Business and the Business Environment Assignment | JP Morgan

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Different types and purposes of organisations..................................................................1
P2 Different types and scope of organisations.......................................................................4
TASK 2............................................................................................................................................5
P3 Relationship between organisational functions and link with objectives and structure....5
TASK 3............................................................................................................................................8
P4 Identify positive and negative impacts of macro environment upon operations...............8
TASK 4..........................................................................................................................................10
P5 Internal and external analysis of JP Morgan...................................................................10
P6 Interrelate external macro factors with strengths and weaknesses..................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment comprises internal and external elements which directly or
indirectly affect organisation and its activities. It is necessary that management implement
adequate equipments and tools in system to conduct operations effectively, thereby deliver
appropriate products and services in market to fulfil demands and requirements of people
(Gebauer, Paiola and Edvardsson, 2011). Present report is based on JP Morgan which is leading
firm and has headquarter in UK. It is a multinational firm which provide financial and banking
services to public. This assignment defines different types and purpose of organisation which are
present in market. Management require to adopt appropriate structure and formulate department
such as human resource, operation, finance and other functions to execute business operations in
efficient manner. Positive and negative impacts of macro environment are acknowledged by
management to design system accordingly. PESTEL and SWOT analysis are various techniques
which help administration of JP Morgan to have knowledge about market conditions and system
capabilities. Thus, internal and external analysis is conducted by management to interrelate
strengths and weaknesses by external macro factors.
P1 Different types and purposes of organisations
Market have different forms of organisation which are present to deliver products and
services and generate adequate profit from business. With fast development, companies have
large opportunities to execute innovative and creative business ideas to enhance goodwill of
firm. Public, private and voluntary are various types of firms which enhances employment
opportunities and help government in development of society. These are different types of
organisation which are described beneath:
Public organisation: This sector comprises companies which are established, regulated
and controlled by government to improve and strengthen state of economic conditions of
country. These are enterprise which help authorities to increase job chances, so that people can
generate adequate income for their livelihood (Holliman and Rowley, 2014). Bank of England is
public firm of UK which provide financial services to other institutions and public. It is main
authority which issue currency and formulate rules to govern the operations of other bank.
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Purpose: Bank of England goal is to provide money to other banks and have gold reserve
as custody to sustain and maintain economic state of UK. It is lender of last resort for other
banks which frame monetary policies to regulate country.
Legal structure:
Local government: This segment constitutes authorities which are given responsibility to
manage public administration of town, city and district. For this, their responsibility is to control
specific region or area by conducting duties that is frame strategies and enforce law (Homburg,
Wilczek and Hahn, 2014).
State government: It is government unit which formulate and enforces law for state. This
unit responsibility is to control trade and regulations to coordinate and control working of state.
Central government: This is political authority which manages and govern whole nation.
For this, rules and laws are formulated by them which local and state government require to
follow to execute work for betterment of country.
Benefits: Public organisation provide education, health care, electricity, transportation
services such as road, rail and other facilities to public. This help government to conduct
business for betterment of society.
Disadvantage: Government require to have skilled staff to provide appropriate services
to people. For this, tax is only source of income for authorities which determine quality of
services that are provided and operations conducted by them (Khan and Quaddus, 2015).
Private organisation: This is another industry which includes firms which are
incorporated, managed by single person or group which spend money to set up business and
generate revenue. Primary, secondary and tertiary are various forms in which private firms are
divided in according to their business activities and objectives. It is necessary that products and
services are delivered in market to satisfy demands and requirements of people. Agriculture
business is part of primary sector which is provide raw material to other companies and public.
Apart this, secondary industry includes firm which are manufactures that produces items to
satisfy demands and needs of people. Lastly, third type is tertiary which comprises warehousing,
transport, banking, advertising and other enterprise which provide services. For example, JP
Morgan is private bank which provide financial and banking services to people. Bank provides
variety of facilities such as brokerage, wealth management, investment banking, asset
management, treasury and securities services to public (Lee and et. al., 2015).
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Purpose: JP Morgan aim is to provide quality and adequate variety of financial services
internationally to become leading bank.
Legal structure:
Sole proprietorship: It is form of enterprise which is started, controlled and managed by
individual to utilise their funds and gain profit from business. Entrepreneur is sole decision-
making authority which is liable for losses and revenue whichever occurs.
Benefits: This tactic includes firm which is owned and managed by single person that
help them to make decisions fastly and choose things which are beneficial for company.
