Understanding the Business Environment

This assignment delves into the complexities of the modern business environment. Students will examine various factors shaping businesses, such as legal frameworks (e.g., sole proprietorship, partnership, corporation), international influences, and competitive dynamics. The assignment encourages critical analysis of scholarly sources and real-world examples like Marks & Spencer to illustrate key concepts.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Discuss different types of organisations with their legal structure........................................1
P2 Size and scope of various types of organisations ..................................................................4
TASK 2............................................................................................................................................5
P3 Assess the relationship between different organisational functions......................................5
P4 Explain positive and negative impact of macro environment on M&S................................6
TASK3............................................................................................................................................6
P5 Conduct SWOT analysis for Mark and Spencer....................................................................6
P6 Identify how strengths and weaknesses can be influenced by external factors. ...................8
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
The business environment are made of with two factors as internal and external factors
that has power to influence business but these both are able to make impact on each others like
they are make impact on customers, suppliers and managements, business regulation or demand.
Generally external factors are beyond the control that any organisation could not be able to
manage it but internal ones can be managed actually they affect the function of the company
(Harrison 2011). These environment are the mixtures of the macro and micro conditions that are
more powerful to affect decision making and operations of business. Some times these factors
can aid to company as they helps in increasing the effectiveness and efficiency of organisation.
The Mark ans Spencer is the British multinational retailer which deals in foods item and
clothing, it is founded in nearly 1883 and serves world wide. Mark and Spencer is coming in
public limited company. Here this report is concerning with the various types such as public,
sloe, private of organisation and their sizes with business scopes also it depicts the relations with
different organisational functions with their objectives. This covers the impacts of macro
environment on business as negative or positive. This report gives environmental analysis of
Mark and Spencer company.
TASK 1
P1 Discuss different types of organisations with their legal structure
Business organisation can be individual or group of persons which collaborates to attain
certain commercial objective. Some of the organisations are frame to earn income for
particularly owners and other ones are call non profits and framed for public purpose. The main
things which are business does that they uses resources, earn and provides life supportable goods
to general public and help them. An business organisation shares same culture in entire different
departments of the company (Aula 2010). The organisational culture reflects the values that are
begin shared in firm. Some of the major types of companies are:
Private company: the private organisations is a company that have legal securities by an
initial public offering and make trade on least stock exchange. This is different from public
sectors but has same operation functions. Privates company has ownership limited to relatively
small numbers of investors. These types of organisation are framed for the purpose of earning
and making profits. This firms are majorly free from government entity other way government
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has no possession or control over private companies. Hence the Mark and Spencer is the firm
which are known as the private company and such kind of enterprise has concentration on
provides employments care they have larger scale of operations (Blanchard Tolbert and
Mencken2011). This types of organisation are more suitable for those national whom have free
economy such as United Kingdom. These firms will functioning accordingly with respect of laws
of the country in which they conducting their operation or generally regulates by states. The
legal frame or structure of these organisations includes:
(Source: legal structure of private sector)
Sole proprietorship: this type of the business are known as the easiest business type to operates
and starts. Here this is not need to go form registration to begin an new business. A single man
can be able to run this type of firm alone they don't have to frame the post of board of directors
and have no regulations. The owner has full possession and control over his business and he is
not liable to answer for his mistakes or profits. In the end owner will be the one who is enjoys all
profits and bear losses. This is a simplest and inexpensive nature of business. One person can
operates this firm but if business has some numbers of employee then this cannot be added to
sole proprietor business. Then one and most attractive thing or advantages of this sole proprietor
firm is the tax time is less complicated the business men do not needs to pay up the corporates
tax and whatever profits are made are reported in the context of the business personal as his
personal income cause he was the only one who made investments in business. There are no
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Illustration 1: Legal structures of private sector

legal duties of accounts and no any audits are made up over his firm. For example this business
involves: storekeepers, plumbers, hairdresser and electricians or so no.
Partnership: The type of organisation is the one whom operations are managed and run by two or
more peoples pool money, knowledge and skills with different resources they persons will liable
to share money, profit, and they need to bear risk or losses accordance of term and conditions of
the agreement of the partnership (Siewiorek and et. al., 2012). There is a legal document which is
named as the contract that have all the legal rule and regulations that peoples whom are supposed
to creates a partnership firm are needs to completes and full fills all the obligations that are
demanded by the contract. Then only person are able to made and run his business enterprise
smoothly. The partnership is exit where the both parties are present and ready to face the risk and
losses of their business. This can be said that the contract of the partnership is the arrange nets
where tow or more parties are agreed on same thing with mutual interest any one can come in
this contract wheatear they are individuals. Groups, schools or organisations, or they can be
governments.
