Business and the Business Environment

This study explores the different types and purposes of organizations in the public, private, and voluntary sectors. It also discusses the size and scope of different types of organizations and the relationship between marketing and finance. Additionally, it conducts a PESTLE analysis and analyzes the internal and external environment using the case of Merrill Lynch.

BUSINESS AND THE
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION................................................................................................................................3
LO1 .....................................................................................................................................................3
P1 Different types and purposes of organisations; public, private and voluntary sectors and legal
structures..........................................................................................................................................3
P2 Description of Size and Scope of different types of the Organisation.......................................5
LO 2......................................................................................................................................................6
P3 DIFFERENT ORGANIZATION STRUCTURE: .....................................................................6
RELATIONSHIP BETWEEN MARKETING & FINANCE.....................................................6
LO3.......................................................................................................................................................7
P4 PESTLE ANALYSIS:.................................................................................................................7
LO4.......................................................................................................................................................8
P5 Analysis of Internal and external Environment..........................................................................8
P6 Association of External Macro factors with Strength & Weakness............................................9
CONCLUSION..................................................................................................................................10
REFERENCES ..................................................................................................................................11

INTRODUCTION
The environment of business is compilation of all external & internal measures such as
customers needs, employees and supply and demand, clients, expectations, owners, suppliers,
activities by government, advancement of social and market trends , technology, changes in
economy. etc. Merrill Lynch is a leading wealth management company which offers products and
services across global markets and serves the requirements of individuals, institutional, corporate
and government clients across the world. This study includes the size, scope and various types of
company. It also explains various type of company such as voluntary, private and public. This study
also determines the interrelation between different departments of Merrill Lynch. Apart from that
this report ascertains the SWOT analysis and PESTLE of Merrill Lynch & the effect of its strengths
& weaknesses on the macro factors.
LO1
P1 Public, private and voluntary organisation - different types , puposes and legal structures .
Public Sector organisations: organisation which are operated & wholly controlled by the
government for providing to general public. They are controlled by government and funds raised
through fund transfer, taxes and fees by other level of government. Public organisation is state- run
organisation. Organisation in public sector not aim to profit generation.
For example: British petroleum works in the areas of gas and oil industry. BP involved in different
major environmental and environmental incidents. Organisation also supplies energy from
renewable and energy sources. (Baicherova and Eskov, 2018).
Purpose: in all their activities they seek to display some fundamental and unchanging qualities-
honest, integrity, treating everyone with respect and striving, dignity for mutual advantage and
contributing to human progress. They conduct their organisation in ethical and socially responsible
manner. Where they work , they always support universal human rigths, protect the environment,
respect the law and benefit the communities.
Legal structure: This organisation require large amount of capital. These organisation can sell there
shares to general public. They are owned and controlled by two or more owners.
Private Sector : Private organisation is controlled by a relatively non- governmental organisation
or small number of shareholders. (Church and Waclawski, 2017).For example: Merrill Lynch an
American Company having member those does not offer its shares to general public on the stock
exchange.They are also known as closely held corporations, unlisted company and unquoted

