Business and the Business Environment Report

This report analyzes the business environment, focusing on Ryanair Airways. It examines different types of organizations, their size and scope, and the relationship between organizational functions. The report also explores the impact of macro-environmental factors on business operations, including political, economic, social, technological, environmental, and legal factors. It concludes with an analysis of Ryanair's strengths, weaknesses, opportunities, and threats, highlighting the interrelation of these factors with the macro environment.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1Different types and purposes of organisations...................................................................1
P2 Size and Scope of different types of organisation.............................................................4
P3 Relationship between different organisational functions..................................................6
P4 Positive and Negative impact macro environment on business operations......................7
P5 Internal and external analysis of specific organisations to identify strengths and
weaknesses.............................................................................................................................8
P6 Interrelation of strength and weakness of macro environment elements on a company.10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment means all internal and external forces that affect functioning of an
organisation including consumers, management demand, business regulations and employees.
There are many factors that affect functions of business environment that are, social, economic,
legal, political and technological (Chetwood, 2014). It is essential for business enterprises to
examine these factors to ensure their overall performance and sustainability. Present study has
been conducted on, Ryanair airways which is a largest European airline. This company is
founded in the year 1984 and headquarter in Dublin and Swords. As per this study, specific
information about different types of organisations has been discussed along with this relationship
between organisational functions and positive and negative impact of macro environment has
also been conducted in this report. Furthermore, internal and external analysis of organisation
and their strength and weakness has done. Lastly, manner in which strength and weakness
interrelate with external macro factor is also stated
P1Different types and purposes of organisations
There are different types of organisations like, public, private and voluntary. All these
organisations have been affected by different factors in marketplace. These organisations are
mainly divided into different basis such as number of employees, size, scope and company
turnover. In relation with, United Kingdom, these companies are mainly distributed into three
different sectors that include, Profit, Non-Profit Organisation (NPO) and Non-Government
Organisation. Differentiation of these organisations have been mentioned below:
Basis of
comparison
NGO NPO FOR PROFIT
Meaning These are charitable
business organisations
that aim towards
providing basic
amnesties to those people
who lacks basic need of
life.
Non profit
organisations aim
towards providing
commodities to
population in order to
improve their living
conditions. These
organisation run their
Organisations working
under this sector,
mainly perform their
business operations in
order to earn profit.
Companies in this
sector provide product
and services according
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business not to earn
profit but to raise
standardisation.
to need and demand of
consumer in market.
Area of operations Organisations under
NGO operates their
business functions on
large scale.
Organisations included
in this sector perform
their business
operations only in
targeted geographical
areas.
These organisation
serves in area
according to their size
and scope.
Objectives One of the main
objectives of NGO is to
develop sense of
independent among
people and raise their
level of livelihood
(Crane and Matten
2016).
Main objective of
business unit working
in this section is to
promote scientific
disciplines,
commercialisation and
art.
Basic objective of
organisations working
in this sector is to
satisfy demands of
consumers while
earning profit.
In addition to above differentiation, organisations are mainly divided into three areas that
include Public, Private and Voluntary organisations. Main functions and their legal structure are
firmly described below:
Public Sector: Organisations mainly comprised under this sectors are owned and
controlled by government. Main purpose of these organisation is to provide services to
consumers and satisfy their need and wants despite of earning profit. Funds in these
organisations are collected through taxes, fees and various other financial institutions.
Companies in this sector engage in improving infrastructure, transportation, telecommunication
and roads in order to economically raise standard of a country. British airways are a public
associated company that serves their functions worldwide.
Private Sector: Organisations in these business sector engages in fulfilling needs and
demands of consumers while earning profit. In context with, Ryanair airways they are largest
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European airline. This company generally operates more than 400 Boeing 737-800 aircraft. Main
purpose of this company is to expand their service area with rapid expansion.