Disadvantage: Entrepreneur have shortage of money which impact on amount of
resources and business activities. Person require to have complete knowledge of market
conditions to conduct operations accordingly. Along this, they even need to asses all financial
sources and communicate with them solely and convince them to invest funds in their business
(O'Boyle, 2014).
Partnership: This is another structure which comprises company which are managed and
controlled by two or more individuals. Businessperson bind themselves in formal deed and sign
agreement which define all terms and conditions that require to be followed in firm. This is one
of most best form of tactic, as it help firm to have good amount of capital to conduct business
operations effectively.
Benefits: Firms which are started in partnership benefits people to have sufficient
resources that is funds, material and manpower to conduct business activities effectively. Along
this, businessperson have chance to enlarge business and open branches in different countries to
have large market reach and customer base to enhance sales volume and revenue.
Disadvantage: Partnership even have demerit which are conflicts between shareholders,
as they have different experience and thoughts which impact on their decision-making activities.
Along this, there is time lag in judgement making which is due to procedure that are
communicating partners about meeting and conference (Chen and et. al., 2014).
Limited company: This is another structure which define that investors have limited
liability which either depend on regulations of authorities or amount of money spend by them in
firm. Thus, limited by liability or share are two forms which depend on company and its top
personnel selection.
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Benefits: Enterprise which use this structure benefits shareholders to have limited
functioning in firm, thereby secure and protect themselves from risks.
Disadvantage: Administration of limited company faces problem about increasing funds
which is due to share of owner rights with investors.
Voluntary sector: This sector comprises enterprise which execute business for welfare
and development of society. It is necessary appropriate products and services are delivered in
market to satisfy needs and wants of people. OXFAM is charitable and an independent firm
which execute activities to lower down poverty and improve conditions of country (Crane and
Matten, 2016).
Purpose: Oxfam goal is to enhance employment opportunities and provide chance to
individuals to gain money for sustaining and maintain their living standards. Besides this, firm
also increases solutions which help nation to become free from poverty.
Legal structure:
Trust: It is traditional form of structure which is used by voluntary organisation to
provide appropriate products and services for improving society. These are firms which get
support from government that is property to conduct activities and provide facilities to needy
people.
P2 Different types and scope of organisations
Public, private and voluntary are different types of firms which have variance size and
scope that are related with products and services provided to satisfy demands of people. Public
organisation conduct operations to develop and enhance economy of nation, while private
enterprise are incorporated by individuals to generate profit. In this, voluntary companies provide
items for needy people. Thus, market have different types of organisation which have variance
size and scope which is described below (De Massis and Kotlar, 2014):
Bank of England: It is public organisation of UK which frame policies and is controller
of financial services of nation. Scope: Bank of England aim is to frame policies for monetary stability and asset
management of nation. Firm aim is to sustain and enhance economy of UK by
formulating policies and regulations which other commercial banks require to follow.
 Size: It is a central bank of UK which was constituted in 1694. Headquarter of bank is in
United kingdom and is old and eighth position in nation.
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JP Morgan: It is private bank which provide financial services such as asset
management, treasury bills, fund management, financial analysis, wealth management and other
banking facilities to people. Scope: JP Morgan is expanding its business to become leading and largest band all over
the world. For this, bank require to have adequate funds to execute and manage business
in different nations.
 Size: JP Morgan is sixth largest bank which has around 166,900 members which help
bank to generate good amount of profit from business to sustain its position and goodwill
in market (Foss and Saebi, 2017).
Oxfam: It is voluntary firm which is conducting business worldwide for development of
country by giving services and facilities to disadvantaged individuals. Scope: Oxfam focus is to reduce poverty level, provide justice to people, disaster relief
and various other facilities to poor people. For this organisation formulate rules about
rights for social services, sustainable livelihood, security of individuals.
 Size: Oxfam was originated in 1970 as an independent non-profit firm which conduct
campaigns and fight for rights of people.
TASK 2
P3 Relationship between organisational functions and link with objectives and structure
Organisation have various department which are developed by administration to conduct
business activities and achieve business objectives and goals. Human resource, finance,
operation/ production, marketing, sales, R&D are different unit which are existing in companies.
