Business and the Business Environment

Business and Business
Environment

Table of Contents
INTRODUCTION-..........................................................................................................................4
TASK 1............................................................................................................................................5
P1) Analyse different types and purpose of organizations like public, private, and voluntary. .5
P2) Explain the size and scope of different types of organization..............................................6
TASK2.............................................................................................................................................7
P3) Elaborate the inter-relation between different functions and their interlink with
organizational objective and structure........................................................................................7
TASK 3............................................................................................................................................7
P4) Discuss the positive and negative impact of macro environment over business operations 7
TASK 4............................................................................................................................................9
P5) Execute internal and external analysis of selected company ...............................................9
P6) Discuss the interrelation of strengths and weaknesses with macro environment...............10
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................11

INTRODUCTION-
Business environment comprises several internal as well as external factors such as
customers, employees, demand, supply and many more that affect the business functions in an
efficient manner (Agwu, 2018). The report considers General Motors that is a multinational auto
mobile company based on US. It offers a range of vehicles, parts of vehicle and financial
services across the globe. Reports comprises different types of organization along with their
purpose, scope and size. Interrelationship between different departments and internal as well as
external analysis along with appropriate tools such as PESTLE and SWOT are also discussed in
report.
TASK 1
P1) Analyse different types and purpose of organizations like public, private, and voluntary
There are different types of organization such as Pub that are formulated for different
purpose. The organizational, legal structure are different for each of them. Several types of
organizations are mentioned below:
Private Company-
Purpose- It is a company that is owned by private business owners. The main aim of
these entities is to earn higher profit margin. These can be started as sole proprietorship,
partnership or company. These organizations are undertaking with an aim to increase market
share and gain profitability. For instance General Motor is a private company that has started to
earn maximum profit margin (Dubey, 2016).
Legal structure-The legal structure comprises various rules, compliances, regulations
that are determine by higher authorities of respective company that helps to take effective
decisions.
Public Company-
Purpose-It is owned and regulated by government or public authorities with an objective
to serve the society. The main aim of these entities is to ensure societal well being. For instance

NHS has established with the aim to provide better health care facilities to citizens of country. It
undertakes various services in order to improve healthy condition of individuals.
Legal Structure- Being a public company it is owned by state or central bodies. All the
important decisions of organizations are taken by top level managers that need to be follow by
the employees of entity ( Gorla, Chiravuri and Chinta, 2017).
Voluntary Organization-
Purpose- It is also known as non profit or civil organization that are initiated by
individuals with an objective to create a social impact. These companies are work for social
benefits rather profit. Oxfam is such an entity that owns several charitable trust within country.
The aim of Oxfam is to cater the needs of poor people and to reduce down poverty. For this, it
carry out several campaigns, programs to improve the standard of living of needy people.
Legal Structure- There are several compliances, policies that have been formulated by
trustees of Oxfam for the smooth functioning of business entity.
Sole trader: Sole trader can be defining as that kind of business which is related to selling
product and services their own basis. There are sole traders which use business and perform
business function at effective level. Here, all the investment is done by single business owner
who owned and controlled it. In this regard, business owner has the authority to take all decisions
related to organization.
Partnership: this can be defining that kind of business under which origination is using to
make partners which will share business profit at some agreed ratio and work according to it. It is
started by two or more person with an aim to earn higher profit margin.
P2) Explain the size and scope of different types of organization
Micro, small, medium and large.
Size refers to the number of employees, market acquire by firm, profitability and other
aspects whereas scope comprises the opportunities of future growth and success of company.
There are varied size as well as scope for different organization.
Private organisation-General Motors
Scope and Size-General motors has a wide scope to provide highly technological and
advance cars as per the current market trend. It has expanded the business over the globe and

