Business and The Business Environment

This document provides an overview of the different types and purposes of organisations in public, private, and voluntary sectors, and their legal structures. It explains the relationship between organisational functions and objectives, and discusses the positive and negative impacts of the macro environment on business operations. The case study used is Marks and Spencer, a leading British retailing company.

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 determined as a total of external and internal environment factor
that influence decision making by organisation. Both imposes different impact on practices of
organisation as internal element the affect of internal elements are controllable but external
factors are determined as a beyond control. Therefore, the organisation considers business
environment assist them in grabbing various opportunities in particular phase of time period. In
this assignment, the organisation is undertaken named as Marks and Spencer. It is leading British
retailing company which is located in London, England. In this report, there is different topic
such as size, scope as well as a structure of organisation in relation to public private and
voluntary firm. Furthermore, the interrelationship between different departments and impact of
external and internal elements on operations of organisation is discussed. In addition to this, how
macro element is interrelated with strength &weakness of organisation are also explained in this
assignment (Bedianashvili, 2016).
TASK 1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
It has been analysed that the success of organisation is depend upon experience as well as
skill by using target market. There are different types of companies that are categorised depend
upon its objective as well as nature. There are three kinds of company that is given below:
Private sector organisations
It plays a very important role within economic of country. The focus is on operating
organisation with clear objective that help in increasing profitability level. Marks and Spencer is
the best example of providing different variety of clothes, products and other goods to its user in
order to satisfy them. This company was given by Michael Mark and Thomas Spencer in the
year of 1884.
Different type of private sector organisation
Joint venture is determined as a business contract between more than two partners in
order to conduct business in an appropriate manner.
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Sole proprietorships: Herein, there is only one person who performs different activity in
an appropriate manner. He is considered as only owner of organisation and responsible for whole
debts such as Ma Bakers a example sole proprietorship..
Partnership: It is the formal type of organisation in which more than two person handle
organisation by sharing profitability level (Franklin and Marshall, 2019).
Features: The main characteristic is that the operations of organisation are performed by
single person without any kind of involvement of government.
Goal: The goal of organisation is to provide superior quality product and services in
order to satisfy them.
Purpose: The main purpose is to increase profitability and achieve leading position in
future period of time.
The objective is to set effective benchmark for other firm which is depend upon quality
of product of organisation.
Legal feature: It is determined as a public limited company in which they listed their
product on London stock exchange
Public sector organisation
This is the type of organisation that is implemented their functions under government.
For example NHS is determined as a health care organisation which provides healthcare facility
to individual person in order to satisfy them.
Different kind of public sector organisation
Public or statutory corporation: This type of organisation performs their business under
the special Parliament Act. The main purpose is to provide welfare to the society.
Departmental undertaking: It is determined as the oldest kind of organisation that is
conducted, financed and monitored through other government.
Features: Herein, the organisation performs their business under control and governance
of government under companies Act.
Goal: The goal of organisation is to provide better health to individual person during
particular phase of time period.
Purpose: The purpose of organisation is to offer high standard of professional services to
its patient.
Objective: The objective is to provide appropriate care to its user.
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Legal features: The NHS follow rules for public company that is financed by UK
parliament.
Voluntary sector organisation
It is other kind of organisation who receives finance from group of individual person for
achieving profit in future period of time. The main aim of organisation is to provide social
service instead of profit. The Oxfam is determined as a best example of charitable organisation
which was founded in year of 1942(Gaganis, Pasiouras and Voulgari, 2019).
Different kind of voluntary organisation
Unincorporated association: It is a group of more than two person that is joined together
in order to achieve profit in future period of time.
Charitable trust: This organisation is mainly established for providing social benefit to
individual person of society.
Features: The main feature of this organisation is to develop or controlled by member
without any kind of an involvement of staff.
Goal: The goal of organisation is to reduce poverty and Injustice.
Purpose: The purpose of organisation is to offer fundamental rights and freedom to
needed person of society.
Objective: The objective of firm is to provide solution to poverty as well as injustice.
Legal feature: The firm operate their business under an unincorporated association in
legal structure.
P2 Explain the size and scope of a range of different types of organisations.
For business organisation, it is required to set objective and goal which is short term as
well as long term that help in attaining them during particular phase of time period. The value,
vision, mission is very important for implementing policy of organisation (Gebauer, Haldimann
and Saul, 2017). Therefore, there are various size and scope of different companies that is going
to be given below:
Organisational size
Organisational sizes are determined as a different type of staff who performs their
operations in an appropriate manner. It includes overall business and there is different size of
organisation that is given below:
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Micro firms it is determined as a small company that focuses on employing Limited
people. They execute with minimum 10 subordinate and increase fund from bank.