Private limited companies: this is a firm which privately operates small business. Person of this
company has limited liability to the amount of share but they cannot be tarted privately like they
needs supports of some government entity for operating his business functions. This are made up
with at least two persons with same business objective the companies are not acting as legal
entity. Mona which are invested has aim to start business. All the profits, liabilities and losses are
refers with co-owner. This firm has liabilities in context of member if some one is joined this
firm with contract them they also be liable for every debt of the company.
Unlimited companies: in these types of the company there is no limits for member's liability.
They are entitled for paying all dabs to their personal property when company are not able to
pay all its dabs.
Public company: A public firm is the one who sells its product stuff and thing in market with
permission of the government of nation. The public firms are able to offers its shares in public.
Here minimum numbers of the shareholder are must be two and accounts need to fills within 6
months of the year. This company has liquidity in his share (Shigang 2010).
Voluntary company: This types of the firm are framed by individuals with some obligations.
They may or may not has paying staff members. Oxfam is the best example for this types
organisation. They framed with an aim to offers social services. It also involve the non- profits
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companies and charitable firm. In the legal frame the includes management committees ,
executive directors , coaching and development broad and several volunteers with different
activities.
P2 Size and scope of various types of organisations
Every organisation whom are currently in action has much scope and carried bigger sizes
of the firm.
Private organisation: The Mark ans Spencer is a company which is covered in private sector. It
is the leading and bigger organisation in UK. This is a retailer firm which deals in food items,
beverages and clothing or home products with own brand name (Gecevska and et. al., 2010). The
Mark and Spencer has its approx. 1,433 stores in world wide area with nearly 3,000 people are
employed in this company and around 65,000 person are associated with it too. This organisation
are acting on flat structural basis there are limited level of employees from management to
administrative and to front line workers. It facilitates the solution of problems in a sufficient
manner with effectively and quick decision making process.
This firm has running with large and huge scope as retailer sector in the reliable division
in UK. It has ability to expand the business through starting and setting up the new venture and
stores in world wide ad grab competitive advantages. The management of Mark and Spencer is
use new and fresh or innovative advanced techniques of marketing which helps them in order to
increase the rate of sales. This expansion will found helpful to expanding the growth of nation
and also make Mark and Spencer to be a market leader.
Public company: Here all the possession are in hands of nation's governments as an example the
BBC (British Broadcasting Corporation) is an public sectors organisation. This is British
broadcasting services providers that has its headquarter in London. It is the biggest and largest
broadcaster with higher number of employees in all broadcasting company. It has approx. 20,950
employee as in staff (lapper, Lewin and Delgado 2011). BBC telecast the news in approx. 28
languages and offers TV, radio and online services in Persian and Arabic. Generally English
news are telecast by BBC world news, as BBC. Come on internet channels and BBC global news
LTD. It has operations under the royal charter which includes attaining the licence from Home
Secretary. Which is a agreement that involves the terms and conditions that are to be followed in
order to broadcasting some stuff. The commercial department of the organisation are involves
the BBC world wide, BBC news, BBC studios and BBC new studio works. The company has
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nearly the second largest budget in whole UK base broadcasters with expenditure of approx
4.673. the most scope for this organisation relays on on,line services that it can covered up the
more service areas. This is important for the company to improve his used digital technology
which facilitates the company to increases the quality of its works and networks. This is needed
to make investments in up growing communications techniques through which they can improve
his reputation and image in the mode of customers.
Voluntary company: The Oxfam is the voluntary company which is known as the international
charitable organisation that includes in social services. This company has around 20 firms whom
is working to carry out its operations as local communities and partners. This organisation are
enacting in approx. 20 nations. The employee of this company has numbers nearly 5,300 with
approx 23 thousand volunteers this firm as co-organisation in which around 16 members are
working with them. Oxfam is acting for providing the social justice and reducing the inequality
of nation's economy. This firm act to faceplates the persons and unions including women, girls,
racist minorities. It may have tie with other big charitable companies to rise more money to deal
with the such issues. Digital media generally used to make its promotional campaigning more
sufficient and effective in order to attract the more people to get association with it.
