Business and The Business Environment

This document provides an overview of different types of organisations, including public, private, and voluntary sectors, and their legal structures. It explains the size and scope of these organisations and the relationship between different organisational functions and objectives. The document also discusses the positive and negative impacts of the macro environment on business operations, supported by specific examples. The case study used in this report is Marks & Spencer, a leading British retailer.

Business and The Business
Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures......................................................................................................................3
P2 Explain the size and scope of a range of different types of organisations.............................5
TASK 2............................................................................................................................................7
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure........................................................................................7
TASK 3............................................................................................................................................8
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................8
TASK 4..........................................................................................................................................10
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses..........................................................................................................10
P6 Explain how strengths and weaknesses interrelate with external macro factors..................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business environment is mainly considered as a sum total of whole external as well as
internal aspect which directly and indirectly influences decision making of business. Both have
various affects upon business practices as internal factors affect are controllable while external
are beyond control (Avramenko, 2012). So, for it entity has to determine irrespective nature of
business environment as it helps them to find several opportunities and threats as well. For this
report, the undertaken organisation is Marks & Spencer which is leading British retailer having
headquarters is in London, England. The topics covered in this report are size, scope, intent and
legal structure of private, public and voluntary firm. Moreover, the interrelationship among
various departments and effects of external as well as internal factors upon business operations.
Apart from this, how macro factors may be interrelated with organisational strengths and
weaknesses are also discussed in this report.
TASK 1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
As it has been determine that organisational success is based upon experiences and skills
through target market. There are various kind of organisation that are categorised based on its
intent, objectives and nature. Mainly there are 3 types of organisation which are discussed below
in detail:
Private sector organisation
This plays a crucial role within the system of country’s economy. It is mainly operated
through firms and people with clear objectives of developing expected profitability (Ballard and
et.al., 2012). So, the best example of it is Marks & Spencer which is British retailer deals in food
products, clothing and others. It s developed in year 1884 by Michael Marks and Thomas
Spencer.
Different type of private sector organisation
 Joint venture: This is considered as business agreement among two or more partners
which agree for pooling its resources for particular intent.
 Sole Proprietorship: It is considered as the one of the simple business type where person
singular person may perform a business that does not have any legal entity. Herein, an
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individual who own business individually is accountable for whole of their debts. Such as
Ma Barker.
 Partnership: It is a formal kind of business type among two or more person who agreed
to handle as well as perform an enterprise for sharing their profitability mutually.
Features: Its main feature is their management that is by single person or two without any
government involvement.
Goal: Its main goal is to develop a inspirational quality accessible firm for another one. This
incorporates quality based goods or service for clients.
Purpose: It main purpose is to gain profitability as well as become a renowned firm into
competitive market (Berg and Kilambi, 2014). Also, its intent is to provide standard quality
products to their potential consumers for gaining higher profitability.
Objectives: Its objective is to set a benchmark for another one based on firm’s quality
products.
Legal feature: It comply public limited company legal structure as well as is listed on the
London stock exchange.
Public sector organisation
This is that firm which is governed through government for facilitating product or
services for the advantage of communities (Bharadwaj and et. al., 2013). Such as NHS that
facilitates health care services to whole people based upon its health care requirements instead of
determining ability for paying for it.
Different type of Public sector organisation
 Public or statutory corporation: This kind of business is undertaken into existence
through special act of Parliament. Its main intent is to assure people welfare.
 Departmental undertaking: it is considered as one of the oldest type of business that is
organised, financed and controlled through another government.
Features: Its feature is to perform under direct control of government as well as few of them
are even developed under Statutes and Companies act. It is semiautonomous in nature.
Goal: It goals is to stand for developing health of people through facilitating the quality
services as well as experiences.
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Purpose: Its main intent is to provide high standard of excellence as well as professional
services to patients and service users. Its intent is to include higher quality care that is secure and
effective for patient.
Objectives: Its objective is to deliver effective care, better health and value to their
customers.
Legal feature: Mainly NHS comply regulation and rule for public corporation that is funded
through UK parliament.
Voluntary sector organisation
It is that organisation which receives funding from groups, states and person to act for
people benefits instead of shareholder. Its main aim is to develop social impact without
concentrating on profitability (Hilton and Platt, 2013). Such as Oxfam, it is charitable firm that
was developed in year 1942.