company.
Purpose: Merrill Lynch organised for achieving objective of profit maximization. They have core
set of owners , one person and small group of interested person who invest in the company.
legal structure: They are generally smaller with more than one owner .There members are friends
or family. They have restriction on transfer of shares. Merrill Lynch with large amount of capital,
limitrd liability and going concern conduct their business.
Voluntary organisation: Organisation which is self assured or functions with the assistance of
volunteers and which procedures services or aid to groups, individual or countries. Voluntary
organisation may be unincorporated or incorporated. Organisation which initiated and governed by
its own member without external control whether their workers paid or unpaid. For example:
Oxfam is an association of 20 sovereign charitable organisations concentrate on the mitigation of
poverty, founded in 1942 and managed by Oxfam international(Rajala, R., Westerlund, M. and
Lampikoski, 2016). Over half a million people in the UK contribute towards its work. They also
receive fund from gifts left to the organisation by people at their will. Many competitor raise
money for Oxfam and they also collect funds in return for organising and providing volunteer
representative.
Purposes: Oxflam established for the purpose of help in long term solutions to the inequality
of poverty. They are member of a global movement for change, allow people to establish a future
that is just, secure and free from poverty. They suppose that sustainable arms reduction and peace
are essential conditions for improvement and inequalities can be reduced between both between
poor and rich nations and within the nations. They also develop mechanism enable people to
become self supportive and opening new market for international trade where crafts and produce
from poorer region of the world able to sell product at a reasonable price to benefit the producer.
The. Organisation for its resources focuses on four main areas: economic justice, gender justice,
essential services and rights in crisis.
Legal Structure : The rules followed by a voluntary organisation are set out in a precise
form. The legal structure of Oxfam includes all the government policies and procedures and
legislations. So Oxfam has to follow all the government regulations for conducting its operations
smoothly as these regulations may affect the workings and growth of the organisation(Barbieri and
et.al., 2016).
P2 Description of Size Scope and structure of private, public and voluntary organisation
Basis Private oraganisation Public organisation Voluntarily
organisation

Size They are small and
privately held
They are large in size
and held by
government.
They are large in size
with large number of
member .
Scope It has some restrictions.
For same minded
people it is easy to
operate their business
operations in effective
manner . Merrill Lynch
has vast opportunities
to expand(Camillus,
2016).
It is governed by rigid
written procedures that
are consistent with the
equality/ justice
objectives which
pursues administrative
actions. British
Petroleum for better
comprehension
struggle with public
management and
decision making.
These are the non profit
voluntary groups
established at local,
national or
international level.
Oxfam perform task
different tasks for
solving problems and
development of society.
Private individuals
involve those believe in
in definite basic social
principles .
Structure Private organisations
follows a hierarchical
structure, a flat
structure or a
combination of both.
British petroleum
follows a divisional
structure, with
commissions and
departments divided by
the type of they do(Noe
and et.al., 2017).
In this organisation, the
informal structure
determine the
functioning. Oxfam
having large base of
membership spread
across vast
geographical areas and
develop more formal
and rigid organisational
structure. They
structure there
activities to bring about
development to
communities whom
they are servicing.

LO 2
P3 DIFFERENT ORGANIZATION STRUCTURE:
An organization structure is defined as “ explaining the hierarchy system in an organisation.
There are many types of organization structures. There is traditional organizational structure four
types functional, divisional, matrix and flat structure.
Hierarchical structure: In an organisation hirerarchical structure, employees are grouped with
every employee ,those having one supervisor. It is an effective way which is followed by most of
the large organisations such as APPLE company. The grouping is done based on few factor like-
Functioning: This define the function of technical, finance, administrative groups and HR.
Employees are grouped as per their functioning in organisation.
Geographical: On the basis of region employees are grouped. APPLE company grouping done
according to countries.
Matrix structure: In an organisational structure, matrix structure is followed by setting up a grid
for reporting . SAMSUNG company follow up this organization strategy or hired similar skills
people for different department. So those employees are eligible for work with different department
managers in their job role(Church and Waclawski, 2017).
RELATIONSHIP BETWEEN FINANCE AND MARKETING
These are the two aspects which affect the success and revenues of the organisation. Marketing is
concerned with advertising, publicity, sales targets, sales volume and sale in comparison to
compertitors . Finance deal with all financial aspects like profits, costs, practicability of projects,
sales growth, financial performance at the end of year . Generally for successful implementation of
marketing strategies a strong base of finance is required for setting goal for marketing like
advertisement, publicity of product. The finance department require to set operational budgets for
marketers. Employees of finance depatment develop visual communication with marketing
department for setting short term or long term goals of marketing.(Noe and et.al., 2017). Credit
policy for marketing affect the finance department bugeting strategies. Marketing is helpful in
acquiring and keeping profitable customers, this functioning directly depends on cash flows. For
successful marketing in an organisation marketing department require a strong base of finance.
Finance department ensures that goals set for marketing are going as per the plan and within the
budget. Marketing department acknowledge finance department about those strategies which helps
organisation in achievement high targeted profitability. While finance department set budget for
marketer so they can increase profit through policies or gain more and more profit without spending

