Business and the Business Environment

This report examines the business environment of McDonald's, a global fast-food giant. It explores different types of organizations, their legal structures, and the relationship between organizational functions. The report also examines the impact of macro-environmental factors on McDonald's operations, including political, economic, social, technological, environmental, and legal factors. It concludes with a SWOT analysis of McDonald's, identifying its strengths, weaknesses, opportunities, and threats. This report is available on Desklib, a website that provides past papers and solved assignments for students.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 different types and purposes of the organisation and their legal structures...........................1
P2 Size and scope of range of different types of organisation....................................................2
LO 2.................................................................................................................................................3
P3 relationship between different organisational functions and their link to the organisational
objectives and structure...............................................................................................................3
LO 3.................................................................................................................................................5
p4 positive and negative impact that macro environment has upon the business operations....5
LO 4.................................................................................................................................................6
P5 Internal and external analysis of organisation to identify strengths and weakness...............6
P6 strength and weakness interrelation with macro factors........................................................7
Conclusion.......................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment is sum of the collection of internal and external factors which
directly or indirectly affect the business organisation.
McDonald's is the private multinational company offering fast food and services across the
world. Present study is based on the types and purpose of public, private and voluntary
enterprises.
Further it also explains about the various macro factors which affect the business organisation
and the interrelationship of various functions of organisation.
LO 1
P1 different types and purposes of the organisation and their legal structures.
There are different type of organisations in which all the companies are mainly classified
in. namely a public, private, voluntary. All these organisations have their own way of control and
containing different legal formalities which are required to be fulfil by the companies which are
incorporated in above organisations.
Public company- is called as public limited company or public listed company which issue their
securities through initial public offering and trade the company's stock on more than one stock
exchanges over the counter market. Example TESCO is multinational public traded company.
Purpose- These public sector enterprises are government owned bodies which seeks to
deliver public goods and services including military, police, public infrastructures and many
other activities which are required for the betterment of the services and government is
continuously funding this enterprise which ultimately helps in further development and growth
of the economy and nation.
Legal structure-the public company is incorporated business run b y the board of
directors of the company on behalf of their shareholders. If the company wants to act under legal
guidance than they will be issued with new certificate of Incorporation and certificate of trading
which allows them to sell their shares on the stock exchanges they have to publish their accounts
to their investors and bankers regarding their growth and success(Phadermrod,Crowder and
Wills, 2019).
Private company-is the company who does not offer their shares for sale to public on stock
market exchanges and which operates under the legal requirement which is less strict than public
1

companies .private companies having small number of shareholders. Example- Mc Donalds
considered under the private company.
Purpose-they are the integral part of the economic system of the country. Their purpose
is to earn good amount of profit and contributes towards the economy through generating per
capita income and increasing the GDP.
Legal structure-the company must have separate legal entity from the owners. Each
shareholder of the company must be part of the company and they re not allowed to sell their
shares to public in any circumstances. Shareholders holding limited liability of the company's
debts. Memorandum of Association and article of association are compulsory documents which
are required to be completed.
Voluntary organisations- is the group of individuals called as volunteers enter together into an
agreement to accomplish the purpose(Helmold and Terry,2017). The organisations which carried
social activities not for profit making but for providing health and social services to the public.
These are non government bodies. Example OXFAM which is charitable organisation focusing
on the alleviation of global poverty.
Purpose-their sole purpose is providing benefits to the society at large without any return
or profit. They help in creating the social wealth and helps in the improvement of the society.
Legal structure-the regulators including nth charity commission, companies house and
HMRC etc. beneficiaries are the people who helped b y the organisation.
P2 Size and scope of range of different types of organisation
Micro enterprises-these are those businesses which are operated on very small scale and are
supported by the micro credit or very small investment capital employing less than 9 people.
Scope-many developing countries constitute with this type of enterprises as whee all the
necessities are fulfilled by these enterprises and micro entrepreneurs which helps in contributing
towards the economy by creating employment opportunities and income generation fort the
unemployed. Example- cancer research UK which is micro enterprise.
Small enterprises- are the small scale businesses which employs small number of employees or
workers and not having high volume of sales.
Scope- these are the private bodies which are owned by sole proprietors and they worked
in partnership having chances of varying their business size and revenue structure .example-
TESCO is the best example for this type of enterprises.
2

