Business Environment and Management

This assignment involves analyzing various studies and research papers related to business environment and management. It includes topics such as the myth behind China's miracle, development of business-to-business critical success factors (B2B CSFs) framework for Chinese SMEs, environmental uncertainty and environmental management perception, and the impact of socio-economic factors on small business success.

Business & Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types and purpose of organizations..................................................................................1
P2 Size and scope of a range of different type of organization..............................................3
TASK 2............................................................................................................................................5
P3.Interrelationship between organisation function and objectives.......................................5
TASK 3............................................................................................................................................7
P4 Negative and positive impact of macro environment upon business actions and operations 7
TASK 4............................................................................................................................................9
P5 External and internal analysis of firm to identify its strengths and weakness..................9
P6 Interrelation of strengths and weakness with macro environment elements...................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................13

INTRODUCTION
Business environment is termed as combination of micro and macro factors which impact
on functions of a company either internally or externally. These attributes include competitors,
technology, legislations, stakeholders and more which effects profitability and productivity of
enterprise in a wide manner. It influence decision making process and operational activities of
organisations. In this report three organisations are taken each of private, public and voluntary
named by Sainsbury, NHS and Oxfam. All these companies have different business criteria
according to size, scope and purpose. In addition to this, present assignment is divided into
different tasks that cover interrelationship of business objectives and major functions. Further it
also reveals the positive and negative impact of macro environment on operations also discussed.
TASK 1
P1 Types and purpose of organizations
There are various types of companies working in UK marketplace which play an
important role in increasing the GDP of country. Generally, these enterprises are classified into
private, public and voluntary as per different aspects. All firms have their own objectives and
goals to carry business operations as per purpose and legal structure. An analysis on enterprises
of these three sectors are given below:-
Private Sectors:
Organisations under private sectors are controlled and managed by a single owner.
Therefore, due to sole proprietorship contribution of legal authority and government is
consequently few as compare to public and voluntary one. The main purpose of these enterprises
is to earn more and more profit as well as increase growth of business in other countries.
Sainsbury is one of the leading retailer of UK among other private enterprises. In terms of legal
structure business of private companies constitutes partnership, sole proprietorship and joint
stock companies. In partnership business, a firm has two or more owners who takes equal
responsibilities in running operations. While in joint stock organisations, business entity has
separated individuality in terms of legal. Business of such companies are established by
shareholders. Along with this, business of such firms is divided into two types of firms that are
limited either by guarantee or share.
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Sainsbury is the second largest supermarket chain headquartered in London. This firm
was founded by John James Sainsbury in the year 1869. In order to compete with competitors
like ASDA and TESCO, it has launched 8000 of products including electronic appliance, toys,
sports, leisure and finance. But like other retailers, it doesn't offer services like catalogue to
customers. In 1995, Sainsbury was the largest retailer firm of UK but due to rise in competition it
has now comes on second position. Therefore, the main purpose of this company is to get that
position again. For this process, it has launched various new products and offer online services
for customers. This would help in earning maximum profit.
Public organisation:
It is also a main part of the business in which government is highly responsible for
control and regulate business activities and operations in an effective manner. Main purpose of
such enterprise is to earning profit as well as social development. This type of organisation
mainly focuses on the welfare and development of society. This enterprise includes different
entity such as education sectors, electricity boards and health care organisation.
Overview of NHS:
NHS is a public organisation which is mainly related to H&S (Health and social care
sector). It provides different kind of health related services to the service seeker at zero cost.
NHS is located in England, UK. They also render free facilities to audience in emergency case
for any infectious sickness treatment.
Purpose: Main purpose and motive of NHS is to develop innovation in facility linked to health
care. They provide basic medical facilities to domestic visitor and people. Another motive is to
give healthy lives to large number of person.
Legal structure: It is important and essential for the company which includes different parts are
determined as below:
Central government: It is part of government which regulates the transaction of entire
country. Main role and duty is collection of printing and tax of denomination.
State government: Under this Central government assist entire functions and objectives of state
government. Main motive is to monitor all activities and functions of education organisation.
Local government: It is another part of the government which work an specific geographical
region like town and city.
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Voluntary sector: It is regulated by large number of person which aim of welfare and
development of society. Main features of this enterprise are working for society development,
autonomy for states, and many other. For fulfilling entire prescribed situation and operating their
business operations and activities in successful manner. One of the main example of voluntary
sector is RSPCA.
