and external analysis...............................................................................................10
P6 Interrelation of strength and weaknesses with external environmental factors....................11
M4 Application of SWOT.........................................................................................................12
D2 Macro and micro factors impacts on business.....................................................................12
CONCLUSION..............................................................................................................................12
REFERENCE.................................................................................................................................14

INTRODUCTION
Business environment is related with internal and external factors such as customers
needs and expectation, supply and demand, employees, management, owners, activities by
government, social trends, market trends, technology etc. Internal factor can be control by
organization whereas external factor cannot be control by entity (Linder and Williander, 2017).
This report is about Merrill Lynch investment company that is leading firm in United Kingdom.
Such organization provides different types of services such as investment banking, commercial
services, financial products etc. . This report is about different types and purpose of organization,
size and scope, relationship between different organizational functions, macro factors and
internal and external analysis of specific organization.
Task 1
P1 Different type and purpose
Organization involves number of units that are developed by business concern to manage
business activities that helps to meet with objectives. It consist of different types of business that
is run by a person for maximizing profits. This is a structure that mainly focus on customer needs
and wants and then provides that kind of products for satisfying customers. Organization can be
classified in to different sectors such as sole proprietor, limited, partnership, public and voluntary
sectors. All sectors and its purpose are defined as:
Sole trader: An individual or entrepreneur who run its business personally is known as
sole trader. In this sector all activities are performed by a single person who is responsible for
any profit and losses. For instance, Oaks Auditors and Tax Advisors are sole trader who has full
control over decision making and profits of company. In this types of organization, no other
person can interfere within decision of company.
 Purpose: The main purpose of sole trader is to expand its business and make
more profits by taking risk. So selected company make decision in order to make
profits.
 Legal structure: The legal structure of Sole trader considers single owner,
unlimited liability and separate legal entity that run their business.
 Oaks Auditors and Tax Advisors is following unlimited liability legal structure.
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Partnership: It is an agreement between two or more people who share profits and losses
in deciding ratio. In such type of industry every partner is liable for any debts and losses which
arises within company while running a business. For instance, John Lewis is a partnership firm
that was established in UK. It is dealing in different types of products and services and make
profits for sharing in partners.
 Purpose: Its main purpose is to run their business and maximize profits by
sharing information. Another purpose is to be largest company in world by
providing more profits (Dyllick and Muff, 2016).
 Legal structure: The legal structure of partnership are consider as limited
liability up to share, unlimited liability, two or more person etc.
 John Lewis is following unlimited liability legal structure in which they make
profits by running their business.
Private: This means an organization who perform operations within private sector and
not operated by public bodies is known as private entity. It performs business function to
maintain profits and achieve more goals. For instance, Sainsbury is private organization that
offers different types of products and services in order to attracts customers and making more
profits.
 Purpose: The purpose of such sector is to become world's best company and
maximize profit by selling number of products and services.
 Legal structure: The legal structure of private sector involves private limited
company, corporate and unincorporated company structure.
 Sainsbury is following corporate structure that helps to provide different products
to all customers and make more profits.
Public: A company whose share are freely sold publicly is consider as public company.
In other words, a company which is controlled by government and follows rules and regulation
made by government is consider as public company. For instance, NICE (National Institute for
Health and Care Excellence) is a public organization in UK. It provides health services by
providing new and existing medicines, treatment, clinical practice and guidance for social care
services.
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 Purpose: The main purpose is to provide satisfaction to its customers by proving
better products and services. The another purpose is to become largest company
by acquiring highest share in market.
 Legal structure: The legal structure of public sector consider local government,
state government and central government that helps to run a business publicly.
 NICE is following legal structure based on Central government in which it
provides good health to customers without focusing on profits.
Voluntary: Nongovernmental company that run by group of people who want to work
for social welfare and deliver good services to poor people. For instance, Oxfam is a British
Heart foundation that provides social services to poor people and helps to improve their living
standard (Vij and Bedi, 2016).
 Purpose: The purpose of this sector to reduce the poverty from country and increase the
living standard of them.
 Legal structure: It consider unincorporated associations, trust and limited liability legal
structure.
 Oxfam is following trust legal structure that helps to provide supports to poor people and
improve their living standard.
P2. Size and scope of different types of organisations
There are different types of organization who run their business and make profits. Its
main objects are to provide maximum satisfaction to customers and make profits. The size and
scope of different organization is follows as:
Public ( NICE):
Size: National institute for health and excellence is wider in size that provides good
health to people. It has more than 6000 employees in more than 150 countries who are working
together for providing satisfaction to customers (About NICE's size and scope, 2019).
