The Impact of Business Environment on Organizations

This assignment delves into the crucial connection between a business's external environment and its internal organizational structure. It encourages you to analyze how aspects such as competitive pressure, technological advancements, and regulatory frameworks influence the way organizations are structured. The goal is to understand how companies adapt their structures to thrive in dynamic and challenging business landscapes.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations..................................................................1
P2 Size and scope of different type of organisations.............................................................3
TASK 2............................................................................................................................................5
P3 Relationship between different organisational function....................................................5
P4 Positive and negative impact of macro environment upon business operations...............8
TASK 4..........................................................................................................................................10
P5 Internal and external analysis of John Lewis Partnership...............................................10
P6 Strengths and weaknesses interrelate with external macro factors.................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment includes organisation and factors which affect on their operations
and achievement of objectives. Shareholders, employees, suppliers, public are internal
components which directly influenced by the organisation. Government, economic conditions,
technology, people and competitors are external elements which affect on firm and its policies
(Apăvăloaie, 2014). Present report is based on John Lewis Partnership which is retail firm
headquartered in United Kingdom. Company provides variety of products which are clothes,
food, furniture and financial services. This report includes different types of organisations like
public, private and voluntary which have vary size and scope is specified in this assignment.
Besides this, organisational functions and their connection in respect to structure and objective is
stated. Furthermore, macro environment factors impact on business operations and internal
strengths and weakness interrelation is explained in the report.
TASK 1
P1 Different types and purposes of organisations
Public, private and voluntary are three forms of sector which comprises firms that
conduct business for development of society.
Public Organisation - It is owned, managed, run and controlled by government or other
related agencies, enterprise and other entities that deliver services and benefits to the public. The
main aim of public organisation is to focus on delivering goods and services mainly to the
public. The concept of public sector is broadly different from core government, not for profit
and private organisation. There are four types of public sector organisation: international,
national, regional and local. Public sector provides variety of services like infrastructure,
education, transportation, military and security services (Botha, Kourie and Snyman, 2014).
Legal structure of Public sector -
Central organisation - It is an organisation level of decision-making structure where all
processes and decision are handled by top level officers.
State organisation - A state government is a compulsory organisation which keeps and
maintains strong relation with central government to use legitimate force within a certain
geographical territory.
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Local organisation - It means the administration or controlling of particular district or
county to common control and service there.
The main purpose of public sector organisation is the transformation of economy in a
way that it results in welfare of society. Crown prosecution service is a public prosecuting
agency responsible for criminal prosecution in England and Wales. This public sector is
headquartered in London, which sets policies and also handles corporate matters. The Director of
public prosecution is being assisted by CPS chief executive in running the organisation (Cai and
Yang, 2014).
Private Organisation - It is the part of a country's economic system which is managed,
controlled and run by an individuals, firms, institutions and companies. Mostly, every private
organisation are incorporated with an aim of profit making. The main purpose of private
organisation is profit maximisation, creating large customer base and choosing right
organisational structure. John lewis partnership is an UK based company which is owned by
employee's who enters into the partnership which the purpose of operating the John lewis &
department stores, Wait rose supermarket, banking and other retail activities.
Legal structure: The legal structure of private organisation are as follow:
Sole proprietor - It is a type of entity that is fully owned and managed by the one person
known as the sole proprietor. It is a simplest form of business organisation and an ideal choice to
run a small or medium scale business.
Partnership - It is a formal agreement in which two or more parties are their to manage
and operate a business. Partnership comes in two ways: General partnership and limited
partnership (Epifanova and et. al., 2015).
Private sector hires employee through business owners, cooperation or other non-
government agencies. Employees get paid out of company's profits and they have more pay
raises, career choices, opportunities and lesser job security. Employee appraisal and promotion is
based on the continuous performance evaluation and achieving goals. The private sector
contributes to the largest portion of an economy as compared to public and voluntary sector.
Legal structure: The legal structure of voluntary organisation includes:-
Unincorporated association - It is a kind of an organisation formulate up through an
agreement between one or more group of people with purpose other than profit making.
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Trust - An arrangement in which a person holds property as its nominal owner for the
two or more beneficiaries.It is charitable trust which is regulated and governed by guardians that
consists power and authority to make decisions about funds.
Voluntary Organisation – This is a type of enterprise where a group of individuals come
together to form a body or association for the accomplishment of a common desired goal. Such
organisations include Not-profit, non-government, third party organisation and any civil society
associations. This type of organisation deals with the goals other than earning a profit for their
owners and mainly to provide services and welfare. These organisations are run and controlled
with the support of both the public as well as private enterprises (Grosanu and et. al., 2015).