Voluntary Sector: These organisations are mainly non-profit and on-governmental
sector. Their main objective is to create social impact and serve people in best way. These
organisations provide welfare services to societies in order to improve their conditions. Cancer
Research UK's is taken as best company under this section (Gharajedaghi 2011). It is an UK
based charitable organisation. Their main motive is to reduce number of death from cancer
worldwide.
Legal Structure of the Sector
There is different legal structure associated with various form of business organisations.
Some of these are briefly described below:
Private Sector: These organisations are part of country economic system that are mainly run by
an individual, rather than government. Companies working under private sector aim towards
making more and more profit. There is a legal structure that are characterised below:
Sole Proprietorship: Business organisation in this sector operates their business on small
scale and are registered as sole proprietor. These business units are mainly owned and controlled
by a single individual who is fully responsible for risk and profit.
Partnership: Business units in these sector is owned by two or more than two individual.
In this partner manage and share profit and losses of business.
Public Sector: Legal structure of public sector are described below:
State government: Organisations in these sector is within a federal structure. Main
function of these organisation is to provide all necessary arrangement authorised by a legislation
of any particular country.
Local government: Organisation working in this sector, aims towards satisfying needs of
local people by providing them basic amenities and facilities.
Voluntary organisation: The voluntary organisations are said to be companies which do not
work for profit and they work for welfare of local communities. With this context, Cancer
Research, UK is a voluntary organisation that raises money with the help of through donations,
community fund and also corporate partnerships.
Purpose of voluntary organisation: The main purpose of this organisation is to make
people aware of Cancer and to control death by preventing this disease.
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Legal structure of voluntary organisation: Legal Structure of a voluntary organisation
is comprised of association and trusts which are being elaborated below.
(a) Association: This incurs low cost and has flexible nature in comparison with various
kinds of incorporated structure. Association are created by small or new groups to carry out6
activities of organisation.
(b) Trusts: It is generally created by people who do need structure of membership.
Voluntary organisations are governed by trust deed.
P2 Size and Scope of different types of organisation
Organisations can generally described with size, scope and structures with a purpose to
achieve certain goals and objectives. In this modern world, there are different type of business
organisations prevailing in order to meet various needs and demands of societies. In order to
differentiate between organisation one can look at their basic goals and targets. Differentiation of
different organisation according to their size and scope are firmly described below:
Private Sector: The private organisations are created with an aim to increase their profits by
giving services as well as goods to their customers. According to their needs and requirements.
With this regard Ryanair organisation is being chosen here which is a private company.
Background: Rynair is an airline which is Irish and has low cost founder on November
28th, 1984 and has headquarters in Swords, Dublin. This company is largest airline which mostly
carries international passengers.
Product and services: It gives airline services which has low fair and also inflight services
to their customers in comparison with their competitors of same market segment.
Size: It serves across 35 countries in Europe, Middle east and North Africa. It has its
operations in airline services with approx. 400 air crafts and sustaining its profits within a market
place.
Vision: Organisation's vision is being a leading low fare airline of Europe and do
continuous improvement in their strategies of low fair in order to provide satisfaction to their
customers.
Objectives: Its main aim is to provide highest quality services to their along with
expanding their operations in business within a competitive environment.
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Mission: Rynair's main mission is to be ranked as a airline which is profitable by giving
high quality airline services to their customers.
Structure: It uses formal organisation structure to do its business.
Public Sector: Public organisation is owned and controlled by government and provide
effective services to consumers despite of having profit (Türetken 2011).
Background: British Airways is a national airline in United Kingdom and formed in 1974. This
company was created by British government.
Product and services: This airline provide generally low base fair.
Size: This company is a merger of two largest United Kingdom airlines and also include small
regional airlines.
Vision: British airways mission is to deliver best service in airline sector.
Objectives: British airways objective is to give better welfare and effective service to their
customers.
Mission: British airways mission is “One destination seek to ensure our customer fly confident
that, together, we are acting responsible to take care of the world we live in”
Structure: British airways operates its business functions with flat organisational structure.