Small size organisation according to companies act, it is determined that they do not
have the staff more than 50. Their turnover is around more than £ 6.5 million.
Medium size organisation: This is determined as organisation that possesses few staff
and subordinate of around 250 and their turnover is £12.9 during particular phase of time period.
Large size organisation: This kind of organisation has more than 250 staff among
geographical location and has appropriate practices of organisation in regular way. Furthermore,
it is complex management hierarchy in comparison to medium and small organisation.
Example
Micro Ma Baker is the organisation who win award in UK that is executed their
operation through Liz Wilson. She is considered as a Baker as well as patient cook.
Medium Oxford determined as a voluntary company that have a large reach in order to
execute different problems related to poverty in an appropriate manner. There are different types
of location that help in providing welfare to individual person within society.
Large NHS provides healthcare facility to individual person and they have around 1,
06430 doctors with 2, 85 893 nurses and different technical subordinate as well as professional
administrator(Gorla, Chiravuri and Chinta, 2017).
Scopes
Private Ma Baker is well known micro organisation in UK operated by Liz Wilson and
provide own services. By providing delicious product, it helps in attracting large number of
customer at Marketplace.
Public for increasing the experience level of quality services, NHS focuses on operating
their business in Scotland and Northern Ireland with limited subordinates.
Voluntary Oxford execute their business in around 90 countries with different
communities and with different partners that help individual person in building its livelihood by
generating permanent alteration or modification.
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TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
In organisation, there are different practices that are based on structure of organisation. It
helps in maintaining relationships that is categorised into various units that is going to be
mentioned below:
Human resource and Marketing department Within, organisation both HRM and
marketing is important for conducting different function in an appropriate manner. The HRM
focuses on conducting training as well as retaining worker in order to offer productive staff to its
organisation. On the other hand, the marketing department execute their activity in relation to
promoting goods that help in increasing opportunity by considering need and want of consumer
at marketplace. In context of Marks and Spencer both department execute collaboratively as HR
manager recruiting talented subordinate who provide maximum opportunity related to market
sustainability.
Marketing and Finance in Marks and Spencer, the role of marketing help in determining
need and trends of market for improving product during particular phase of time period. Herein,
the Finance Department focuses on providing support to execute investigation in market
appropriately for increasing growth of organisation in future time period(Hillary, 2017).
Research and improvement with finance function: The key position of R&D branch is
to aids entity for retaining their competiveness. It way of monitoring the patterns of marketplace
that are emerging in addition to performing practices of competition. This specific division is
appearing to decide a clear expertise approximately gift situation into supplied area. For acting
those activities, Finance sector render their personal contribution through delegating expected
finances for market research.
Marks & Spencer organisational structure
Marks and Spencer follow flat structure for its organisation and work practices related to
department that is completely depend upon procedure of decision making within given structure.
This kind of a structure help in motivating individual person to take part in the decision making
process. Furthermore, it helps in decreasing Bureaucracy and improve subordinate enthusiastic
by executing its involvement to increase performance of organisation. In addition to this, Marks
and Spencer focuses on enhancing productivity level of organisation in order to achieve growth
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in future period of time. In context of Marks and Spencer, they adopt flat structure of
organisation with no level of administration among management as well as worker. The flat
organisational structure help in taking decisions quickly which will be beneficial for organisation
in future time period.
TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
PESTEL Analysis
It is tool which is used by enterprise to examine the external element that affects the
workflow and overall organisational function of business. So, it is used by Marks and Spencer
which is further explained below-
Political factor-
It is factor in which it comprises of environmental law, trade policies etc. In context with
M & S, company is located globally & has been affected by this factor at global level. They gain
competitive advantage of EC agreement as they move their products into those countries where
travelling of product is free (Rialp-Criado and Komochkova, 2017).
Positive impact- The positive impact of this factor is that it assist firm in managing their
overall cost of production due to gaining benefit from EU market & EC agreement.
Negative impact- The Company has to work under government rules & regulations and
also has to pay additional charges to governmental charges for their services.
Economic factor-
It is also another element which affects the business as because it includes taxation
policy, tariff & non-tariff, inflation, deflation rate etc. In context of U.K, fiscal & monetary
policy is managed because government has stable economy & manages the low rate of-inflation.
Positive impact- In this, it is beneficial for M& S to expand their business at wider level
by paying low taxes.
Negative impact- In this, due to low demand of high quality of product, company is
unable to expand their business in many countries which disrupts their overall business structure.
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Social factor-
It is also another element in which it focuses on religion, culture, etc. Both ASDA and
M& S, is segment their market on basis of demographic variable. With changing trends of cloth
industry, firm introduces new modes of payment technology through online wallets, credit cards
which enhances their opportunity to retain customers.
