Business Context and its Management

This report by Desklib provides insights into business management, industry trends, internal and external environment analysis, change management, and stakeholder analysis using Amazon as an example. It covers topics such as the impact of COVID-19 on businesses, external and internal environment analysis, McKinsey 7S model, culture and management decisions, and stakeholder analysis.

Business context and its
management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART 1- INDUSTRY TREND REPORT.......................................................................................3
2.2 An analysis of an organisation’s external environment........................................................3
2.3 An internal environment competence analysis.....................................................................5
2.4 The impact and influence of change and culture..................................................................8
PART 2 CLIENT REPORT...........................................................................................................11
2.5 strategic planning................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business management is all about managing the business operation and activities in order
to gain success in the market. Business managers of the company help staff members reach their
top performance and gain profitability. A business management team also guide and train their
new employees, help a company reach its organizational goals, operational objectives and
financial targets. Due to covid-19 many business get affected such as its supply chain
management and other operations. During the pandemic period their has been effect on
employment as many people lost their jobs. After that, business faced financial crisis which has
impacted their performance and productivity in the competitive market.
The present report will be based on Amazon which is retail company providing varieties of
products or services to people. They offer high quality goods to customers as per their
requirements this includes clothing, books, homeware, electronics items and many more. The
company has clearly been the fantastic performer through the course of this global financial
crisis. The firm has played an important role in offering quality product or services to satisfy the
necessities of customers. Their has been an increasing trend of online shopping during the time
of pandemic. With the help of internal and external analysis company can analyse its market
position and performance. The report will provide detailed information about management
function done in the company. By using effective strategy, report will provide market and
industry opportunity also it will provide recommendations to improve the business activities.
PART 1- INDUSTRY TREND REPORT
2.2 An analysis of an organisation’s external environment
(a) determining the components of the retail industry sector (external environment)
Customers- customers plays a vital role in the company because they can impact the
business operations in a negative and positive way. Low income clients benefit the most from
sliding scale pricing strategy, because they don’t have to make payment more for goods or
services. However, high income audience can also provide benefit to company if they are paying
full amount of money for product.
Government- government also is a part of external factors which can impact the business
operations. Due to policies made by government such as tax policy, fiscal policy, tariff and trade
policy companies business activities can impact highly whether negatively or positively. A mild

change in policy made by government can affect firms’ operational efficiency, so amazon needs
to consider before making any important decisions.
(b) Market or industry opportunities
Red ocean strategy- This strategy is used by company to grab a greater position in the
existing market, here industry boundaries are being defined. Red ocean strategy is used by retail
industry in order to compete in existing market area, they basically beat the competition for its
product or services. They rather exploit existing market demand in order to attract more clients
and make the value cost trade off.
Blue ocean strategy – Blue ocean strategy says that company needs to create its own market
space and guide the managers of the firm to not let existing market structure limit their thinking
and creativity (Madsen and Slåtten, 2019). By using blue ocean strategy, amazon has created its
own uncontested market space and attracted more customer by providing them varieties of
products or services. Amazon have offers lots of varieties, in order to make the competition
irrelevant. With the help of blue ocean strategy, any industry can capture new demand to meet
the needs of customers (Yunus and Sijabat, 2021). They can break the value cost trade-off and
align the business system as whole in pursuit of low cost strategy and differentiation.

Source: (Zavydivska and Ratych, 2020)
(c)
Due to corona virus pandemic, many companies has faced a lot of challenges, which also has
impacted business structure and organizational culture. According to Donthu and Gustafsson,
(2020), Drastic change in social life, economic condition, technological factors and
environmental elements has impacted the behaviour of people and their purchasing power, this
has make huge impact on retail industry. However, support of government for retail industry has
handled business operations and daily necessities of people.
2.3 An internal environment competence analysis
(a) reviewing the internal factors
Employees- employees of the company are a huge internal factors that can impact the
business operations and organisational culture. A mission-vision statement, business ethics, code
of conduct, policies and norms, guidelines provided by company needs to be taken into

