Business and the Business Environment

Business
And
The business environment
1

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO1..................................................................................................................................................3
P1 different types and purpose of organizations..........................................................................3
P2 size and scope of different types of organization...................................................................5
M1 analyse size and scope of organization.................................................................................6
LO2..................................................................................................................................................6
P3 relationship between different organizational unction and linking with organizational
function and objectives................................................................................................................6
M2 analyse advantage and disadvantage of interrelationship.....................................................8
D1 analyse of complexity of different types of business structure..............................................8
LO3..................................................................................................................................................8
P4 Positive and negative impacts of macro environment on business operations.......................8
LO4................................................................................................................................................11
P5 analyse internal and external analysis of organizational strength and weakness.................11
P6 explain strength and weakness interrelate with external macro factor.................................13
M4 analyse and justification for influencing decision making..................................................13
D2 evaluates the impact of macro and micro factor upon business objectives and decision
making process..........................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
Business environment is the collection and sum of all internal and external factors like
employees, customers’ needs and expectations, supply and demand, management, clients,
suppliers, owners, activities through the government, innovation in technology. The preset report
is based on “Morrison” which is British multinational supermarket in United Kingdom. The
company is operating different product and services so that it will help to increase financial
performance. Presently, company has 110000 numbers of employees by serving 498 numbers of
locations. The report will explains different types and purpose of organization like public, private
and voluntary sector with its legal structure of company along with describe size and scope of a
firm. The study will explains association between various administrative tasks and link with
organizational purposes and assembly. The report will examine positive and negative influence
of external environment into the business by using some example. This will conduct internal and
external analysis of organizational for identifying strong point and weaknesses. Lastly, report
will highlighted the strength and weaknesses interrelated with various macro issue.
MAIN BODY
LO1
P1 Various forms and purpose of organizations.
There are various kinds and aim of a business which are established at market place for
getting success at market place in perfect way. Such as there are two type of business like, earn
for profit and not earn for profit. Profit making organization has one main aim to earn higher
profit from market by proposing product to customers (Hamilton and Webster, 2018). Beside
this, non profit making businesses has attention on protection their image at market place. This
kind of business is providing free services to their customers. Below is mentioning some
different types of organizations which are as follows:
Private organization:
This kind of enterprise is track and established by person and businesses for earning
income edge as well as having main purpose for grow at market place within effective economy.
Private organization has some different types which are explains below:
 Sole proprietorship: This kind of group is owned by separate people but setting goal to
gain advanced income edge from market place with purpose to keep product cost lower.
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This type of organization have objective to make cash for accomplish their needs and
objectives. This includes some small retail business like beauty salon, stores and ice
cream parlour. These sort of business are consider under sole proprietorship business
only
 Partnership Company: That business are possessed by more than two people with
sharing equal profit and loss which is the goal of company (Quinlan and et.al., 2019). The
main purpose of this business is to bring together all the skills and utilize the resources to
get best market image within a business. For example, Berkeley.
 Public limited company: this kind of companies start own business through partial
shares. This sort of organization is taking of their shares from fair. The main goals of
enterprise is to increase advanced income margin with the aim of accomplish the needs
by providing rage of product and services at reasonable rates. For example: Morrison is
the best example of public limited company. The company have effective ability to
perform their task and sustain position in outstanding manner.
 Private limited company: Under this, business are established with landlord who is
accountable to earn shares. This sort of companies has their active aim and purpose to get
profit by offer product at reasonable rates.
Public sector:
This type of enterprise is established by government for providing better services to
society. Those types of firm are introduces to meet the demand of customers and perform
business for their welfare only (Aydiner and et.al., 2019). One of the best examples of Public
Sector Company is NHS who provide medical service to patients with getting success and
maintains their effective image at market place. The key characteristic of a business is to provide
best service to people with an objective to keep safe their patients from all.
Voluntary sector:
This kind of firm are made for the welfare of the society without thinking of their profit.
One of the best example of voluntary sector is OXFAM, who is a charitable firm and also try to
employ people in order to reduce the poverty up to some level.
P2 size and scope of different types of organization.
Size and structure is differentiated below:
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Micro sized
organization
Medium sized
organization
Large sized
organization
Meaning This type of
organization is
established by
individual people.
Organization started
with small number of
workers and there is
single owner.
This kind of firm is
including
multinational
companies.
Example of company Real beauty salon Morrison NHS
Aim To gain income by
offering best service
(Saleem, 2017).