The main purpose of voluntary organisation is to provide opportunity for face to face by
participation in contribution to the social cause, welfare work and other charity based
contribution. It plays a crucial role in rural development by supplementing government and
changing scenario of liberalization and socialization. In context with UNICEF, it is an United
Nation agency that provides social and development assistance to children and mother in a
developing countries. The legal structure of voluntary organisation includes three types of
entities namely unincorporated association, company limited by shares or guarantee and trust.
P2 Size and scope of different type of organisations
Public, private and voluntary are three forms of sector in which firms vary in respect to
their operations and goals (Khan and Quaddus, 2015). This is description of various forms of
organisation which is as follows:
Public: Crown Prosecution Services is a non- ministerial government organisation which
has headquarter in London. CPS is an independent that make investigation in against of
government and police. It pursue and prosecutes criminal cases which are examined by police
and other investigate firms in Wales and England.
Products and services: CPS duty is to support investigators by providing them advice in
respect to practicality of prosecution. They collect information and evidence about criminal and
their offences to help authorities make appropriate judgements about case (Maula and Murray,
2017).
Size and scope: Crown Prosecution Services has around 6000 staff members which help
them to take cases and provide support to police in investigation process. This helps agency to
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generate revenue of about £600 million annually as per 2013. CPS responsibility is to take care
that correct individual has been enacted for the offence. If not, then prove them right and justice
through evidences.
Vision and mission statement: Crown Prosecution Services vision and mission statement
is to make positive differentiation on community by formulation of justice system.
Business Objectives: Crown Prosecution Services goal is to provide quality prosecution
services that is economical and effective. It is necessary that victims get respect and appropriate
response in respect to their rightfulness. For this, agency implement new policies and reform for
creation of a justice system.
Stakeholders: Alison Saunders is director of Crown prosecution and Paul Staff is chief
executive officer which make decisions about selection of cases. Besides this, Geoffrey Cox is
minister that define process and actions which are undertaken to collect evidence and
information about rightness of case.
Private: John Lewis Partnership is retail firm headquartered in London, United Kingdom.
Company is controlled by trust which regulate businesses that are Waitrose & partners, John
Lewis and partners and financial services.
Products and services: John Lewis offers different items which are food, clothes, watch,
jewellery, cosmetics, housewares, furniture and many other. Company also provides various
services that are computing, photography and financial services to people (Moroni, Arruda and
Araujo, 2015).
Size and scope: John Lewis Partnership is able to make profit of about £11 billion as per
2015. Company's number of workers are 89, 000 which help management provide quality
products and services to people. Company scope is to maintain relations with stakeholders that
are investors, public, competitors and other outsiders in fair and transparent manner.
Vision and mission statement: John Lewis Partnership mission and vision is to become
create an unique brand image and market position in respect to its structure and commercial
activities.
Business Objectives: Goal of John Lewis Partnership is to enhance profitability by
execution of operations in sustainable manner.
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Stakeholders: John Spedan Lewis is owner of John Lewis Partnership who founded
company. Sir Charlie Mayfield, Paula Nickolds and Rob Collins are top personnel which manage
functioning of system and firm.
Voluntary: UNICEF that is United Nations Children's Fund is a UN agency which had
headquarter in New York.
Products and services: UNICEF provides developmental and humanitarian assistance to
mother and children for development of nation.
Size and scope: UNICEF is United Nations agency which is able to generate profit of
about $5,009,557, 000. Their duty is to protect and fight for right and needs of children and
mother.
Vision and mission statement: UNICEF vision and mission is to protect rights and
children and mothers by completing their requirements and needs.
Business Objectives: Goal of UNICEF is to give equal rights to girls and women in
respect to their participation in political, social and economic development of society (Niemann-
Struweg, 2014).
Stakeholders: Henrietta H. Fore is executive director which formulate policies and
reform in respect to protection of women and girls.
TASK 2
P3 Relationship between different organisational function
Organisational functions are very important for every business in order to conduct
business activities in an efficient way for achievement of goals and objectives. Every business
has functions like Human resource, Finance, sales and marketing, Research & Development etc.
Functions of an organisations depends upon size of business and are related to each other for
achieving goals and objectives. Organisational functions of John Lewis Partnership are as
follows:
Human Resource department: This department manage different functions in an
organisation. In case of John Lewis Partnership main function of human resource is recruiting
and firing staff, training and development for new and existing employees. They manage
employee relationship and benefits in the organisation. Functions of HR are related to other
departments like marketing as this department needs manpower to perform marketing and
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promotional activities. HR department recruit and train employees to conduct these activities for
increasing sales as this will help in achieving objectives and goals of business (Savrul, Incekara
and Sener, 2014).