These departments have interconnection with each other and helps management of Tesco to
utilise resources efficiently. Along this, appropriate business activities are conducted in firm to
provide adequate products and services to customers to fulfil their demands and needs. This also
help top personnel to establish competitive advantage to sustain company's position and
reputation in market. Hence, these are different organisation functions which are explained
below (Oriesek and Schwarz, 2016):
Human resource department: This is essential unit to which top personnel given
responsibility to have sufficient workforces in organisation. For this, management of Tesco
conduct HRM practices which are recruitment, selection, performance management,
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compensation, training and development activities. This help them to have skilled and competent
staff to provide quality products and services to buyers. Human resource distribute members in
different department that are operation, marketing, sales and R&D to utilise resources efficiently.
Along this, they construct and make employees motivated and dedicated to position firm superior
than rival bank.
Finance department: Major role of this department is to provide funds to every
department for completing their work in the given time period in effective manner. In context to
Tesco, function of finance department is related to every to every department as it provides fund
to them for complete their work in given time period. For example: finance department provides
funds to marketing department to use latest advertisement and promotional tools. This will help
them to perform their work in effective manner (Prajogo, 2016).
Operation/ production department: Functional activities of production department
involves manufacturing of products and services. In relation to Tesco, its operation department
is related to the function of marketing team. As marketing members are communicating with the
customers and understands the requirement of customers. Marketing department help the
operation department to influence buyers easily, as they have knowledge about different products
that are food items, clothes, home appliances. Along this, management is able to manufacture
appropriate items in respect to demands and choices of people.
Marketing department: Function of marketing department is to promote and popularise
the products and service at market place. In addition to this, marketing team also develops the
brand name of the Tesco in external environment. This department has relation with operation
team, as they interacts with customers on regular basis. In addition to this, marketing team guides
production team to modify products in respect to demands of customer. It will enhance
satisfaction level of customer.
Sales department: Marketing people helps salespeople to promote and advertise
information to people about organisation and its products and services. Tesco provide food
items, home appliances, apparels and many other products to satisfy demands and requirements
of public. In this, marketing team provide support to salespeople to attract customers and make
them purchase products to fulfil their needs. Along this, they even help production team to
provide products accordingly.
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Organisation structure: Executive frame structure to give systematic order to department
and members to make them perform activities accordingly. Divisional, functional, matrix,
project, flat and many other forms of organisation structure which are chosen by top personnel
in according to market conditions and business objectives.
Divisional organisation structure: It is efficient structure which firm uses to manage and
coordinate branches in different countries. This help management to have good market reach and
customer base to improve sales volume and profitability. For this, firm require to have sufficient
resources that is capital and members to conduct business activities effectively.
Functional organisation structure: This is another form of structure which specifies that
department such as HR, finance, production/ operation, marketing, sales, R&D are designed by
management to conduct business activities effectively. Management distribute members in
different unit to make them perform tasks and deliver appropriate products and services in
market (Weiss, 2014).
Management of Tesco uses functional and divisional organisation structure to arrange
and execute business operations to achieve objectives. This help company to sustain its position
and reputation in market. With help of divisional structure helps Tesco to manage outlets in
different countries, thereby have large market reach and customers (Al-Saleh and Mahroum,
2015). Along this, functional structure which specifies that HR, operation, finance, marketing,
sales and R&D department are frame by top personnel to execute activities effectively and
provide variety of food items, home appliances, clothes to people. Thus, company uses these
organisation structure which help top personnel to sustain its position and reputation in market in
respect to rival firms.
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(Source: Functional and Divisional Structure of Tesco, 2015)
Hence, this can affirm from the above discussed graph that Tesco function according to
the hierarchical structure of organisation in regard of properly maintaining their operations in
each division worldwide.
TASK 3
P4 Identify positive and negative impacts of macro environment upon operations
Macro environment is refer to components which are existing in external of organisation.
Government, economic conditions, technological, public and environment are various
components which indirectly affected by business operations. For this, PESTEL analysis is
appropriate tool which is used by top personnel of JP Morgan to have accurate and complete
knowledge about market conditions. It is necessary that bank conduct activities and provide
appropriate financial services to public to fulfil their demands and requirements (Bah and Fang,
2015).
PESTEL analysis of JP Morgan:
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Illustration 1: Functional and Divisional Structure

Political factor: This tactic define that government frame rules to control and regulate
organisation. Trade policies, taxation and many other policies which are formulated by
authorities and which differentiate from one nation to another. For this, executive of JP Morgan
require to have complete knowledge about countries policies which are considered to make
system function legally. Along this, company even require to registration and take license from
government to protect and secure important assets of firm. Positive impacts: JP Morgan provide financial services to people, for which bank follow
instructions and rules of government to make system function properly. Negative impacts: Employment policies, tax and regulations about banking require to
considered by top personnel of JP Morgan which affect on operations (Bryman and Bell,
2015).
