Business and The Business Environment

This document discusses the purpose and types of organizations, the size and scope of organizations, organization structure and functions, and the positive and negative impact of the macro environment in the business environment. It focuses on Sainsbury's, NHS, and Oxfam as examples of private, public, and voluntary organizations. The document also includes a comparison of micro, small, and large enterprises and the inter-relationship between different departments within an organization.

Business and The
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Purpose and types of organisation........................................................................................1
P2. Size and scope of the organisation........................................................................................2
TASK 2............................................................................................................................................4
P3. Organisation structure and functions with inter-relationship................................................4
TASK 3............................................................................................................................................6
P4. Positive and negative impact of the macro environment......................................................6
P5. Strengths and weaknesses of company.................................................................................8
TASK 4..........................................................................................................................................10
P6. Interrelation of strength and weakness with macro factors...............................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment refers to the sum total of both external and internal environment
including customer needs, employees, government, technology, trends and so on. Apart from
this, there are various factors that helps in taking decision and also executed by company by
considering tax rates, exchange, governmental policies and many more (Okeyo, Gathungu and
Peter, 2016). It is identified that business environment is helpful in significant resources because
of that organisations tends to achieve higher growth and effective development for the overall
performance. To carry forward this report, Sainsbury's is undertaken which is the second largest
chain of supermarket in UK and also founded in 1869 by the John James Sainsbury and also
became the largest retailer grocery store. In terms of public NHS is considered that tends to offer
public healthcare system and its purpose to offer healthcare to people. For voluntary Oxfam is
undertaken as its objective is to reduce poverty and enhance the overall condition of society.
Moreover, the report is going to cover the comparison among the private, public and voluntary
organisations considering their legal purpose and structure. Additionally, size and scope of the
company is also discussed with significant inter-relationship. Moreover, both internal and
external analysis is organised with its strengths and weaknesses.
TASK 1
P1. Purpose and types of organisation
Private: Here, company include sol proprietorship, partnership and corporation and its
objective is to earn more and more profitability. Sainsbury's is the private association that tends
to provide high quality products within the market. It is the largest supermarket store and also
has global presence. Purpose: For this, company develop various essential products to customers at the low
prices that help them in order to enhance their profitability and sales (Strydom and
Rudansky-Kloppers, 2016). Furthermore, the purpose of Sainsbury's is to earn more
profit and achieve competitive advantage within the market.
 Legal structure: In terms of private sector, the legal structure is prominently relies on the
higher authorities of an organisation as they also have the right to take decision
considering the laws and norms of company. In terms of Sainsbury's, its Board of
1

Directors take prominent decision which is useful in communicating to all the employees.
For this, the decision tends to impact the overall functioning and operations of company.
Public: This type of company is owned and controlled by the government as the NHS is
undertaken which is established in 1948 with the purpose of offering best healthcare services to
people. Purpose: The prominent purpose of NHS is to offer best health services to individuals
regarding their living standard as it tends to offer best service to patients in terms of
enhancing the health conditions to their patients (Hamilton and Webster, 2018).
 Legal Structure: In terms of NHS, all the prominent decisions of public organisation is
owned by the state and central government. Therefore, all the decisions should be
followed by the higher authorities and workers of NHS in terms of performing their
activities in smooth and effective way.
Voluntary: It defines the collection of individuals who tends to work together in order to
achieve common objectives and goals. For this, company is not managed and controlled by
government. Oxfam is undertaken as the voluntary institution in 1942. Moreover, around 20 or
more independent charitable trust is linked with Oxfam. Purpose: Its objective is to eliminate poverty from the society and tends to support poor
and needy people in order to raise their living standard by enhancing their status. It also
tends to bring prominent change with the help of various programs and campaigns to
improve the conditions of society (Čepel and et. al., 2018).
 Legal structure: Oxfam is the voluntary company and take all the decisions considering
the norms and policies that are taken by the trustees of company. They also take decisions
that are good for the society and employees as well.
P2. Size and scope of the organisation
Private company – Sainsbury's Size and scope: Sainsbury's has wide scope in market as it tends to offer good quality
products and services to their customers. For this, company tends to operate within
around 15 countries as have 7000 stores at the global level. In regard of this, the reason of
the success of Sainsbury's is the prominent talent and human resource and the operating
profit of company is around 2.20 billion pounds. It tends to offer effective products in
market at he low rates and also attract large number of customers that prevails in market
2