Scope: The scope of NICE is to reach globally by providing services. As it works for
non-profit so it get support from government.
Vision and mission: To improve healthcare quality by changing its process and also
improve people's living chances by providing good health.
Objectives: The main objectives are to provide good health to people by recognizing
innovation and create more values.
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Private (Sainsbury)
Size: This is large organization that have 186,900 employees who provides different
products which attracts customers and mainly focus on profits.
Scope: The scope of such company is to be largest company by making profits. Its main
target is to beat the competition and maintain highest profits (Stacey, 2016).
Vision and mission: To offer great quality of services to its customers and also provide
good financial return to stakeholders.
Objectives: To exceed customer's expectations for healthy, tasty food, grocery items,
safety and fresh things that make their life easier.
Voluntary (Oxfam):
Size: It has diverse size in which more people contribute for social welfare. It has 650
Oxfam speciality shops and 23000 volunteers worldwide.
Scope: Oxfam renders humanities services in more than 14 countries and expand its
scope more by adding new location in order to serve services to potential customers.
Vision and mission: The vision and mission of Oxfam is world should be without
poverty and people should be treated equally.
Objectives: To eliminate the discrimination among rich and poor people and provide
safeguard global food supplies.
Partnership (John Lewis)
Size: This is a large size retail firm that has 83000 employees who are working in
departmental store. Moreover, it makes plans to expand its business in more area.
Scope: Its scope is to provide variety of products and services to all customers at one
single roof or departmental store.
Vision and mission: To inspire and nurture the human by providing the good products
and services.
Objectives: To provide satisfaction to its employees in order to make successful business
and make profitable organization.
Sole trader: (Oaks Auditors and Tax Advisors )
Size: Oaks Auditors and Tax Advisors is a small size charted accountancy firm running
business by single owner with small amount of capital.
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Scope: Oaks Auditors and Tax Advisor's scope is providing reliable accountancy services
and also suggest to small company to maintain bookkeeping and transactions.
M1 Size, scope and structure of different organization link to business objectives
The size and scope of business organization is linked directly with business objectives as
it affects the profitability of different organization. Along with this, structure is also linked with
objectives that helps to communicates problems and provide solutions. For instance, Sainsbury is
super retail market who is large in size and has wider scope that helps to achieve goals by
making high profits. It follows network structure in which employer and employees
communicate with each other and solve them in order to achieve objectives. The size and scope
of sole trader is small that does not require to arrange high amount for running its business and
can make single business decision in order to attain objectives. Oxfam that is a voluntary
company who works for poor people and make efforts to achieve objectives (Appelbaum, and
et.al., 2017).
D1 Complexity of different business
Sainsbury has adopted network organizational structure that is interrelated with functions
such as manager can share information with all employees and get solution of problems. HRM
department of Sainsbury understand needs of company and hire candidates for marketing
department that helps to increase sale by attracting people. Moreover, finance department give
funds to marketing manager to perform its functions effectively. Therefore, structure and
functions of business organization are interrelated.
TASK 2
P3 Relationship of different organisational function and their link to organisational objectives
and structure
Organization perform different types of function in different area that helps to make
profits after attaining goals or objectives. The main object of all organization is to focus in
customer demand and supply better quality of products in order to achieve higher profits. The
different functions are finance, human resource, marketing, research, production etc. Sainsbury is
a super retailer company that sets objectives and utilises structure in effective manner which are
interrelated with different organizational functions (Organizational chart, 2019). The description
of different organizational structure is as given:
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Illustration 1: Organization chart, 2019
Source: Organization chart
Matrix structure: In this structure, employees maintains relationship as a grid rather
than traditional hierarchy. According to this, people with same skills are pooled for common
assignment and report to one manager.
Horizontal structure: This is mostly adopted by small organizations and start-up
company for their early stage. This structure helps to eliminate middle management by making
quick and independent business decision.
Network structure: This structure helps visualize both external and internal relationship
among top level management and managers in order to make profits. It is not only decentralised
structure but also it is more flexible than other structures in which employer communicates will
all people and share information.
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Sainsbury is following Network structure that helps to share information and make
business decision independently. The manager and employees of such organization can
communicate openly and control operations smoothly and maximize profits.
The interrelation is defined as:
HRM with marketing: This means HRM department is interrelated with marketing
department it hires skilled and experience employees that helps to convince customers.
Sainsbury's management understand needs of marketing department and recruit highly skilled
person who are able to convince customers. It linked with network structure and objectives such
as HRM manager communicate with all employees and get what are their needs that helps to fill
their objectives. It helps to perform operations and marketing functions effectively (Cepel and
et.al., 2018).
