Business and Business Environment

This report explores the different types and purpose of organizations, the relationship between different functions of organizational structure, and the impact of macro environment on business decision making. It provides an analysis of the internal and external factors affecting a company's operations and decision making. The report is based on Northern Trust Investment Bank, a public company in the US. Get study material and solved assignments on business and business environment at Desklib.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Different types and purpose of organization...............................................................................3
Size and scope of different type of organization.........................................................................4
TASK 2............................................................................................................................................5
Relationship between different functions of organizational structure........................................5
TASK 3............................................................................................................................................7
Identify negative and positive impact of macro environment.....................................................7
TASK 4............................................................................................................................................8
Determine internal and external macro factors...........................................................................8
Evaluate impact of macro and micro factors upon business decision making............................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is defined as the collection of all internal and external factors and
forces which affects the working and operations of company. The present report is based on
“Northern trust investment bank” which is a public company providing their services in US. The
report will outline the different types of organization in accordance with their size, legal structure
and scope. Further the study will also outline relationship between different functions of
organizational structure. Further the analysis of external and internal environment of the
company will take place with help of different models.
MAIN BODY
TASK 1
Different types and purpose of organization.
There are different types of business such as profit and non-profit making business. Profit
making organization has a goal which is to make better profits by providing best quality of
product and services to customers. On the other side, non-profit making organization have
complete focus only on providing better services to customers without any profits margin.
Different types of organisations:
Private organization:
This type of organization is run by the individual people for earning profits. This type of
organization has different types which are as follows: Sole proprietorship is a type of business which is owned by an individual person who is
solely responsible for all profit and loss. (Bashir and Verma, 2017). For example: Ice
cream parlour and Beauty salon are counted into the sole proprietorship business. Partnership firm is a type of company which is formed by two or more people who share
profit and loss and all responsibilities on agreed terms with the aim of earning profit. For
example, Social China is a company founded in partnership by Steve Bartlett and Dom
McGregor. Public limited organization is a type of company which has a separate legal existence and
its shares are sold and traded within the market. For example: John Lewis is best example
of public limited company.

 Private limited company is a type of business which is handled by small group of people
and has some particular objective and working of company is in direction of attaining that
objective. Arcadia group is the best example of private company.
Public sector company:
This is a type of company which is owned by government for providing better services to
the people and society worldwide along with providing better services to customers at the market
place (Belás and Rózsa, 2019). Northern trust investment bank is providing better financial
services to their customers in order to manage their investment and money.
Voluntary sector company:
This is a type of company which include social services and services in order to improve
the society and underprivileged people in society. For instance, OXFAM is an independent
charitable organization which focuses on alleviation of global poverty line.
Size and scope of different type of organization.
As per size and scope of company there are three types of organizations which are small,
medium and large sized organization. Explanation of those are as follows:
Basis Small Medium Large
Meaning This is a type of
business which has the
income of not more
than £6.5 million and
total of balance sheet
of not more than £3.26
million.
This is a type of
business wherein the
turnover of the
company is not more
that 36 million and
balance sheet total of
36 million.
This is a type of
business where the
profit is more than
medium company but
here the number of
employees need to be
500 or more.
Goals To earn profits by
providing services.
To increase
sustainability of
business (Gaganis,
Pasiouras and
Voulgari, 2019).
To provide better
services and offer best
quality of products to
customers against of
money.
Objective To sustain better To increase profit To build best brand

customer services. margin by offering
products and services.
image and goodwill at
market place.
Number of
employees.
Minimum 5 employees More than 250
employees.
More than 500
employees.
Market share Not have any kind of
market share.
Minimum 25% market
share
Minimum 50% market
share.
Legal structure Not have any kind of
legal structure
Company follow the
complete legal
formalities and
agreement of
partnership as well as
have AOA in their
business.
Company fulfil all the
government
legislations and have
MOA for their
business.
Example Beauty salon and Ice
cream parlour.
Northern Trust
investment Bank.
NHS (National health
services)
TASK 2
Relationship between different functions of organizational structure.
An organizational structure is being defined as a system which involves the way how the
activities will be delegated to the employees in a sequential order. There are different types of
organizational structure which might be used by Northern trust investment bank. Explanation of
those are as follows:
Functional organization structure:
This is based on organization being divided into smaller group with specific tasks or
roles. In that each department has their manager or director who answers to an executive a level
up in hierarchical who may see multiple departments at same level. This type of structure relates
the employees providing the work in which they are efficient and have complete and thorough
knowledge (Hamilton and Webster, 2018). This is advantageous to bank as the employees will
get the work in which they excel and have proper knowledge.

