Business and the Business Environment Report

This report examines the business environment, analyzing different types of organizations, their legal structures, and the impact of macro-environmental factors. It analyzes the strengths and weaknesses of B&M Retail and Yorkshire Bank, highlighting how these factors influence their operations. The report also explores the relationship between organizational functions and objectives, providing a comprehensive understanding of the dynamics within a business context.

BUSINESS AND
THE BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION:..........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Different types and purposes of organisation; public, private and voluntary sectors and
legal structures............................................................................................................................4
P2 Explain the size and scope of different types of organisations..............................................5
TASK 2............................................................................................................................................8
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.......................................................................................8
TASK 3............................................................................................................................................9
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples................................................................................9
TASK 4..........................................................................................................................................12
P5 Conduct the internal and external analysis of specific organisations in order to identify
strength and weaknesses...........................................................................................................12
P6 Explain how strengths and weaknesses interrelate with external macro factors.................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................14
.........................................................................................................................................................1
.........................................................................................................................................................1

INTRODUCTION:
Business environment is an important attribute for organisation and consist all internal
and external factors that directly and indirectly affects its proceedings. On other hand business
environment in that includes individuals, groups and institutions and outside environment that
operates and gives their contribution in economic development with self development. These
factors affect overall working and its profitability. This report is based on B&M European Retail
value S.A that is European Based Retail organisation and it is listed under stock exchange of
London. That organisation is client of Yorkshire bank that is also a UK based bank that's main
motive is to give important values and principles in day to day life of their clients. This report is
based on different types, sizes and scope of organisation that play an important role in economic
development. It elaborates about interrelation ship among various functions and also link
between functions and structure of organisation. In addition to both negative and positive aspects
of macro environment factors in organisation. Further it elaborates relationship between micro
and macro environment of business and their effects on organisational growth and development.
TASK 1
P1 Different types and purposes of organisation; public, private and voluntary sectors and legal
structures.
Business environment play a significant role in organisation to adopt changes that are
important part for organisational development and enhancement. Business environment evaluate
threats and weaknesses to business and give guidance to improve them. In environment there are
different factors that helps to firms in gain organisational goals and objectives(Andersson,
Forsgren and Holm, 2015). There are different types of organisation in that includes public,
private or voluntary organisation and their sub parts that also known as their legal structure.
Public organisation:
Public sector is an attribute that operated by government and they giving their services to
masses. The motive of public sector firms is to provide services to customers by earn profit. The
main source of their fund is taxes, fees and financial transfers of income generation for them
(Boons and Lüdeke-Freund, 2013). Examples of public sector is Atomic weapons establishment
that works for design and manufacture of weapons. Their main purpose of this organisation is to

give intelligence with support by providing solutions for terrorism and nuclear. And put efforts
in organisation development in operation works and activities.
In public sector organisation when a person pays taxes from their salary it creates sense
of responsibility that comes from public sector workers. An worker can contribute in local,
society and nation development by their work. Private organisations works for consumers and
also for their benefits. That sector faces less competition in comparison to other organisations. It
provides such services that are less profitable in comparison to other fields. Public sectors also
work for welfare and provides goods and services to people who don't afford goods and services.
There are some disadvantages of public sector that are as follows:
public sector should be considered as bureaucratic in which red tap ism and corruption prevails
very much. Public sector have less profit motive and also lack of innovation in that sector. In that
sectors if changes occurs that mean change in priorities and that brings variation in funds and
spending.
Legal structure of public sector organisation:
Public sector is one of another type of joint stock company like a private limited
company. Public sector is run and operated by board of directors in perspective of shareholders
and A.G.M for that shareholders vote for certain issues of company. Public limited company
have different memorandum of association and articles of association from private limited
company. In some cases organisation have to follow rules and regulations or follow laws in best
interest of shareholders, for it they have to issue certificate of incorporation and trading
certificate that allows to sell in market. In that case price of shares fluctuate according to
perception of investors.
Private organisation:
Private organisation which is run by individuals and firms rather than government to earn
profit and large market share (Chen, Chiang and Storey, 2012). Private organisation plays crucial
role in economic development. Example of private organisation in UK is B&M retail that has
chain of stores that deals in variety of products such as home and living, furniture and electric
items etc. expansion of firm and gaining competitive advantage are major objectives of private
organisation.
Private jobs access opportunities from outside world according to consumer needs and
demands that gives profitability to both consumers and organisation also (Hilton and Platt,