consideration while making any decisions. With the help of these elements employees of the
company motivate themselves by following its strictly. It is helpful to foster and direct
employees of the firm which is beneficial for the firm.
Managers- another internal factors is managers and leaders of the company which can
impact highly the business operation and culture. A positive leadership and management style
can shape the company while on the other hand negative management team or leadership can
impact in a negative way which is not beneficial for company’s productivity. By using an
effective leadership style known as pragmatist and transformational, leaders of Amazon set high
standards and expect those standards to fulfil the needs of employees and clients both and
achieve goals.
(b) Applying assessment tool- McKinsey 7S model
McKinsey 7S strategy is used by company to find out the internal factors that can impact
the business operation and activities. This is the most popular strategic planning tools; company
use to present an emphasis on human resources and to manage high performance of firm. The
major purpose behind using this model is to show how 7S or elements of the firm can be aligned
together to meet the effectiveness and achieve goals (Henderson, 2021). The 7S areas such as
skills, staff, structure, systems, shared values, strategy are interconnected with each other and a
small change in one areas of the company require change in the rest of them in order to function
effectively.
With the help of this model, Amazon can identify how each area may change in a future situation
and can implement new strategy to meet goals. The most common uses of this model are to help
implement new ideas and techniques and to facilitate the organizations merger and change in
organizational business.

Source: (Gechkova and Kaleeva, 2020)
These areas of company are classified into hard and soft areas in order to manage,
maintain things in business. With the help of this model company can create its sustained
competitive advantage to stay in the market.

Skills- These are the abilities that company’s staff members perform very well to achieve success
and improve its own personal and professional talent. These type of areas include competences
and capabilities to perform task. By using this areas, Amazon management team think about
what skills the firm and its employees will really need to reinforce its new strategy or new
business structure.
Staff- This element is concerned about which type of and how many people a company will need
and how they will be motivated towards their goals, trained for the betterment, rewarded for their
efforts and recruited.
Systems- using this elements company can find out about the procedure, which reveal business
daily activities and how important decisions are made to achieve objectives. With the help of this
area, the amazon can focus on organizational change and determine how business is done.
Shared values- This element is the rules, policies and norms that guide staff member’s behaviour
and organization actions.
Style- This element represents the way a firm is managed by its top level management team, how
they work together to achieve common goals, how they interact with each other with the help of
skills and what actions do they take to operated business. By using effective management style
Amazon company leaders have achieved goals.
Structure- This element shows the way company units and business divisions are managed and
includes the business important information in particular department. In other words, business
structure is the company chart and also it is most visible element of McKinsey 7S Model.
Strategy- It is a plan developed and improved by a company in order to achieve competitive
advantage and maintain its sustainability. By using strategy, amazon is able to compete
successfully in the market.
(c)
By evaluating the external and internal factors, it has been determined that external
scanning is helpful to find out the information about trends, relationships in the company
external factors and internal components which can impact the business operation and activities.
By management planning the company can shape its future course of action and meet
organisational objectives. Before making any planning and decisions about business, amazon is
focusing on internal and external factors such as employees, managers, leaders, government
policies and customers. Using this elements, company is making most its important and informed

decisions which is beneficial to run business smoothly. It is important to meet the needs of
customers, employees and follow the instructions given by government agencies.
2.4 The impact and influence of change and culture
a) Assess the impact of implementing of change
Change management is one of the crucial process that allows the organization to prepare and
support individuals to accept the alternative factors. The specified organization is performing
successfully as pay attention on having relevant kind of the change management so that higher
profitable & sustainability can be derived. It allows to company to affect its operational practices
positively by ensuring compliance with changing requirements of business environment. This
can be understood by following models.
John Kotter has developed model that is helpful in understanding the impact of change on
Amazon so that deeper understanding can be obtained (Bergstra and et.al., 2019). The current
study will give emphasis on eight steps such as increasing urgency, building guiding team,
developing vision, communicating it, creating short term winds, don’t let up and make change
stick. It is essential for the Amazon to pay attention on developing effective strategy to
coordinate with change.
Creating urgency can be exerted by identifying the lacking areas prevailing in specified
company so that relevant support providing strategy can be recognized. Formulating power
guiding coalition helps in recognizing the effective leaders who can properly implement change.
Developing vision & strategy can contribute in understanding crucial core values & defining
ultimate vision for executing change in company. Communicating vision in accurate manner to
develop clarity for roles & task help in achieving objectives. Removing obstacles aids in having
appropriate structure in place so that desire outcome can have obtained for gaining objective of
executing change. Creating short term wins can help in gaining victory feeling by implementing
non long term objectives. Consolidating gains aids in achieving continuous improvement in
Amazon. The last step of this model concentrate on anchoring change in corporate culture of
specified firm which allows management to execute corrective action to get positive impact.
b) Explaining the influence of culture on management decisions
Handy is one of the significant model that helps in assessing the impact on culture on
management decisions. Amazon has certain values & policies which differentiate it from other