provides efficient products to global audience (Kirchoff, Tate and Mollenkopf, 2016). It is one
of the largest auto mobile company that cater the needs of international customers. The company
has several qualified and efficient employees who contribute towards success of organisation. In
addition, it posses high share at global auto mobile sector and earn higher profit margins.
Vision and Mission- It has a mission to produce self driven cars to serve the needs of
customers in an efficient manner. With this, it has an aim to be world's biggest automotive
company that will provide high technological products.
Public Organization- NHS
Scope and Size-The company has an aim to provide better medical services to individuals
in order to improve their health conditions. With this, it has large number of employees to
undertake different activities and cater the needs of patient. Although, the main purpose of NHS
is to serve society but it is able to earn significant revenue. It aims to improve services in order to
explore business operations at wide level.
Vision and Mission- NHS has a vision to render better medical treatment to each and
every patients in order to enhance their standard of living.
Voluntary Organization -Oxfam
Scope and Size- The entity has a wide scope to perform various activities for the well
fare of people and society (Kumar and Sethi, 2016). It has numerous charitable trust to serve the
individuals. There are various voluntaries are associated with company who aim to serve the
nation.
Vision Mission- The mission of Oxfam is to reduce down poverty and discrimination on
the basis of gender, race and other factors. It has an aim to improve standard of living of
individuals within nation.
Small, Medium and large enterprises
Basis Small Medium Large
Investment Here, small amount is
invested in business in
terms of machinery,
plans and other
equipments as it is
generally owned by
In this, sufficient
amount is invested in
organization to
undertake various
business functions.
These entities are
operated at large level
thus huge amount is
invested in
machinery, tools and
other equipments in

single business owner. order to meet with
higher demands arise
at market place.
Level of operations Small organizations
are functioned at
small level generally
within a particular
region with limited
resources.
It is operated at
comparatively higher
level with sufficient
number of employees,
fund and other
resources within
country.
Large enterprises are
operated at global
level with higher
number of resources.
TASK2
P3) Elaborate the inter-relation between different functions and their interlink with
organizational objective and structure
There are different departments in an organization such as finance, marketing, human
resources, sales and many more. All the departments are associated with each other and help to
achieve business objectives (Ricciardi, Zardini and Rossignoli, 2016). General motor is a
prominent company that has presence in different countries across the globe. The interrelation
between different divisions of entity is discussed below:
Finance and Marketing Department- Finance manager are responsible to procure,
allocate as well as control funds within organization. Whereas marketing department of promotes
products and services at wide level to increase in sales and profit margins of company. In context
of General Motors, it is analysed that there is effective association between both division.
Finance people provide funds to marketers while they promote products and services of entity to
enhance sales. Thus, inter-relation is significant to achieve business goals.
Human resource and IT Department – Human resource managers recruit, select suitable
candidates for IT department in order to fill the vacant position. They also organize training and
development programs to enhance technical skills of employees. While IT people develop
software to ease the work of HR managers. It helps to save their time during screening process.
Thus,they are able to select a potential applicant for the growth of company. In regards of

General motors, there are strong association in both units that will enhance coordination and
provide competitive edge.
These functions are used by firm in order to maintain function such as Finance and
Marketing Department and Human resource and IT Department. This will help in organization to
manage function to use better results. All these functions are related to different areas and
performed by managers of General Motors in an efficient manner to achieve desired goals.
TASK 3
P4) Discuss the positive and negative impact of macro environment over business operations
PESTLE analysis refers to a framework that is used to monitor the impact of external
factors upon business operations (Schaltegger, Hörisch and Freeman, 2019). Macro
environmental factors in context of General Motors are mentioned below:
Figure 1 PESTEL Analysis, 2020
Political Factors-General motors is working at global level thus it is affected with the
rules and regulations of government of different countries. The sales of company is affected with
the trade war between US and China. Government also render grants to promote technological

