Business and the Business Environment

This document discusses the different types of organizations and their legal structures, the size and scope of organizations, and the interrelation between different organizational functions. It also explores the positive and negative impacts of the macro environment on business operations.

Business and the business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different types of Organisations and their legal structure.....................................................3
P2. Explanation of the size and scope of different types of organisations..................................5
P3. Interrelation between different organisational functions ......................................................7
Part 2 .............................................................................................................................................10
P4. Positive and negative impacts of macro environment has upon business operations..........10
TASK 4..........................................................................................................................................12
P5. Internal and external analysis of specific organisations in order to find out strengths and
weakness....................................................................................................................................12
P6 Strength and weakness which are interrelated with macro factors.......................................13
CONCLUSION..............................................................................................................................15
..........................................................................................................................................................1

INTRODUCTION
Business environment is consider as marketing term involving various factors that affects
the ability of organisation in order to build and maintain good relations with customers. In other
words, it is the sum of internal and external factors such as customers’ needs, supply and
demand, management, clients, suppliers, owners, innovation in technology, economic changes,
market trend, activities by government and economic changes etc (Alsaad, Mohamad and Ismail,
2017). All factors are affecting the functions of firm and states how its works directly and
indirectly. This reports will help to collect different types of information such as types of
organisation and their scope, size, purpose and legal framework. Structure of company and kind
of functions which are related to organisation, interrelation between functions and macro
environmental factors which affects the business, to be discussed properly.
TASK 1
P1. Different types of Organisations and their legal structure
Business environment is the important aspects of business that covers different types
organisation, formed by different authority and legal frameworks (Different types of organisation
involving public, private and voluntary, 2020). It involves mainly three typ[es of organisation
like private, public and voluntary that are as discussed beneath:
Private sector
This sector involves those firms which are owned by individuals and driven by profits. It
run business by private financed, collected from shareholders, bank loans, personal property etc.
In this, legal and financial framework is set by private individuals for running business and
making profits. For instance, Morrisons, Bentley motors, ASDA, Mark and Spencer etc. The
main discussion is about Sainsbury that is larger super market in UK.
Purpose: The main purpose of Sainsury is to provide healthy and good food at fair prices
and gain competitive advantages (Wood and Logsdon, 2017).
Legal structure:
Sole proprietorship: A simple structure of business that is operated by limited
corporation as it is operated by public limited firm.
Limited company: This introduce kind of corporations that controls the fixed liability
for investment and getting profitability. Private organisation are runs for making profit where as

public is run for social purpose. Limited company is consider as a type of business structure
where organisation is having legal identity of its own. It is separate from managers and owners
and formulated under companies act.
Partnership: This states agreement between two and more person for starting a business
in order to attain common objectives.
The legal structure of Sainsbury is public limited liability company. It is managed by
people who works in organisation collectively by following rules and regulations (Wood and
Logsdon, 2017).
Public sector
Public sector considering organisation which are owned by government, providing goods
and services for community benefits. This types of of organisation operates their business by
raising money from taxes (Aydiner and et.al., 2019) . For instance, HM Treasury, Department for
Transport, Civil services, Crown Commercial services etc. are run by governmental authority.
The main discussion is about Crown commercial services that is providing professional
procurement services to public sector that enable companies to deliver improve value for money
in activities (About Crown Commercial services, 2020).
Purpose: The main purpose of CCS is to provide high procurement services that can help
to improve value for money in order to run business activities. Moreover, to increase business
value by providing financial support and improve environments by using savings (About CCS,
2020).
Legal structure:
Local government: An administrative structure that covers small geographical area such
as town, city etc. that control over a specific region.
State government: A part of government that forms laws and legislations for state which
is liable for local needs and problems of particular state.
Central government: This is governmental authority, that regulates whole country by
formulating rules and regulations. It maintains public welfare and global negotiations as having
power and authority (Fabuš, 2017).
Crown Commercial service is the public organisation that is following central
government legal structure. It is providing services to required person all over the nation by
following government regulations.