TASK 2
P3 Assess the relationship between different organisational functions
Each and every company has different departments whom performs different activities in
the firm with the aim to garb higher competitive advantages in market and achieve the objective
of the company (Robbins, Judge and Campbell 2010K). It is needed to operate these task in a
systematic, sufficient and effective manners. Mark and Spencer consist several functions that is
very important for business. Those action are taken by all the departments like finance,
marketing , human resource and R&D etc. all of these segments of the firm performs various
activities that are able to make influence to each other. These sections runs its action through
cooperation with others part of company also they shares the sound relations with each other as:
Marketing- this can be known as the main and most important function of the company. In
Mark and Spencer, this firm gives proper attention to its marketing strategy and use several
methods of marketing that facilitates them with good profits. When company wants to begin the
promotions and starting so many other activities which are covered in marketing department
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them they need to make contact with financial and accounting divisions cause the part of
marketing needs some funds and money to begin and use soma of marketing methods which the
department of marketing suppose to apply in market to grab customer's attentions. Hence they
going to make cooperating with other departments like human resource too. Marketing
department need to have some skilled human resource in order to execute all those tricks and
methods whom will be applied to market in promotional time. Hence the marketing department
of M&S has their inter link with other departments (Fernando 2011).
Human resource: the department of human resource cab be a sound function in any
organisation so in Mark and Spencer also need quality hymen in its firm cause they will make
direct contact with customers. As Mark and Spencer is the foods retailing company their
employee are presented in front line in their stores where they have opportunity to make contact
to them. For this human resource department announce the recruitment and selection process for
refilling the new and vacant post. To make outer world aware of this posts HR department goes
for having assistance of marketing department to gives promotions, or advertisement of the
vacant job and made customers aware about company's blank post now this way they are inter
linked with each others.
Research and development: the department of R&D is playing the role of engine in an
organisations which activates the generation of new ideas, innovations and gives assistance in
framing new product or services. In order to frame the something new organisation need to have
proper knowledge of the market such as financial conditions and new arrivals, or preferences of
the customers only then the product development process could begin. For it the department of
R&D need to have skilled employees which are derived through human resources segment of the
company which provides helps in order to make effective, sufficient and appropriate product
which has attribute to attract the customers. Hence R&D and human resource department are
interrelated (Hamilton and Webster 2015).
All the departments of Mark ans Spencer are interrelated and keep their functioning accordingly.
P4 Explain positive and negative impact of macro environment on M&S
Macro environment is important part of the business which is largely a external one.
These factors are uncontrollable and beyond the influences of the organisation. This covers are
elements such as political, legal, economical, and technological. There factors has power to
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affect an organisation negatively and positively in both manners. In order to know the effect of
this macro environment the analysis of PESTEL has been done as:
political: the European committee took decision that involves free flow of the trade with other
country. This framed export and import of product and services easier for organisations. But
government has some possession and power to ruled the company (Moutinho 2011).
Positive impact: because of the restriction of movement of product. The M&S is having
big advantages cause they involved in retailer sectors that have major activity of moving goods
for this European committee give helps.
Negative impact : because of strict health rules this company has to make investment
high to make consistency of the quality in product but this will make cost high for firm.
Economical: This is dynamic factor that makes changes on continuous basis. The GDP, inflation
rate may make effect on purchasing power.
Positive impact: this helps in increasing the numbers of customers and provides the high
competitive advantages in market.
Negative impact: due to this market has reduction of job with 2 percent rate as its the
increased cost for over all production that has been noted due to changed prising policy.
Social: this factors has relation with society and culture. The tastes and preference of the
customers are main thing which has power to make impact over organisation.
Positive impact: this helps firm to know the actual demand of society and accordantly
make effective decision for framing the product (Welford 2013).
negative impact: to maintain the quality of goods company need to invest more and
more.
Technological- most vital thing for the company that need to be up dated to frame new product.
Positive impact: this helps organisation to use more advance tools in order to serve
market.
Negative impact: to opts new advance technology make effect on employee cause if they
face new thing which they have never seen before how they will use it in performance.
Legal: this is related to laws for the organisation.
Positive impact: some changes that made in law by government will focuses on more
authenticities of packaging.
Negative impact- they have power to make impact decision making.
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Environmental- the current conditions of environment will impact on business decision making
process.
Positive impact: this involves environment preservation that improves its brand image.
Negative impact: this is expensive as more fund needs to be located.
TASK3
P5 Conduct SWOT analysis for Mark and Spencer
It is very important to analyse internal environment of business in order to operate in
effective manner. This helps in identifying inner strong factors of an company that could assist in
proper decision making. SWOT analysis of Mark and Spencer is to be done so as to identify its
strengths, weaknesses, opportunities and threats. There are various good opportunities available
at market place that is required to be grabbed by this firm to ensure its productivity and
profitability in long run. These elements are as follows-
Strengths- Mark and Spencer is an leading retailer in UK which is indulged in providing
luxury goods to its consumers. There are several strengths that are enjoyed by this organisation.
It has highly recognised brand in this market. This is due to effective marketing strategies of this
firm. Along with that, it is providing standard quality of goods and services to its buyers because
of which there is huge consumer loyalty (Astrachan, 2010). It has various stores and outlets in
UK market which is another main strength of this enterprise. It allows wide variety of product
line to its consumers in clothings, house wares and food items.