and also helpful for company to maintain their position in market for the long time and
accomplish higher growth. Mission and vision: The mission depicts to offer effective experience to the customers by
offering good quality products and services. The vision depicts the first preference of
customers in order to achieve competitive advantage in the sector.
Public organisation – NHS Size and scope: NHS also has huge scope as it leads to decide in bid to increase the
number of medical workers as presently, company has more than 18000 employees and
its global revenue for the last year is around $540 billion. In terms of this, company tends
to offer better services and also planning to expand its operations in other countries as
well. Mission and vision: The mission is to offer quality services to every patient who vision
in hospital. The vision is to enhance the health conditions and lifestyle of people.
Voluntary organisation – Oxfam Size and scope: Oxfam has huge scope to work for the welfare of individuals as it is
related with approximately 20 charitable trust and also planning to add more. In regard of
this, the higher authority is to develop significant strategies to take better decisions that
are beneficial for people to raise their living standard. Mission and vision: The vision is to make a better world which is free from the poverty
and its mission is to offer justice to people by which they can treat them on the equal
basis considering the gender, colour, age and many more. For this, top management of
company tends to align with the global partners to fight against the discrimination among
people.
Comparison among Micro, small and large enterprises
Basis Small Medium Large
Purpose The objective of small
organisation is to fulfil
the primary needs and
requirements of the
employee and their
family as well
The objective is to
enhance the living
standard and earn
basic profit.
The purpose of large
organisations is always
regarding their
expansion and
operations to generate
3

(Prajogo, 2016). higher profitability.
Number of employees It include the ventures
who include less than
10 individuals to
perform prominent
activities in an
effective way.
In terms of this, the
total number of
workers may get vary
within the medium
venture and include
around 50 to 249
employees
(Cherunilam, 2016).
In this, it include more
than 250 employees to
work in the company.
Decision making The decision making
of small companies is
in the under to
managers and because
of this, they does not
take time to take
decision.
Here, decisions are
taken by the higher
authority and
stakeholders of
company.
BOD, top level
management and chief
executives take
decisions considering
the enterprises and
also take time in bid to
take better decisions.
TASK 2
P3. Organisation structure and functions with inter-relationship
Within every company, there are various departments who perform several businesses
and activities in an effective way. It also tends to include marketing, finance, customer service,
HR and so on. In terms of Sainsbury's, which is the multinational company and also has global
presence as organisation has several departments that are linked with each other and also helpful
for company in order to achieve desired outcome. The prominent functions considering the
interrelationship with other departments is mentioned as under:
4

Illustration 1: Organisational Structure
(Source: Organisational Structure, 2019)
Sales and marketing department: The marketing department tends to promote and
develop awareness among people regarding the products and services of company (Ključnikov
and et. al., 2016). For this, the sales department of Sanisbury's sell prominent products and also
take feedback from the customers that is helpful for the marketing unit in order to develop
strategies in terms of enhancing the profitability and sales. Hence, the inter-relationship among
these departments is important in order to achieve prominent profitability.
HR and IT department: Human resource department plays an important role in each and
every company as they tends to hire suitable candidates for an organization. Despite from this,
HR unit offer effective training program and sessions to their subordinates that tends to enhance
the level of knowledge and skills of workers (Fabuš, 2017). Moreover, the IT department of
Sainsbury's offer new and updated techniques to HR department that help them to maintain
effective records and identify the performance of employees. Hence, the interrelationship among
both of these units is important that tends to enhance the profitability of company.
5

Marketing and finance department: The marketing unit of company leads to develop
promotion strategies, conduct loyalty programs and so on in terms of attracting customers and
also improve their sales (Gaganis, Pasiouras and Voulgari, 2019). In terms of performing
prominent activities in an effective way, finance department of Sainsbury's make sure the
availability of finance. Therefore, it is essential for the higher authorities of an organization to
put emphasis on developing and maintaining prominent relationship between the departments
and also help company to increase their sales and profitability in an effective way.
Therefore, from the preceding discussion it is identified that it is important to make sure
that there should be proper communication between the department to achieve growth and
success and also make sure that it tends to achieve competitive advantage and productivity in
market in order to increase sales and profitability of Sainsbury's.
TASK 3
P4. Positive and negative impact of the macro environment
PESTLE analysis is useful in terms of identifying the critical factors that are present
within the business environment and also impacted by both internal and external environment. In
terms of this, it tends to include those components that are more controllable by the company. In
terms of this, Sainsbury's opt this framework that tends to influence these factors and the overall
performance of company which is mentioned as underneath: Political: These factors consider the norms, government policy, taxation, labour law and
so on as these factors tends to put positive and negative impact on the working condition
of company (Kozubikova, Homolka and Kristalas, 2017). In terms of Sainsbury's it is the
large organisation who operate across the world and has global presence. In regard of
this, there is significant changes in the taxation and government policies that tends to put
direct impact on the profit and sales of company. Moreover, changes in law tends to
impact the overall activities and functionality of Sainsbury's in terms of implementing the
work in effective manner. For this, the positive factor include the stability of political
conditions of UK and profitability of company. Because of the worldwide issues and
attack on the territories of nations tends to put negative impact on the transportation of
company.
6