Divisional organizational structure:
This is a type of structure in which the work is being divided on the basis of the work
which is being done by the company. For instance, if employees are working for marketing of
product and services then they come under the marketing department. Most of the large scale
company works on the basis of divisional structure as this divides the work on the basis of the
work which is being undertaken by the department. Under this structure, each division operates
on their own and control their own resources in accordance to their requirement (Huntenburg,
Bazin and Margulies, 2018). This type of structure is beneficial to bank as this provide every
department with their own resources and this assist that department in managing their work on
their own.
Relationship between different organisational functions:
Marketing and finance department:
Marketing is most important function of company which help to promote product and
service at market place. On the other side, finance department is providing funds to all
department to pay their bills. Through that finance department have proper funds to allocate all
department and pay to employees (Koišová and et.al., 2017). On the other side marketing
department of bank is related with finance department as budget of marketing is being allocated
by finance department only. This help to meet objectives of Northern trust investment bank
because through better marketing customers are more attracted towards business and finance is
generated by increase in sales. Hence, both the department work together and try to manage and
improve performance of company.
Human resources and sales department:
Human resources department is back bone of each and every company because they hire
employees for company and without human resource company cannot operate. On the other side,
sales department have role to increase sales of company by offering and providing complete
information about product and services. Both department have their effective relations at
Northern trust investment bank. Human resource department hire employees for sales team in
accordance to requirement of sales department. Hence, this recruitment will assist company to
increase number of employees and this will increase sales of company. in addition to this HR
department of bank also provides training and development session for sales employees. This in
turn assist the sales people to learn new changes taking place and implement them in their

working. As a result of this bank try to improve its sales and this in turn increases revenue of
company (Komljenovic, Loiselle and Kumral, 2017).
TASK 3
Identify negative and positive impact of macro environment.
The business exists in external environment which keeps on changing and in order to
analyse these changes PESTLE analysis model is used. This is a type of model which assist the
company in analysing all the external forces which affect the working of company:
Political factor:
With reference to political factors this involves the changes taking place in the political
sector of country which has impact over operations of company as well. Currently there are
many different types of laws which need to be followed and implemented by the company as
well. These laws are like employment law, discrimination law, health and safety law and many
other laws. If bank will follow and comply with all these laws then this will improve the working
to a great extent (Ma and et.al., 2018). Hence when bank will adhere to all the laws then this will
create positive impact over working and goodwill of company.
Economic factor:
Economic factors have significant impact on business which includes interest rate,
exchange rate and many more aspects. Currently due to current pandemic the economic
condition of economy is not much good and effective and consumer also not have enough
finance. Hence, because of this now majority of people are coming to take loan for business and
because of this bank will flourish. Also in addition to this if economic condition will be good
then this will improve the working of bank to a great extent.
Social factor:
Social factor is an important factor which affect to business in negative and positive
manner. The social factor involves attributes like attitude, taste and preferences of customers
(RAO, 2020). For example: in the current pandemic many people have lost their job and because
of this now they are not having money for fulfilling their needs. Thus, for this Northern trust
investment bank need to provide loan to people on less interest rates. In addition to this bank
must also invest some amount of their profit in the development of society.
Technological factor:

Currently there are many modification and development in the technology and these need
to be adapted by company. In this, management need to take decision to use new and advanced
technology for completing their work in effective manner. This creates positive impact on
business northern trust investment bank. This is pertaining to the fact that when bank will make
use of latest technology then this will improve performance of bank. On the flip side is bank will
not make use current technologies then this will decrease the productivity and efficiency of bank.
Environmental factor:
This is another aspect of PESTEL analysis which involves changes within the
environment in which company is operating. Currently with respect to pandemic the consumer
has become more health conscious and because of this Bank must also focus on assisting in
management of environment and society. for this bank can add some investment in strategies for
protection of society (PESTEL analysis, 2017).
Legal factor:
This factor consists of different rules and regulations created by government which can
affect business in negative and in positive manner. This includes different types of legislation
rules and regulation like consumer protection act, employees right act, employee compensation
and many more. For example: consumer protection act says that provide complete information to
customers and if the bank will hide any of the information from the consumer. This is pertaining
to the fact that when consumer will not have information then they will not trust bank in future
and this will result in reduction in number of consumers.
TASK 4
Determine internal and external macro factors.
For success of company, it is very important to analysis internal strength and weakness of
company. On the other side, for taking business on higher level management need to analysis
internal opportunities and threats of company. for the purpose of internal analysis SWOT model
is used which assist in analysing strength and weakness and internal opportunities and threat of
company. Explanation of those are as follows:
Strength Weakness
 Company have strong leadership team
by that they are able to attract new
 Company has lack of client diversity as
it caters mainly to need of wealthy