Finance department: It manages all things related to money in an organisation. In case
of John Lewis Partnership functions of this department includes planning, auditing, accounting.
They prepare and interpret financial statements for analysing company's financial condition.
Finance department is linked to HR, Marketing, R&D and other departments as it manages
finance to ensure that enough funds available with each and every department for achieving
specific goals. Like HR needs financial information when goals are not achieved due to lower
customer dissatisfaction, they need this data to improve performances of employees by reducing
the gap between these two.
Marketing and sales department: Marketing identifies needs and desires of consumers to
provide them products which can satisfy them. In context to John Lewis Partnership it includes
advertising, promotions, pricing, distribution and customer service etc. and act as intermediary
among consumers and production. Function of sales is to influence customers to buy products
and services. Marketing and sales department is linked to all departments like finance department
helps it by providing funds for conducting promotional and advertisement activities.
Research & Development department: Functions of this department in John Lewis
Partnership are related to new product research and development, improvement in existing
products by updating them, innovation in products to be competitive in market for effectively
achieving goals and objectives of business. R & D is related to other departments as it needs data
from marketing department for innovating products and services as per the requirements and
needs of consumers. This will help organisation in achieving goals and objectives in order to
increase profitability and productivity (Smith, 2016).
Organisational structure: It is a system that describes how action like task allocation,
coordination and supervising are directed for attaining objectives of an organisation. A company
should be flexible and innovative enough for achieving competitive advantages to be ahead in
market place (Definition of organisation structure, 2018). Different companies uses different
organisational structures like Functional, Divisional, Matrix and Flatarchy. John Lewis
Partnership use Functional organisational structure as it defines clear roles and responsibilities of
each employees. In this structure, business is divided into different functional areas as Finance,
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Marketing, Research and development, Production etc. Each employee helps organisation for
achieving goals and objectives by using their skills and knowledge (Sodeyfi, 2016).
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Figure 1: Organisational chart

TASK 3
P4 Positive and negative impact of macro environment upon business operations
PESTEL ANALYSIS: The tool that is used by a company for analysing and monitoring
the overall external environment which can impact the growth of the firm and the analysis is as
follows.
Political factors-Those factors in which government interfere in the economy of the
particular or group of industries through their policy and the stability and instability of the
government also makes the impact on the environment of the bushiness. In John Lewis
Partnership the political stability in the government helps in improving the growth of business
and instability in the government policy can become threats in the business.
 Positive-In John Lewis Partnership ,the political stability in UK favours the growth in
the business.
 Negative- Instability of government can pose risk to existence of enterprise in
marketplace as there may be chances of policies made by government that do not
favour the functioning of John Lewis Partnership.
Economic factors-The financial factors which affects the operation of the business and
its decision-making process. Such factor are inflation rate,economic growth of the
country,inflation rates etc. For example if there would be recession in UK then it will prevent
John Lewis Partnership to increase its workforce (Smith, 2016).
 Positive-If the inflation rates are low the it will be helpful for John Lewis
Partnership to sell their products easily.
 Negative-while if interest rate of the loan are higher then there would be less chances
of customer taking loans from bank it will decrease the purchasing power of the
consumer and its outcome would be negative for John Lewis Partnership.
 Social factors-Those factors which influence the life style of the group like its
religion, family etc. In John Lewis Partnership social factors plays an important role
in sales of the products, for different geographical region it depends upon the
culture in that particular region in accepting and rejecting the product.
 Positive-If the people of the particular region accepts the product of John Lewis
Partnership then it would help the company to grow.
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 Negative- If the customs and value of the particular religion does not allows to accepts
the product then it could become threat for a company to grow (Savrul, Incekara and
Sener, 2014).
Technological factors-The factors which uses the innovation in the technology to manage
the different operations in the organisation are known as technological factors and some time it
is favourable for a company to innovate. It includes research and development
activity,automation process of machines which influence the decision making of certain
industries and company like John Lewis Partnership.
 Positive- Through the medium of digitally technology the retailing process of a John
Lewis Partnership could become much more effective.
 Negative-On implementing more technological things the Social skills of a company
could become weak. By using the advanced technology and privacy , security feature of
John Lewis Partnership could also become weak.