Voluntary sector (Not for profit)
The third sector organisation are non profit organisation, are run and owned voluntarily
by trustees. This types of corporation runs business for the purpose of desiring the help of needed
people. It don not make any types of profits because it is formulated for welfare. It operates
business by with money from donations, gifts and any other reinvested profits. For instance,
Kaleidoscope plus group, Touchstone, Cancer research, East Anglian Air Ambulance, Regenga
homes etc. The discussion covers information about Cancer research UK that helps by providing
helps in Cancer research and supporting cancer.
Purpose: To conduct research and save people's lives by providing good health and
supports (About Cancer research UK, 2019).
Legal structure:
Trust : It is a form of charity which is established by group in order to run a business by
following the Trustee act. Herein, number of people work voluntarily to provide the safety and
welfare of people.
Association : This is a group of members who works collectively for the purpose of
attaining common goals other than profits (Calabrese and et.al., 2018). In other words,
collection of people woks together for the purpose of providing relief to people and giving good
life.
Cancer research UK is following trustee legal structure where number of people works
collectively to conduct research and giving their contribution to reduce the diseases.
P2. Explanation of the size and scope of different types of organisations
The difference between size and scope of micro, small, medium and large organisational are as
defined: EU classification
Basis Micro Small Medium Large
Classificatio
n basis on
number of
employees
10 or less
This organisation
employs less than
10 people who are
running their
business at small
10 to 50
Small
organisation
employs more
than 10 but less
than 50 people for
50 to 250
In such
organisation
more than 50 but
less than 250
people are
250 or more
When number of
people are more than
250 works for
attaining the profits
by providing products

area and region .
(Micro, small and
medium size of
companies, 2019).
running their
business.
working
collectively is
medium
enterprises.
and services
effectively consider as
large enterprises.
Market
share
Micro business are
not having market
share as it runs
business in town
and city.
The market share
of Bright star,
Orion electro tech
etc. organisation
is small because
company sales
products at small
range.
Medium
organisation
such as
Pharmacy 2U,
Airdri etc, are
capturing market
share by selling
its products and
services at
different places.
Currently Sainsbury
has 15.3% that is
marginal dip by
comparing to the
same period.
Commercial crown
has wider market
share approximately
20% where as Cancer
research hold a
regional market share
of 46%. (Corradini,
Polzonetti and
Riganelli, 2018).
Growth The growth of
Willoughby Book
club is achieving
180% revenue
growth that
supports to run
business.
Sustainabilit
y
By becoming
environmentally
and customer
focus it is creating
sustainability in
Small business
sustain in
environment by
handling issues
and creating a
The
sustainability of
medium
organisation
increasing by
Sainsbury is large size
organisation that
operates business by
proving better quality
of products, using

environment
(Frösén and et.al.,
2016).
healthy
environment.
implementing
practices, bring
innovation and
satisfying
customers that
increases sale.
new technology and
taking competitive
advantages which
increases
sustainability in
environment.
Size and scope of different organisation
Sainsbury (Private): Sainsbury is larger in size that is operating business at 1415
locations by offering variety of products and services. It has around 800 stores by involving
supermarket and convenience stores (Size and scope of Sainbury, 2019). The scope of Sainsbury
is international as it offers variety of products and services at global level.
Growth: The growth of Sainsbury is increasing continuously as it made 27.9 billion
British pounds in retail sales by innovating and proving new services to customers.
Commercial crown services (Public): This is larger which advice and providing
commercial services to public sector and helps to save money. It is working with 17000 customer
companies in public sector and has more than 5000 suppliers (Size and scope of Commercial
crown services, 2019). The scope of CCS is national that offers services at national level and
make feel good to customers.
Growth: The growth chances of Commercial crown services organisation in large
number as it brings innovation and attracts people to get commercial assistance.
Cancer research (Voluntary): It seeks manuscripts which provides pathological and
transactional impacts to inform people, clinical and societal issues. This is leading charity
company dedicated to cancer research. The scope of Cancer research is national where it offers
researching services in relation to cancer is providing at national areas.
Growth: It is growing industry that conduct research on timely basis and provide a good
health to people that influences more customers. This helps to improve the organisational
productivity.
P3. Interrelation between different organisational functions
and attaining business goals. The main aim of corporation is to understand the needs and wants
of people then provide kind of goods that can satisfied people effectively. In context to

Sainsbury, there are different types of functions that are performed by specific management
in order to complete task and achieve goals. The interrelationship between all functions of
Sainsbury is defined as:
Marketing with finance: Marketing department is playing an important role in Sainsbury
organisation as it inform and attracts people through advertisement and other promotional
activity. Herein, the role of function is to keep record of finance and provide finance to
marketing functions so business can continue effectively. Therefore, marketing and finance
functions are interrelated because without finance marketing activities can not be done and
without sale or marketing finance can not be earned as marketing helps to increase the sale
and profitability which is objective of business corporation (Gavurova and et.al., 2017).
HRM with IT: In organisation HRM is playing important role as it hire people who are
related with IT, marketing and production by knowing vacancy. For instance, this
department helps Sainsbury to fill the requirement of IT department which helps to
introduce new technology in supply chain and delivering products effectively. Therefore in
HRM and IT function are related to each other and with Sainsbury objectives that hire
technical employees which helps to improve the productivity and profitability effectively
(Madhavaram and Hunt, 2017).
Organisational structure
The structure of company involves types and level of hierarchy in corporation where
roles and responsibility of employees are delegated in order to achieve business objectives
(Gaganis, Pasiouras and Voulgari, 2019). Different companies are having different structure such
as pre – bureaucratic, bureaucratic, post bureaucratic, matrix, functional and strategic business
units. Sainsbury is following hierarchical organisational structure because there is series of level
of people and level is above control at each level. For example, managers of Sainsbury are
responsible for line managers and line managers are responsible for sales managers. Herein,
roles and responsibilities of employees are allocated in hierarchy form and all employees
coordinate with each others, helps to attain the business objectives (Organisational structure of
Sainsbury organisation, 2020).

