Macro-environmental Impacts on Business Operations

Business and Business Environment INTRODUCTION 3 LO13 P1 Overview of different types oforganisations and the growth of international business.3 P2 Size and scope of the organisations 6 LO28 P3 Organisation structures and functions 8 CONCLUSION 9 PART 210 Introduction 10 Positive and negative impacts of the macro environment onbusiness operations 10 SWOT analysis of M&S:- 12 Interrelation of strengths and weaknesses with external macro factors 13 Conclusion 13 REFERENCES 14 INTRODUCTION Business is an ongoing process in

Business and Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1 .................................................................................................................................................3
P1 Overview of different types of organisations and the growth of international business..3
P2 Size and scope of the organisations...................................................................................6
LO2..................................................................................................................................................8
P3 Organisation structures and functions...............................................................................8
CONCLUSION...............................................................................................................................9
PART 2..........................................................................................................................................10
Introduction...................................................................................................................................10
Positive and negative impacts of the macro environment on business operations...............10
SWOT analysis of M&S:-....................................................................................................12
Interrelation of strengths and weaknesses with external macro factors...............................13
Conclusion ....................................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business is an ongoing process in which products and services are sold to the customers
so that money can be earned for living livelihood easily. On the other hand, business
environment is a combination of several factors that affects the overall growth and profitability
of firm in positive and negative manner. Present report is based on Marks and Spencer which is
a multinational retail chain and based in UK. Organisation was founded in 1884 in Leeds,
England by Thomas Spencer and Michael Marks. This report will be discuss about the different
kind of size and scope of organisation along with difference between large, medium-sized and
small organisations including goals, objectives, market share etc. Along with it, interrelationship
between departments that supports the organisation in achieving its goals and objectives.
LO1
P1 Overview of different types of organisations and the growth of international business.
Different kind of organisations are exist in marketplace i.e. profit, Non-Profit and non
governmental whose structures are different with each others. Their policies and strategies are
also vary because of their mission and vision are different with each other. Major motive of
some organisations is to sustaining within the marketplace whereas other organisation wants to
enhance their profit and market share in market. Types of organisations along with purposes are
given as below:
Public sector company
These organisations are formed by governmental authorities or bodies so as to serving
the needs of citizens. Functions and duties of these organisations are framed according the needs
of citizens along with they offers products and services in market not for earning profit whereas,
they perform their functions so that specific needs and wants of customers can be fulfilled in
easy manner (Adeoye and Elegunde, 2012). These organisations have rights to sell their shares
publicly. National Health organisation is the taken organisation as an example of public
organisation.
Purpose
National Health service is formed with a purpose of providing appropriate medical
services across the UK along with removing inequalities from the health services. Most of the
services which are offered by company are free of cost.

Legal Structure
 Central government- This is the main legal structure in which policies related with
health are formed for maintaining health care service across the nation.
 State government- In it, board of members and responsible persons have duty to
maintain health care services at state level.
 Local government- This is the lower level of legal structure in which authorised persons
of NHS have duty to maintain health services in a small area such as city or town.
NHS is a public organisation which is formed by government of UK so as to maintaining
healthcare services across the UK (Andersson, Forsgren and Holm, 2015). Company's functions
are divided in primary, secondary or tertiary sector in which they first contacted with patient
discuss their problems then provide services accordingly. Due to which company have to follow
central structure so as to managing their operations.
Advantages- The main advantage of legal structure of public organisations are that specific
responsibilities are provided to authorised persons so that healthcare and medical needs of
customers can be satisfied in easy manner.
Disadvantages- Due to larger structure and shortage of medical practitioners patient's needs are
not be satisfied effectively which can be considered as the main disadvantage of legal structure
of NHS.
Voluntary Organisation
These are those organisations who performs duties so as to serving needs of needy
people. These associations mainly works for satisfying the needs of needy and poor citizens of
society without making profits so that they can live their livelihood easily. Taken organisation
for this kind is Oxfam which is a non-profitable organisation and works for welfare of societal
individuals. Company performs its functions in tertiary sector (Belás and et. al., 2015).
Purpose: Main purpose of Oxfam is to removing poverty, educate the people and fulfil
the basic needs of needy individuals
Legal Structure
 Trustee- In this kind of structure, some responsible persons are authorised by company
so as to controlling whole activities and functions.
 Charity- In it, funds are arranged by donors or investors and used in well-being of
society.