Voluntary Sector: These are non-profit organisation mainly established to provide welfare
services to consumers. In relation, taken organisation here is Cancer Research, UK established in
2002.
Mission: The main mission of Cancer Research is to cure cancer in order to conduct
effective research.
Vision: Main vision of this institute is to conduct best research and raise awareness
among people for cancer.
Product and services: Bring awareness among public about Cancer and how to prevent
from this.
Size and Scope: This organisation was Established in the year 2009 in order to genearte
awareness among people for cancer.
Objective: Main objective of Cancer Research, UK is to conduct best research and cure
cancer.
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P3 Relationship between different organisational functions
There are different types of departments in an organisation which perform their business
in effective and interrelated way to fulfil goals and objectives of company. In Ryanair airways
each and every department perform their activities separately but have a common objective, that
is to gain high profitability and productivity (Gilboy, 2016). Mentioned below there are some
interrelation of their department described below:
Marketing: Employees in marketing department perform various functions like
promoting business products and services in a targeted area. In Ryanair airways employees of
marketing department is linked with production department by providing them source of raw
material, labour and funds. All these marketing functions aid other business department to get
proper and effective resources and source of funds.
Human Resource Management: In Human resource department employees fulfil staffing needs
in each and every department. In Ryanair airways main function of human resource department
is to recruit effective and efficient candidates in business organisation. Human resource
Employees of Ryanair airways acquire candidates from various sources, train them and increase
their knowledge after that assign them in suitable department. Therefore, finance, marketing and
production department are mainly depending on HR department to have effective candidates.
Finance: Main function of Finance department is to allocate funds in each and every
department. Employees of finance department in Ryanair airways prepare appropriate statements
of balance sheet and profit and loss accounts (Zsambok and Klein 2014). They also manage
expense and evaluate need to funds in every departments of business organisation.
All departments in Ryanair airways perform their functions in inter related manner. This
will not only benefit company to achieve their target in effective time frame but also to maintain
smooth working condition in their workplace.
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(Illustration 1: Organisational chart, 2013)
Source: Organisational chart, 2013
P4 Positive and Negative impact macro environment on business operations
Ryanair is expanding its business all over the world. So it is essential for the organisation
to determine its external as well as internal factors. This can be done with the help of PESTLE
analysis which has been discussed below.
Political Factors: There are certain laws and regulations laid down by government which is
important for every organisation to follow. Some of the major political factors are minimum
wages legislations, product labelling and taxation.
Positive Impact: By implementing governmental rules and regulations will aid company
to run their business in ethical and legal manner.
Negative Impact: As modern world is dynamically changing, various taxation policies
can hinder growth rate of business organisation and hamper their performance.
Economic Factors: There are some economic factors like, rate of interests, foreign exchange
and taxation policies that can impact on organisation competitive advantage.
Positive Impact: Effective economical condition of a country will make people buy
different products and services. This will enhance sales of a company and increase their
profitability.
Negative Impact: Economic crises and reduction in purchasing power of buyers can
affect adversely effect on business profitability rate.
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Social Factor: There are some basic social factors that is essential for every organisation to
analyse. Some of these are, culture, education level and demographic class.
Positive Impact: If any business organisation considers and take care of social factor, that
will automatically help them in increasing their brand image.
Negative Impact: If any company do not follow CSR activities in effective manner then it
can result in decrease in their goodwill and demand of their product and services.
Technological Factor: Continuous change in technology directly affect functioning of
organisation.
Positive Impact: If an organisation takes advantages of new technologies regularly and
implement effective networking system in their working culture, that can results in completion of
their targets in effective and efficient manner.
Negative Impact: In order to implement latest technology a company require large
amount of capital and training to their employees.
Environmental Factor: This is a major factor that impact upon functioning on organisation.
Factors include in this sector is availability of raw material and resources.