Different type of Voluntary sector organisation
 Unincorporated Association: This is a group of two or more person that is joined through
mutual consent for a lawful act to organise a profitable objectives. It does have any legal
rights.
 Charitable Trust: It is a kind of business that mainly developed to attain a social benefit
for people. This is also considered as a unchangeable trust that developed for charity
purpose.
Features: its main feature is that it is an association that is developed as well as controlled
through their own member without any eternal involvement either staff are paid or un paid.
Goal: Its goal is to develop a world without poverty as well as in injustice.
Purpose: The main purpose of voluntary sector is to compromise through providing
fundamental rights as well as freedom to required person and societies.
Objectives: Oxfam main intent is to form a permanent solution to poverty and injustice.
Legal feature: Oxfam lies under Unincorporated Association legal structure. It was mainly
developed with an agreement among individuals for providing a poverty solution.
P2 Explain the size and scope of a range of different types of organisations.
For all firm, it is needed to set an objective which could be long and short term which it
seeks to attain. Vision, value and mission play an essential role for setting policies and strategies
of firm. So, sizes as well as scope of various companies are discussed below:
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Organisational size
This is considered as a number of staff who are performing at any areas of company
(Janita and Miranda, 2013). This will involve whole business either it is into regional areas or a
decentralized firm section.
 Micro firm: This considered to be a small organisation that employs a limited people. it
mainly perform with minimum 10 staff as well as enhance finance from banks.
 Small size Organisation: As per companies act, it is considered that it do not has above
50 staff. Their turnover does not have more than £ 6.5 million.
 Medium size organisation: This is considered as those businesses who have few staff of
approx 250 and should have turnover within £12.9 million.
 Large size organisation: This type of organisation should have above 250 staff into
geographical location and has effective business practices regularly. Moreover, it has
more difficult management hierarchy than medium as well as small firm.
Example:
 Micro: Ma Baker is award winning firm in UK which is operated through Liz Wilson.
She is a teacher, baker and passionate cook.
 Medium: Oxfam considered as a voluntary sector organisation which have a huge reach
which perform to solve poverty problems with assistance of limited voluntaries. It
reached to various locations through spending a particular amount of its welfare.
 Large: NHS facilitates health care services to people and having about 106, 430 doctors,
285, 893 nurses and various equipments, technical employees and professional
administrators.
Scope
 Private: Ma Baker which is a renowned micro company in United kingdom operated
through Liz Wilson and facilitates their own services. With assistance of delicious bakery
product it reach towards various areas through developing their structure at huge level.
 Public: For expanding the experience of quality services, NHS is seeking towards
exploring their operation into more location of Scotland, Northern Ireland and Wales
where it perform with limited employees.
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 Voluntary: Oxfam performs above 90 countries with various communities, various
partners and others for helping individuals for rebuilding its livelihood through creating
permanent modification.
TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
Within firm, the various department practices are depends upon their business structure.
Mainly, it assists them in setting up a network f relationship that categorised task into several
units. Some of them are discussed below:
Human resource and marketing department: Within firm, both HRM and marketing plays
vital role. HRM performing for training, staffing, worker retention and other for providing a
productive personnel (Prins and Cybercrime, 2017). Whereas marketing section perform to
promote the product of business as well as create product sale opportunity through determining
the market needs. In Marks & Spencer both perform collaboratively as HR recruit competent
staff who may able to maximise opportunities of market sustainability.
Marketing and Finance: Within Marks & Spencer, marketing section role is determine
current marketing trends as well as consumer’s needs for developing expected products. In this
respect, finance department facilitates own support to them to perform market investigation
effectively for maximising organisational growth opportunity.
Marks & Spencer organisational structure
Marks & Spencer generally comply the flat structure for its business as well as their work
practices of all departments are depends upon process of decision making within respective
structure. The main intent of executing this type of structure is to motivate staff to participate
into firm’s decision making procedures. Moreover, it also aids them to minimise bureaucracy
and develop staff enthusiastic through performing its involvement into practices of company.