companies which contribute in formulating culture that is required to be followed by employees.
Influence of culture can be properly understood by focusing power, task, person and role culture.
Power: in organizational process power is given to few people who takes accountability for own
and others working (Parsons, 2020). These people play crucial role in decision making process of
company and may influence the working of other people. This type of culture helps in building
responsible working environment.
Task culture: there are few activities which are accomplished by formulating teams in which
each individual attains certain task. This leads to result in having proper insights about
specialization and innovative practices that help in gaining success.
Person culture: there are certain individuals who consider themselves superior then other that
create bias based culture. There is low participation is found which impact functioning of frim.
Role culture: in this every individual is given role & responsibilities which leads to clarity and
specialization into organizational process. This form of culture is followed by amazon which
allow to take significant decision in management by allowing participation of employees.
c) Effectiveness of operational functions
Total quality management is one of the highly used technique that permits firm to get
surety of operational activities by performing as per certain parameters through detecting &
reducing errors (Chiarini, 2020). In Amazon, this is exerted to analyse the different components
such as demanding & forecasting, inventory, transport, customer service, distribution,
procurement, strategic planning, assessing risk, etc. the particular organization has given
emphasis on developing such effective approach that can allow to have quality performance in
each segment. TQM permits to evaluate risk and lacking areas prevailing so that relevant course
of action can be implemented. For quality enhancement it has upgraded service quality,
assurance of delivery of quality product in quick & efficient manner, return facility, etc. These
course of actions are allowing firm to achieve effective operational ability to meet market
demands.
d) Identifying internal and external stakeholders
Stakeholders landscape
there are different types of parties who show interest in functioning of company which
are distinct between internal and external stakeholders. Internal stakeholders are those who are
responsible for functioning of company and external parties are indirectly related with

functioning of company. Stakeholder analysis helps in getting deeper information about their
interest and power so that significant impact on decision can be identified (Stakeholder matrix,
2022).
High power, low interest (keep satisfy)
 Sponsors
 regulator
 Customers
High power, High interest (managed
closely)
 Owners
 Directors
 Associates
 executives
 Shareholders
Low interest, low Power (monitor with
minimum efforts)
 Communities
 System admin
High interest, Low power (keep
informed)
 Investors
 Suppliers
From the valuation of the stakeholder landscape and mapping it can be identified that
there are three crucial phases which are require to be involved into process of decision making.
This includes recognizing stakeholders, their significance in decision making process and level
of engagement. It aids in assessing that how effectively the particular organization get affected
from the mentioned stakeholders (Rześny-Cieplińska and Szmelter-Jarosz, 2019). Their power of
influence assist in understanding the extent of effective decision making process. On the basis
of recognising stakeholder’s proper distribution of information is exerted in turn their
participation can be obtained. The significance paly role in ensuring their level of contribution in
decision process and engagement in overall functioning.
e)
From the report it can be concluded that there is positive impact of change on
organization. in addition to this, different type of culture play role in influencing decision
making process. As per John Kotter model. TQM is helping to achieve higher productiveness sin
quality manner. The internal stakeholders are employees, owner, management and external are
competitors, suppliers, creditors, etc.

