Business and the Business Environment

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Distinct types of organisations and their purposes and legal structure..................................3
P2 Size and scope of distinct types of organisations...................................................................5
TASK 2............................................................................................................................................8
P3 Interrelation between distinct organisational function and the way they link to objectives
and structure of firm....................................................................................................................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..........................................................................................................................................11
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses. ........................................................................................................11
P6 Explain how strengths and weaknesses interrelate with external macro factors.................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business environment refers to the surroundings in which a firm perform its activities and
operation. It consist of various intrinsic and extrinsic forces that influence functioning of
business in both positive and negative way. Internal factors includes employees, management,
organisational structure, culture etc. and extrinsic forces involves political, economical, legal,
environmental, social and technological factors that highly impacts on operations and functions
of business (Anolfatto and MacDonald, 2019). This report is based on HSBC Holdings plc which
is a multinational financial services and investment bank of Britain. The bank was established in
year 1991 and its headquarter is located in London, United Kingdom. This report covers different
type, size, scope and purposes of organisations along with their legal structure. It also includes
the relationship between distinct functions of organisation and their link to its objectives as well
as structure. Apart from this, positive and adverse influence of macro environment on operations
of business are determined along with strengths and weaknesses of organisation by conducting
internal and external environmental analysis. At last, interrelation of strengths and weaknesses
with extrinsic macro factors and a brief summary based on the overall project is provided in the
report.
TASK 1
P1 Distinct types of organisations and their purposes and legal structure
In the business environment, distinct types of organisations are operating and each has its
sole purpose for which it function. The legal structure of each type of organisation is also
different (Andersson, Forsgren and Holm, 2015). Satisfying needs of customers and yielding
high revenues is the prime purpose of each company. Different types of business organisations
are mentioned below:
Private sector organisation: The business entities which are owned and run through
private individuals are fall under private sector organisations. Generating higher amount of
revenues and acquiring large market shares is the prime motive of private companies. HSBC
Holdings plc is the private sector organisation which offers banking and financial services to
customers.
Purpose: Acquiring large market share and earning high profits by providing high quality
products and services to customers is the purpose of private firms (Argyris, 2017).

Types of legal structure: Partnership: In it, two or more people come together to form a business. These people
are called partners. All the partners in a business sign a deed with their mutual
understanding and divide profit and losses in business equally or as per their share in
business. Sole proprietorship: A single person run and manage activities and operations of whole
business in this legal structure and is solely accountable for losses and profits takes place
in firm (Birru and et. al., 2019).
 Limited company: In this, the company is registered and formed under Companies Act
and the debts and liabilities of business are the responsibility of its owners as per their
stake and investment in firm.
Public organisations: The firms which own and operate by government are included in
public sector firms. Satisfying needs and requirements of customers and earning revenues is the
objective of public companies. National Health Services is a public sector organisation which is
own and run by government.
Purpose: The purpose of public organisations is “To generate adequate profits by
fulfilling needs of society and ensure their welfare”.
Types of legal structure: Central government: In this legal structure, the local and state affairs are handle by
central government and tax generation is the main source to collect funds (Bah and Fang,
2015). State government: The issues of a specific state are handle by state government and
posses power in their hands, applicable to certain area.
 Local government: All the local affairs of a particular town or city are managed and
handle by local government and the funds are raised from council tax.
Voluntary sector organisation: The firms which are operate and managed by volunteers
are included in voluntary sector firms. The primary purpose of these organisations is to enhance
the living standard of society and improve life of people. Oxfam is one of the voluntary sector
firm which operates with the intent of declining poverty from the entire world (Bocken, Rana
and Short, 2015).