Business Environment and Organisational Effectiveness

This report discusses how business environment and its factors impact on organisation's effectiveness and further operations. It describes different organizational sectors' size, scope, mission, and vision based on ownership. Additionally, it explains the impact of changes in environmental factors on profitability and operations.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
P3 Organizational function and its interrelationship with objective and structure.....................1
P4 Impact of macro environmental factor on business performance..........................................4
P6) SWOT analysis and its interrelationship with macro environmental factors.......................8
CONCLUSION..............................................................................................................................10
REFERENCE...................................................................................................................................1

INTRODUCTION
Business means environment surrounding organisation. There are many factors that
directly have impact on business working, strategies, planning, policies etc. The various internal
and external factors that have effect on firm are prices, economic system, government polices,
social and legal factors. The assignment will be based on JOHN LEWIS company, it is operating
in retail industry and provides fashion, food, service etc. to potential buyers. Report will
describe nature scope, mission, vision and objective of chosen organization.
This study will explain functions of the firm and its interrelationship with
objective and structure. Furthermore, it will conduct PESTLE analysis and
its impact on business environment. In addition, assignment will analysis
internal and external business environment of JOHN LEWIS company.
TASK 1
P1 and P2
Completed in ppt
P3 Organizational function and its interrelationship with objective and structure
The main objective of the JOHN LEWIS company is profit
maximisation and enhance customer satisfaction.
JOHN LEWIS company is dealing in various industries there are
many functions that are performed by entity. It has complex structure.
Various functional department help employees in organisation to clearly
understand their roles and responsibilities and to focus on their core goals.
There are various functional department in an organisation that are direct
has linked with organisation objective and its structure. These departments
are - Management function-This department has the responsibility to
arrange each and every activities. Their main task is to coordinate
with each and every member as well with every department in firm to
ensure smooth flow of activities and to check that only needed task
are being performed. This will assist firm in acquiring accurate and
standard result. It will also help in reducing repetition of activities
and increasing productivity and efficiency. And they help in analysing
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the need of type of structure in an organisation. Structure his
important as it had effect on firm decision making power. Thus, it can
be said that objective of JOHN LEWIS are interlinked with
management function. Human resource function: Their main task is to employ skilled and talented
staff to meet various goals and of organisation. Their task includes designing
the business structure and finding various aspects on which the staff will
work. On basis of that aspect they hire employees. That assists in getting
skilled people those who can deal with customer well. That will help in
increasing profit of the entity. Marketing function- The focus of this department is to increase sales and
generating revenue for organisation in order to accomplish its aim of profit
maximisation. Customer service function- This department helps JOHN LEWIS company
to full fill its main aim of earning profit through customer satisfaction.
They help in building good customer relationship. They do this by
communicating with customer and solving their problems, by providing after
sales services. Sales- The focus of sales department is to sale those products and services
which produce profit. They important role lies in generating income. They
work in coordination with marketing department regarding introducing of
new product. Their function is to generate plan and idea to sale the product
as soon its been produced.
 Accounting and finance department-They are mainly responsible for
arranging the sources of finance and keeping the records of accounts. Their
role is important for organisation as they keep record on cash flow of
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company. Their focus remain on analysing and evaluating the financial
position of company and comparing it with the past record help them to
know the growth percentage and judging the position of organisation in
market. Administrative department- This department works as the backbone of any
company. The various role of this department include handling the day to
day operation, managing them, coordinating with other department, decision
making, supervising the tasks to be performed by various department.
Ensuring that there be should be smooth flow of information among
different department and the activities are being performed according to
company standard. Production- this department deals with manufacturing product. The
responsibility of this department is to produce good quality and standard
product. They are also responsible for maintaining the inventory as this all
may affect the goodwill and efficiency of organisation. Operation department-their main task is to support production department
and full fill their demand and also to control the production in order top
prevent misuse of organisational resources.
 Purchasing-There are some factors that are to be considered by these
department purchase good quality of raw material at low cost and to
purchase right quantity of product, as these factor may affect the pricing
strategy of firm.
Structure is interrelated with this function as they provide the path for
communication and coordination among different department, this method help
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them in achieving their specific target that are associated with firms objectives and
goal.
P4 Impact of macro environmental factor on business performance
Macro environment means situation prevailing outside the firm which could be
favourable or unfavourable for organisation. The various macro factors that have direct or
indirect effect on firms are political, economic, social, technological,
environmental and legal. These elements are uncontrollable. The company has
conducted the pestle analyse to evaluate what positive and negative impact these
factors have on their organisation and various opportunities the company can
explore from these components in addiction to this study will help the firm in
examining threat. These macro component generally have impact on those
companies who are operating outside their national boundaries. The good
organisations is that which identifies situation and respond accordingly.