Overview of RSPCA: It stand for Royal Society for the Prevention of Cruelty to
Animals, it is a voluntary and charitable enterprise. It located in Wales and England that
promotes animal welfare. It was established in 1824 by William Wilberforce, Arthur Broome.
Purpose: Main purpose is to decrease poverty from world and to give product to lack of
population of society.
Basis of
Comparison
For Profit NPO NGO
Meaning Companies under this
sector concern more on
delivering products or
services as per demand and
need of employees. It will
help in earning more
profitability and increasing
growth of business as well.
For example: Sainsbury is a
second largest company in
UK having 16.9% share. It
In this sector, instead of
earning profitability,
organisations focus on
improving condition of
people and raise their
standardisation by
supporting them to open
business in a particular
field. It will help them in
earning money to become
financially strong. For
example: NHS of UK
provide free medical
services to poor people.
In Non- Government
sector, associations are
considered as
charitable trusts that
works on the concept
of developing societies
and fulfil basic
demands of citizens.
For example: RSPCA
in UK work for for
decreasing poverty
level of societies.
Area of
Operations
As per kind of business,
companies are operating
activities in either small or
For improving condition of
society, firms are
conducting operations
NGO covers a large
area of operations.
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large area. targeted and limited area.
Objectives To earn more and more
profitability by completing
requirement of targeted
audience on time.
Promoting art, scientific
disciplines and
commercialism is
considered as main
objectives of NPO.
Provide benefit to
public as well as
reduce their poverty is
main aim of such
NGO.
P2 Size and scope of different organizations of UK
Different business have their own size and scope. Business scope defines regarding
different functions and size of company that precise regarding area where company gives its
services and goods. Due to distinct purpose and objective, scope and size differs that identifies as
below:
Sainsbury is considered as the second largest organisation of UK which offers a wide
variety of food products and deals in financial as well as property business also. In terms of
revenue, 58 billion euros are earned by this firm in last year as per statistical point of view.
Currently in context with profitability, this company has acquired 16.9% market share. It rapidly
increase business in many countries where currently 2800 branches are running. Along with this,
more than 145000 workers are working currently in these locations. It offers a wide range of
products and deliver effective customer service at marketplace which help this firm in making
remarkable growth in retail business as compared with other companies of same sector. Along
with this, the major objective of Sainsbury is “ To provide high qualitative services or products
to customers on reasonable price rates”. This kind of aim is termed as strategy of present
company used in acquiring mind of customers in a large manner. Beside it, “To offer a wide
range of products of best quality by rendering proper nutrition level as per requirement of
national and international clients”.
National Health Service: It is a type of public sector which are located in United
Kingdom and health related services to home population of nation. There are different countries
like Scotland, England etc. where business provides its effective services. One of the main
motive of organisation is to carry social reform. For rendering effective and healthy facility to
public, approximately 1.6 million people which are engaged in firm.
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Scope of NHS: Basic medical facilities and services are given by enterprise to lack of
population of country. Dental and Optical services are also render by company to people. Scope
of NHS are defined as:
 Transmit health related data and information to society development.
 Allocation of management fund or budget for facilities concentrated to health care.
Vision: Enabling large number of person to live independent and healthier by high
standard seamless care.
Mission: To give better service and care that service seeker families neediness to use.
RSPCA
Size of RSPCA : For providing quality and healthy services to public sector, 20
charitable business work with RSPCA. Services are render by enterprise throughout the in all
over the world for the aim of decreasing poverty.
Scope of RSPCA: It help the government in formulation of laws regarding protection of
animals. Also there are different programs are initiatives by RSPCA which contributes to bring
awareness among the individuals about safety of animals.
Mission: The main mission of RSPCA is to prevent animals from dangerous and promote
kindness as well as alleviate suffering of them in legal manner.
Vision: “ Create kindness among people for animals and ensure that every domestic
animal is cared with love and have a good home”
Basis Size Scope
Micro Scale Companies under this sector
run their business on very low
capital. Main purpose of such
enterprises are to earn for
livelihood. Thus, number of
employees of these firms are
much small.
Since these firms are earn
much less so scope of
contribution in increasing
economy is much less.