talent and transforming existing leaders
into new roles.
 Company has developed a strong
reputation of safety and has a vast
client base (SWOT analysis of northern
trust investment bank, 2020).
 Company has strong distribution
network.
individual and corporation.
 This involved lawsuits regarding its
securities leading program.
 Company have lower investment on
research and development session
which is create negative impact.
Opportunities Threats
 There is a scope for expansion as it is
not present in all domestic markets.
 Small financial institution acquired to
gain access to untapped markets.
Opportunity to attract new customers from
online business in an effective manner.
 Shortage of skilled workforce in certain
global market.
 More losses can be incurred if the US
real estate prices are falls (Siegel and
Snyder, 2017).
 Growing strength of local distribution
which is present a threat in some
markets.
Those are strength and weakness of Northern trust investment bank. In order to overcome
threat, company need to use their opportunities are help to resolve problems in an effective
manner.
Evaluate impact of macro and micro factors upon business decision making.
There are various micro factors which are affect to business and their decision making
process by making combination of macro factors. The company has to adhere to many different
laws and if they will not be in position to manage it then this will be a weakness for the
company. In that management need to make proper consideration with legal factors from
external factors which is help to take better decision as per requirement at workplace (Sivarajah
and et.al., 2020). In addition to that company have effective strength which is strong distribution
network and effective leadership team. In that management of northern trust investment bank
need to consider with social factor because through that customers easily gathered their products

and services from company. This is effectively help to managed effectiveness and performance
of company in an effective manner. This affect decision making process of company because in
that management need to take better decision making process in an effective manner.
The company have effective opportunity which is attract new customers toward business
online channel. This is affected with environment changes at market place. This creates more
effectiveness for business and their growth factors in an effective manner. Like if environment is
better than it is not affect to business. Customers are easily give their order from online sources
are help to increase sales of company. On the other side, company have weakness which is lower
investment on research and development department (Ślusarczyk and UL HAQUE, 2019). For
that management need to increase their investment on that by using more technologies. Through
that management have chance to developed more effectiveness because company have complete
knowledge about market place.
CONCLUSION
From the above study it is concluded that business environment involves all the internal
and external forces which affects the working of the company. The business operates in external
environment and there are many different forces which affects the working and operations of
company. from the above study it was highlighted that there are different types of organization
like public, private and voluntary. Further it was analysed that the different function of the
company is interrelated with one another like marketing with finance, HR with sales and many
others. The report also summarised that for analysing the external environment PESTLE model
was used and for internal analysis use of SWOT model was made.

REFERENCES
Books and journals
Bashir, M. and Verma, R., 2017. Why business model innovation is the new competitive
advantage. IUP Journal of Business Strategy. 14(1). p.7.
Belás, J. and Rózsa, Z., 2019. The impact of the public sector on the quality of the business
environment in the SME segment. Administratie si Management Public.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling. 78. pp.275-292.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Huntenburg, J. M., Bazin, P. L. and Margulies, D. S., 2018. Large-scale gradients in human
cortical organization. Trends in cognitive sciences. 22(1). pp.21-31.
Koišová, E. and et.al., 2017. SMEs financing as an important factor of business environment in
Slovak Republic regions. Montenegrin Journal of Economics.
Komljenovic, D., Loiselle, G. and Kumral, M., 2017. Organization: A new focus on mine safety
improvement in a complex operational and business environment. International Journal
of Mining Science and Technology. 27(4). pp.617-625.
Ma, Z. and et.al., 2018. Evolutionary history resolves global organization of root functional
traits. Nature. 555(7694). pp.94-97.
RAO, S. P., 2020. International business environment. HIMALAYA.
Siegel, J. S. and Snyder, A. Z., 2017. Data quality influences observed links between functional
connectivity and behavior. Cerebral cortex. 27(9). pp.4492-4502.
Sivarajah, U. and et.al., 2020. Role of big data and social media analytics for business to
business sustainability: A participatory web context. Industrial Marketing Management.
86. pp.163-179.
Ślusarczyk, B. and UL HAQUE, A., 2019. Public services for business environment: challenges
for implementing Industry 4.0 in Polish and Canadian logistic enterprises.
Administration & Public Management Review, (33).
ONLINE
PESTEL analysis. 2017 [Online]. Available through:
<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>
SWOT analysis of northern trust investment bank. 2020. [Online]. Available through:
<https://www.mbaskool.com/brandguide/banking-and-financial-services/7851-northern-
trust.html>