2013). It creates large no. of employment opportunities to masses. It work to bring innovation in
market that very much beneficial. It is more efficient sector and has less risk in comparison to
public sector (licensing of product and services).
Disadvantages of private sector consist there is less job security and employees become
dissatisfied from jobs. It has restrictions in transferability of shares.
Legal structure of private organisation:
This is another part of joint stock organisation which has separate legal identity from
their owners. These organisations commonly small, family run organisations that are owned and
operated by stakeholders. In private organisation each member is part of firm and not any
circumstances shares should be not given to general public. In that organisation every member
have limited liability and company is run by board of directors and head of company is
chairman.
Voluntary organisation:
Voluntary organisation is entity which is created or framed by groups that totally rely
upon unpaid manpower, work as a charity firm. The sole motive of voluntary organisation is
welfare of people. Example of voluntary organisation is Oxfam. It has employee commitment
because employees work by their personal interest and committed to their works and objectives.
Non profit organisations provides services to overlooked people and communities that are
neglected so that it helps in enhancing people standard(Kew and Stredwick, 2017).
In disadvantages they have limited funds that is greatest challenge for them. They also faces
social pressure while dealing with public due to their beliefs and attitudes.
Legal structure of voluntary organisation:
There are important considerations that have to take while selecting legal structure of
organisation in which includes part of income come from grants and donations and from selling
goods and services. So it is important to access source while selecting best source of funding. In
organisation members take part in voting and in large organisation member take part to elect
board of directors and trustees so that effective results should be achieve. In legal structures
includes many rules and regulations consist in which payment of trustees, record keepin and
political campaign are basic rules that have to follow.
Advantages and disadvantages of different organisations:
Public organisation:

it has less no. of competitors in comparison to private sector and it gives large no. of
opportunities of employment. On other hand in that sector lot of corruption and bureaucratic are
exist that create hurdles in development.
In private organisation it help to access requirements of consumers and launch innovative
products that helps in increase standard of living and less risky on other hand in that job security
is not available.
In voluntary organisation it gives advantages to overlooked community that don't able to
afford goods and services. On other hand it has limitation of funds.
Sole traders are responsible for their own decisions and with profits and losses so it is
both advantage and disadvantage for them. It takes all decision that gives accuracy.
Partnership firms distribute their liabilities to other members so they have limited liability
and they in a ratio distribute both risk and profits that are both advantage and disadvantage for
them. In that sometimes conflicts arises.
P2 Explain the size and scope of different types of organisations
In present scenario competition is very fierce and large no. of organisations operates in
that environment (Cohen and Kietzmann, 2014). There are many organisations that operates in
different size and scope and for varies objectives and play a important role in economic
development, organisation types, scope with their advantages and disadvantages that are as
follows:
Basis of difference Atomic weapons
establishment
B&M retail Oxfam
Work and objective Atomic weapons
establishment works in
design, research and
development in
weapons. It provides
services in nuclear
deterrence mission by
more than 60 years. It
main objective to give
B&M European retail
organisation that formed
in 1978, now it is one of
the most well known
organisation in UK. Its
objectives is to provide
delighted shopping
experience to customers
with fun, give fantastic
It is a non
governmental
organisation and it
comes in territory
sector. Its main
objectives is to
work for reduction
in poverty and
injustice with

intelligence and
assistance to UK
government by
providing nuclear
solutions and resolve
issues of threat, terror
and proliferation of
problems
products and services so
that they avail their
services again and again.
seeking to enhance
their efficiency.
Size and scope There are 70,000
approximately
workforce to provide
service to industries. It
has 25 years of
contract to AWE. Its
major works in
Burghfield, blacknest.
Its objectives are to
maintain warheads to
provide security and
safety to industry and
design best weapons to
industry (Craig and
Campbell, 2012).. In
addition to develop
potential skills and
techniques that fulfils
future aim of
organisation. It is very
prominent in
innovations and adopt
time to time. It uses
It has 28000 employees in
their organisation and it
operates in 600 locations
in world wide (Crane and
Matten, 2016). It provides
majorly grocery and other
products. In its scope
includes that it aimed to
purchase raw material
directly from the factories
and purchase goods in
bulk, it means earn more
profit to purchase directly
from whole sellers. More
than three millions
consumers each week
purchase from their
outlets.
Oxfam is a unit of
20 independent
charitable
organisation and
its name is Oxford
committee for
famine relief work
for reduction in
poverty. It also
work for
sustainable life to
people and provide
social services
with security
(Hair, J and
et.al .,2015). It
operates in
different countries
such as Austria,
Belgium,Canada
etc. Oxfam has
shops in world
wide by fair trade