Economic factor: This aspect includes interest rate, inflation, exchange rate, growth
which depend on state of country. These are various factor which influence on business activities
as it affect on capital and profit generated by organisation. Positive impacts: JP Morgan is benefited by population growth which help bank to have
adequate clients and members to conduct operations and generate money. Interest,
exchange rate and financial products pricing are require to be set by bank in according to
conditions of country for making contribution in growth of economy.
 Negative impacts: JP Morgan funds availability depend on financial crisis of country
which affect on its operations and market position.
Social factor: Organisation provide products and services to satisfy and fulfil demands
and requirements of people. For this, executive conduct market research and survey are
appropriate technique which help them to have knowledge about needs of public to conduct
business activities effectively (Gebauer, Paiola and Edvardsson, 2011). Positive impacts: JP Morgan provide banking and financial services to people to increase
their habit of saving, investing and take loan for enhancing economy of nation.
 Negative impacts: JP Morgan have large number of rival bank, for which it is necessary
that appropriate financial services are provided to clients to sustain them for longer time.
Technological factor: Administration require to implement appropriate tools and
equipments in system to execute business activities effectively. It is necessary that modification
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in system that are appropriate technologies are used by firm to provide adequate products and
services to people. Positive impacts: In JP Morgan bank, appropriate equipments and software are
implemented in system to provide quality services to clients. Along this, bank also has
mobile application and online website to build and communicate with people about
financial products to attract them and avail their services.
 Negative impacts: Bank require to have skilled and competent people which have
knowledge about technologies that are used to provide adequate financial services to
customers. If, employee is not aware and skills about software than they will not be able
to satisfy clients (Holliman and Rowley, 2014) .
Environmental factor: This is essential tactic which define that organisation require to
utilise natural resources efficiently. It is necessary that waste management and environment
pollution are various aspects which are considered by management to use material properly. For
this, it is necessary that appropriate tools and equipments are implemented in system which don't
emit harmful gases and chemicals which are bad for health of people. Positive impacts: In JP Morgan, management give attention to ecological aspects to
business to construct appropriate position and market share in financial service sector.
 Negative impacts: Bank adequate tools and software are used to provide appropriate
financial services to clients.
Legal factor: This tactic includes government rules and laws which are formulates to
secure and protect rights of employees. Health & safety, discrimination, equality, minimum wage
and hours are various act which require to be considered by management while providing duties
and responsibilities to employees. Positive impacts: JP Morgan has good market value which help management to have
good brand value to have sufficient manpower to conduct business operations effectively
and deliver quality services to clients (Homburg, Wilczek and Hahn, 2014).
 Negative impacts: Bank don't have skilled and competent people which help them to
provide appropriate facilities and services to customers, than this affect on reputation in
respect to competitors.
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TASK 4
P5 Internal and external analysis of JP Morgan
Each segment have large number of organisation which affect on profitability and its
working. SWOT analysis is appropriate technique used by executive of JP Morgan to have
complete information about system capabilities and market capabilities. This help them to design
system and conduct business operations effectively to sustain its position and image in respect to
competitors.
SWOT analysis of JP Morgan
Strengths: JP Morgan has good financial position and strong brand name which help top
personnel to attract large number of clients. It is largest bank which has global presence to have
large market reach and customer base. Along this, bank provide different variety of financial
products which help management to construct good position and brand value in respect to
competitor (Khan and Quaddus, 2015).
Weaknesses: JP Morgan has stiff competition from other banks that provide financial
services, thereby affect on revenue and sales of firm. Along this, bank is present in environment
which is dynamic and there are fluctuations in policies and conditions which affect on its
functioning.
Opportunities: JP Morgan have large number of opportunities in which one is to enlarge
business and have branches in other nation to have large market reach and customers to enhance
sales and revenue. Besides this, bank require to provide diversified financial products to give
different variety of services to people.
Threats: Government makes modification and alterations in policies to regulate and
control functioning of organisation for development and enhance economy of nation. Bank plays
essential role in development of nation, so authorities make changes in regulations to control
their functioning. Financial crisis is situation which affect on income of people and bank which
depend on number of clients and deposit it has which can used for purpose of loan (Lee and et.
al., 2015).
