Business Environment Analysis Report - Business and Management

This report provides a comprehensive analysis of the business environment, focusing on how various factors influence organizational structures and operations. The report examines different types of organizations, including public, private, and voluntary sectors, and analyzes their size, scope, and legal structures, using examples like Wm Morrison Supermarkets plc, McLaren Technology Group, and Oxfam. It explores the relationship between organizational functions such as marketing and finance and their alignment with organizational objectives. Furthermore, the report applies PESTEL and SWOT analyses to evaluate the impact of the macro environment and internal factors on decision-making processes. The analysis covers complexities within different sectors and how they impact organizational performance and strategic planning. The report concludes with an overview of the key findings and their implications for business management.

BUSINESS AND
BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Determine different types and purposes of organisations......................................................3
P2 Determine different size and scope of different types of organisations.................................5
M1 Analysis of structure, size and scope of various organisations link to corporate objectives 7
D1 Critical analysis of complexities to different organisation structure and their interrelations
with organisational functions.......................................................................................................7
TASK 2............................................................................................................................................8
P3 Describe the relationship between various organisational functions and their linkage to the
organisational structure and their objectives...............................................................................8
M2 Explain advantages and disadvantages of relationship between different organisational
functions and their link to objectives...........................................................................................9
TASK 3............................................................................................................................................9
P4 Evaluate the negative and positive impact of macro environment on managerial operations9
M3 Application of PESTEL model and analysis of macro environment..................................12
D2 Evaluation of micro and macro factors by which decisions can be made...........................12
TASK 4..........................................................................................................................................13
P5 Examine internal and external analysis of organisation to identify their strengths and
weakness....................................................................................................................................13
P6 Describe how strengths and weakness interrelate with external macro factors...................15
M4 Application of appropriate SWOT analysis and their impact on decision making.............16
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17
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INTRODUCTION
Business environment is an amalgamation of all internal and external factors which can
influence functions of management and their managerial operations. Some of the factors such as
employees, technological advancements, changing market trends, economic changes,
government interventions, change in demand and supply and others. There are several different
types of organisations through which a business operates in the industry and such companies
have different size of their business through which they function and perform their managerial
activities (Akhmetshin and et.al, 2017). Due to any change in business environment, it can create
an impact on organisations legal structure, their size and on their stakeholders and thus these
change can aid in organisational growths. Wm Morrison Supermarkets plc trading as Morrisons
is a largest supermarket chain which was established by William Morrison in 1899 in Bradford,
West Yorkshire, England. It is a public retail company which have 494 stores and provides
products such as foods and drinks, apparels, books, magazines, CD's and DVD's. This project
report is based on business and business environment and influence of responsible factors
through which business can face loss and can also gain competitive advantage from their
operations. In this project report, several marketing techniques such as PESTEL analysis and
SWOT analysis are used to analyse the changes in the business environment.
TASK 1
P1 Determine different types and purposes of organisations
Public Sector
Public sector organisations are part of economy which comprises of public goods and
services which are provided by governmental services such as law enforcement, military, public
transit and education, military and other services which are provided by government personnel’s.
These organisations are owned by government, which focuses on providing goods and services
through which they can create a benefit to the society and such business entities are operated by
money which is collected through taxes (Althouse Allan and Hartt, 2016). Wm Morrisons
Supermarket plc is a public limited company which operates in retail industry and provides
different products and services to their customers through which they can meet the changing
demands of the industry.
Purpose
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The purpose of Wm Morrisons plc is to offer customers a one-stop shop through which
they can provide products by which they can meet customer demands. The company focuses on
providing quality services to their customers through which they can gain co0mpetitive
advantage.
Legal structure
 Statutory corporation- The statutory corporation is made by the state and are brought
by public enterprises and this is brought by the Special Act of the Parliament Act. This
Act defines functions, powers, rules and regulations which are governed by employees
and their relationship with government personnel’s (Arsić and et.al, 2018).
Private Sector
These companies are operated by individuals and such business entities have no
government involvements. The main motive of a private sector organisation is to earn maximum
profit through which the company can gain maximum competitive advantage. These companies
are owned by private groups which focus on providing benefits to their owners, their
stakeholders and their investors. McLaren Group is private company which provides automotive
services and manufacture many luxury cars by using high technology through McLaren Applied.