PART 2 CLIENT REPORT
2.5 strategic planning
(a) explaining the benefits of planning
Planning is all about a systematic process of goal setting and defining the business action
required to meet the goals of organisation (Belavadi, 2020). With the help of proper planning
company can achieve high profitability and make market position, as success begins with goal
setting. As the report has already understood that external and internal factors can impact the
company’s performance. With the help of proper planning and using situational analysis
company can find out its areas of improvement and strengths so that proper steps can be taken
(Arov, Vahter and Löfström, 2019). However, Amazon is using effective strategy like planning
process, SMART goals setting, set standards to meet organisational goals. Through the goal
setting process and SMART goals, managers of the firm identify key sources as well as critical
elements which can impact performance of company and its employees. Proper planning can
motivate people working in the firm and provides a guide for action.
(b) applying planning cycle
Planning cycle is a method used by industries to plan small to medium sized project or
task. This includes developing new product line, planning events for employees and any other
cost effective projects which is beneficial for company. With the help of this tool, amazon
managers can plan and implement those plan fully to achieve goals of cost effective projects.
In the first stage company do situation assessment or analysis of different situation about the
project, after that they monitor and evaluate the factors which can impact business. After doing
this, the implement the strategy which is beneficial for company in order to make decision
making process successful.

(c) recommendations
By using retail marketing strategy and more distribution channel, Amazon can improve
and Focus its long term stability and selling products online in the competitive market. In
addition to this, strategies includes traditional and modern marketing mix, market research
strateg, focusing on target market and concentrating on needs or prefernces of cutomers to satisfy
them. To develop organisational culture amazon is focusing on handy's model which can be
beneficial for them after analysing its internal and external factors through frameworks.They
need to set their product price and focus on pricing strategy in such as way that delivers value for
the goods or services and complete shopping or purchasing experinces in the retail industry. This

strategy can be taken to avoid any uncertainity after the pandemic to meet the productivity and
performance.

CONCLUSION
From the study it can be summarized that industry trend play crucial role in influencing
company’s functioning. The current study has analysed internal and external environment which
has influence on organizational practices. The external parties are customer, government, etc
and internal participants are employees and managers. From the industry report it can be
recognized that company is possessing certain opportunities in market which identified via
applying red & blue ocean. On the basis of this, it can be specified that company is performing
well by overcoming prevailing external challenges as its revenue is facing inclining trend
growth. For assessing impact of change on Amazon John Kotter Model has been applied.
Handy model has been used to get deeper insights about influence of culture on management
decision. The change management is helpful for the company to accomplish the objective of
coordinating with alternating business environment. TQM and stakeholders’ analysis has been
implemented to get relevant information. The suitable recommendations have been provided in
client report for gaining continuous improvements such as develop organisational culture .

REFERENCES
Books and Journals
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Bergstra, S.A. and et.al., 2019. Three handy tips and a practical guide to improve your propensity
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Chiarini, A., 2020. Industry 4.0, quality management and TQM world. A systematic literature
review and a proposed agenda for further research. The TQM Journal.
Donthu, N. and Gustafsson, A., 2020. Effects of COVID-19 on business and research. Journal of
business research. 117. pp.284-289.
Gechkova, T. and Kaleeva, T., 2020. The mckinsey 7s model in the airport system
protection. KNOWLEDGE-International Journal. 42(5). pp.843-848.
Henderson, R., 2021. Reimagining Capitalism in a World on Fire: Shortlisted for the FT &
McKinsey Business Book of the Year Award 2020. Penguin UK.
Kabeyi, M., 2019. Organizational strategic planning, implementation and evaluation with
analysis of challenges and benefits. International Journal of Applied Research and
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Madsen, D. Ø. and Slåtten, K., 2019. Examining the emergence and evolution of Blue Ocean
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Parsons, D., 2020. Leading Change and Making Positive Decisions. Interface. (98). pp.16-17.
Rześny-Cieplińska, J. and Szmelter-Jarosz, A., 2019. Assessment of the crowd logistics solutions
—The stakeholders’ analysis approach. Sustainability. 11(19). p.5361.
Yunus, M. and Sijabat, F. N., 2021. A Review on Blue Ocean Strategy Effect on Competitive
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Online

Stakeholder matrix. 2022. [Online]. Available through:
<https://ohiostate.pressbooks.pub/drivechange/chapter/chapter-1/>.