Source: Organisational structure chart, 2019.
Relation of functions with organisational objectives
Every organisation is running different types of function that are important to run a business
In Sainsbury, marketing , HRM, Finance and IT functions are important that are performing
by management by coordinating and connecting with that helps to attain complete the
mission and attain business objectives. The main object of Sainsbury is to increase sale
globally by entering in to international market. For instance, HRM function formulate
policies and hire skilled employees for all department so activities can be perform easily that
helps to increase organisational sale. Hence, it accomplish company's objectives. Marketing
functions inform people about new products and services and get finance from finance
department which helps to run the business activities. With the helps of marketing function
sale of products and services increases at international market which processes to
accomplishment of objectives. Moreover, with the support of finance and HRM function IT
function run effectively as it hire employees and provide finance to IT department for using

new technology that improve productivity and profitability resulting accomplishment of
organisational goals.
Part 2
P4. Positive and negative impacts of macro environment has upon business operations
Macro environment is sum of various factor such as government intervention, digital
revolution on production and consumption, cyber security, BRICKS market, social technology
etc. that has impacted on business operations (PESTLE analysis of Sainsbury, 2020). There are
different types of organisations such as Tesco, Asda and Morrisons that analysis the external
environment and get their impacts. PESTLE analysis is done by Sainsbury's management that
may affect the operation positively and negatively such as:
Political: It is related with political system, government intervenes, political stability etc.
that has impacted on organisational operations. In UK, the political system is stable and it
formulate policies which are helpful for Sainsbury's operation and increases business sale.
Positive impacts - It is good because government do not bounds Sainsbury to limits its
business even it supports to sale its products in other nation also.
Negative impacts - Same time, it affects operations negatively for instance productivity
and selling activity of any organisation reduced due to Brexit which has bound organisation to
sale its products in Europe and others. Moreover, changes in tax rate and other duty can reduce
its spending power because organisation has to be pay more amounts which limits on buying raw
material (Gavurova and et.al., 2017).
Economical: This is related economy of a nation by involving interest rates, inflation
rate, personal disposable income, exchange rate and unemployment rate.
Positive - For example, The operational activities of Sainsbury is increasing due to social
factor as it provides products and services at retail prices by considering disposable income of
people that encourages to buy products, impacted in good way. In other words, this factor
impacts on Sainsbury and other organisation positively.
Negative - On the other side, administrative activities of organisation can be reduced due
to increasing interest rates which also reduces profitability because in that situation organisation

has to may more then earnings. hence, this factor may impact badly on Sainsbury as well as other
organisations (Saleem, M. A., 2017).
Social: In environment there are different types of people who have different needs and
wants affects the business operations. In UK, there are many shoppers who abandoning their
weekly shopping, foods and grocery rather than preferring to spend money on numerous trips to
local convenience store, specifically internet shopping and discounters.
Positive - This has affected the sales and profits of Sainsbury's in good way because
organisation provides products and services as per customers choice which helps to increase
sales across the nations.
Negative - Other side, not focusing on changing demand and culture of person
productivity of organisation reduced which affects the profits negatively (Madhavaram and Hunt,
2017).
Technological: Most of the corporations are adopting digital revolution and technical
services in operating their business online that impacted on operations. For example, by using
digital revolution Sainsbury has introduced digital services such as online food and grocery
shopping, digital payment and click or collect services.
Positive - It helps to sustain in competitive environment as customer place order and
collects products from super market easily that has impacted positively.
Negative -Same time, this factor has created cost to research and technical employees
cost which have affected the operation badly as it reduced profitability (Sarkis, Meade and
Talluri, 2017).
Legal: To run a business and operation there is need to follow legal framework or
legislations which helps to maintain the productivity.
Positive - This factor impacts positively on Sainsbury, new sugar tax is levied by UK
government. It helps to reduced the content in sugar drinks by 20% that impacted positively as
improving branding production effectively (PESTLE analysis of Sainsbury, 2020).
Negative -This factor may challenge the operation by formulating new rules that
banning advertising of salt, sugar and high fat in food and drink products that restricts marketing
and promotional activities (Sarkis, Meade and Talluri, 2017). Therefore, legal factor can impacts
negatively on business performance and activities in case of not following legislations.