With assistance of this, Marks & Spencer can increase their business productivity which assists
them to enhance its opportunities for growth. It has been determine that organisational functions
directed regarding the accomplishing organisational aims and objectives, Respective department
workers in isolation but for attaining the sole aim that is organisational development for that they
assign resources with accountabilities to one another so that each and every people can provide
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one of their best effectiveness in organisational growth and development. Further to deliver roles
and accountabilities needed a well explained organisational structure which required following
through each person. In reference to M&S, they use flat organisational structure with few or no
levels of management among administration and staff level workers. The flat organisation
supervisees workers less whereas promoting their maximised development in the decision
making process.
TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
For firm, this is essential to determine numerous external factors as well as their affects
which will be helpful in reducing pessimistic effect of those factors and may avail opportunities
into current business environment. So, Marks & Spencer utilise PESTEL analysis which are
discussed below:
Political factors: It have direct impact upon Marks & Spencer as it is performing into
various countries because of that it has to follow numerous needs that imposed upon them
through government. Such as free trade policies of UK with another government have
affirmative impact upon respective organisation as this will minimise several requirements
implications.
 Positive impact: It have affirmative affect upon organisation. But Brexit have adverse
effect on firm because of it free trade agreement will not be available to them.
 Negative impact: Also, its manufacturing cost will enhance that will has pessimistic
effect upon organisational profitability.
Economic factors: The enterprise has to perform some adjustments into its policies based on
prevailing economic situation (Schaltegger, Lüdeke and Hansen, 2012). Several economic
factors which they has to considered are employment rate, inflation rate and many others.
 Positive impact: Marks & Spencer have been performing upon huge scale within present
marketplace but UK trends states that shifting is taking place towards small retail stores.
Because of this mark up cost has low down that allows them to become a premium brand
thus this helps them to make affordable products to all that have affirmative effect upon
enhancing its sales.
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 Negative impact: The failing customer buying power of United Kingdom force them to
moves towards local small retailer instead of premium brand as well as it directly and
negatively impact on organisational profitability.
Socio- culture factor: This has effective impact upon organisation as it is concern about
consumer’s preferences, tastes and many more. So, this helps them to develop its product as per
their requirements.
 Positive impact: With enhancing demand of firm’s ready meal industry have essential
market share as it become successful in tapping respective market segment through
ascertaining the requirements as well as serving them meal based upon its needs.
 Negative impact: As it has been performing from longer time so it has brand image but it
has not launched any innovative product for its consumers because of this they are
preferred to be non trendy through its potential clients.
Technological factors: This states the trends into technology which the enterprise has to opt
in order to satisfy its customers.
 Positive impact: Marks & Spencer have adapted some kind of self checking counters in
its retail shops that have provided the client an improving shopping experience as with it
their billing procedures get reduced. Moreover, with enhancing online shopping trends
also accepted through organisation because of which it provides all its products by online
medium as well as it have an affirmative impact upon respective firm.
 Negative impact: This regular development in technology impact firm’s cost structure.
Legal factors: The firm have to obey numerous regulations which imposed on them so that it
may assure ethical business operations as well effective image among their consumers (Vitale,
2017).
 Positive impact: It follow whole legal aspects that assures that they has ethical code of
conduct in its firm as well as have affirmative affects upon them.
 Negative impact: Marks & Spencer have faced numerous legal disputes because of which
the firm’s brand image got impacted in adverse way.
Environmental factors: With enhancing individuals concern the firm have to consider
numerous affects of its business practices upon environment.
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 Positive impact: Marks & Spencer have undertaken the sustainability its offering because
of which it has optimistic affects on its business as government support them in this.
 Negative impact: But this enhances difficulties as well as cost into procedures of firm
because of this shareholder may get impacted.
TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses
In order to analysis the internal factors SWOT analysis is considered through organisation
as it is helpful in identifying strengths, weaknesses, opportunities and Threats. So, with the help
of this they can able to develop several strategies and overcome from the issues that hinder
business development (Weiss, 2014). Therefore, SWOT analysis of Marks & Spencer are
describe below:
Strengths Weaknesses
 The main strength of Marks & Spencer
is its strong cash flow which helps them
to explore its business in simple
manner as it has efficient resources.
 Also, they are more effective strategies
of moving to marketplace for whole
products which are provided through
them.
 UK government is facilitated their own
contribution towards respective
organisation for managing trade
policies appropriately so that its
business practices can be expanded in
effectual way.