Oxfam follows charity structure in their working and formed under the charity Act, 2011.
Due to this act, volunteers of firm have no right to making profit from the functions of firm.
Advantages- Main advantage of legal structure of non-profitable organisation is that, they works
for maintaining well-being of society.
Disadvantages- As per their legal structure these firms are based on donations due to which
some of these organisations fails to adhere their duty because they having less amount to fulfil
the needs of societal individuals (Chang, 2016).
Private Organisation\ profit organisations
These associations are controlled or regulated by single person or a group of individuals
with a motive of earning profitability through satisfying the needs of customers. Taken
organisation for this kind is M&S which operates its business across the world. Its offering
includes daily house-hold accessories, clothing products etc.
Purpose
Main purpose of Marks and Spencer is to offer high quality of products and services to
the customers so that customer base and market-share can be maintained in marketplace.
Legal Structure
 Sole proprietorship- This is a easiest form of ownership in which a single individual
have to take decisions for growth and success of organisation.
 Partnership- In this kind of structure, two or more individuals are comes together and
makes agreement to perform business activities together. They shares their profit and loss
equally.
 Private Limited companies- These companies are formed by single or a group of
individual and before formation they have to take all the necessary licence from company
House UK. These organisations have no right to sell their shares publicly whereas they
performs their duties to earn profitability (De George, 2011).
As Marks and Spencer is engaged in retail sector and provide products and service in
return of earning money. Therefore, legal structure of private limited company is applicable on
its functions. Company performs its functions in secondary sector as it provides products and
services to customers.
Advantages- Main advantage of legal structure of private limited company is that the financial
liability of the shareholders of company are limited to their shares.

Disadvantages- As per their legal structure, private limited organisations have to follow more
instructions which are provided to them by governmental authorities.
 Micro small and Medium-size Enterprises – In which, micro and small organisations
is the smallest part that are formed with a less amount of funds such as 50000 pounds
along with a small number of employees. Purpose and objectives of these firms is to
satisfying the needs of customers so that they can survive in marketplace. Example of
these organisations are carpenter, road side grocery shops etc. who provides products and
services in a smaller area of market so as to satisfying their needs. Whereas, medium-
size organisations are those which is started with an amount of 10 million pound along
with 50 to 250 peoples. These organisations provides goods and services in larger area of
market than the small and micro firms so that growth and success can be achieved in
market. Example of these enterprises are Travelodge, Rowlinson. Purpose and objectives
of these organisations is to making innovations in the offerings so that market share and
customer base can be increased (Doppelt, 2017).
P2 Size and scope of the organisations
Different organisations are exist in market who performs their operations and functions
for fulfilling the needs and wants of customers. Size and scope of these firms differs from each
other due to their purpose and objectives as well as market and profit share. Differences between
large, medium-size and small organisations are given as below:
Basis Large organisation Medium-size Organisation Small Organisation
Definition These are those
organisations who
performs their functions
in more than one nation
and they have no
limitation of investing
share capital in their
business operations.
Chosen firm for this kind
is M&S which is a retail
These organisations
operates its functions in
more than one location in a
specific nation so as to
satisfying the needs of
customers. Chosen firm for
this type is Rowlinson
which is a school and
corporate uniform
manufacturer and provide
These firms operates
their functions in a
small area of market
so that they can earn
money for carrying out
their daily activities.
Example of these
organisation is
Clarasys which is a
management

organisation and provide
services across the world.
services within the UK. consultancy firm.
Goals and
Objectives
Goals and objectives of
Marks and Spencer is to
satisfying the needs of
customers (Erasmus,
Strydom and Rudansky-
Kloppers, 2016).
Rowlinson's goals and
objectives are related with
gaining competitiveness in
market.
Clarasys is a small
consultancy firm
whose goals and
objectives is to
satisfying the needs of
their clients so that
growth can be
achieved in market.
Market and
profit share
Stores of M&S are
spread in across the
world due to which
market and profit share
of firm is also huge.
The firm is operating its
functions throughout the
UK due to this, small
market and profit share is
gained by company.
Clarsys is a
consultancy firm who
operates its function in
London. Due to which
market and profit
share of this firm is
less than medium and
large organisation.
Growth and
Sustainability
As the company operates
its functions globally
then the growth and
sustainability of firm is
also high in market.
Rowlinson performs its
functions throughout the
United Kingdom due to
which growth and
sustainability is good in
marketplace.
Operations of firm are
situated in London and
Boston but growth and
sustainability of
Clarsys is low than the
M&S and Rowlinson.
Differences between Franchising Joint Ventures and Licencing
Basis Joint ventures Licencing Franchising
Meaning Joint ventures is an
agreement between
two organisation in
which they both
It is an arrangement in
which a company sells
its right to others so as
to growing their
It is also an
arrangement in which
franchisor or a
company provides