The company is involved in Formula One and other motor sport manufacturing and was renamed
as McLaren Technology Group in 2015. The company have several subsidiary companies, some
of them are McLaren Racing, McLaren Automotive and McLaren Applied.
Purpose
The purpose of McLaren Technology Group is to provide products and manufacture
luxury and racing cars by using best technologies through which they can maintain their
goodwill in marketplace and in the industry (Belás and et.al, 2019). The purpose of delivering
best quality products and services help in bringing large scale disruptive change in motor sport,
automotive, public transport and health.
Legal structure
 Certificate of incorporation- The certificate of incorporation is a legal document
through which is related to the formation of the company. This acts as a license which
depends on legal system which is used.
 Memorandum of association- memorandum of Association (MoA) is a legal document
which is made during registration and formation stage of company and it also defines
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relation with stakeholders. This legal document is made with and filed with the Registrar
of the company in the process of incorporating of the company.
Voluntary Sector
The Voluntary sector company are those business entities whose primary motive is to
make a social impact on the society rather than focusing on earning profits. Such business
entities focus on doing welfare of the society through benefiting people of the society and
bringing change in the society (Beznovskaya and Kovalenko, 2020). Voluntary sector is often
called as third sector and are non-governmental, non- profit organisations. Oxfam is a voluntary
sector business which focuses on providing shelter to people, encourage women empowerment
and is a part of global movement in which millions of people work together to remove poverty
from the economy.
Purpose
The purpose of Oxfam is to provides services through which they can protect women's
rights through providing economic stability and safety to them. The motive of company is to help
people by providing shelter, food and more employment opportunities through which they can
enhance the living standards of people. Oxfam also raise awareness for climate change and their
influence on the environment and business environment.
Legal structure
 Partnership management- The legal structure of Oxfam is to maintain ethical and legal
partnership by maintaining effective and productive relationship between the partners
which is maintained through legal and mutual agreement.
P2 Determine different size and scope of different types of organisations
There are several different size of organisations through which a business operates and
perform their managerial functions, the size of the organisation depends on the number of
employees who are working in the company (Buno, Nadanyiova and Hraskova, 2015). The scope
of different organisation depends of mission, vision and objectives of the company. To analyse
the size and scope of different organisations are explained below:
Public Sector- Wm Morrisons supermarket plc
Size- The company have employed 72,120 people through which they focus on
performing all managerial functions effectively and efficiently which will help business in
gaining competitive advantage. The company is operating with 490 stores which includes 80
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gasoline stations and more than 30 supermarkets which are engaged in operations of retail
supermarkets.
Scope- The scope of Wm Morrisons Supermarket plc and their sales rely on the changing
customer demand which can influence the sales and profits of the business. The average number
of customers who shop from the supermarket have been increased through which business is
making huge profits and all resources are utilised effectively (Doleski, 2015). Through providing
valuable and quality products and services, Morrisons supermarkets have retained maximum
number of employees.
Private Sector- McLaren Technology Group
Size- McLaren Technology Group which deals as an automotive company The company
have more than 4000 employees through which they bring effective change to the industry by
using advanced technology. The company provide effective training t their employees through
which they can perform assigned roles and responsibilities.
Scope- The scope of McLaren Technology Group is focused on becoming the leading
sport and technology powerhouse and they focus on organisational growth in the industry. By
providing valuable products and services and through their effective operation management the
global vision of the company is to maintain their goodwill and brad image in the industry.
Through partnering with different companies who have same vision help them to use innovative
approach and strengthen their image in the marketplace and it will also help in earning maximum
profits from innovative managerial operations.
Voluntary Sector- Oxfam
Size- Oxfam is a voluntary company which is running in 67 countries and 5 continents
with the employee size of 2500 who are operating in different departments through which they
canperfo4rm all functions of the company. The training requirements of employees are accessed
by the management through which they provide them accurate training sessions which will help
them in preforming the job role and assigned tasks effectively.