 Economical: This factor plays an important role in an organisation as it include both
inflation and deflation rates that put direct impact on the profitability and sales of
company. In terms of Sainsbury's the economic position of UK is quite strong and it
tends to create significant income for the business organisation in terms of gaining
competitive edge in the market. In relation with this, organisation tends to offer effective
employment opportunities to people that help in increasing the living standard of
employees (Asongu and Odhiambo, 2019). In terms of this, the economic condition of
UK is good which is helpful for company to earn more profit and also offer effective job
opportunities which is helpful in order to enhance the living standard. In terms of this,
due to increase in the labour cost put negative impact on the sales and profitability of
respective company in order to increase labour turnover ratio. Social: These factors tends to include income, age, regions and so on that tends to
include sales and profit of business. It is important for company in order to develop goods
as per the needs and requirements of customers. In regard of this, the supervisor of
Sainsbury's tends to develop prominent goods which is helpful in order to satisfy the
demand of customers. It also tends to create good reputation and brand image of
company in dynamic business environment. This factor is helpful in order to satisfy the
requirements to customers as it is helpful for company in terms of creating good image
but sometimes it also induces the organisation to use CSR that put negative impact on the
running and functioning of company. Technological: For this, technology plays an important role in terms of enhancing
productivity and profitability of company. In regard of this, Sainsbury's always try to opt
latest technology in terms of accomplishing competitive advantage in market area. It is
essential for the manager to offer proper training session to employees in terms of using
advanced technology which is useful in eliminating wastage for work (Akhtar and Sushil,
2018). Because of the advanced technology, Sainsbury's tends to generate and offer good
quality products and services to their customers in terms of creating more income for
business. Moreover, with the effective execution of cost and advanced technology which
is very high tends to put negative impact of the functioning of company. Legal: This factor tends to include various laws and regulations that tends to impact the
operations of company and in terms of this, the manager of Sainsbury's tends to execute
7

prominent laws and legislations in the organisation and it also tends to offer prominent
security and safety to tier employees in an organisation. Moreover, the laws and
legislations should be comply with company as it helps in enhancing the performance of
company. Meanwhile, legal restrictions tends to offer various problems that put negative
impact on the profitability of company.
 Economical: Here, organisations tends to perform their operations and functions towards
the betterment of company and interest of society that offer effective help from the
government authorities (Trad and Kalpić, 2017). In regard of Sainsbury's, its supervisor
use advanced technology that offer prominent products and services which is best fit as
per the needs of society. For this, Sainsbury's offer safe and secure business environment
in terms of attracting customers to purchase prominent products and services. Meanwhile,
the cost for the execution of Eco-friendly technology is very expensive and costly for the
company that put negative impact of the functioning and running of company.
P5. Strengths and weaknesses of company
SWOT analysis of Sainsbury's:
Strengths Weaknesses
 Here, company tends to consider low
cost strategy which is helpful for them
in terms of retaining prominent number
of customers and also helpful in
earning high profitability (Calabrese
and et. al., 2018).
 Company also has effective market
presence as it tends to offer high quality
products and services to their potential
customers that tends to increase the
level of customer base of Sainsbury's
and also positively impact the
performance level of company.
 Because of the increase in competition
level tends of eliminate the profit
margin of company and affect
negatively to the market share and
performance level of Sainsbury's.
 Regular decrement for the credit rating
tends to impact the brand image of
Sainsbury's in negative way.
Opportunities Threats
8

 For this, respective company also has
the chance to take entry into
underdeveloped areas as urban people
also purchase branded commodities.
 Sainsbury's can enter into other market
area and increase its market presence
which in turn enhance the market share
of company.
 Changes and modifications in laws and
standards tends to influence the
business activities because of this,
company is not able to influence the
business activities and objectives
within the stipulated period of time
(Foss and Saebi, 2018).
 The significant competitors of
Sainsbury's is Asda, Lidl, Aldi and so
on that tends to cut down the profit
margin of company.
SWOT Analysis of NHS:
Strengths Weaknesses
 In UK, there are various private
hospitals and healthcare services in UK
but for the emergency and accident
services are unique of NHS.
 Along with this, the continuous
monitoring for the waiting list to get
approval and proof for the demand
outstrips and since its establishment,
NHS continuously grow regarding its
services (Kim, 2016).
 NHS is unable to cope up with the
demand because of increasing
population that can become barrier for
the growth and success of company.
 NHS possibly link regarding the
management in order to link the chain
according to the resource analysis.
Opportunities Threats
 Use the marketing strategies
prominently in order to raise the profile
of NHS and also increase the private
investment.
 Due to the work of contractors, the
image and reputation of NHS get
influenced and the staff turnover is
high.
9