advancements in auto mobile industry. On the another side, organization need to make
appropriate changes as per the amendments of current policies that is great hassle for entity.
Economic Factors- The company is highly affected with this factor. As company is
working in different countries thus any change in the price of crude oil, condition of present
economy will affect the demand of products. Due to current pandemic situation the sales of
General Motors has reduced down drastically. Thus, it is essential for organization to constantly
analyse the changes and prepare strategies accordingly.
Social Factors-It is analysed that now people are concern for environment. So, it is
essential for General Motors to monitor the buying behaviour of people and focus on
development of electronic cars. It will help to enhance sales and revenue of organization. On the
another side, change in market trend, attitude of people may influence the present sales of entity.
Technological Factors- There are rapid technological changes have been introduced in
auto mobile sector. Due to this General Motors are focusing on advancements to provide
electronic cars to minimize the usages of fuel based vehicles ( Shaughnessy, 2016). It will
provide an edge to company over other competitors such as Volkswagen, Ford motors and so on.
Although, it will inflate the sales of entity but needs huge investment.
Legal Factors- There are ample of trade regulation, consumers protection laws, business
laws are applicable on General Motors. It has been sued by customers to not obey the predefined
compliances. Thus it is abide by ample of rules and regulations that need to be follow in
prescribed manner. Otherwise, it may cause legal disputes to company.
Environmental Factors- To maintain a positive brand image at market place General
Motors takes initiatives for environmental protection. It is developing electronic cars to reduce
down pollution. It will create brand value of company at global level. On the another side, it will
incurred high expenses for organization.
Out of above discussion, it is monitored that macro environment factors significantly
affects sales and profit margins of General Motors. It has both positive as well as negative
impact on business setting ( Steiner and Teasdale, 2016).

TASK 4
P5) Execute internal and external analysis of selected company
Figure 2 SWOT, 2020
SWOT analysis of General Motors:
Strengths Weaknesses
 General motors is joining hands with
some Chinese automotive companies
that is a great strength for the company.
 The position of company in the
automotive market of United States is
very strong.
 The company is highly dependent on
the U.S market for its revenue that is
one of the losses for company.
 The company required to spread its
brand awareness as people are not
much aware about the brand now.

 They are creating eco-friendly and safe
vehicles that is beneficial for the
environment and one of major strength
of company.
 They are also highly dependent upon
just a few models for sales growth
such as trucks and SUVs which is a
weakness.
Opportunities Threats
 Demand of fuel efficient cars can prove
to be a great opportunity for company
to increase their revenues.
 The new models that company comes
up with from time to time is a great
opportunity it has over its competitors
in the market.
 The demand for autonomous vehicles is
rising. General Motors can focus on it
which will help them to increase their
revenues.
 Increase in competition in automotive
sector is a great threat for company.
 The rise in exchange rate of US dollars
is also increasing risks for company.
 The increase in costs due to changes in
U.S. Regulations may also lead to
increase in threats for the company.
P6) Discuss the interrelation of strengths and weaknesses with macro environment
Basis Strengths Weaknesses
Political Company is highly benefited
from the US market as they
have high market share in
country due to flexible
regulations (Zhao, Fan and
Yan, 2016).
Entering Chinese market is a difficult
deal for company due to its complex
policies and regulations.
Economic GDP of countries like China
and US are a great opportunity
for General Motors as they have
Economic fluctuations have direct
impact on sales and profit of the
company leading to a decline in with.

a strong foothold there.
Social Bringing in fuel efficient cars as
per changing social values is a
great strength for company that
will increase its profits.
The trends in society are continuously
changing that are weaknesses for
General Motors.
Technological Bringing in continuously new
technological development
helps General Motors to face
competition in market.
Automotive sector requires
continuous technological development
that requires huge investment.
Legal Following all the legal rules and
regulations help General
Motors to effectively enhance
the reputation of organisation in
the market.
Company have faced legal
proceedings due to a number of cases
such as defective ignition switches
and so on.
Environmental They are developing efficient
and effective electric cars for
environmental benefits.
There are a number or regulations
regarding the use of resources from
environment which limits the
company.
CONCLUSION
With above discussion, it is monitored that business environment is crucial aspect and has
significant impact upon business performance. It is analyses that business environment is
significant and helps make effective strategies to enlarge operations at wide level. Besides this,
there are various types of organization that has been initiated for different purpose and own
different legal structure, scope and size. Further, Pestle and SWOT analysis is essential to
analyse the impact of internal as well as external factors over business productivity and outcome.

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