Scope- The company focuses on providing valuable services through which they can
provide shelter, food and other basic services to the people of the society. Oxfam provides
financial and emotional support to people through which they focus to encourage and make
people aware about equality (Georgescu and Popescul, 2015). The company focus on making
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more number of people aware for women empowerment, changes in climate, education
requirements and other social issues.
M1 Analysis of structure, size and scope of various organisations link to corporate objectives
Wm Morrisons supermarket plc
The size, scope and structure of a public company such as Wm Morrison supermarket
follows a functional structure which focuses on offering support with their procurements.
McLaren Technology Group
The size, scope and structure of the company helps in generating higher revenues by
offering highest quality services and meeting the industrial competition by which they can get
competitive advantage and operate for longer period of time in the industry.
Oxfam
The size, scope and structure of voluntary sector organisations such as Oxfam offers full
overview of the business. The organisation offers integrated products and services portfolio. The
business focus on offering physical financial and emotional support to the people and the
organisation structure is team based and functional which helps them in meeting their social
responsibilities.
D1 Critical analysis of complexities to different organisation structure and their interrelations
with organisational functions
Different types of complexities in different sectors is defined below:
Public sector
Public sector organisation faces high complexity in satisfying the stakeholders as the
demand of consumers is rapidly changing which can be due to social media and networking sites.
Private sector
One of the major complexity faced by private sector business is management of finances
and government rules and regulations which are imposed on such organisation as diversification
in private sector is very low which can create hurdles for the company to operate.
Voluntary sector
The complexity faced by voluntary organisation is concerned with internal control, risk
management, fundraising and proper documentation which must be done effectively.
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TASK 2
P3 Describe the relationship between various organisational functions and their linkage to the
organisational structure and their objectives
There are several organisational functions which are performed by the company through
which they can meet their objectives, meet performance standards and gain maximum
competitive advantage and make their business profitable (Gölgeci, Karakas and Tatoglu, 2019).
Some of the organisational functions of Wm Morrisons Supermarket plc and their linkage to
organisational structure and their objectives are explained below:
Marketing and finance: Marketing department of Wm Morrisons Supermarket plc is liable
for their behaviour through which they can improve the structure of whole organisation. By
using efficient data, the potential and behaviour of buyer is based on the interaction and through
conducting an efficient market study, it helps in strategically planning all activities and
promoting the products and services which are offered by the company. The finance department
of Wm Morrisons Supermarket plc is accountable to maintain all monetary transactions of the
company by planning all budgets and deciding initially. Through panning all budgets, it helps
business in optimal utilisation of resources and planning all promotional activities through which
numerous customers can be attracted.
Marketing and HR: The functions of human resource management are to recruit, plan,
organise all activities a focus on employee satisfaction through which they can enhance their
employee performance which will help them to contribute in the achievement of the
organisational goals and objectives. The human resource department focus on providing training
sessions through monitoring employee training needs (Gorla, Chiravuri, and Chinta, 2017). The
HR supervisor focus on collecting all employee information which is mandatory through which
they can keep a track of their employees. Furthermore, marketing and advertising strategies of
business transfers all necessary information which is gathered by human resource department
through which all resources can be shared effectively and all employees can participate in
forming constructive decisions and achievement of shared and common goals of the Wm
Morrisons Supermarket plc.
Marketing and Sales: The marketing and sales department are interrelated as through
marketing and promoting products and services which are offered by the company helps the sales
department to sale maximum number of products and services. The marketing department of
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Wm Morrisons Supermarket plc helps in promoting products and services which are offered by
the company through which they can enhance the sale and generate maximum revenues and
profits (Halbert and Ingulli, 2020). The sales department of Wm Morrisons Supermarket plc
focus on planning all activities and setting targets which needs to be accomplished and take help
of marketing department in advertising and promoting products and services which are offered
by the company.
Marketing and logistics department: The marketing department of Wm Morrisons
Supermarket plc focus on promoting products and services which are offered by the company.
Logistics affects the marketing functions as through maintaining effective collaboration among
the marketing and logistics department it helps to meet customer demands on time and at right
place, it also improves efficiency of business and enhances the products value. The logistics
department of Wm Morrisons Supermarket plc helps the business to meet customer demand on
right time through which they can attract numerous customers and more loyal and potential
customers can be retained.
