Business and the Business Environment

Business and the Business
Environment
1

Table of Contents
INTRODUCTION 3
LO 1 3
P1 Different types and purpose of organization 3
P2 Size and scope of different types of organizations 5
LO 2 7
P3 Relationship between different organizational functions and their link to structure 7
LO 3 9
P4 Positive and negative impacts of macro environment on business operations 9
LO 4 10
P5 SWOT analysis of an organization 10
P6 Interrelationship of strengths and weakness with macro factors 12
CONCLUSION 12
REFERENCES 14
2

INTRODUCTION
Business can be defined as an activity which is being done by an individual with the purpose of
making money and serving people. Business environment is a combination of internal and
external factors that have direct and indirect impact on activities of an organization (Melgar,
2018). This study is based on Unilever that is a British transitional consumer goods company
whose headquarter is in London, UK. This company has approximate more than 400 brands and
provide food, beauty, personal care services in 190 countries. This present study of business
environment is going to show different types of organization that are different in size, scope and
legal structure. It will also describe the interrelationship between different organization functions
and organizational structure.
Second part of business environment is going to describe the importance of internal and
external analysis tool such as PESTLE and SWOT. With the help of PESTEL analysis, Unilever
identifies all those external factors that have negative and positive impacts on its operations. By
analysing all factors it can take competitive opportunity by modifying its strategies accordingly.
LO 1
P1 Different types and purpose of organization
There are mainly 3 types of organizations such as private, public and voluntary that has
different vision and mission. The purspose of different types of organization differ from each
others. The numbers of employees and purpose of operating business decide the type of
organization. Difference and background of different types of organizations are being described
below:
Private: Private sector includes all those organizations and businesses that is not controlled by
the government. Businessman and all partners of the business have responsibilities of all profits
and loss (Rai, 2016). The main purpose of these type of organizations is to make profit and
increase sales. There are several examples of private sector businesses such as: Apple, John
Lewis partnership, Arcadia group etc. These types of organizations make and increase revenue
by competing against their competitors and try to make their products differ from others. By
making products innovative and valuable, they attract customers who help them out in
accomplishing their goals and purpose of making profit. It may be sole proprietorship,
3

partnership, trade union and other large multinationals. Different type of private companies like
individual, partnership and corporations also have different legal structure and numbers of
employees. Different types of formalities have to be followed by all private organizations.
In the context of Arcadia group it can be said that it is a British multinational private
retailer whose headquarter is in London. It has more than 2,600 outlets in the UK. It is known for
its qualitative and fashionable clothes, accessories and shoe. It owns different brands like
Topman, Topshop, Burton etc. It was founded in the year of 2002.
Public: Public sector of organizations are those whose control is not in the hand of businessman.
That are controlled by the government. The main aim of these type of organizations is to serve
people and then make profit. These type of organizations are either fully or partially owned by
the state. It may be public limited that offers its shares to the general public and has limited
liability (Iqbal, 2017). For example Tesco, Unilever and completely public are schools, police
services etc. Public and public limited have different legal structure and requirements of number
of employees. Public limited companies seeks for money and do not have purpose of serve
people only.
Unilever is consumer goods public limited company who offers food and beverages,
personal and beauty care products to customers of approximate 190 countries. It has a primary
listing on the London stock exchange.
Voluntary: Voluntary sector organizations are those whose also purpose is to serve and help
people who are in need without thinking of making any profit out of it. People who work in these
type of organizations also don’t seek profit and work voluntarily (Liao and Huang, 2016). Some
examples of voluntary organizations are Oxfam, Maytree etc. They also do not generate revenue
for workers because they work for charities not for earning income. Money which they raise all
goes towards their chose trust and charity.
Oxfam is charitable organizations whose main aim is to help poor people and remove
poverty for improving their living standard. In the year of 1942 this organization was founded
which is led by Oxfam international.
4