Positive Impact: Company can use eco-friendly engines which will results in decreasing
pollution level in environment.
Negative Impact: Climate change and various laws of air and water can create adverse
impact on functioning of business organisation.
Legal Factor: As there is increase in competition, it is essential for Ryanair airlines to
abide every legal laws when they enter into a new market segment.
Positive Impact: If a company take cares of every rules and regulations including
employee’s health and safety it will create positive working environment in a business sector.
Negative Impact: If an organisation follow so much of legal rules and regulation it will
create obstacles in every step. That results in slower down their business functions.
P5 Internal and external analysis of specific organisations to identify strengths and weaknesses
Ryanair is a European based private air lines, which have a strong network over entire
Europe and North Africa also. Here SWOT Analysis for company is been made to identify it's
strengths, weaknesses, opportunities and threats.
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Strength Weaknesses
 The biggest strength of Ryanair is all
their low cost of expenses per customer.
 This help them to maintain low fares
 Another biggest power of the
organization is their strong network,
which covers about 1,500 routes across
28 countries.
 Ryanair also have very low turn over
time (time spend by a flight between two
fly), they have only 25 minutes as turn
over time. This increase number of fly
and attracts customers.
 One of the major weakness of Ryanair is
about their seasonal profits, their profit
increases in Q2 i.e. July to September
and this comes down in to loss for
organization in winters that means from
October to March.
 Another biggest problem for the
organization is about their inconsistency.
As they don't use to provide frequency in
the map of route to their customers,
while their competitors use this and
provide frequent facility for flights
(Saleem 2017).
Opportunities Threats
 As Ryanair is one of the biggest airline
service provider in Europe at very low
cost, so it have an opportunity that it can
extent their business more rather then
Europe.
 Increase in bench strength can also help
them to make their market stronger.
 According to Tims of economics,
Ryanair has a great potential of finance,
and this allows them to invest to increase
resources very easily.
 Ryanair have threat of external activities
like earthquake, thunder storms, many
other natural disasters, because these
disasters can cause them to huge effect
on finance.
 Increase in tax by government is also a
biggest threat to them as increase in tax
also increases the fare and this may cost
to lack of customers.
 Now a days company is following a strict
pattern of discipline if any loss in that
occurs then competitors may be able to
get benefit for that.
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P6 Interrelation of strength and weakness of macro environment elements on a company
Every organisation has their own strength and weakness which they have to overcome in
order to achieve their pre-determined goals and targets. There are different types of external
factors that affect business functions in positive and negative way. In relation with, Ryanair
airways this company aims towards satisfying demands of consumer while expanding their
business worldwide (Zeng and Duan 2012). Interrelation of strength and weakness of macro
environment has been mentioned below:
Political Factors
Strengths: Company is having low cost
expense as per consumer and one of their
biggest strength is that they are having strong
network and low time turn over rate.
Weaknesses: In order to develop strong
network and maintain them continuously a lot
of cost is required.
Economic Factors
Strength: Company is having great amount of
potential in finance with allow them to make
investments in various sector.
Weaknesses: With increase in tax rates by
government and tax fares it will become hard
for company to function effectively.
Social Factor
Strength: Company have increased number of
flights which will attract attention of large
amount of consumer base and increase revenue
of their company.
Weaknesses: Company lacks in consistency
that results in decrease in loyal consumer base
and can make company to suffer more.
Technological Factors
Strength: Company have developed effective
networking system which will benefit them to
perform their work in effective manner.
Weaknesses: In order to adopt technology
frequently company is required to make large
amount of funding..
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CONCLUSION
As per the above report, it has been concluded that business environment is a
combination of all internal and external factor. There are various macro environment factors that
affect business growth and their functioning. In order to take competitive advantages
organisation need to evaluate their strength and weaknesses to perform better. Company also
need to measure their size scope and nature and conduct effective measure to take their company
in a direction of growth.
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REFERENCES
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