Medium and large enterprises- these enterprises include both the employees workings as
voluntary memberships and involve the multi-national bodies which have possibility of
increasing their growth of the organisation at a fast pace.
scope these enterprises include the multinational companies which also work as a part of the
government sector which leads in earning the high revenues. The capital earned by the
companies are kept aside for future development. Virgin money can be taken as a example for
this type of enterprises.
LO 2
P3 relationship between different organisational functions and their link to the organisational
objectives and structure
There are various functions which are performed by the organisation say McDonald's
through which they are able to achieve their objective effectively and efficiently and also leads
the organisation to smooth flow in their business(Fozer and et.al., 2017). The organisation needs
to perform all the functions with full attention and with full efficiency to improve the quality of
goods and services which they are offering.
Some functions which are performed by every organisation are :-
Marketing – it is the technique in which business make s their product expand and popular in
customers mind which attracts the customers for their products. It is one of the Most integral part
of the organization which also help them to create a better and healthy relationship with
customers.
Finance it is another important function of the organisation which needs to be carefully
performed as this functions involves the control of all the expenses and revenues of all other
departments and it also maintains the entire investment process.
Human resource- this is the most initial function which are required to perform by the
organisation. They carry out the most effective, management of the internal work processes by
utilising all the resources effectively(Barik and et.al.,2018). They also focus on carrying out the
activities which related to the recruitment, selection for hiring the best candidate for their
organisation.
Operations-this function sees the entire process or production which starts from putting the raw
material in process to the production of finished goods to maintain the quality standards for
satisfying the needs and wants of the customers.
3

Relationship between the organisational functions
Marketing with HR- there is great relationship between the marketing and human resource
department as like if the McDonald's wants to market and sale their products and for
advertisement the marketing departments needs salesman which can be hire and recruit with the
help of HR department so that they can help them to hire the employee or salesman which helps
in effective marketing of the goods and services.
Finance with operations- for the defective production thee is needs to purchase the raw
materials and other machines which helps in further and effective production of the goods into
finished goods and for acquiring the raw material, production department has to reach with
finance department for allotment of money from which they can purchase the raw material and
can start their production.
HR with finance- for managing all the cash inflow and cash outflows of the company , they
need a effective finance manger which can manage all the funds effectively and more accurately
on which company can rely upon. For this decision company needs to approach to the
h department which will help them find the most suitable candidate for this job. So that
organisational objective can be effectively archived.
Organisational functions link with objective and structure-
As McDonald's is following the hierarchical structure where the higher authorities assigns task to
their next entity. That is every entity in the organisation is subordinate to single another entity. It
contains Chain of command for the organisation from top to bottom. These organisational
functions have direct link to the organisational objective and structure as McDonald's is
following the hierarchical structure than it is easy for the organisation department to convey the
command to other departments or entity in systematic and smooth manner(Bull and et.al., 2016).
Say purchase departments have to order for the raw materials from which the production process
can be started similarly purchase department needs finance for purchasing the raw materials and
so on . For this effective chain of command where budget is initially passed for acquiring the
raw materials than production will starts which leads to the production of finished goods through
which how much demand can be met can be analysed this all can be done only through th proper
and effective chain of command and of effective communication executes in the company than it
4

helps in achieving the organisational goal and objective with more ease by satisfying the needs
and wants of the customers and earning a good amount of profit.
LO 3
p4 positive and negative impact that macro environment has upon the business operations
Some factors of environment which have impact on the business operations of McDonald's
are :-
Political factors:-are some factors which include government actions and policies which have
direct impact on the organisation(Carroll, 2015). Government intervention in business operation
is ble to determine the path of the business development
positive impact
Government rules and regulations help organisation to work in legal direction and also helps t
work in given guideline which protects the organisation from any other disruptions.
Negative impact-
Political factors make disruptions in the organisation which restricts McDonald's to work
efficiently and in smooth manner .
Economic factors include th growth rate, foreign exchange rate, interest rates which have direct
impact on the operations of the business organisation.
Positive impact
Favourable changes in growth and foreign exchange rate helps McDonald's to export their
product and hence expanding its global business.
Negative impact
Unfavourable changes leads to fall in the growth rate of organisation which also leads' ion
slowing down the economy(Fozer and et.al., 2017).
Social factors includes the lifestyles, taste and preferences of customers, beliefs, culture which
guide the to attract towards the particular product. McDonald's must create the products which
satisfy the requirements of the customers.
Positive impact-current taste towards fast food help McDonald's to attract many
customers and capture larger share of the market.
Negative impact
Fast food are not considered into healthy foods and the population is very much b getting health
conscious which may result in the sever fall of its sales.
5