Legal element impact- There are various laws and policies such as
taxation policies, law related to employment is to be applied by
company while recruiting their staff, some country may banned import
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of particular product, keeping in consideration consumer safety rules
imposed on supply of particular item, punishment on committing fraud
etc. These laws describe and set various standards firm. Every firm
working in that country follow the business standard of that country.
The UK government has framed stiff rules for
organisations considering the health and safety of consumer, It has
given opportunity to firm to renew its resources and it lead to proper
utilisation of organisation resources.
Political impact- Every country is governed by different types of government. Some
countries are governed by the communist government. The political system has
close relationship with economic system as well as with economic policies.
Therefore, the various investment decision are taken by them. This system describes
and set standard for business. Political stability, ideology, political interference in
business etc. are factors related to political issue which may have affect on working
efficiency and productivity of company.
JOHN lewis company is entering in London market that is part
of European union, it may have to give tough competition with both
European market as well UK market. UK government is deciding to
reduce corporate tax it has provided opportunity to company to increase
their profit margin.
Social cultural environment-This environmental factor have direct impact on
company strategies. As these factors related to customer include customs,
traditions, taste ans preferences of customer they are having direct link with
organisation growth. It is very important for multinational company to analyse the
Social cultural environment of a country in which they are operating. These
element have direct impact on its operation. These factors explain the role and
responsibility of business towards society.
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Customer change their life style and preference according to the
society and they shift their choice towards new trends and fashion created by
society. For meeting this challenge the JOHN Lewis company should frame
strategy which give rise to innovation and should focus on development of product.
Economic impact-These element consists of economic policies, economic condition,and eco
system. Economic system include mature of economy, economic situation of region that are
related to money, raw material, demand, supply, services etc. Regional development, distribution
of income, level of income etc. all are the part of economic system. Availability ofraw material
may have impact on the productivity of organisation and may affect the quality of product.
In UK there is period of great recession in UK it is having direct impact on each
and every retail industry. Increase in competition has provided the opportunity to firm to
increase their incentive.
Technological impact- Activities involved in this such as assessing internet,help[ firm in
connecting with wide range of customer and helps in analysing their needs and demands and
knowing latest market trend. Technology can also be used for increasing productivity.
Rise in trend of online shopping had greatly affected the retailing firm. The main advantage of
this is that it has reduced the burden of paperwork and this has provided the path for promoting
newly launch product.
Environmental impact-it include geographical, ecological factors. Climatic condition,port
facilities and related facilities that affect the supply of product by company. And environmental
laws may affect the sources of raw material used by firm. For example penalty for using
livestocks is disadvantage for firm as it may restrict the source for obtaining raw material by
firm. Favourable climate may create opportunity for firm to increase its production.
P5 Impact of internal and external analysis on firm decision making
The major strength of the company is that it is dealing in retailing
sector and besides of financial issues it stands at good position in global
market. Other issues that have directly effected the retail sector are
increase in competition, declining consumer income, increase in internet
asses by consumer has given a tough competition to company but still in
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spite of giving up company has focused on enhancing it competitive
strength. Due to this threats this has provided them with an idea to
facilitate online marketing of its product and services to increase their
customer. For reducing competitive the company has decided to innovate
and launch new product in market.As the company is partnership firm that
might become the weakness organisation. Lack of coordination and
understanding m,ake affect the goodwill as well as raise question on its
survival. Its also may affect its structure and its working. The other
weakness lack of competitive spirit is that as company is surviving in
competitive market, and to reduce competition it has decided to enter such
market where there has financial crisis is there. Quick decision making is
the strength of company as it has analyse that the company is facing stiff
competition and its profitability is being affected by it, they decided to
divide serve customer in different segments. They have great analysing
power they had decided to produce those product which are more demande
by customer and are being less supplied in market. There aim is there
strength they have decided to focus on customer which will help them to
grow and will help them in expansion.
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P6) SWOT analysis and its interrelationship with macro environmental factors
SWOT stands for strength, weakness, opportunities and threat that presents actual
performance of John Lewis partnership (Fratzscher, 2012). Through identifying these tools, it is
set for increasing strength, reducing weaknesses, grabbing opportunities and overcoming threats
occurred at workplace. In order to this, SWOT analysis for John partnership can be understood
as below:
Strength:
 Good position in global market for
producing its products.
 Strong competitiveness among different
retailers across UK.
 Maximum customer satisfaction with
groceries and food items of John Lewis
partnership (Lenzen and et.al., 2012).