more money or time. Marketers gives finance ideas on where finance can cut spend money.
RELATIONSHIP BETWEEN HR & FINANCE
The HR or finance department have close relationship. These departments targeted towards higher
level of performance and profitability. They generally handles people management and finance
handles money management. HR department keep away duties to hired right skills people with right
position employees in finance department. Human resourse department need to keep retaintion of
talented employees. HR for financial needs of budget, new hiring activity or for training the exiting
workforce dependent on finance department. Finanace department give salary status of employees
to HR. HR according to performance of employees give salary to employees that help to company
growth. HR or Finance department keep away important role in company(Noe and et.al., 2017).
LO3
P4 PESTLE ANALYSIS:
Pestle analysis is the tool that is useful to evaluate macro environment of the firm. By this
way the entities can frame their policies and practices dealing in such environment effectively.
There are several parts that have high impact over Merrill Lynch. There factor described :-
Political factor: political factor is beneficial factor for Merrill lynch company. Political factors
encompass government regulation, tax legislation and stability of country. The political stability of
country becomes a deciding factor for most of the organisations as these affects their profitability
ratio and sales. Merrill Lynch considers these factor weather they are expending their business or
establishing business across the world for example in 2017, UK government mitigated regulatory
pressures and forces on finance industry and banking system which will promote to enhance their
emphasis on customer relation. Sometimes, when government change that time government change
their policies, laws or loan strategy. Company have to change their policies according to new
government rules which may create problem for the company. Due to political instability the
company may face issues in making appropriate decisions which may also lead to financial crises
which may affect Merrill Lynch company.
Economical factor: Economical factor keep close relationship with banking sector. Economic
factor encompass tax legislation, foreign exchange policies and stability of country. Country
stability matter for bank sector if country is stable then country easily can investment or that will
beneficial for Merrill Lynch company. when the inflation occurs bank experiences the backlash. as
inflation affects currency as well as it values and also causes instability(Bull and et.al., 2016).
Socio cultural factors:cultural influences include buying behaviours as well as necessities.it can
effect the public and also the banking options. People trusted banks for loans related to the issues

such as business home . Merrill Lynch bank also provides such facilities to their customer.
Technological factors-Technology helps the bank to stay in more updated such as mobile banking
which helps people to transfer their funds as well as pay checks with their smartphones it helps to
save he paper and Merrill Lynch bank can drive the branch through
These methods .nowadays debit cards also changing as there are chips implemented.
Legal factors- Merrill Lynch bank follows the strict guidelines such as privacy ,trade structures
such structures are necessary for the customer lived within the country(Dibrell, Fairclough, and
Davis, 2015).
Environmental factors- use of paper is reduced nowadays as there are more banking apps are
launched which helps to protect the environment. As many issues are solved due to online banking
services Merrill Lynch Bank follows the mobile online services which will helps to protect the
environment.
LO4
P5 Analysis of Internal and external Environment
For proper planning for business, it has to study the environment first in which it is working,
as it affects the business most and also lets the business know about its threats and valuable
opportunities. Internal Environment analysis is in respect with the strengths and weakness within
the company and on the other hand external environment deals with the study of the outside factors
of the business, that is, competitors, consumers, etc. through which a thorough analysis can be done
of the opportunities and threats for the business. For proper examination of the current situation of
Merrill Lynch internal and external analysis has to be done so that the current market position of the
company can be ascertained through following the various steps of SWOT Analysis(SWOT
Analysis: What It Is and When to Use It, 2019).
 Strength: Merrill Lynch is the largest financial service company at a global level. It
provides good quality financing at very low prices as compared to different global brands. In
the UK financing market it owns a large position as it has 440 offices in various states of
UK. As it has maximum offices the quality of banking and financing services is also high
with new and advance technology which results in lower production cost and ultimately
cheaper service provider to the customers which gives a competitive advantage in the global
market over different competitors(Bull and et.al., 2016).
 Weakness: It does not follow proper planning structure for its banking and financial
department. As they provide wide range of financial services which results in over
burdening and more mistakes but then also they provide cheap services by lessening the