Weaknesses- It is common that if an organisation has strengths then it also have some
weak factors that cannot be ignored. This in necessary to overcome such issues in effective
manner in order to deal with intense competition in market place. Some of its publicity
techniques are not very effective and these are not as per current trends. Competition in retail
sector is increasing at very high rate due to its market share is getting affected adversely. As it is
an very popular brand so it is required to maintain security of its name so that other retailers
cannot sale duplicate products with its tag. But, this firm is somehow failed to deal with such
issues due to weak strategies in this context.
Opportunities- In recent conditions, there is huge trend of online purchasing as
consumers feels it more convenient mode of buying products. Mark and Spencer can grab this
opportunity by developing its website in effective manner. They can make it more attractive and
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consumer friendly so as to give better experience ton them (Bai and Sarkis, 2010). Along with
that, they can also launch their products in new market segment so that consumer base could be
enhanced. There is huge scope expansion in markets like India and China.
Threats- These are related with risk factors available in market place. It affects the
operations of company in negative way. There are so many retail stores in UK market which are
providing goods at reasonable prices (Bos‐Brouwers, 2010). This firm could face decline in
number of consumers due to this threat. There is need to make changes in pricing policies so
that, needs of every segment of buyers can be fulfilled. Certain political can also affect workings
of this firm if these re not in favour of its business operations. Its main competitors are Aldi,
Asda and Tesco.
P6 Identify how strengths and weaknesses can be influenced by external factors.
External and internal factors are very much dependent on each others. It covers micro and
macro elements related with business operations. Outside issues are economic conditions,
political issues, technological advancements, legal factors and environmental aspects. On the
other hand internal environment is concerned with strengths, weaknesses, opportunities, and
threats of this company. It is important to make decision makings by keeping all these
components in mind so as to reduce the chances of risks. There should be proper strategies to
make internal strengths linked with outside factors. Macro and micro environment is dependent
on each other due to which any change in outside elements effects strengths and weaknesses of
this organisation. In case of Mark and Spencer, there are so many positive aspects which
facilitates its growth in effective manner (Chen and Chang, 2012). It has highly recognised brand
name and huge presence in this market place. It is due to good quality in products delivered by
this firm. Its marketing strategies are very strong and numerous stores and outlets is another
strength of this entity. Weaknesses of this firm are related with ability to handle tough
competition in retail sector. Also it is failing in securing its brand name from being pirated.
Social factors are important part of external environment. It includes elements related
with tastes and preferences of consumers. Buyer behaviour is very dynamic and it could be
biggest risk for any organisation. In current scenario, there is huge demand for clothing at
reasonable prices. Consumers are not very much focussed on buying high price products. This
affects strengths of this company as it is providing goods at higher prices and it could lead to
more weak points. Apart from this if government policies are in favour of retail sector then it will
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help in making more effective strategies by grabbing such opportunities. As discussed above its
brand name is highly recognised but increase in rates of marketing activities could affect its
advertisement scenario and they might compromise with such aspects. Apart from this, people
are becoming very conscious about health and safety factors. There is need make changes in
product line so as to meet demands of buyers in efficient way. Economic conditions are also
dynamic in these aspects. It effects operational decisions of this company as changes in economy
affects purchasing power of people (Commander and Svejnar, 2011). It influences their
behaviour related with buying a products because due to less capacity to purchase buyers seeks
for low value products. This might result in declined sales of this entity.
Therefore, it can be determined that everything that occurs in business environment
affects internal strengths and weaknesses of Mark and Spencer. It is not clear how operational
activities and decision making gets affected due to this as it could whether positive or may be
negative. Sometimes these factors helps in generating more strengths whereas several times it
results in creating weaknesses for company. It is required to actively deal with all such issues to
make it in favour of business.
CONCLUSION
From the above report it has been concluded that the environment of business are consist
a set of environment such as internal and external which are more powerful and capable to make
impact of business functions. They are made of with the mixture of the some of the factors like
customers, suppliers, political and legal which are some how uncontrollable by organisation
cause external cannot be controlled but it can said that internal factor can be managed.
Companies has come up with various types and in different sizes which have so scope in order to
growth. The both analysis are given for Mark and Spencer which showing some lights in those
thing which influence organisations such as PESTEL and SWOT one which helps in examine
external part and other one has ability to analyse the internal part of the environment. This report
has also throwing lights on the positive and negative impact on business operations of macro
environment with suitable example on the other side of this report some lights are travels to those
section where different organisational functions are brighten. The entire report is based on the
business environment with grounds of Mark and Spencer company.
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Online
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