Organisational structure: The management of Wm Morrisons Supermarket plc use matrix
structure through which they can interact with numerous corporations of various regions. There
are several divisions which operates together through which they ca perform all managerial
functions effectively and business can gain maximum profits. Several divisions such as finance,
advertising, operational and human resource department work together by working
collaboratively through which they can optimise all resources effectively and operate for a linger
span of time. Through effective collaboration among various departments, it helped to manage
Wm Morrisons Supermarket plc to plan all activities, and better control among all department
through which all activities can be performed by using constructive decisions (Hamilton and
Webster, 2018).
M2 Explain advantages and disadvantages of relationship between different organisational
functions and their link to objectives
Advantages
 Effective supervision- With the help of effective supervision and experienced supervisor
tells to create a diverse workforce and effective teams who can perform and meet design
standards and organisational objectives.
Disadvantages
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 Lack of coordination- Due to ineffective team working ability and lack of coordination
the groups might not be able to perform up to the desired standards and several issues can
be faced by the companies.
 Segregation- Employees from different teams do not get chance to share their ideas and
opinions do it affects their interest and their performance which directly creates a
negative influence on permanent business development.
TASK 3
P4 Evaluate the negative and positive impact of macro environment on managerial operations
Business environment create an immense impact on the operations of management, such
factors can also create an impact on the profitability of the business and on their brand image and
competitive position in the industry (Jovanović, 2015). For analysing the impact of external
factors, PESTEL analysis have been used to observe the impact of such responsible factors on
managerial operations of Wm Morrisons Supermarket plc.
PESTEL ANALYSIS
Pestel analysis is a technique which is used to analyse the Macro environment factors which
can create an impact on the operations of Management. This technique health and environmental
scanning and helps in understanding the market growth or decline business position potential and
direction for operations. There are several environmental factors which can influence the
business environment some of the responsible factors are analysed through pestle analysis which
involves analysis of factors such as political factors economic factors social factors technological
factors environmental factors and legal factors. The impact of factors on the macro environment
of Wm Morrisons Supermarket plc. The factors and their impact on the business are explained
below:
Political Factors- Political factors helps in analysing the influence of external factors such as
political stability, level of corruption, bureaucracy, pricing regulations, taxation, wage
legislations, employee benefits, industrial safety, product labelling and other requirements in
retail Industry. Through environmental scanning, Wm Morrisons Supermarket plc focus on
building a business strategy which will help them to face challenges effectively and avoid loss of
market share and they can retain maximum customers and meet customer satisfaction. Through
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environmental scanning Wm Morrisons Supermarket plc can utilise all resources effectively bye
making constructive decisions (Khan, Çera and Nétek, 2019).
Positive impact: Through environmental scanning, the political factors which created a
positive impact on Wm Morrisons Supermarket plc includes diversity and planned strategy
through which they reduce systematic risk and more favoured trading partners were involved in
business and the company focus on providing employee benefits through which they can retain
their talented personnel’s.
Negative impact: Some of the negative impacts of political factors which was faced by Wm
Morrisons Supermarket plc is that such factors create a huge impact due to multiple government
legislation on UK food retailers. It can also be seen that's a lot of uncertainty was build due to
changes in policies and regulations (Likoko and Kini, 2017).
Economic Factors- The economic factors which influence Morrison supermarket includes
inflation rate savings rate interest in foreign exchange rate and it also helps to determine the
demand and aggregate investment in an economy.
Positive impact: The positive impact of analysis of economic factors involves better
exchange rates, better infrastructure quality in retail Industry. It can be observed that the skills
and competencies of workforce was improved through providing training opportunities which
resulted in decline in unemployment rate.
Negative impact: The negative influence of such factors on Morrison involves more
government interventions in the free market and instability of host country currency. This also
lead to high labour cost and discretionary income.
Social Factors- The social factors of business environment create an impact on the culture of
business environment, this involves shared beliefs, values and attitudes of population and how
marketers will analyse the demand of the customers and meet their needs (Monroe, Rikala and
Somervuori, 2015).
Positive impact: Some of the positive impact of social factors on business involves
entrepreneur spirit, increased leisure interest and better quality of products can be provided.
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