prices below to the actual costing to the company itself, which is an ultimate loss to the
company. Though it has a strong online base, but the marketing strategies used by Merrill
Lynch are very poor due to which the service distribution process is affected badly resulting
to loss of sales.
 Opportunities: Nowadays, as customers crave for online services more in all the fields, it
will be the biggest opportunity for Merrill Lynch by adopting new technology and strategies
for marketing, promoting and pricing by providing a wide range of financial services options
through creative efforts which can provide it a competitive advantage in the financial
market. Also, through targeting the markets which are under developed or developing will
help in global level business expansion(Dibrell, Fairclough, and Davis, 2015).
 Threats: As the operations of Merrill Lynch are held worldwide, it has to comply with
regulations and laws of banking and financing with each country and also deal with
fluctuations of laws, currency, interest rates, government regulations, etc. Due to new
entrants in the market which provides a good range of close substitute services are a major
threat for the company as it will result in losing of its position of dominance in the market.
P6 Association of External Macro factors with Strength & Weakness
The organizations decision-making is mostly affected by the external factors of the macro
environment as it influence the strategies adopted and the performance achieved by company, they
are uncontrollable factors and it is impossible for the company to control them according to the
situation, these factors includes technological changes, social, legal, economic factors, etc. These
factors have an indirect impact on the conditions of various functions such as working and
financing operations of Merrill Lynch, which includes:
Technological factors: With the fast and massive change in the technology frequently, the company
is going concurrently with it. This strength of the company of being the foremost leader of online
marketing and technology it is easy for Merrill lynch to cope up with the early changes if any
occurs, as it is all prepared with the advance technology, which in turn helps in becoming global
leader of the financial market(Leonidou and et.al., 2017).
Political Factors: As the company dos not have stable financial structure, it is difficult for the
company to gain competitive advantage, as any change in the political atmosphere will have a bad
effect on the Merrill Lynch's market. If there is any change in the regulations and decrease or
increase in international agreements with other countries it will be more difficult for the company to
adopt such a situation and overcome due to this, the structure will become more
unstable(Phadermrod, Crowder and Wills, 2019).
Legal factors: The laws and policies of each place are different, as Merrill Lynch has acquired a

great market base with many customers, the risk is also increased along with it. As with so much of
work pressure it is difficult for organization to operate smoothly, it can do any mistake or misuse
the funds of public for achieving the personal goals of the firm. Due to which customer can file a
suit against the company for getting relief(Fifield and et.al., 2002).
Social Factors: These external factors can have a positive impact on the growth of Merrill Lynch as
its customers are both lower and medium income groups, by improving the quality of financial and
banking service it can satisfy more of the customers as it is a global level financing company. Here,
it is the strength of the company as through technological advancement and giving cheap services to
the customers, it will gain their confidence which in turn is a competitive advantage for the
company at global level(Hillary, 2017).
Economical Factors: With the change in the economic trends, the company can get affected as the
inflation will result in increase in the interest rates through which it will be difficult for the
company to invite the new customers or to retain the old one, as Merrill Lynch is having
approximately 440 offices worldwide, the change in exchange rates of different country will also
shake its market base.
CONCLUSION
The above report conclude that various types of size scope as well as scope of the banks. It
can also demonstrate the various functions that will link to the organization structure. Here above
some examples are Faso used related to the banking industry and at last it also determines the
strength as well as weakness such as pestle analysis of the banking industry.

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Online
SWOT Analysis: What It Is and When to Use It. 2019. [Online] Available
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