horizontal legal
structure which is very
beneficial for it to
obtain its objectives
and goals in effective
manner.
and by donate
items to open
charity shops.
Controlling power It is basically operated
and controlled by
government and
control is in hands of
government.
In that organisation
control is in hands of
owner of organisation and
it give direction to all its
subordinates.
It is controlled by
communities and
their heads that
operate them in
effective manner.
TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure
In organisation there are different departments with various functions that have definite
path to obtain business goals and objectives. Functions of business depend on structure of firms
that vary according to their nature. In an organisation mainly these departments operate to
achieve their goals and objectives and there is close relationship among them. These are as
follows:
Finance department with Marketing:
Finance department in an organisation is responsible for whole proceedings of money or
finance and auditing. It collects data and insights from other departments and then according to
them frame budget that sanction from finance department. For example marketing department
give information about investments in potential area and according to them they evaluate their
budget and give their revert to them (Pearson, 2017). Finance department take report from HR
department about employees and give their salaries and other benefits.
In structure of atomic weapons establishment that follows horizontal structure in which there is
higher authority at top level and subordinates at middle level of organisation. In B&M retails
have vertical structure in which higher one is on top and structure of organisation is in pyramid

form so that proper communication and proper division in power and responsibilities should be
determine. So both horizontal and vertical structure of organisation help to effective
communication among departments and gives effective results. In vertical top supervisors take
decisions to run organisation while in horizontal organisation structure it bifurcate organisation
structure into smaller divisions and head have to report with supervisors.
Marketing/ promotional department with HR:
Marketing department is very potential to increase sales and obtain growth. To gain right
and potential work force in organisation, that department have to advertise in potential market
according to their need and wants.
Customer service provision with Finance:
Customer service department helps to finance department by giving insights and
changing needs and wants of consumer according to their feedback. As per suggestions they plan
to bring reform in their products and services for that finance department prepare budget and
check potentiality of plan. Organisational structure plays an important role to attain business
objectives and its goals. According to objectives of organisation their structure should be frame.
So there are close relationship among these departments and they have their sole objectives and
goals that mutually makes organisational objective (rajogo, 2016). Hence all departments
combine with each other and gives fruitful results to organisation.
Research and development:
Research and development is one of the important department which helps to other
departments to accomplish organisational goals and objectives. Research helps to marketing
department in giving important insights to organisation about recent trends and preferences of
consumers that directly and indirectly helps to obtain organisational goals. R&D helps to beat
competitors by bring innovation and essential changes in product and services. Frequent changes
makes brand image and also helps to build strong customer relationship.
TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples
Business environment is very dynamic and frequently occurs changes, to adopt these
changes and compete in fierce world, analysis of different factors play a crucial role. To analyse
market and its current trends there are lots of factors that should be analysed such as Macro

environment, micro environment and competitors analysis are main attributes that helps in
evaluation of strategies that are very essential to beat competitors in effective manner(Savrul,
Incekara and Sener, 2014).
The macro environment of business that consist Political, economic, legal, social, technological
and environmental factors that are main attribute in analysis of competitive threats and
opportunities also.
Political factors:
In politics consist of rules and regulations that have to follow organisations to operate
according to legal norms. Government rules and regulations influences at both national and local
level on daily basis. Government and legislation encourage rivals so that more options can be
present for them. In today scenario banks are struggling for survival but UK government
providing support to them in their development. Fear of global recession impacts on their
profitability and they have to cut down their interest rate. This bank surrounded with many rules
and regulations in different countries where they are working and reform in companies policies
according to norms. Yorkshire bank develops its own rules and regulations to smooth operation
of work and activities in fierce competitive world (Scheer, 2012).
When organisation follows rules that help to organisation to operate their business in ethically
and legally fit it is positive aspect. On other hand negative aspect is that there are many tax
regimes while operating in many countries so it hinders its economic growth and prosperity.
Social factors:
Social environment is one of the most difficult aspect for marketers to analyse and
response for that. In social factor includes different changes that occurs by variation in
characteristics of eduction of people, culture and trends and beliefs of people. Today consumers
become more demanding to giving proper satisfaction and fulfil their needs and demand
Yorkshire have to bring changes in their operating system. Recently Yorkshire bank brings two
pension programs to beat its competitors (Sekaran and Bougie, 2016). This bank is affected by
society in which it deals. It tries to give their best work and policies in best manner to each and
every society. Bank dedicated to give its new schemes benefit and increase their interest rates so
that large market share should be achieve although fluctuations arise in economy deeply impacts
on its image and brand value also. When an organisation take care about people choice and