Small Scale In this sector, associations
have launched their business
These companies are generated
minimum 5 million dollars and
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on sufficient capital and earn
for further expansion. In terms
of staff members, these firms
have more near about 50
workers.
expanding business at high
rate. So, they have contributed
a lot in improving economical
condition of a nation.
Medium Scale As compared to small sectors,
these firms have less than 100
but more than 50 employees in
workplace. The main purpose
of these firms is to globalise
their businesses and sale
commodities in other
countries.
Moving business on
international level aid nations
to increase their economies.
Large Scale Under this section, firms have
more than 250 workers.
Instead of expansion, these
companies are used to develop
strategies for gaining
sustainability at marketplace.
Organisations on large scale
are used to sale goods or
services in many countries so
gain higher profitability. Thus,
contribute a lot in increasing
GDP of a nation.
TASK 2
P3
a) Different organisation structure
In order to accomplish targeted goals and objectives, every kind of companies have
different-different business structure depends upon scope and size as following:-
Functional structure: In this kind of structure, each portion of organisation is set up as per
purpose of business. Companies having this type of structure has various departments like
marketing, financial, human resource and more. Generally, small business organisations like
Talent Plus, each department rely on support of talented workers.
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Divisional structure: Big organisations are used divisional structure which operate business
operations in wide area by converting each function into small divisions. It allows a firm in
increasing specialisation. But major disadvantage of this kind of structure is that communication
under different divisional groups are not allowed.
Matrix structure: It is the most useful organisational structure which is beneficial for
international companies like Sainsbury to have. It is a hybrid of divisional and functional
structure which is a combination of above two structures.
b) Complexities of transnational, international and global organisation structures
Basis Translational International Global
Meaning It includes firms
having commercial
business and operates
substantial facilities.
These organisations
are able to maintain a
high degree of
responsiveness to local
market area.
Companies in this
sector are importers
and exporters which
have made no
investment in other
countries.
Industries under this
sector are operating
business in multiple
countries but have
same culture and
policies to run
businesses over there.
Complexities As translational
companies used to do
business in local
markets of many
countries so, they have
faced many
complexities like
making different-
different policies as
per culture and belief
of people.
As comparison, firms
having international
business structure have
low complexities.
They just need to do
legal formalities while
exporting products or
services in other
nations as per their
governmental law.
Complexities are
seemed to much less
due to conducting
business in same
culture and policies.
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c)Interrelationship between organisation function and objectives
Main aim and motive of Sainsbury is to gain maximum amount of profit by rendering
quality products. Each and every business put their full dedication in satisfying basic requirement
of customers. It is another essential department in the organisation whose have different role and
responsibility in order to innovate new products and services in marketplace. Role of this
department is to apply different promotional mix such as advertisements, publicity and many
other. All these are assist to gain competitive benefits in limited time period. In this organisation,
there are different departments such as marketing, human resources and many other. Functions
of these divisions are interlinked with each other in following manner:-
Interrelation of marketing with Human resource department: It is a main department of
the company which is strong for the business to recruit knowledgeable people with aim to
achieving long term goals and objectives. In this manger is also responsible for providing proper
training and development secession to their employees. So that they can attend whole programs
and maximise their basic skill on business activities and functions in an proper and effective
manner. HR managers help other divisions like marketing department in getting high skilled
workforce who contribute their efforts in accomplishment of their functions in a higher manner.
Interrelation of marketing with Finance department: It is a most important department
of the company which help them to arrange sufficient amount of money for doing business
activities and functions easily. It is good for them to accomplish objectives and goals of company
in an effective and efficient manner. It is identify as a role and responsibility of finance manager
to arrange proper amount of fund with aim to dealing with difficult situation. With the help of
marketing department, this division can search sources from where they can raise funds on easy
terms and conditions. In addition to this, finance managers provide proper amount of funds to
other divisions so that they can operate their functions in a proper manner.
Interrelation of marketing with Production and operation department: It is an other
department which is linked with manufacture of services and goods. Company produced goods
for consummated wants and needs of costumers. Working style of production and operation
department are extremely linked with business objectives and goals. This department mainly
emphasised on product quality and its features. Marketing department aid production division in
getting proper resources like raw materials, human resource and more. They used to provide
these resources by searching suppliers who will give the same on low cost.