Positive effect: Positive effect is that it helps company to market their product according
to mind set of consumers.
Negative effect: In this, M& S need more resources, technology to understand the
consumer behaviour & social factors which leads to high cost of firm.
Technological factor
With use of internet globally, the technological field is also expanding at larger scale. In
context with chosen company, they also uses technology within their firm such as high end
security data base system, SAAS software etc.
Positive impact: Use of technology within business assists entity to access to customer
insight in most appropriate way.
Negative effect: Adopting technology req1uires regular update and which is time
consuming as well as require huge investment.
Environmental factor-
It focuses on pollutants, waste management, etc. which are focused towards safety of
environment. These elements have large impact on business functions because many countries
are focused towards their safety of environment & have policies and rules for foreign as well as
domestic businesses (Saleh and Watson, 2017)
Positive impact: By properly focusing on environmental rules & regulation of country,
goodwill of entity increases at higher level as it reflects their ethical practices and corporate
social responsibility.
Negative impact: Due to strict rules in many countries, M & S is unable to expand their
business properly.
Legal factor
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It includes elements such as contracts, agreements, laws which affects the business. In
relevance with chosen firm, they have legal department which ensure that everything is done
with proper followed legislations (LiuZhao and Mao, 2017).
Positive impact: By properly following laws and legislations, it is easy for firm to
eliminate problems.
Negative impact: Neglecting these rules and regulations will cause a major problem to
business structure.
PESTEL Analysis of NHS
Political environment influences positive impact on NHS. There are various factors which
imposes both favourable and negative impact on political atmosphere of NHS.
 Positive impact: Due to stability in political condition of UK it imposes positive impact
on NHS.
 Negative impact: The management team of NHS do not maintain proper plan and due to
increase in modification in political condition that adversely affects growth of
organisation.
Economical environment it involve exchange rate, currency rate, inflation rate and many
more.
 Positive impact: They provide appropriate services to its client during particular phase of
time period.
 Negative impact: Due to rise in inflation increases cost of commodity.
Social: Social environment of country within NHS is prevailed that help in determining
modification they needed to make.
 Positive impact: They establish their business in the area in which individual person can
arrive in hospital when there is a situation of urgent requirement(Khajeheian,
Friedrichsen and Mödinger, 2018).
 Negative impact: Due to increase in Covid-19, there are increasing number of patients
that unfavourable impact the organisation.
Technological: Technology is improving quickly and it is necessary for NHS to implement
its technology for achieving competitive edge.
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 Positive impact: Technology favourably affects NHS in context of providing surgical
equipment as well as innovative instrument that is related to medical facility.
 Negative impact: The adoption of technology in context of handling patient and providing
information to its customer that negatively affects the organisation.
Environment: Each organisation is morally accountable to provide positive atmosphere to
its employees within company.
 Positive impact: NHS focuses on using surgical equipment during particular phase of
time period.
 Negative impact: Due to increase in corona virus, it increases stress on subordinate.
Legal: The law and regulation that must be follow by NHS in an effective manner.
 Positive impact: It is necessary to maintain financial record every year and pay taxes on
time.
 Negative impact: Due to frequent change in law and regulation that impact negative
impact on company.
TASK 4
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses
For assessing internal environment and factors, SWOT analysis is determined by company
as it is useful in assessing strength, weakness, opportunity as well as a threat. Through help of
SWOT analysis, they can improve their strategy and overcome from different kind of threat
which hinders development of business organisation. The SWOT analysis which is adopted by
Marks and Spencer that is going to be mentioned below:
Strengths Weaknesses
 The strength of Marks and Spencer is to
have a strong cash flow that helps in
expanding its market in appropriate
manner (LiuZhao and Mao, 2017).
 The appropriate strategy which is
adopted by organisation in order to
provide products and services
 For Marks and Spencer, it is necessary
to make more investment into
technology for expanding business that
add cost to the company which is
considered as a main weakness for
organisation.
 Due to increase in the turnover rate of
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according to their needs that help in
increasing brand image and reputation
of company in front of customer at
Marketplace.
 Furthermore, the procedure of Marks
and Spencer planning help in sustaining
and retaining into market of UK by
implementing innovative ideas in better
way.
employees and other organisation spend
more money on providing training to its
subordinate that is considered as a
threat of organisation. Due to Brexit,
there is a challenge faced by company
in handling sustainability of
organisation into appropriate cost.
Opportunities Threats
 With appropriate availability of fund,
Marks and Spencer have capability to
expand its operation of organisation.
 Due to increase in brand image of
company that helps them in achieving
leading position around the world.