Marketing with finance: The marketing department of all organization are interlink with
finance such as the marketing manager make plans and get funds from finance department to
implement such plans. It affects network structure and objectives which is adopted by Sainsbury
that helps to understand the needs of marketing department and funds are provided by finance
department in order to perform operations effectively.
Research with production: Both function is interrelated with each other such as the
research manager of all organization analysis market and knows what people wants and share
with production department in order to produce that kind of products. The research manager of
Sainsbury visits the market and get people's needs and also try to bring changes within
organization. They communicate with production or distribution department to provide such kind
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of products. It is connected with network structure such as managers discuss with production
manager and make available that kind of products and services. Moreover it interlink with
organizational objectives that helps to achieve goals (Stott, Stone and Fae, 2016).
M2 Advantages and disadvantages of interrelationship
Organisational structure is important for company as it helps to make decision by sharing
the information and thoughts. It helps to maintain the coordination and communication among all
activities of business. Different organizational structure helps to know how to motivates
employees and get work from them for completing task. As result it can increase productivity
and profitability. For instance, Sainsbury is following network structure that helps to reduce the
difference between people for their minimum status and solve employee's problems. Moreover it
helps to perform different task effectively in order to achieve goals. The disadvantages is there
may be risk of confidential information which can be share by employees to its competitors. The
decision making process may be long due to involvement of all employees.
TASK 3
P4 Impacts of macro environment upon business
A macro environment considers whole economy and external factors which can impacts
business organization positively or negatively. It is important for all companies to focus on
external factors for the purpose of running a business effectively. The PESTLE analysis of
Sainsbury has stated as:
Political Factors: The government debts and policies are very high in UK due to this its
performance are greatly influenced. Changes in rules and regulation may be challenges for such
organization. Its impacts are given as:
Positive Impact: It operate its business smoothly by facing changes and also follows
new rules which is developed by government (PESTLE analysis of Sainsbury, 2019).
Negative Impact: It changes customer attitudes, preference and business conditions
experience greatly pressure. Due to this Sainsbury faces more competition situation.
Economical Factors: The UK's economy is slowdown that affects demand, cost, prices,
and profitability of Sainsbury's business. Due to slow economy it creates employment situation
and inflation in food prices affects business.
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Positive Impact: Stability in inflation rate helps to generate employment within country,
resulting growth of organization as well as country. Moreover, company can make profits by
selling number of products and services.
Negative Impact: The production and profit margin of Sainsbury may decrease due to
changes in inflation rate and increase in unemployment rate.
Social Factors: In present time, people tend to prefer one stop shopping that means to
purchase products under one roof. Sainsbury focuses on such needs and introduce non food
products by adopting strategy that helps to attracts more customers.
Positive Impact: Sainsbury make more profits by providing lifestyle, organic food and
non food products in one store that save customer time and cost. It provides products at retail
prices in order to influence people (Neelankavil, 2015).
Negative Impact: The number of customer can be decrease in case of not providing
products and services under one roof, because people may start to give preference to other
retailer company.
Technological Factors: By adopting new technical advancement organization can
perform well within industry and can face competitions. It has positive impacts on business
operations that helps to expand business of Sainsbury.
Positive Impact: In Sainsbury, manager update technology that give potential growth in
online and web based operations in order to make smooth business. Therefore, its online food
delivery is increasing continuously.
Negative Impact: It may reduce profitability of Sainsbury because to use new
technology it needed to hire highly skilled and experienced employee whose demand is high
salary. So it may be costly for organization that may reduce profit margin.
Legal Factors: Sainsbury is retailer super market that follows government legislation
such as minimum wages act, equality law and new tax rate which impacts directly on
organization's performance. Its impacts are shown as:
Positive Impact: Sainsbury following compliance with law and legislations that helps to
avoid conflicts among employees and employer and also create friendly relations between them.
Negative Impact: In Sainsbury, management follows laws and legislation due to this it
may bear lot of funds problems on unproductive activities, as result, low productivity.
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Environmental Factors: It has great pressure on company to as social responsible in
order to keep environment safe. The Sainsbury focus on such factor and provide organic food
and non food item. It also follows environment protection law that helps to keep clean
environment by reducing wastages.
Positive Impact: Sainsbury is taking initiative in all area as it follows reduce, reuse and
recycle approach that helps to influence customers and increase customer loyalty. Moreover,
availability of natural helps Sainsbury to conduct business activities without any difficulty.
Negative Impact: It may impacts negatively by changing in season and climate Seasonal
that reduces sale of products.