preferences with their customs that automatically helps to increase brand value of organisation.
On other hand if organisation does not follow CSR activities properly than it spoils its image.
Technological factors:
Technology is an very important factor in business growth and accomplishments. In past
years Yorkshire bank requirement of better technology, internet and development needs of
information technology affects its business proceedings (Shenkar, Luo and Chi, 2014). To better
operations bank have to adopt different services and techniques such as internet to reach at large
consumer base and it also help to know trends and preferences of consumers at worldwide.
Except from these services bank also provides advance services to achieve their goal and
objectives.
If an organisation continuously improve in its technology that increase its customer base and
helps to increase their brand value. On other hand while using latest technology in organisation it
incurs huge cost and needs lot of training and development to employees.
Environmental factors:
Environment factors and norms are different, according to types of organisation. Every
Firms have different aims and goals to protect the interest of their consumers and some have to
boycott according to regulations. Sometimes weather conditions impacts negative while
transporting of resources and finished goods. Consumers become more conscious and they want
eco friendly products and services to give their best services and make them loyal consumers.
When organisation use e co friendly products it helps to decrease in pollution. On other hand
various laws and regulations hinders image of product and services.
Legal factors:
Legal factors consist of framework and regulations that affect business proceedings while
operating in different countries. There are many types of laws such anti trust laws in banking
industry affects its proceedings and discrimination law with intellectual property rights are
important laws and regulations. Consumer protection and commerce affects banks and its
proceedings.
When organisation take care of employees and follow all rules and regulations that impacts
positively on employee’s. On other hand so many rules and regulations creates hurdles in
organisational development.
Economic factors:

In economic factors consist of rate of inflation, saving rates and rate of interest are
important attributes that impacts directly and indirectly in economic scenario(Siewiorek and et.al
,2012). While dealing in different countries it has to encounter various interest rates and inflation
rates which impacts sometimes positive and negative on its business. Due to Brexit bank have to
face instability and fluctuations in their work and profits. There is close relationship between
organisational objectives and structure.On other hand economic instability influences
profitability of organisation.
TASK 4
P5 Conduct the internal and external analysis of specific organisations in order to identify
strength and weaknesses
Yorkshire is a bank which operates in England and it is a trading division of clydesdale
bank. That bank almost operates in England and gives their best services to their clients to fully
satisfy their needs and wants (Smith, 2016). To expand in market share they have to evaluate
their micro environment that are as follows:
Strengths:
Yorkshire bank is an international bank which operates globally and it is enough capable
in industry so that it give advice other companies to conduct international business. Yorkshire
knows aspects that help in expanding their business internationally. It is very successful bank
which earns high profit share of market. It has experience of many years in operating in business
environment so it deals in fierce milieu successfully.
Weaknesses
Yorkshire bank has poor performance in customer dealing that it want to reduce but it fail
to recover from that problem. It has a famous brand name but while dealing in different countries
due to different scenario of economics and working patterns spoils its image and hinders its
economic viability. There is lack of accuracy in its works and dealings that impacts negative on
its image sometimes loop-falls spoils its image and impacts on its profitability.
Opportunities
Growth in emerging businesses directly and indirectly affects business of banks that
proves profitable for them. Increase in outside citizens impacts on its profits. Yorkshire bank
have favourable economic environment which impacts on its profitability. With help of
technological advancement in whole economy helps to bank to develop potentiality in its market