Environmental: Rise of ethically and environmentally conscious people are affecting the
UK cloth and retail industry where companies are require to follow some practices.
Positive - By following proper packaging, zero waste material and use for recycled
materials operation of Sainsbury organisation is increasing positively that helps to compete with
other supermarket also.
Negative -It may affect negatively in case of not increasing carbon emission, increasing
wastages of food products etc. that directly impacts negatively on operation and profitability as it
starts to decline (Stott, Stone and Fae, 2016).
TASK 4
P5. Internal and external analysis of specific organisations in order to find out strengths and
weakness
Internal analysis is a framework which is required to get the strength and weakness of
organisation in order to make profits. The SWOT analysis of Sainsbury is defined as:
SWOT analysis of Sainsburry
Strength- As one of the oldest market chains in UK, it has large market share into the
market. Its strength is the delivery of quality services and products at discounted rates. Over
these year, the company, successfully has establishes its trust over people. Along with this, the
company also uses innovative promotions strategies to attract maintain as well as to attract new
customers respectively. Besides this the staff is also highly trained and customer focused (SWOT
analysis of Sainsbury, 2019).
Weakness- The company has a major weakness that it is only limited to UK only. It has
not expanded itself in international markets. It is also difficult for the company to find trained
staff with right and attitude. Along with this it is also hard for the company to present catchy
offers on a continuous basis (Sarkis, Meade and Talluri, 2017).
Opportunities- The company, Sainsburry, has a major opportunity to grow itself in
international market. For more growth the company must expand itself all over the world.
Company can also utilizes its central database in identifying its potential customers and increases
its market share (Triaa, Gzara and Verjus, 2016).

Threats- The company's major threat is its competitors. Increasing competition in market
and innovative ideas emerging by new marketers can prove to be great source for threat. It can
affect the company's sales volume (Gavurova and et.al., 2017).
SWOT analysis of Asda
Strengths Weaknesses
 It has wide range of products and
services. Moreover it provides financial
services.
 It has almost 25 distribution stores from
where it sales products and services.
 It has number of store format like Asda
superstores, Asda living, Asda
essentials and Asda Petrol that attracts
customers (SWOT analysis of Asda,
2019).
 This organisation is having few global
presence.
 For this company, restrictions are
having in some country to enter in to
new market.
 Some critics about quality of products
(SWOT analysis of Asda, 2019).
Opportunities Threats
 Asda has expanded its business
operations in to many areas like
pharmacy, photo and many more.
 This has capability to acquire small
organisations and expand operations.
 Long term goals that targets 100%
recyclable, 100% sustainably and
operational waste recycles.
 Price war with other existing retailer
that is big issue.
 Presence of other online and offline
retailers in market.
P6 Strength and weakness which are interrelated with macro factors
Basis Strengths Weaknesses

Political Sainsbury is creating positive brand
image and goodwill by following all
governmental rules and paying tax
which helps to increase business
performance.
Brexit has affected the political system
of UK as not paying taxes and
changes in government rules create a
feeling of pressure and burden that is
weak point for organisation.
Economical Sainsbury is focusing on disposable
income and spending power of
customers then provide products to
customers that strengthen the sale and
productivity of corporation.
In UK, increasing inflation rate and
interest rate bounds people to buy
products which is weak point for
chosen supermarket ((Frösén and
et.al., 2016).
Social The management of chosen super
market is adopting social technology
by focusing on changing demand and
culture which helps to improve the
sale and it become success to retain its
existing customers.
The weakness of social factor is
continuously changes in customer
demand and choice which can reduce
the productivity and profitability of
organisation.
Technological By using digital revolution Sainsbury
has increases its supply chain services
that make effective company. With the
help of this productivity and
profitability has increases
continuously.
To arrange the funds and other
resources can be weak concept for
organisation which limits the
operations and reduced profits
(Gavurova and et.al., 2017).
Environmental Sainsbury is providing better quality
of foods under food safety and
standard act, reducing wastages etc.
that build customer trust and brand
image effectively (Calabrese and et.al.,
2018).
Not following the reducing wastages
material, carbon emission act etc.
affected business and activities
negatively (Wood and Logsdon,
2017).
Legal Proper application of minimum wages,
health and safety, anti discrimination
Not following the rules and
legislations company can not run its

and minimum wages act that affects
favourably encourages employees to
work effectively and increases
production.
business hence, productivity and
profitability reduces (Triaa, Gzara and
Verjus, 2016) .
CONCLUSION
From the report it can be concluded that in business environment there are kind of sector
public, private and voluntary. Private organisation is owned by single and others that runs
organisation and increase productivity. Public companies are run by governmental authority and
voluntary organisation are run by members by their will. While running a business there is need
to do internal and external analysis that helps to defined what are strength and weakness of
organisation and what factors can affects operations.

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