To raise
appropriateness at
market place.
To earn brand image
by offering best
quality of service than
others
Needs To attract customers
again and again
To improve the
financial performance
of a company at
market place.
To build marque
appearance at market.
Market share Not have Occupied only 25% Large size occupy
60% market share
Number of workers Maximum 10 Can hire more than
250 employee
May hire 500
workers.
Number of product
and services
Different Product Different product and
singly service line.
These service keep
people healthy
Legal structure Do not require any
legal structure
Firm has comply
proper legal format
which include legal
formalities and
agreement (Balraj and
Ratna, 2017).
Company follow all
the legal entities. this
include, all the
director and
shareholders who
make decision
accordingly.
Internal expansion Firm have to extend
the business by add on
different features to
By offering range of
development session
and also make the
By adding new
techniques into the
workplace in order to
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their existing
business.
employees aware with
the new technologies
by organizing proper
training session
meet the customer
service.
External expansion Under this the
company is planning
to expand the
company at a new
place by way of
opening a new branch.
Under the medium
size organization the
main focus is over
investing in
technology and more
emphasis is on
research and
development.
Under this the
company tries to
interact with other
competitors and try to
take their products.
M1 analyse size and scope of organization.
In this present competitive working environment every company has its own specific
goods and services which are created on the basis of trends in market. In accordance to these
trends every company sets their own objectives and goals and earns the required profit margin. In
this scene every company whether be it micro, small or large works in different direction because
their aim and goals fo running the business are different.
LO2
P3 relationship between different organizational unction and linking with organizational function
and objectives.
There are various organizational functions which are most important and effective for the
business and Morrison. The company follow hierarchical organizational structure which is
follows by various functions. Those organizational functions such as marketing, human
resources, production, research and development, finances department, etc. those departments
are interrelated with each other within the organization because that are work for achieving
common goals and objectives of organization. Those department working are related with
organizational structure and objectives. In respect of analysing effect and interrelation of those
functions here is going to discuss below:
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Marketing and finance department:
Marketing is very important function of business which is help to promote product and
services at market place by completing some marketing activities at market place. Marketing
team is completely responsible for getting success through market activity in effective manner.
This creates most effectiveness for business and for its environment in effective manner. Team
generate funds from marketing activity and handover to finance department. Through that
finance department have proper funds for allocating to other department in order to complete
their payments (Benzer and et.al., 2017). On the other side, finance department have proper
funds for allocating another department which are collected from marketing activity. As per this,
both departments are interrelated with each other within the organization. The main objective of
Morrison is to earn profits from market by providing better product and services to its customers
in effective manner. As peer that finance department is sets budget for company in order to
complete their task and working structure where all the employees are perform their task and
activities to earn profit. Company follow hierarchical organizational structure which is help to
take better decision making within the company in effective manner.
Finance and human resources departments:
The finance department is important function of Morrison who is sets budget for
company in order to complete their task in effective manner. In that management requires highly
eligible candidates who are completely ready to add hard work and contributes in attainment of
the goals and objectives of business in successful way. In finance section has to take the
assistance of the human resource section as if recruiting and selecting best candidate for team
that is responsibility of HR team. Hr team is also responsible for organize training and
development program for give training about working style. This is effective and more valuable
for company to hire best and effective candidate for working in effective manner. As per that
both the departments are linked and have effective relationship within the Morrison (Ahmady,
Mehrpour and Nikooravesh, 2016). This is an effective for company which is help to make better
organizational goals and objective. This is completely linked with organizational structure and
objective. Company have main objective for earning higher profits by performing task through
employees. As per that both the departments are interlinked within the organization. Like the
change in business which is affect to HR department is aligning resources in better manner. This
help to company for maintaining perfect organizational culture in effective manner.
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M2 analyse advantage and disadvantage of interrelationship.
Morrison has different types of function such as finance, marketing, HR, sales and many
another which impact to structure of company. Company follow hierarchical structure than it is
beneficial for company for performing own roles and responsibility by coordinating with all
departments (O’Brien and Gowthrop, 2016). This creates effective advantage for company is
performing better task. On the other side, disadvantage for company is to all the department are
having any connection within the organization which is create challenges in different times.
D1 analyse of complexity of different types of business structure.
Company is faced various complexity within the business when performing task at
working place because company adopt ample organizational structure that is lead some
challenges. This is because of the reason is to business operations complex in leading changes
within the business. Challenges are affect to business and organizational functions as all the
departments have needs to change polices and formulate various strategies to complete in
business at global market.
