Business and the Business Environment - Assignment Solved

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain different types and purpose of organisation; public, private and voluntary sectors
and legal structures.................................................................................................................3
P2 Explain the size and scope of a range of different types of organisation..........................5
TASK 2............................................................................................................................................7
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure .................................................................................7
TASK 3............................................................................................................................................9
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples...........................................................................9
TASK 4..........................................................................................................................................11
P5 Conduct internal and external analysis of specific organisations in order to identify
strength and weakness .........................................................................................................11
P6 Explain how strength and weakness interrelate with external macro factors.................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment refers to the combination of internal and external factors such as
customers, suppliers, employees and many more (Begg, Van and Levy, 2018). In other words, it
is define as marketing term in which factors directly or indirectly affect the functioning of the
organisation. This report is based on Merrill Lynch which is investment firm in financial services
industry. In addition to this, this company was founded by Charles E. Merrill in 1914. Its
headquarter is located in New York, United States. This company provide their service related to
investment management across the globe. Along with this, the respective company deals with the
wealth management of Bank of America. This report is going to explain about different types of
organisation sectors and their purpose as well as objectives. Along with this, it also explains
about their size and scope. In addition to this, with the help of PESTEL analyses the respective
company is able to analyse their external environment. It also explains the interrelation of
strength and weakness with external macro environment.
TASK 1
P1 Explain different types and purpose of organisation; public, private and voluntary sectors and
legal structures
Organisation is defined as place where different individuals work for attaining goals and
objectives of the company. Every company has a motive to make strategy in order to achieve it's
mission goals. It refers to a place where people are working together to run the activities and
operations. The purpose of running an organisation is to earn profit and enhancing productivity.
In UK, there are there are three types of organisation private, public and tertiary and they operate
their business in different sector. These are explained as follows – UK has three different types
of sectors including
Primary – The primary sector is classified as extractive industry and produce or extract raw
materials.
Secondary – the secondary sector of economy includes manufacturing business that takes raw
materials and produce products.
Tertiary – The tertiary sector includes service industry. These do not provide a physical good
rather they provide a service. These are insurance, banks, police, etc.

There are different types of organisation such as public, private and voluntary having
their respective objectives and purpose which is described below:
Public Sector Organisation
It refers to those organisation that is owned and govern by central and state government
and provide goods and services to their citizens (Hofmann and Klinkenberg, 2013). Along with
this, they also occupy private sector organisation to deliver products and services to customers.
For example, Farm Credit System
Purpose
The purpose of Farm Credit System is that to provide credit to America agriculture in
form of loans to eligible borrowers at competitive price as well as insurance and other related
services.
Objectives
Objective of Farm Credit System is to raise capital in order to provide loans and
important resources to people for their agriculture activities.
Type of public sector organisation:
 Departmental Undertakings: It is a public sector organisation as well as oldest form of
company (Mori and et.al., 2012). These undertakings has no existence other than
government. Function of departmental undertakings is to overall control departments of
government. Along with this, they also finance annual budgets of government.
 Public Corporation: It is a kind of body corporate that is formed by special act of
parliament. Its powers, objectives and other sectors are fully managed by government.
Along with this, it is under control of central or state government as well as it have its
own existence.
Legal structure:
The legal structure of Farm Credit System is a government sponsored enterprise that
deals in providing loans to qualified people for their agriculture business.
Private sector organisation:
It defines as a form of organisation that is run by individuals or companies in order to
earn profits. These private sector organisation is partially owned by government which is known
as public private enterprise. For example, Merrill Lynch which deals in investment as well as
wealth management.

Purpose:
The purpose of Merrill Lynch is to provide financial advice to their clients in order to
achieve their respective goals.
Objectives
Objective of Merrill Lynch is to manage assets and liabilities of their potential clients.
Along with this, to also manage their fee-account (Grigoroudis, Tsitsiridi and Zopounidis,
2013).
Type of private sector organisation:
 Sole Trader- It indicates to a person who sets up and owns their own business. They may
decide to employ other people but they are the only owner. The individual has unlimited
liability. Example, Kurt Geiger &dash is an example of sole trader which manufacture
shoes. This belongs to secondary sector.
 Advantages and disadvantages- The advantages of thee kind companies that start up
costs are low, establishing and operating business is simple and there are only single
owner. Limitations of these kind firms are that retaining high calibre employees can be
difficult and the life of the business is limited.
 Joint venture: It is a type of private sector organisation which deals with shared
ownership, risk, returns and many more (Grigoroudis, Tsitsiridi and Zopounidis, 2013).
Along with this, it is created by more than two business entity. It helps in analysing new
market, emerging markets, helps in gaining efficiencies as well as also assess skills and
capabilities.
 Partnership: It refers to a formation of companies where partners agree to share equal
number of profits (Glen, Suciu and Anson, 2015). They can be individuals, schools and
other private sectors. Along with this, in partnership share all assets and liabilities
equally. No single partner has to bear all risk as well as profit alone. Example, Mumsnet
is a partnership organisation which was founded by Carrie Longton and Justine Roberts.
It provide internet service to its customers. This belongs to tertiary sector.
 Advantages and disadvantages- A partnership business is the lack of formality
compared with managing a limited company. These kind of business do not require to
complete a corporation tax return. The disadvantage of partnership business that it has no
independent legal existence distinct from the partners.

 Limited company- It is a general form of incorporation that limits the amount of liability
undertaken by the organisation's shareholders. It refers to a legal structure that ensures
that the liability of company members or subscribers is limited to stake in term of
investments and commitments. Example, Marks & Spencer is a limited company which
operate its business in retail sector by producing clothing, home and food products. This
belongs to primary sector. (Hofmann and Klinkenberg, 2013).
 Advantages and disadvantages- The advantages of these kind of companies are that
there are no restrictions on the number of members allowed and owners are not
personally responsible for business debts and liabilities. Disadvantages of these are that
limited life and ownership is typically harder to transfer that with a corporation.
 Public limited company- It is the legal designation of a limited liability company that
has offered shares to the general public and has limited liabilities (Smits and Mogos,
2013). Example, Tesco is a public limited company which deals in retail sector and
operate its business with the help of grocery products. This is a secondary as well as
tertiary sector.
 Advantages and disadvantages- The advantages of these kind firms are having shares
will fund expansion, allowing the business to grow and raise company profile.
Limitations of these are share prices could collapse and there are various legal
formalities.
Legal structure:
Legal structure of Merrill Lynch company is a financial company that looks after the
investment management of their clients or customers.
Voluntary sector organisation:
It refers to those organisation that deals with welfare of people by providing them goods
and services. Organisations in this sectors are majorly non profit companies whose main motive
is to serve citizens rather than to earn profit. Along with this, there in no interference of
government in these companies. For example, The Carter Centre is a voluntary form which
operate its business of the welfare of the society and help human beings to provide their rights.
This includes tertiary sector.
Purpose