Business and the Business Environment

This report explores the different types of organizations, their business purposes, and goods or services. It also discusses the size and scope of different organizations and the positive and negative impacts of the macro environment on business operations. The report focuses on the case of Dave, a sole trader firm, and provides insights into the organization structures and functions relating to its objectives.

BUSINESS
AND
THE BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
Part 1................................................................................................................................................3
1. Different types of organisations with their business purpose and goods or services..............3
2. Size and Scope of different organisation with difference between enterprises based on size 5
3. Organisation structures and functions relating to organisation objectives..............................7
PART 2 ...........................................................................................................................................8
4. Positive and negative impacts of macro environment on business operations.......................8
5. Internal and External analysis to identify strengths and weaknesses....................................10
6. Interrelation of strengths and weaknesses with external factors...........................................11
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Business Environment can be defined as sum total of internal and external components of
an organisation which affect its surroundings and activities performed in it (Calabrese and et.al.,
2018). It refers to all factors which impacts working of an enterprise. External factors includes
political, legal, technological and social environment whereas internal includes employees,
management, rules and policies. It is important for a company to consider all factors of
environment for its overall development and attainment of desired objectives. For this report
chosen company is Dave, it is the sole trader firm. The main aim of this report is to identify
various organisations and their business purpose and goods or services. This defines various
enterprises on basis of size and also considering interrelationship between different structures
and functions of an organisation.
Part 1
1. Different types of organisations with their business purpose and goods or services
The various types of organisation and their purpose of formation with their legal structure
are described as:
Public sector company
It is an organisation where more than half or majority shares are owned and decisions are
taken by Government and it provide services only to citizens (Cepel and et.al., 2018). The
motive of this sector is not to earn profit. Example of Public sector company is National
Healthcare Service.
Business Purpose
The main purpose of National Healthcare Service is to provide healthcare services free to
their residents and visitors also. NHS of UK aims to provide healthcare and medical services to
its citizens better than other places where target is not to earn profit through them.
Types of Public sector organisation
 State Government: All the legal activities and rules and regulations in a state are under
regulation of State Government.
 Central Government: Central Government deals with entire county. All rights and
authority to control communities of country totally in the hands of Central Government.

Goods and services
NHS provides primary care, in-patient care, dental care, ophthalmology and long-term
healthcare to the citizen.
Legal structure
The NHS is controlled by the UK government through Department of Healthcare and
Social Care with aim to provide health services to its citizens.
Private Sector company
Private Sector companies are owned and regulated by one or more than one person with
motive to earn profit from citizens (Chang, 2016). In this sector, all decisions and activities are
under the control of its owner who are individuals or group of peoples. The example of private
sector company is Dave.
Business Purpose
The main aim of Dave is to provide best services to customers. Dave maintains its quality
level in proportion to its price distribution.
Types of Private sector organisation
 Multinational or Large corporation: These are the corporations which deal with other
countries in business to purchase or sell its products and services.
 Partnership: It is a firm where two or more than two persons acts like partners in an
organisation (Eling and Schaper, 2017). Partnership is a legal firm where all activities
and profits are shared among the partners as per their share in the company.
 Sole Proprietorship: In this business all activities and decision are taken by an
individual to earn profits by achieving its own targets in firm. It is also known as Sole
trading.
Legal structure
Director is responsible for all the decision made in business, it is legal liability of firm to
repay all liabilities to creditors.
Voluntary sector company
Voluntary sector companies are those which are originated not with the purpose of
earning profits. Non- Profit organisation and trust companies are known as Voluntary sector
company (Erasmus, Strydom and Rudansky-Kloppers, 2016). Its activities leads to the
achievement of objectives for benefit of society. The example of Voluntary sector is Oxfam.