LO3
P4 Positive and negative impacts of macro environment on business operations
There are various macro environment factors that impact the business operations both
positively and negatively. The different factors that are impacting business operations of
Morrison are as following:-
Political factors:-
There are some of the political factors like government policy, tariffs, Trade control, tax
policy, trade restriction etc. that may have both positive and negative impact on business
operations (Rastogi and Trivedi, 2016).
POSITIVE IMPACT NEGATIVE IMPACT
 The political factor like tariffs helps the
business to increase its production and
the higher price of the offering
increases the spending of consumers.
 Government trade policy helps
Morrison to trade across the
 Different tax policy affects the business
operations of Morrison as it increases the
cost of business.
 This may also decrease the consumer
spending and that directly affects the
revenue of business.
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international border in an easy manner.
Economic factors:-
There are economic factors such as interest rate, demand and supply, exchange rate,
inflation etc. that affects the business positively and negatively (Joshi and Beck, 2018).
POSITIVE IMPACT NEGATIVE IMPACT
 Exchange rate encourages the
international trading and investment.
 Moderate inflation rate adjust the price
and the goods are able to attain real
price.
 Change in interest rate affects the
disposable income of the consumer and
that affects the business revenue.
 Demand and supply affects the revenue
attainable from the market as limited
supply affects the business operations
negatively.
Social factors:-
Social factors such as attitude, opinion and interest of family and friend affect the
business operations both positively and negatively (Perera, 2017).
POSITIVE IMPACT NEGATIVE IMPACT
 As the customers are becoming health
conscious and their life style is
changing, it is bringing new
opportunity for Morrison to have
effective business operations.
 There are customers with different religion
and belief and it is tough for Morrison to
understand individual belief of customers
and accordingly provide them the
respective offering.
Technological factors:-
The technological factors such as change in technology, research and development,
innovation etc. affects the business operations both positively and negatively in following
manner:-
POSITIVE IMPACT NEGATIVE IMPACT
 Technological change motivates
Morrison to adopt such technology that
 It may be costly for the business to adopt
new technology and may also bring
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can increase business productivity and
operations (Vatharkar, Gao and Fomin,
2018).
 It brings an effective communication at
the workplace.
complexity in business operations.
 Training and development cost will also be
implemented in order to train the
employees.
Legal factors:-
The Legal factors such employment law, health and safety, competition etc. may affect
the business both positively and negatively.
POSITIVE IMPACT NEGATIVE IMPACT
 The legal factor such as health and
safety at the work place affects the
business positively as it retain the
employees for period and it directly
helps the business to increase
productivity and profitability.
 Competition provides goods and service to
employees at lower price and that may
affect the team’s morale and productivity
of Morrison.
Environmental factors:-
There are some of the Environmental factors that affects the business positively and
negatively such as climate change, pollution, recycling etc.
POSITIVE IMPACT NEGATIVE IMPACT
 Recycling saves money and is a
sustainable initiative that creates value
of products offered by Morrison
(Yakubu, Yalo and Halilu, 2019
 Pollution and carbon foot print may impact
the health of business brand and company
may loss its revenue.
LO4
P5 analyse internal and external analysis of organizational strength and weakness.
Strength Weakness
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 The company is having knowledge and
expertise in developing business in new
market and gaining success within the
new market place as company works
with great efficiency and perfection.
 Company has built effective and strong
brand image at market place. This is
very useful for company in building a
new system for revenue.
 Morrison is having high cash flow
within the company which assist the
company in having access to resources
in hand any time and this assist the
company in expanding the project
overseas.
 The company is having a large network
of distribution which assists the
company in reaching to a majority of
the consumer and the large market
share.
 Company has very effective and best
strength which is highly satisfied
customers because their works to
satisfy needs and wants of customers in
effective manner.
 The company is having profitability
ratio and new contribution which is
below in the industry is the main
weakness of company (Engelbrecht,
Lindeman and Hoermann, 2019).
 Their organizational structure is
compliable with the present business
model thus limited expansion.
 Another weakness of company is lack
of new technology investment.
 Company not done proper financial
planning.
 Morrison has not higher demand at
marketplace as compare with their
competitors are at market place.
Opportunities Threats
 Morrison has effective opportunity to
develop market which will lead
competitors advantage are enable for
increasing competitiveness compare to
 New technology developed by their
competitors which is threat for
company.