Therefore, top personnel require to consider micro and macro environment components
to have knowledge about system capabilities and market conditions to make appropriate
judgements which are beneficial for JP Morgan. It is essential that employees, shareholder are
included in decisions making process which help management to have knowledge about
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requirements of people, thereby provide products and services accordingly. Along this, strengths
are used by top personnel to utilise market opportunities and secure system from weaknesses.
Thus, competitive advantage is constructed by head to position firm superior than rival firms.
P6 Interrelate external macro factors with strengths and weaknesses
External macro environment of organisation includes components which are present in
outside and affect on business operations. It is necessary that management of JP Morgan to
design system and formulate strategies to conduct activities effectively in order to sustain its
position in market. Strengths and weaknesses of macro elements help top personnel to utilise
market opportunities and redesign and make changes in system to reduce negative points.
Political: JP Morgan provide financial services to people, for which bank require to
follow rules and policies of government to make system function legally. Along this, as bank has
branches worldwide which affect on business and require that system is designed in according to
rules of nation in which outlet is established (O'Boyle, 2014). Strengths: Management of JP Morgan provide financial products and services to people.
For this, bank authorities follow rules and regulations of government to get benefits from
them and make system function legally. Weakness: JP Morgan require to follow government laws and rules, as there are chances
of decline in its reputation and image if not functioned according to them.
Economic: Finance industry have various tactics that are unemployment rate, financial
crisis, growth of population, urbanization rate and many other which affect on business and
profitability of bank. Strengths: JP Morgan provide financial products at appropriate rates to grab attention of
large number of people and help government in growth of economic conditions. Weakness: JP Morgan is affected by government policies which keeps on changing with
time. Along this, recession is another factor which impact on decline in bank's number of
clients and revenue (Al-Saleh and Mahroum, 2015).
Social: Financial service sector have large number of bank which are conducting
business. For this, customers have choices to select bank in according to rate and facilities. It is
necessary that JP Morgan provide appropriate financial services with quality to satisfy clients
and sustain them for longer time.
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 Strengths: JP Morgan provide facility to people to open account for saving money or for
business purpose. Along this, bank also provide loan and financial instruments to public
to gain income by investing in various financial products. Weakness: Bank face problem in context of people demands which keeps on fluctuating
with time. Along this, there are many people which don't have knowledge about financial
products, while some don't trust on its services. This affect on profitability of bank.
Technology: In JP Morgan advanced technologies and software are used by bank to
provide appropriate financial services to clients. Along this, marketing techniques such as online
advertising, company's websites, electronic media and many other tools are used by management
to promote and aware people about different financial products that are offered by bank. This
also help bank to establish competitive advantage over competitors to enhance its position and
image in market. Strengths: In JP Morgan, management uses advanced software and tool which help bank
to conduct operations effectively and maintain record properly. Along this, employees are
also able to provide appropriate financial products and overcome queries of clients.
 Weakness: Employees of JP Morgan require have knowledge about software, otherwise
they will not be able to give adequate service to customers. For this, training and
development sessions require to be conducted to enhance skills and capabilities of
members which is time consuming and efforts of top personnel (Chen and et. al., 2014).
Therefore, government, economic conditions, public and technology are various
components which executive of JP Morgan consider while conducting decision making process.
This help top personnel to frame strategies and have sufficient funds to execute operations
effectively. Along this, they even require to provide appropriate financial products and services
to people. For this, bank require to have adequate tools and software implemented in system to
deliver quality services to clients and fulfil their queries.
CONCLUSION
As per above report, it can be comprehended that business environment includes internal
and external factors directly or indirectly influence business. Public, private and voluntary are
different kinds of organisation which vary with each in context of size, scope and structure. Each
and every firm have various functions such as human resource, finance, marketing, sales,
operation and many other department which help top personnel to conduct business activities
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effectively and utilise resources efficiently. These unit have interrelation with each other and
helps executive to formulate organisation structure accordingly. PESTEL and SWOT analysis
are various tactic that can help management to gain knowledge about external factors and
internal and external environment of market and system. Thus, executive make appropriate
decisions which are beneficial for company by interrelating external factors with strengths and
weaknesses.
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Online
PESTLE Analysis of JP Morgan. 2017. [Online]. Available
through:<http://marketingdawn.com/pestle-analysis-of-jpmorgan/>.
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