Business Purpose
The main purpose of Oxfam is to help people through NGO to eradicate poverty
problems and many other society issues.
Types of Voluntary organisation
 Trustee: Trustee is a person or individuals who provides funds to organisations for the
welfare of society such schools, colleges etc.
 Charity: Its main is to provide social welfare to the suffering peoples and needy ones
through funding it.
Goods and services
Oxfam provides trade justice, fair trade, education, livelihoods, healthcare and works on
gender equality, conflict, natural disasters and human rights.
Legal structure
The Oxfam charity is controlled by number of trustees who makes decisions in the
company for the societies welfare and benefits.
2. Size and Scope of different organisation with difference between enterprises based on size
In an organisation there are aims and motives to work and achieve targets which can be
analysed by their business share, market share, growth and sustainability of the firm. Size and
scope of Public, Private and Voluntary organisations are such as follows:
Public company: These organisations are owned and controlled by government for
citizens of society. NHS perform activities for the welfare of citizens.
Size: National Health Service is one of largest employers in the world and biggest in
Europe with 1.3 million staff (NHS Jobs, 2019). It works at several places for people.
Scope: Scope of NHS in UK is to aware people about medical care and enhance quality
of care, instruments used in medical treatment and improvement in medical techniques.
Business share and Profit share: As NHS is a public enterprise business share of this are
wholly owned by Government of the Country. NHS is mainly funded from general taxation and
contribution of national insurance, it generates income from parking charges and land sales only.
Growth and sustainability: Sustainable economic growth is rate which can be maintained
by an organisation without creating hindrances for future generations (Hamilton and Webster,
2018). NHS plans for various developments in healthcare for future generations and their
problems.

Private company: These organisations are owned and controlled by individuals or
persons to earn profits by fulfilling needs and wants of customers to achieve targets of this
organisation. Dave is a private organisation (Sole trader) which have:
Size: it is the sole trader hence it generates less profit and work to hire new employees
those who can support in raising profitability of company.
Scope: Dave provide high quality products which include tour services, financial services
which aims to cover major market share.
Growth and sustainability: It is recognised as most sustainable bus service provider in
the World. Dave enables Plan A strategy to build sustainable future to have positive impact on
customers also.
Voluntary sector company: Voluntary organisation aims to provide social welfare
without gaining profits and benefits to society.
Size: Oxfam is an international alliance of 19 organisations which are working with
partners and local communities in more than 90 countries (OXFAM International, 2019). It
works for people at various places.
Scope: Oxfam supports people by practical and innovative ways to lift themselves out of
poverty and thrive. It campaigns so that voices of poor influence other peoples.
Business share and Profit share: Oxfam is a international charity that works with
different sectors and businesses either large or small wants to address and provide help to global
poverty.
Growth and sustainability: Oxfam is also adopting several plans and strategies for
agricultural investment, for biofuel and poverty reduction for growth and sustainable
development.
Micro Enterprise: In this type of business there are less than 10 employees and turnover
should be under 2 million (Linder and Williander, 2017). Best examples of micro enterprise in
UK are such as Boss Brewing Company, Issoria, Mantons Cards, WriteUpp etc.
Small Enterprise: This enterprise consists of less than 50 employees and have turnover
under 10 million. Example of Small enterprise in UK are Brightstar Financial, Clarasys,
Marshfield Bakery etc.