 In assistance of this, they have an
opportunity to decrease the cost of
transportation and decrease whole cost
of operation.
 The trend in specific sector increases
the level of competition which imposes
direct impact on operation of Marks
and Spencer.
 Due to increase in cost of production, it
imposes negative impact on
profitability of company.
SWOT analysis of NHS
Strengths Weaknesses
 By using appropriate CQC report that
helps in proper delivery of quality as
well as implementation. Track or
maintain record of providing
transformational change to improve
both clinical as well as fiscal execution.
 The weakness of NHS is financial
deficit which require being resolved in
timely manner.
 There is a vacancy in the nursing as
well as AHP work force but there is a
problem in relation to sustaining as
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 Loyal, committed as well as engaged
subordinate with increasing moral and
satisfaction.
well as a retaining staff member
(Nguimkeu, 2016).
Opportunities Threats
 Increase integrated pathways along
with local health community provide
challenges in existing model related to
care.
 They focus on performing their work
with private sector and joint sector to
increase revenue for develop or
improve health campus during
particular face of time period.
 The focus is on increase service user
for improvement in public career and
many more.
 Financial context as well as uncertainty
related to national economy, future
financing model is considered as a main
threat of organisation.
 Due to adopting framework related to
new ownership that helps in enhancing
cost during particular phase of time
period.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
The organisation possesses opportunity for organisation that helps in achieving objective
and can decrease various threats during particular phase of time period. Therefore, the
interrelation of internal with external environmental factor that is given below:
External factors Strengths Weaknesses
Political factors The positive impact of this
factor is that it assist firm in
managing their overall cost of
production due to gaining
benefit from EU market & EC
agreement.
The Company has to work
under government rules &
regulations and also has to pay
additional charges to
governmental charges for their
services.
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Economical factors In this, it is beneficial for M&
S to expand their business at
wider level by paying low
taxes.
In this, due to low demand of
high quality of product,
company is unable to expand
their business in many
countries which disrupts their
overall business structure.
Socio culture factors Positive effect is that it helps
company to market their
product according to mind set
of consumers (Nguimkeu,
2016).
In this, M& S need more
resources, technology to
understand the consumer
behaviour & social factors
which leads to high cost of
firm.
Technological factors By properly following laws
and legislations, it is easy for
firm to eliminate problems.
Neglecting these rules and
regulations will cause a major
problem to business structure.
CONCLUSION
On the basis of above mentioned report, it has been analysed that business environment is
determined as a total of external and internal environment factor that influence decision making
by organisation. Both imposes different impact on practices of organisation as internal element
the affect of internal elements are controllable but external factors are determined as a beyond
control. Therefore, the organisation considers business environment assist them in grabbing
various opportunities in particular phase of time period. In this report, there is different topic
such as size, scope as well as a structure of organisation in relation to public private and
voluntary firm. Furthermore, the interrelationship between different departments and impact of
external and internal elements on operations of organisation is discussed.
14

REFERENCES
Books and Journals
Bedianashvili, G., 2016. The Global Business Environment, European Integration and the
Cultural Potential of Social-economic Development of Georgia. Globalization &
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trust in business-to-business relationships. Industrial Marketing Management, 77,
pp.170-181.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling, 78, pp.275-292.
Gebauer, H., Haldimann, M. and Saul, C.J., 2017. Competing in business-to-business sectors
through pay-per-use services. Journal of Service Management.
Gorla, N., Chiravuri, A. and Chinta, R., 2017. Business-to-business e-commerce adoption: An
empirical investigation of business factors. Information Systems Frontiers, 19(3), pp.645-
667.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Khajeheian, D., Friedrichsen, M. and Mödinger, W., 2018. An introduction to competitiveness in
fast changing business environment. In Competitiveness in emerging markets (pp. 3-11).
Springer, Cham.
Liu, G., Li, K., Zhao, D. and Mao, C., 2017. Business model innovation and its drivers in the
Chinese construction industry during the shift to modular prefabrication. Journal of
management in engineering, 33(3), p.04016051.
Nguimkeu, P., 2016. Some effects of business environment on retail firms. Applied
Economics, 48(18), pp.1647-1654.
Reeves, M., Levin, S. and Ueda, D., 2016. The biology of corporate survival: Natural ecosystems
hold surprising lessons for business. Harvard Business Review, 94(1-2), pp.46-56.
Rialp-Criado, A. and Komochkova, K., 2017. Innovation strategy and export intensity of Chinese
SMEs: The moderating role of the home-country business environment. Asian Business
& Management, 16(3), pp.158-186.
Saleh, A. and Watson, R., 2017. Business excellence in a volatile, uncertain, complex and
ambiguous environment (BEVUCA). The TQM Journal.
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