 Also facilitate online marketing of its
product services in wide range.
Weaknesses:
 Difficult to achieve proper coordination
from all workers of John Lewis
partnership.
 Risky to sustain its position in
competitive market.
Opportunities:
 To adopt new technologies for better
quality services.
 Using effective advertisement
techniques to attract people at high
level to purchase its goods and taking
advantages of its services.
Threats:
 Cut throat competition (McGovern,
2016).
 Changes in environmental factors that
affect further business operations.
Every business firm requires an effective development of key tools and techniques on the
basis of external environment. If business entity is not having sustainable values then it will
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impact the overall outcome in desired manner. It has been noticed that application of SWOT
analysis is necessary because it allows to have better designing of values. In addition to this, it
can be said that company have various strength and weakness related to its operations and
products. John Lewis is effectively considering technological use in order to accomplish goals
and objectives (Mellahi and Frynas, 2015). It improves the delivery of products and services in
desired way to meet long term sustainability. Global level operations of company are also well
structured which also advances the overall work situations. John Lewis has utilised innovative
business methods in its rise, including the creation of stores. By having an appropriate
development of standards company is continuously accomplishing its key goals and objectives.
Another key strength of the business firm is highly impressive customer base which assist in
meeting framed vision.
Other than this, weakness of business entity also need to be referred properly in order to
ensure about key goals and objectives accomplishment. One of key weakness of John Lewis is
that its product line is very limited which does not offer diversified options to customers. It
might affect the development of customer base in diverse manner. High level of competition in
the market also affects the sustainable development (Popescu, 2013). There are number of
competitors in the market which provide issues to the business in regard to market share.
However, company can also focus on expansion activities in regard to have better
opportunities. With an application of various activities in respect product development the John
Lewis can also have effective development of market share (Sena and et.al., 2012). Along with
this, any kind of changes in internal and external factors might affect the company strength and
weakness. In addition to this, it can be said that there is great interrelationship with the external
factors. For example, economic condition of UK is not stable then it might affect the strength and
weakness. It is because the issues in respect to economy forces the UK businesses to cut down
investment on expansion plan. It means during the period of unstable economic aspects the John
Lewis expansion opportunities will be influenced. Along with this, it can be said that changes in
social factor also affects the company strength. For example, the company is well focused
towards fashion related products but the social trend has changed and customers get more
attracted towards traditional cloths. It such aspect if company does not have changes according
to need to market then the customer base will get affected because customers does not buy
products and services which is not according to their needs (Vygotsky, 2014).
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Along with this, it has been noticed that one of key strength of the company is that they
are well focused towards ethical work style. However, improvement in ethical values creates a
better relationship with government authorities. In addition to this, it can be said that by having
an effective consideration of such values the political relations can also be improved. It is
because government always expects that businesses are having an ethical work relationship. It
clearly indicates that company strength/weakness are interrelated with the external factors. By
having a continuous improvement in such values the work standards can be advanced. It also
leads business entity to the impressive level of success (Wang and Marangoni, 2015 ). Along
with this, long term sustainability can also be enhanced in order to ensure that better
opportunities can be created for business.
CONCLUSION
As per the present report, it is concluded that both business environmental factors
(internal and external) impact on organisation's effectiveness and further operations. In this
regard, different organisation's sectors' size, scope, mission and vision are described on the basis
of ownership. In addition to this, several organisational functions and their link with its structures
are described. However, impact of changes in environmental factors are understood through this
assignment that affect profitability and further operations. Thus, significance of business
environment and its factors is understood through this report.
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REFERENCE
Books and Journal
Fratzscher, M., 2012. Capital flows, push versus pull factors and the global financial
crisis. Journal of International Economics. 88(2). pp. 341-356.
Lenzen, M. and et.al., 2012. International trade drives biodiversity threats in developing nations.
Nature. 856(74). pp. 109-112.
McGovern, E., 2016. International trade regulation. Globefield Press.
Mellahi, K. and Frynas, G., 2015. Global strategic management. Oxford University Press.
Popescu, G.H., 2013. Macroeconomics, Effective Leadership, and the Global Business
Environment. Contemporary Readings in Law and Social Justice. 2(1). pp. 170-176.
Sena, F. and et.al., 2012. Framework for performance measurement and management in a
collaborative business environment. International Journal of Productivity and
Performance Management. 61(6). pp. 672-690.
Vygotsky, L.S., 2014. 3 Genesis of the higher menta functions. Learning to think.
Wang, F.C. and Marangoni, A.G., 2015. Internal and external factors affecting the stability of
glycerol monostearate structured emulsions. RSC Advances. 5(113). pp. 9310-9316.