Medium-size Enterprise: This enterprise involves less than 250 employees and turnover
under 50 million. Example of medium sized enterprises are Verdant Leisure, Captify, Giacom
etc.
Large Enterprise: While large enterprises consists of 500 employees and turnover under
100 million. Large enterprises in UK are such as JCB, Clarks, Harrods Group etc.
3. Organisation structures and functions relating to organisation objectives
There are various organisational structures in a system which guides how certain
activities are directed towards achievement of goals of an enterprise (Laudon and Traver, 2016).
Organisational structures are used in different companies are such as functional, divisional,
matrix and flat.
Public Organisation: NHS followed a hierarchical organisational structure, this structure
contains chain from top to bottom of organisation and senior makes all decisions which then
passed to subordinate level.
Private Organisation: Dave also follows flat organisational structure which has limited
levels of management between administration and employees
Voluntary Organisation: Oxfam is a non profit organisation which follows flat
organisational structure in this business enterprise have direct chain of command which is
connected straight from executives to staff.
Complexities of different organisational structures such as transnational, international and
global are described as: Transnational organisations are mixture of global, multinational and
international companies (McDowell, Harris and Geho, 2016). Structure of company is complex
as it faces complexities due to different organisation structure and cultures. It also face internal
manpower issues and organisational problems. International companies are those who sell export
products. This organisation face challenges such as legal, regulatory and custom issues which
also affect smooth functioning of organisational structures. Global companies have operations
and trading in countries across world. Organisational structure of Global companies follow
centralised approach to make major decisions such as merger, acquisition etc. This can affect
effectiveness of working among subordinates and other various problems relating to investment.
In an organisation there are different functions and departments to perform activities and
operations for attainment of goals and objectives (Pearson, 2017). In context to Dave, this
includes finance, human resource, marketing, sales etc. which plays an important role for

achieving targets with highest profitability ratio. Finance and marketing department functions
together to achieve aims by promoting their products in different marketplace which needs
advertisement costs and other that can be managed by both departments. Human resource and
Sales departments performs all activities and aims to increase sales day-by-day effectively
through proper training to their employees and development of programmes to create efficient
marketers.
PART 2
4. Positive and negative impacts of macro environment on business operations
There are various factors in an environment which affects working of an organisation
either internal or external. External or macro environment factors are affecting Dave on
executing its strategies. This analysis guides an enterprise to mention factors which are important
and needs of organisation to be fulfil in its industry.
Political: In this factors such as political instability, trade policies and restrictions, tariffs,
government rules and regulations etc. are included (Saebi, Lien and Foss, 2017). To achieve
success in tourism industry across various countries is necessary to diversify systematic risks of
political environment.
Positive impact- Reduction in corporate tax rate in UK helps Dave to growth its sales and
distribution of products and services.
Negative impact- Free trade agreements has opened up new markets in UK which affect
Dave and forced to fight for its position in market.
Economic: Macro environment factors such as inflation rates, interest rate, foreign
exchange rate etc. determine aggregate demand and investment in an economy (Schaltegger,
Lüdeke-Freund and Hansen, 2016). UK has largest economy in world but due to recession it
faced inflation and increase in unemployment for long time.
Positive impact- Consumers are get back on their feet from recession stage and this
results in booming condition in tourism industry such as Dave.
Negative impact- As UK is hub of e-commerce, customers are not limited to bus service
only, this can affect business of Dave.

Social: UK has a big consumer market but its population is getting older. Consumer's
taste, preferences and lifestyle changes both threats and opportunities for UK tourism industries
such Dave.
Positive impact- Tendency of being loyal to single brand and products is in consumers of
UK this can guide Dave to retain their customers.
Negative impact- With change in taste of customers, culture and fashion trends, can affect
profitability ratio of respective company.
Technological: Advanced technology system offers unlimited opportunities for new
enterprises to grow in markets of UK. Technological analysis involves recent technology
development in Dave, impact on cost structure and on its value chain structure.
Positive impact- Paperless activities and various technologies are used to develop
working criteria of this organisation.
Negative impact- Online marketing can be a threat for Dave and also affect is cost and
value chain structure.
Environmental: Due to operations of business industries environment get affected in
various ways which also creates hindrances for companies by population of UK. Government,
media and many others initiates to create environmental awareness and reduce negative impact
on environment. Because of weather conditions of UK, sometimes it faces challenging
conditions.
Positive impact- Its beneficial for Dave to opt environment friendly fabrics and raw
materials and also initiate towards environmental safety.
Negative impact- Weather conditions and climate change of UK can results as change in
demand of customers frequently.
Legal: These factors includes enactment of various Acts such Employment Act,
Consumer Protection Act and many more for protection of rights of employees and consumers in
marketplace.
Positive impact- Focus towards laws for employees and use natural resources in
production shows better results and efficiency of workers towards organisation.
Negative impact- Workers respond negatively in absence of proper laws and working
conditions.