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TASK 3
P4 Impact of macro environment on operational activity of business in positive and negative
manner
Macro-environment of business includes various factors that put an impact on operations
and procedures of Sainsbury in both positive and negative manner. Factors like political,
economical, social, technological, legal and environment are included in this sector. In this
regard, impact of these factors on Sainsbury can be described as:-
Factors Objectives Positive Impact Negative Impact
Political Factors
The rules and
legislations made by
regulatory bodies
which creates
fluctuations in taxation
and interest rates,
trade policies,
employment
legislations etc. As
Sainsbury is operated
its business in many
countries therefore,
performance of them
are much influenced
by political laws of
those nations. In terms
of UK Government,
officially they have
developed a new tax
policy which affect
operations of this
As business of
Sainsbury is operating
mostly in territorial
region of UK so, its
operational activity is
much affected by
political factors. As
government of this
country is stable so, its
offers various
opportunities to
present company in
running business
profitably.
Increasing in
globalisation, creates
various challenges to
Sainsbury. In this
regard, intense
competition is
considered as major
challenge for this firm
in getting retention of
customers for long
term profitability.
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company in a both
negative and positive
manner as shown
below:-
Economical
Factors
The most concerning
part of economical
factor is considered as
rise in price of fuels.
This would affects the
management of supply
chain of Sainsbury and
its strategy as well. It
includes period of
inflation, deflation as
well as buyers power
of availing services.
If economical
condition of country is
good then it would
increases income level
of citizens also. This
would creates a
positive impact on
company's economy
as due to high
purchasing power of
people they will
demand more
products.
In case of deflation
period, cash flow in an
economy becomes low.
This would create
negative impact on
business expansion of
organisation.
Social factors
Some major
consideration point of
social factor include
ethical business, CSR
activities and CVM
etc. Due to
modernisation, taste of
customers are
changing rapidly.
They always look out
to get something new
and fresh. Therefore, it
creates a great impact
Good and educated
background of people
living in a particular
society used to buy
products from such
companies in a large
manner. This would
help in earning high
profitability.
Customer's culture also
plays crucial role in a
sale of products. This
would assists
organisations in bring
ethical culture at
workplaces.
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on profitability of
enterprise like
Sainsbury in following
way:-
Technological factors
Development of
technologies aid
organisations in
operating and
enhancing business
activities in more
profitable way. This
factor includes
different methods for
conducting business
operations easily.
Hence, it is necessary
for Sainsbury to
introduce latest
technologies in
operational and
production activity as
well as in marketing
techniques also. So
that demands of
customers can be
completed as per their
requirement. Some
benefits and drawback
of changes in
technologies on
performance of
Innovation and high
techniques help
organisations in
improving sales
performance of
business by producing
best quality of
products and services
as per requirement of
customers.
Adopting new
techniques in
workplace will impact
on business in negative
manner also. This
would demoralises
workers of company
who may feel not able
to work on system
easily.
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companies can be
explained as:-
Legal factors
It includes legislative
laws made by
government of
countries which are
enacted on main
purpose is to stop
illegal activities in
businesses. These laws
are amendable for all
enterprises like
Sainsbury to follow
rules and run business
accordingly. Various
legislative factors like
Food Retailing
Commission, effects
business of enterprise
as it bans several
activities of Sainsbury
and other retail
sectors.
As per laws, if a firm
wants to expand its
business in different
locations then by
following such
legislation they can
achieve the same
easily.
If enterprises will not
follow laws and
legislations like health
and safety law, then
will be legally
penalised. This would
effect on brand image
of firms in negative
manner.
Environmental
factors
It is an essential
factors which makes
an obligation upon
organisation to keep
environment clean. It
includes various other
factors like climatic
It increase brand
image of such
companies which give
importance to
environment.
Environmental factors
creates much impact
upon costs of
production as it forces
companies to reduce
wastages.
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change, weather,
pollution, availability
of non-renewable
goods and more.
Supply of renewable
and non-renewable
goods also impacts on
manufacturing process
of companies like
changes in price rates
of these will raise
manufacturing costs
and vice versa.
TASK 4
P5 External and internal analysis of firm to identify its strengths and weakness
SWOT analysis is the effective tool which helps the organisation is to understand about
their strengths and weaknesses. This will helps to grab the future opportunities in more optimum
manner. The information which is collected with the help of this tool helps in formulation of the
effective strategies which directs the employees in performance of different functions efficient
manner.