M3 Application of PESTLE
Sainsbury is supermarket that provides variety of products to its customers. It applies
PESTLE on its organization that helps to make profits effectively by expanding business in
different areas. As government of UK is stable that helps to expand business by following
existing rules. By bringing changes in people's fashion and use of new technology it can
influence customer in order to make profits. By applying employment law and environment law
it create good image of organization and make profits.
TASK 4
P5 Internal and external analysis
Internal analysis: This is a framework that is used by company to analysis the strength
and weakness of company in order to expand the business. All company analysis micro
environment that explores organization's competency, competitive viability in market place and
competency. The internal analysis of Sainsbury is assessed below in a matrix:
SWOT analysis of Sainsbury:
Strength Weakness
 Diversified business with high market
share that helps to increase
profitability.
 Differentiate food items and non food
items with better quality.
 Good place to work with employees as
 Many competitors in market like Asda,
Tesco, Amazon etc that ca create low
productivity problem.
 It is single operating market.
 Low margin food business due to
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they have high skills and talent to
attracts employees.
 Balance sheet shows high profitability.
competitors.
 It has an issue with supply chain
management and inventor management
that affects its products negatively.
Opportunity Threats
 Online groceries and easy convince
stores channel of future.
 Global market expansion with the help
of online collaborations.
 Growth and diversification of such
organization.
 Technology analytics that helps in
customer influence.
 Impacts on prices due to Brexit.
 High level of competition in grocery
and retailing products.
 Cyber attacks that create significant
losses in online business strateg (SWOT
analysis of Sainsbury, 2019).
P6 Interrelation of strength and weaknesses with external environmental factors
Strength: Sainsbury is following stable political system, government policies under the
political factor that helps to run a business in UK and other country by increasing efficiency.
Economical factor such as decrease in interest rate create a good opportunity for Sainsbury to
take loan for purchasing raw material at less interest rate and provide products at low prices than
competitors which increase number of customers. Social factor such as changing in demand and
fashion create interest of people that is an opportunity for Sainsbury to sale its products in large
number by focusing on new demand and trends (Fleisher and Bensoussan, 2015). By using new
technology like artificial intelligence, Sainsbury improve organization image and also can create
brand loyalty in market. In legal factor, Sainsbury follows employment law that helps to
influence employees resulting they retain for long term and give their efforts to maximize
productivity. At the time of manufacturing and distributing production it follows environment
protection law in which it reuses wastage material and also uses hygiene products. It helps to
keep safe environment. Moreover, it can reduce wastages of products in order to protect
environment (Laursen and Thorlund, 2016).
Weakness: It is interrelated with PESTLE that may be reason of low productivity. If
UK's government changes its rules and regulation then it may be difficult for Sainsbury to follow
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new rules. In economical factor, increase in interest rate can be a weakness for Sainsbury, in
which it has to pay high amount as interest. Not focusing on social changes like food item,
grocery ect. Switch the mood of customers towards other organization that reduces Sainsbury's
profits. If Sainsbury not focus on technological factor that means improvement in production and
distribution with the help of online system, then it can loss its new as well as regular customers.
Because in modern time, every person believes in new technology and wants to adopt new
technology (Vom Brocke, Petry and Gonser, 2016). If Sainsbury does not follow equal wages
and health safety act then it may be reason of conflict among employer and employees. Resulting
they may leave organization that can reduce its productivity. The selected company does not
follows environment protection law and not focus quality of products due to wastages then
organization can face loss situation. Moreover, can be out from UK market due to not following
environment protection legislations (Staniewski, 2016).
M4 Application of SWOT
SWOT analysis helps state strength and weakness of company in which company can
make correct business decision. It influence decision such as Sainsbury's manager prepare a plan
to expand its business by introducing new products and services with the help of new
technology. In this situation, manager analysis the organization that helps to make decision
whether it will be good or not. So it can improve decision according. Hence, SWOT analysis is
helpful to make business decision. (Buxel, Esenduran and Griffin, 2015).
D2 Macro and micro factors impacts on business
Macro and macro factor are helpful for business industry as it helps to make business
decision in order to achieve objectives. Sainsbury apply macro and micro factor that states how it
impacts on operation and other activities. Therefore, manager can make business decision easily
after evaluating such factors. PESTLE analysis is used to focus on external factor that helps to
define how it can be overcome. And SWOT analysis states strength and weakness to Sainsbury
and also create opportunity in order achieve business objectives after making business decision
(Armeanu, Istudor and Lache, 2015).
CONCLUSION
From the above report it can be concluded that company should focus on business
environment that helps to grow the business activities. Different types of sector like public, sole
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trader, private, voluntary and partnership perform their business activities and controls
organization's function by following specific structure. PESTLE analysis is used to analysis the
which factor can impacts business. SWOT states strength and weakness of industry and create
business opportunities.
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