and enhancement in globalization opens door for new opportunities. It has various diversification
options in banking sector such as financing, credit etc..
Threats:
There is also some difficulties before Yorkshire bank that are Politics of UK are very
uncertain after Brexit uncertainties in economy appears so much that hinders its profitability. It
has threat of subsidiaries that are exist in large number in economy which directly and indirectly
affects its business. While operating in different countries it has to adjust and bring reforms so
that it occupy large market share but due to culture diversity and hazardous changes divert from
their self interest (Zikmund and et.al ., 2013). So there are many threats that hinders in their
profit, there is fierce competition that exist in sphere that impacts hazardous for business and its
proceedings.
So by evaluating all these factors an organisation can gain competitive advantage to eliminate
threats and weaknesses to eradicate at maximum level and adopt strengths and opportunities by
accessing environment so that fruitful results should be achieve.
Porter's five force model:
Threat of new entrant:
Banking industry have a lot of opportunities so that no. of new entrants increase in that
sector to grab large opportunities that available in that sector. But on other hand it creates fierce
competition for other organisation also. In UK rising financial institutions and other commercial
agencies are reaching at that market and influence its profitability also.
Supplier power:
Supplier power is an important attribute in industry and there are two main supplier of
banks that are depositors that supply capital, employees and other resources. On other hand
employees are other suppliers who supplies labour. So they directly and indirectly affects the
supplier power of banks and affects their profitability also.
Threat of substitute products:
The threat of substitute goods increase in banking sector such as increase in financial
institutions that in olden days are not available. So consumers divert from banks to other sources
that decrease their contribution.
Bargaining power of consumers:

Bargaining power of consumers increase day by day due to the increase in no. of banking
and other institutions that gives more options to consumer to give business according to their
choice and preferences. So it decrease their business and increase bargaining power of
consumers because they have many options.
Competition from industry rivals:
In banking industry it faces intense competition due to large opportunities to new entrants
after Brexit in UK and it gives opportunities to them to enter into market. Rivals in area of retail
and commercial banking area enhance the competition level. Principal cell phones and other
competitors continuously rising in banking industry.
P6 Explain how strengths and weaknesses interrelate with external macro factors
In business there are both strengths and weaknesses exist, weaknesses have to decrease in
possible manner and strengths have to occupy. In business there many external factors that
influence both positive and in negative way to their profitability. In addition to Yorkshire have to
satisfy consumer needs and wants in proper manner by evaluating external factors and their
impacts on business. There is interrelationship between strength and weaknesses of macro
environment are as follows:
Political factor
In political factors includes political changes that occurs in territory that directly and
indirectly affects business proceedings. In political factors consideration of Yorkshire bank
consist of Brexit results that affects stability of businesses. Further in it includes different laws
and regulations that have to face while deal in different nations (Kew and Stredwick, 2017). that
bank work at world wide which is an important factor and it has UK politics is stable in nature so
that they don't face any problems while operate in that country. On other hand when many types
of discrimination and working behaviour changes in country at that time it adopts laws that prove
beneficial for it. This factor also increase cost of organisation while operate in different types of
laws.
Social factors:
In social factors consist of changing needs and preferences of consumers regarding
product and services and organisation have to build product according to them. so that they
become satisfied and become loyal consumers.

Social factors become opportunities and work positively to expand market share by
accessing new tastes and preferences of consumers and launch and reform in existing products.
In olden days people save their money at home and borrow money from local people but
according to new trend people borrow money from different financial institutions and banks that
increase their business on other hand it increase increase chances of criminal cases that impacts
on its profitability of banks.
Technological factors:
In technological factors consist of adopting new techniques and machinery so that life
style of consumers should be enhance and organisation also earn higher profitability (Pearson,
2017).
It works as a strength for organisation by giving advance goods and services to consumers. On
other hand it occurs huge cost and it also enhance cost of operating. With help of technological
advancement and financial stability of organisation help to easily adaptation in new techniques
so it increase loyalty of consumers and on other hand it increase operating cost of machinery.
Legal factors:
In legal factors consist of different rules and regulations that have to follow while operate
in environment. These factors sometimes impacts positively that organisation have to take care
of their employees that increase faith of employees on the organisation and they give their best.
On other hand to follow all laws and regulations create hurdle for organisation and increase its
cost. In legal factors consist of when discrimination and maladministration exist in UK economy
then it impacts on its profitability also but at than time bank adopts different laws that prove
beneficial for it and but it creates chaos in organisation to follow successfully.
CONCLUSION
From the above report it has been concluded that business environment is very dynamic
and changes in demand of people also affect its proceedings. Businesses have to change their
strategies according to organisation type and other important factors that are very crucial for
business development. To analysis and bring perfection in organisation there is need to proper
evaluation of different factors that are important insights to evaluate threats and potential
opportunities for business. Evaluation of these factors helps in eliminate influences of these
factors that are very important for business. There are many organisations in economy and they

have different objectives they jointly contributes in economic development. There are different
functions that helps to each other to obtain business objectives and goals in effective manner. In
organisation both internal and external analysis link with each other and helps to organisation to
obtain potential areas in business and loop falls that exist so that firm can eliminate at maximum
level.
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