Strengths
 World Renowned brand: It is one of the most recognised food organisation in all the
world. In terms of revenue it is worlds largest food organisation. This will adopt the
effective branding approach for their different kind of reports which provides the
opportunity regarding creation of awarenesses among consumers about their different
various brands.
 Large workforce: There are large number of employees are working in organisation
which is around 182,000 in 1500 stores. It provides the opportunity regarding effective
disbursement of their services in all over the world.
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Weaknesses
 Technical problems: It hinders business of Sainsbury as due to technical fault, official
website of this company suspended for some days. It affects online shopping business in
a great manner.
 Limited Business: Due to limited presence in global marketplace, scope of this firm also
gets in limited. It shows that in case of situations in retailing sector, recovery of loss can
be considered bad debts.
Opportunities
 Expanding market: Due to having their extensive distribution channel there are large
number of opportunity for expansion of business in rural areas also.
 Increasing income level: There are many aspects which helps the organisation is to earn
large number of profits like stability of government, improves literacy rate, higher
income of individuals etc.
Threats
 Competition in market: There are many other small and large companies which
provides food items in market. This will direct impact upon sales and profitability of
organisation. Price of commodities: Increase in the price of intermediaries has direct impact upon
final good price which results in decrease of demand of their products and profit margin.
Porter's Five Force Model:-
Competitive rivalry: In supermarket, retail industries are developing at fast manner, so it
creates a threat for Sainsbury also. Therefore, this firm used to produce more innovative and new
products in order to grab customer attention. In addition to this, to gain competitive rivalry it
needs to build economics of scale against fixed cost per unit.
Barriers for entry: Due to intense competition at marketplace, long term profitability of a
company affects more. Therefore, in this context Sainsbury needs to build a sustainable
differentiation.
Threats of Substitutes: In order to increase base of customers in business, competitors are used
to provide same kind of products on low cost. So, by concerning more on service orientation
instead of product helps Sainsbury in reducing threat of substitutes.
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Buyer Power: It demonstrates power of customers whose role affects profitability of businesses
more. Thus, by providing products or services as per demand of them aid a firm in reducing
power of buyers and gives opportunity to streamline its production and sales process.
Supplier Power: Retail industries are always used to buy raw materials from various suppliers
in order to complete demand of customers. Therefore, it reflects the dominant position of
suppliers which decrease margin of Sainsbury also. When power of suppliers is high then it
lowers profitability of this firm also so, it needs to build effective supply chain with numerous
suppliers.
P6 Interrelation of strengths and weakness with macro environment elements
Political Economic
There are many standards provided by
government which is need to adhere by
organisation regarding providence of food and
beverage items.
Changes in import and export policies has
negative impact upon the business of decision.
Strength: They have good management and
legal team which helps in adherence of such
different laws.
Weaknesses: Different regulation persist in
different countries which makes the task
difficult regarding fulfilment all laws and
conditions.
Economic factor include so many factors like
level of income, flow of cash, rate of inflation
and deflation. In different countries, it becomes
their strength and weakness as per the
situation.
Strength: Having operations too many
developed countries which helps to improve
their profits.
Weaknesses: Difficult to change the policies
frequently.
Social Technological
Attraction of customers towards healthy food
and more concern about different cultures like
languages and religion.
Strength: It helps the Sainsbury to attract large
number of youth
At present new techniques are used in
Sainsbury for production of food items. Also,
many R&D are situated in different countries
Strength: Providence of high quality product
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Legal Environmental
Frequent changes in law are ascertained in
different countries.
Strengths: It helps in forming good
organisational structure in business through
which chance of conflicts among workers can
be reduced.
Weakness: Difficult to understand such laws
and make new strategies every time.
Providence of the activities regarding save of
environment and development of society.
Strength: It helps to attain the support of
employees in achievement of business
objectives.
Weakness: Concerning on environment laws
may affect production of companies
CONCLUSION
From the above mentioned report, it can be concluded that business environment is an
effective and efficient combination of external or internal factor. This factor influence on
business operations and activities in a proper manner. There are different types of organisation
and its scope, purpose, vision, mission and legal structure effected on company and its
performance. There are different departments whose are play vital and essential role in
accomplishing business's goals and objectives as well as gain competitive benefits. There are
mainly two factor SWOT and PESTLE, both are interrelated with each other and influence upon
organisation and its development in a direct and indirect way.
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