 No regular supply of innovative
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their competitors (SWOT analysis of
Morrison, 2017).
 New opportunity for company to create
new environmental policies which is
great and effective opportunity for
company.
 Another opportunity to attract new
customers from online channel because
present days customers like shop with
online platform.
 Company can expand their business in
another county because of government
agreement.
 Other opportunity for Morrison to think
about innovation in their product and
services are help to satisfy needs and
wants of customers as per current
trends.
product and services is leads to
variation present in the sales which may
range from high to low over a period of
time.
 Stable profitability is increased the
number of players in the industry over
the years that is puts downward
pressures on mot only profitability.
The present discussed pints are the internal positive and negative aspects as well as the
external threat and opportunities present outside the business internal environment. The
strengths discussed assist the company in overcoming the weakness present and the opportunities
present in the external environment aids the business in facing the threat present in the external
environment.
P6 explain strength and weakness interrelate with external macro factor.
Morrison has effective and valuable management system which is strong and effective for
doing team work involving hard working team members. This assists the business in attaining
the objectives and aim of the business in successful manner. Morrison is MNC Supermarket
business which is needed to recruit best employees for working in better manner. The main
strength of company is to superb performance in new market which is help to attain success in
this highly competitive working environment. In that company have advantage with political
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stability (Nash, Manning and Heiser, 2019). With the help of this goodwill and large market
share and brand image assist the company in providing for much better employment
opportunities within the country. Thus, this assists the company in building good brand image
and market in the highly competitive market. .
Morrison Company has effective opportunity which is to expand their business in another
country. This helps the company in enhancing the sales and the presence of business with great
efficiency all over the globe. In that company management need to take effective benefit the
economic factor and legal factor (Sheikholeslami and EBRAHIMI, 2019). With legal factor
government agreement is allow to company for expand and operates business in other country.
On the other side, consisting with economic factor for understands the condition of the country is
good or bad with respect to the economy of the country. Through, that analysis positive effect
for extending business in other country.
On the other side, risk for the business is the latest and new technology develop and
adopt by competitors. This can have adverse effects on Morrison and can impact in negative was
as due to this company have not chance to extend their business through technology using.
M4 analyse and justification for influencing decision making.
With the help of the SWOT analysis of the company, the company is able to understand
and is easily able to find the weakness, strength, threat and the opportunities in very simple and
organized manner. Those can affect to business of Morrison and their process of decision
making. This helps the company to comprehend analysis of internal environment of Morrison
which is consisting within the alteration relating to decision making and the operations of the
company (Ilin and et.al., 2016). With the help of this the efficiency and the working capacity of
the company has increased to a great level. Another side, weakness is to required best marketing
strategy for overcome weakness. In that company need to consist through the various numbers of
opportunities which are mention in report are help to get valuable success at market place.
D2 evaluates the impact of macro and micro factor upon business objectives and decision
making process.
Both the factor has affect to the process of decision making and objectives of Morrison
through making changes in the economic condition and meted with political changes. Those are
creating various challenges for company which are faced by company in order to attain the goal
and objectives of business. In accordance to Morrison can make effective and valuable within the
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business the goals and objectives of the business and the process of decision making to get and
successfully attain goals and objectives of company in effective way.
CONCLUSION
With the help of the above study it is inferred that external environment or the business
environment is very important and effective part of the company which has required
understanding that in effective manner. In order to get successful in the highly competitive
market, company required to make some changes into the strategies and their operations with
policy. In the market has the different type of organization which has established with effective
purpose to attain success within external environment. In the light of this, the current report
analysed public, private and voluntary sector organization. On the other side as per the size and
scope report covered different types of companies from variety of class that is medium, large or
small with best example. In respect of that, functions of organization like marketing, human
resource, production, operation and many others has been interrelated with together in the
company for achieving common goals by linking with structure and objective. This has identified
different factors from macro environment which has both negative as well as positive effects by
using PESTEL analysis. For the company it has very important to analysis internal strength and
weakness or external opportunity and threat of company for that report had been covered with
SWOT analysis model. At the end of report has highlighted the interrelation between micro and
macro environmental factors which has creates advantages for business in effective manner.
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ONLINE
SWOT analysis of Morrison. 2017. [Online]. Available through:
<http://fernfortuniversity.com/term-papers/swot/1433/1363-morrisons.php>
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