Environmental factors-The climate and weather of the particular location are considered
as the environmental factors In John Lewis Partnership the climate of the region affects the
sales in the company as in rainy season it is tough to deliver the product at far distance, the
company should make product accordingly to the weather condition like in winter season it
should make woollen cloths and in summer the cloths could be delivered accordingly
 Positive- If the recycling standard of the product of the company are high then it will
never harm the geographical environment. Negative-The transportation of the product is done by the help of vehicles the air gets
polluted this is the negative aspects of it.
Legal factors-Those factors which mention how the laws affects the operation of the
business. Such as consumer laws,health and safety law,discrimination law are the part of the
legal factors. In John Lewis Partnership the legal factors influences the cost and demand for there
product.
 Positive-If the law of health and safety of united kingdom support the John Lewis
Partnership then it will help in gaining the brand image of the company.
 Negative- If the law regarding the employment in the united kingdom are not effective
then the turn over of the employee could be increased company can suffer from it
(Niemann-Struweg, 2014).
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TASK 4
P5 Internal and external analysis of John Lewis Partnership
SWOT analysis is technique which help organisation to have information about system
capabilities and market conditions. Strengths are ascertain by management of John Lewis
Partnership for utilising market opportunities. While, weakness and threat require to be protected
for execution of business effectively.
SWOT Analysis of John Lewis Partnership
Strength
 Strong brand image - John lewis is a retail fashion leader in the United Kingdom. Its
brand image is so unique that consumer has strong relationship with the fashion and
Home-care products of it. They offer wide range of fashion products from different brand
to choose from and even their own brands. Extensive product range - John lewis provides varies choices in fashion and home-care
products with exclusive price. They are basically attract their customer by premium
display of products, super offer and price strategies.
Weakness
 Absence of international Business experience - John lewis is lacking in business
experience at global level because of limited market presence. Recent slump in profit - John lewis has effected their profit portion because of less
business and loosing competitive advantage, which may be as a result of weak promotion
and advertisement of the products.
Opportunities
 International market expansion - John lewis has wide opportunities for the market
expansion at the global level. For this, there is a requirement of money, manpower
resource, infrastructure and marketing knowledge for implementing it. New product development - John lewis is currently dealing with Fashion(Women &
Men), Home-ware and electrical categories. There is a wide and large opportunity for the
John lewis for developing new product either in the same segment or introducing new
segment with new product planning(Niemann-Struweg, 2014).
Threat
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 Cash flow problems - It is a threat for John lewis to manage the business and cash inflow
because continuously decrease in the market portion of the company. It needs to be done
for protecting loss bearing of the John lewis.
P6 Strengths and weaknesses interrelate with external macro factors
Political:An activity which is related to the related to the policy of government and its
administration are the political factors.
 Strength-if the relaxation of tax in the country would be there then John Lewis
Partnership can do its business easily and tax relaxation becomes strength of the
company.
 Weakness- If the product is exported to another country then the tax applied there could
be much more higher, can impact the business of John Lewis Partnership and this is its
weakness.
Economical: All the factors related to the finance and monetary measures of the business
are considered as economical factors. Strength-If the growth rate of country is high then it will give strength to the John Lewis
Partnership in that country.
 Weakness- If the inflation and interest rates are high then it gives weakness to
establishment the businesses in that particular region for John Lewis Partnership.
Social: Those factors which affect the lifestyle of the individual or group such as religion
and wealth etc. are considered as social factors. Strength-The brand image of the John Lewis Partnership is good among the people as
person prefers brand image and genuineness of the product.
 Weakness-As fashion changes the demand of the product also changes so survival of the
particular product is tough in John Lewis Partnership after some time (Grosanu and et.
al., 2015).
Technological-Those factors which evaluates the business or company in terms of the
current technology are considered as technological factors. Strength-Technological advancement in the logistics always helps John Lewis
Partnership in making their product reach to far places.
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 Weakness- Security threats from hacker and cracker in the software of John Lewis
Partnership are the weakness that could be considered as the weakness in technology .
(Khan and Quaddus, 2015).
CONCLUSION
As per above report, it can be concluded that there are various types of organisation
present in an economy which differ with each other with respect to scope, size and objectives.
Also, it can be analysed that the various functions of management like Human Resource, finance,
marketing, sales etc. are strongly interconnected to each other and help in accomplishment of
organisational objectives. PESTLE analysis help firms to have knowledge about impacts of
macro environment on operations. Besides this, SWOT aid organisation to have information
about internal and external capabilities.
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REFERENCES
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Grosanu, A. and et. al., 2015. The influence of country-level governance on business
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Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the
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Online
Definition of organisation structure. 2018. [Online]. Available through;
<http://www.businessdictionary.com/definition/organizational-structure.html>
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