5. Internal and External analysis to identify strengths and weaknesses
SWOT analysis of an enterprise defines its strengths, weakness, opportunities and threats
at marketplace (Sodeyfi 2016). Through this Dave analyse its needs to explore new markets and
improvement its online sales. SWOT analysis of Dave is follows:
STRENGTHS WEAKNESSES
 Dave highly focused on enhancement
of customer experience.
 Strongly concentres on consumer needs
and affordable products
 Its inability to penetrate in foreign
markets successfully results in
imperfection.
 A97212is too much dependent on UK
markets rather than expansion and bad
financial performance also.
OPPORTUNITIES THREATS
 There is an opportunity for A97212to
open up new markets and adopt new
technologies.
 It can develop new segment so that it
can offer more profit.
 Increase of competition in all areas of
business of A97212.
 Regulation of new environment and
trade laws can affect its business in
several countries.
Porter's Five Forces Model
It is a framework to analyse company's competitive environment with numbers of
competitive rivals, potential new market entrants, suppliers, customers and substitute products
which can influence organisation's profitability (vom Brocke, Zelt and Schmiedel, 2016).
Analysis of Dave five forces are such as follows: Bargaining power of Suppliers: In Dave, suppliers plays an dominant role with higher
bargaining power that can lowers its profitability. It can develop efficient supply chain
and focus on private can reduce power of suppliers. Bargaining power of Buyers: Customer's bargaining power is high as they want to buy
best products available in minimum price through different competitors. Dave has to
focus on demand of buyers and build customer relationship by providing high quality
products in minimum prices.

 Threat of New Entrants: Dave can be affected by new entrants as it brings innovation
and different ways to do things in market. Threat of new entrant and competitor in market
is comparatively low as it needs high investment and cost top entry in market. But Dave
can handle this by creating new products, building economies of scale and research
relating to new trends. Threat from Substitute Products: This can be defined as production of similar products
can reduce demand of customers for original and branded products (Hillary, 2017). Dave
can tackle this situation by working as service oriented organisation and requires
continuous innovations in its product to keep position of brand strong. It can make efforts
to be distinctive to achieve customer satisfaction.
 Competitive Rivalry: Marks and Spencer is facing high degree of competition in market,
because companies entering markets with similar quality of products and affordable
prices. It can differentiate its products and collaborate with them to increase market size.
6. Interrelation of strengths and weaknesses with external factors
Interrelationship of strengths and weaknesses with political, economical, social and
technological are such as:
Political: These factors can create strengths for Dave when taxes are reduced from
exporting products in other countries it results in increment of sales. Some trade agreements
support entrance of new companies in market and increase competition for this.
Economic: Change in inflation and unemployment rates can impact positively on
business strategies of Dave. Its working is also affected by frequent change in economic
conditions of UK.
Social: Loyalty of customers towards single brand can helps Dave to maintain its profits
in this changing environment. Frequent change in taste of customers and trend of markets can
affect sales of this organisation.
Technological: Change in techniques can leads towards paperless operations and
effectiveness in working. But less up gradation in online sales can push it backward in
comparison to its competitors.

CONCLUSION
From description of above report it is concluded that proper knowledge of organisations
it is necessary to analyse it core structure. This includes understanding types of organisations and
their criteria which includes size, scope, business and profit shares and products & services of
different organisations and enterprises on basis of size also. It helps to realize that to carry a
business its important to examine business functions and environment which can impact on
operations of an enterprise. This reports assists to study PESTEL factors, SWOT analysis and
Porter's Five Forces analysis which guide an organisation to control its activities and take up
opportunities to achieve goals and objectives of an organisation.

REFERENCES
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Online
NHS Jobs. 2019. Online. Available through:<https://www.jobs.nhs.uk/about_nhs.html>.
OXFAM International. 2019. Online. Available through:<https://www.oxfam.org/en/about>.