Technological factors include any change in technology which helps in maximising the benefits
and profits of the company(Helmold and Terry,2017). Technology can be introduced through
effective research and development,
positive impact
Advanced technology helps McDonald's to satisfy the demands of the customers faster and can
earn good amount of profit.
Negative impact
introducing the technology requires heavy research and development which is wastage of time
energy and money of the organisation,
Environmental factors are the factors which are required by organisation to take steps for
protecting the environment and for optimum utilisation of all the resources.
Positive impact
McDonald's have set goals to reduce carbon emission and also sustainable engagement which
will helps in preventing and protection of the environment.
legal factors includes the impact of laws and regulations of the company .any change in the
system impose new requirement(Phadermrod,Crowder and Wills, 2019)
Positive impact
it can help organisation in directing their activities in systematic and in smooth way.
\negative impact
Changes in legal regulation or policies disrupts the organisation which brings difficulty in their
operations and they are not able to wok effectively.
LO 4
P5 Internal and external analysis of organisation to identify strengths and weakness
Strengths- McDonald's has rolled into many other product varirties like Angus burger, coffess,
smoothies, etc which help them to capture larger share in the market.
Operations of te McDonald's has spread across the world which leads in creation of strong brand
image.
weaknesses
Unhealthy food image leads in reduction of their sales volume as people are more health
conscious nowadays. Using of beef oil and high calorie food claimed to be bad for consumers
healthy which leads to barrier in their growth and development.
6

Opportunities
McDonald's can improve their services and expand their business by improving the home
delivery services which brings a great increment in their sales.
They have opportunity for bringing the vegetarian food verities in countries like India.\
Threats
Nowadays people are more health conscious so they start avoiding the fast food.
Increasing competitors can reduce the market share of the McDonald's.
P6 strength and weakness interrelation with macro factors
McDonald's is increasing their production across the globe which can be disrupted by the
political factors as government policies and rules can disrupt the organisation from expanding
their business(Tamiru, Mishra and Namu Kurse, 2018). they haver rolling out into new varieties
which many not get success because of the taste and preferences of the customers regarding that
products and people are more health conscious. in addition to this using of high calories products
can leads to affect badly on consumers' health which resulting in lowering down of
sales .unhealthy food image can leads McDonald's to be in danger as legal factors or the
government can take serious actions for providing the unhealthy products through which
company can be in danger and can lose their brand value.
Conclusion
From the above report it can be concluded that There are different type of organisations in
which all the companies are mainly classified in. namely a public, private, voluntary. their scope
and objectives are also mentioned in the report. It can also be concluded from the report that the
relationship between different organisational functions is interrelated and have great impact on
organisational objective. In addition to this macro factors and their impact is also discussed in the
above report.
7

REFERENCES
Barik, S.K and et.al.,2018. Spatial distribution and potential biological risk of some metals in
relation to granulometric content in core sediments from Chilika Lake,
India. Environmental Science and Pollution Research. 25(1). pp.572-587.
Bull, J.W and et.al., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis
of the ecosystem services framework. Ecosystem services. 17. pp.99-111.
Carroll, K.E., 2015. A Question of Culture: The Impact of College Major and Personality on
Pursuits of Different Types of Company Culture.
Fozer, D and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production. 147.pp.75-85.
Helmold, M. and Terry, B., 2017. Supply Management Organisation. In Global Sourcing and
Supply Management Excellence in China .(pp. 121-129). Springer, Singapore.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Tamiru, S., Mishra, B.B. and Namu Kurse, H., 2018. Land Suitability Evaluation for Major
Rainfed Crops at Edo Gojola Watershed, Central Rift Valley of Ethiopia (Doctoral
dissertation, Haramaya University).
Online
McDonald’s SWOT Analysis & Recommendations, 2017 [Online ]Available
through:<http://panmore.com/mcdonalds-swot-analysis-recommendations>.
PEST Analysis of McDonald’s: Which factors affect their future success, 201[Online ]Available
through:<https://pestleanalysis.com/pest-analysis-of-mcdonalds/>.
8