 Whereas, process of Marks & Spencer
strategic planning aids them to sustain
 For Marks & Spencer, there is more
need to invest into technology for
process integration expansion which is
essential.
 Moreover, the employment turnover
rate is higher because of which firm
should to spend more upon its staff
trainings.
 Also, for respective organisation the
Brexit arises challenges in respect of
managing the sustainability of business
into effective cost.
 On another side, consumer buying
behaviour rate is minimising because of
lack of awareness, it also arises few
weakness for respective organisation to
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into marketplace of UK through
executing new ideas in simple way.
accomplish specified development.
Opportunities Threats
 With effective availability of cash,
Marks & Spencer has an ability to
explore its business operation.
 Moreover, as it has great brand image
so this allows them to assure its
business success.
 In addition to this, it has an opportunity
to minimise transportation cost as it
will minimise its overall operation cost.
 The trends into particular sector drives
towards enhancement of competition
level that directly impact Marks &
Spencer’s operations.
 Also, the maximising production cost
because of abolished free trade
agreement impacts their profitability.
SWOT analysis of NHS
Strengths Weaknesses
 Effective CQC report which evidences
consistent delivery of quality and
execution
 Track record of delivering
transformational change to develop
both clinical and fiscal execution.
 Loyal, engaged and committed
employees with immense level of
morale.
 Community facilities not owned with
variable quality of rented estates.
 Highlighted financial deficit that
requires being resolved.
 Vacancies in nursing and AHP
workforce and problems recruiting and
retaining these staff.
Opportunities Threats
 Improve integrated pathways with local
health community challenging existing
model of care.
 Work with private sector, commercial,
third sector and joint NHS providers to
generate revenue for Trust and develop
health campus on main site.
 Financial context and uncertainity of
national economy, future funding
models etc.
 Loss of services as they are contracted
by an AQP process.
 New ownership framework for NHS
property driving increase in cost o
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 Increase service user, carer and public
development.
rented estate.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
The firm have to determine the opportunity for firm so that it may able to avail them as
well as attain its objectives and also can reduce several threats impacts (Werbachand
Hunter2012). So, the interrelations of micro with external factors are discussed below:
External factors Strengths Weaknesses
Political factors The free trade agreement
provides Marks & Spencer an
opportunity to explore its
business as it has strong cash
flow.
But because of Brexit of
production cost enhances as
well as it impact
organisational profitability.
Economical factors As Marks & Spencer is
leading brand which facilitate
more employment opportunity
to new talent for executing
ideas. It supports UK
economic development.
Brexit enhances the challenges
due to reduction into UK’s per
capita income. This impact a
major fall into customer
buying power.
Socio culture factors As Marks & Spencer has a
strong consumer base because
it facilitates quality goods to
its clients through determining
their needs. It aids them in
obtaining expected cash flow.
The main weakness of Marks
& Spencer is lack of involve
ment into promotional
practice which divert traffic
towards the another stores
competitors. So, because of
lack of promotion this is
difficult for firm to develop
new consumers base from
existing one.
Technological factors Marks & Spencer drives
towards their business with
But becasue of high price war,
this is tough to execute
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assistance of strategic
planning procedures where it
pays more attention towards
execution of new technology.
expected technology at every
steps of operation. The
weakness of Marks & Spencer
is non upgraded technology
because of which it can not
able to meet consumer’s
preferences.
CONCLUSION
As per the above report, it has been concluded that the enterprise should ascertain objectives
which helpful in developing several strategies and attained it at specified period. Moreover, the
interrelationship between various sections allows firm to accomplish their goals effectively and
efficiently as it perform consistently towards it. Apart from this, it has been also summarised that
with the assistance of SWOT as well as PESTEL analysis are performed so that the business
effectiveness can be attained.
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REFERENCES
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development of a customer-specific business process model. U.S. Patent 8,639,542.
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Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Janita, M.S. and Miranda, F.J., 2013. The antecedents of client loyalty in business-to-business
(B2B) electronic marketplaces. Industrial Marketing Management. 42(5). Pp,814-823.
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tulip’. Fox-IT, November.
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Werbach, K. and Hunter, D., 2012. For the win: How game thinking can revolutionize your
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Wheelen, T.L. and et. al., 2017. Strategic management and business policy. pearson.
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