 NHS has the chance to develop
performance culture instead of
expectation culture for the better
employee relations climate regarding
the recent years (Jevšenak, 2019).
 Respective company also need proper
clarity over the behaviour which
individuals want regarding their
motivation like maintaining balance
among quality and speed.
TASK 4
P6. Interrelation of strength and weakness with macro factors
Basis Political Economical Social
Strengths The top level
management of
Sainsbury's tends to
consider the laws and
regulations in terms of
carrying out the task in
an effective way.
For this, an
organisation tends to
pay fair wages to their
labour in order to
enhance the
productivity for the
achievement of the
objectives of company
(Okeyo, Gathungu and
Peter, 2016).
Sainsbury's provide
products in the market
after identifying the
needs of customers in
terms of satisfying
their customers to
achieve profitability
and objectives.
Weaknesses Modifications is
policies tends to incur
high cost that
negatively impact the
functioning of
company which is its
weakness.
It represent that the
economic condition of
UK put negative
impact on the overall
performance of
company because it is
fluctuating.
In modern time,
people are more
concern regarding
their health that can
become weakness for
company in terms of
their offerings
(Strydom and
Rudansky-Kloppers,
2016).
10

Basis Technological Legal Environmental
Strengths With the help of
innovation,
Sainsbury's tends offer
quality products and
goods on time for the
effective services to
their customers.
Here, organisation
tends to follow
prominent laws and
policies that leads to
increase the brand
image in market.
Here, company opt
eco-friendly tools and
techniques in terms of
eliminating the level
of pollution and
protect atmosphere.
Weaknesses With the increasing
change in technology
tends to eliminate the
revenue condition of
Sainsbury's.
Modification in rules
and norms of company
tends to face legal
issues and because of
this, company should
pay penalties that
impact the overall
profitability of
company (Hamilton
and Webster, 2018).
The supervisors of
Sainsbury's does not
follow the
environmental laws
that influence the
image of company in
negative way and can
become weakness of
company.
CONCLUSION
By undertaking the preceding discussion, it is identified that business environment tends
to impact the performance and productivity of company. In terms of this, purpose and scope of
private, public and voluntary is quite different from each other. For this, PESTLE analysis is
considered in terms of analysing the impact of external factors on the overall performance of
company. For this, SWOT analysis is considered in terms of analysing the strengths and
weaknesses for the micro environment factors and the overall performance of company.
11

REFERENCES
Books and Journals
Akhtar, M. and Sushil, S., 2018. Strategic performance management system in uncertain
business environment. Business Process Management Journal.
Asongu, S.A. and Odhiambo, N.M., 2019. Challenges of doing business in Africa: A systematic
review. Journal of African Business, 20(2), pp.259-268.
Calabrese, M and et. al., 2018. From mechanical to cognitive view: The changes of decision
making in business environment. In Social Dynamics in a Systems Perspective (pp. 223-
240). Springer, Cham.
Čepel, M and et. al., 2018. Business environment quality index in the SME segment. Journal of
Competitiveness.
Cherunilam, F., 2016. Business environment. Himalaya Publishing House.
Fabuš, M., 2017. Current development of business environment in Slovakia and Czech Republic.
Foss, N.J. and Saebi, T., 2018. Business models and business model innovation: Between
wicked and paradigmatic problems. Long Range Planning, 51(1), pp.9-21.
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.
Jevšenak, S., 2019. The Millennials’ Effect: How Can Their Personal Values Shape the Future
Business Environment of Industry 4.0?. Naše gospodarstvo/Our economy, 65(1), pp.57-
65.
Kim, J., 2016. The platform business model and business ecosystem: Quality management and
revenue structures. European Planning Studies, 24(12), pp.2113-2132.
Ključnikov, A and et. al., 2016. The entreprenurial perception of SME business environment
quality in the Czech Republic. Journal of Competitiveness.
Kozubikova, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Okeyo, W.O., Gathungu, J. and Peter, K.O., 2016. Entrepreneurial orientation, business
development services, Business environment, and performance: A critical literature
review. European Scientific Journal October 2016, 12(28).
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics, 171,
pp.241-249.
Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business management.
Oxford University Press Southern Africa.
Trad, A. and Kalpić, D., 2017, June. A Neural Networks portable and Agnostic Implementation
Environment for Business Transformation Projects the basic structure. In 2017 IEEE
International Conference on Computational Intelligence and Virtual Environments for
Measurement Systems and Applications (CIVEMSA) (pp. 153-158). IEEE.
12