provide resources to
each other so that
goals and objectives
can be achieved in
marketplace.
market share
(Hamilton and
Webster, 2018).
authority to others for
using their brand name
at a specific charge for
conducting business.
Governance These are governed by
company law of UK
Licenced entity is
governed by contract
law.
Frachised
organisations are
governed by company
law.
Stakeholders and Responsibilities of organisation – Marks and Spencer is operating its
functions at global level due to which they having several stakeholders such as investors,
customers, employees etc. Therefore, management of company have responsibility to consider
their expectations so that any challenge from their side not be faced by organisation. For
example – Investors wants better return on their investments, customers wants better quality of
products and services etc. these are the expectations of stakeholders in which M&S have duty to
fulfil it effectively so that business operations can be carried out in easy manner.
LO2
P3 Organisation structures and functions
Organisational structures can be defined as an outline that defines the ways to its
managers or employees that how certain activities are performed within the firm so that goals
can be achieved in easy manner. There are several organisational structures which are followed
by the firms according to their size, scope, goals and objectives such as beuraucratic, strategic
business units, matrix etc (Hillary, 2017). Apart from that, transnational, global and international
organisations have to face several complexities in their operations. Such as due to presence in
number of locations these organisations can't adopt a single structure in their operations because
if they follows a single structure such as bureaucratic then employees of their branches which
are located in other nations will feel dissatisfied at workplace which is not beneficial for growth
and sustainability. That's why these organisations can't based on single organisational structure.
Marks and Spencer is a multinational organisation that follows flat organisational structure in

their functions so as to managing their functions. Departments of company and their
interrelations are given as below:
Marketing and production department – Marketing department of M&S is responsible
for promoting the products and services whereas, production department of company have to
produce products in effective quality so that needs and wants of customers are satisfied in
effective manner. For example – Marketing department performs market research so that total
demand of products in market can be identified in effective manner then these demands are
provided to production department so that inventory of products can be maintained within the
organisation. These divisions are interrelated with each other and provide very much support the
M&S in achieving pre-determined goals and objectives (Hilton and Platt, 2013).
Marketing and Finance: These both departments are highly interconnected with each
other which can be understand by an example – marketing department of M&S requires funds so
that promotional activities for offerings can be done in easy manner. Then these funds are
provided by the finance department which automatically leads the profitability and market-share
of M&S in Marketplace.
Advantages and Disadvantages of Interrelation – Interrelation is very important within the
workplace because it supports the organisation in achieving its goals and objectives. Whereas,
more interrelation between employees at workplace can leads delays in decision making which
is not profitable for productivity and profitability of M&S (Iansiti and Lakhani, 2014).
CONCLUSION
From the above discussed informations, it has been concluded that determination of size
and scope of organisation is very important as it defines whole financial position and stability of
organisation in marketplace. Along with it, interrelations between departments of organisation
are also very important because they supports the organisation in achieving their goals and
objectives in limited time-frame.

PART 2
Introduction
Business environment is consists of several factors such as internal and external factors that can
put positive and negative impacts on the growth and sustainability of firms. Therefore, it is very
essential for the organisations to make their focuses on these factors so that effective solutions
can be made for overcoming negative impacts of these elements. Chosen organisations for
completing this presentation is Marks and Spencer and NHS. This presentation will covers
PESTLE, SWOT and interrelation of strength and weaknesses with macro-environmental
factors.
Positive and negative impacts of the macro environment on business operations
In current scenario, identification of macro-environmental factors are very much
important because it can affect the whole profitability and growth of firm in negative manner.
Hence, management of M&S and NHS can use PESTLE analysis as it will helps them in making
valuable decisions for growth and sustainability of firm.
Political factors: These factors includes political interference, trade policies, tax duties
etc. that can influence overall performance of M&S and NHS in positive or negative manner.
Therefore, consideration of these factors are very important for Marks and Spencer while
conducting business in different nations (Kolk, 2016). Positive and negative impact of these
factors are given as below:
Basis M&S NHS
Positive Marks and Spencer is
operating its functions at
global level but corporation
tax in UK nation is remaining
constant from last three years
such as 19% that can helps the
firm in making growth of their
business in other nations.
Due to Brexit, legislations of
trade policies were revised in
UK because of this company' s
sales figures were reduced in
marketplace.
Negative Government policies of UK Government is reducing their

are more constant rather than
other nations which is
beneficial for NHS in gaining
growth and success within the
UK nation.
investments in public
healthcare firms which can
affect the growth and
sustainability of NHS in an
adverse manner.
Economical factors: This factor includes economic conditions of a nation and its
influence on overall profitability and growth of firm. Positive and negative impacts of these
factors are given as below:
Basis M&S NHS
Positive Economic conditions of societal
individuals of UK are good as they
prefers quality products for satisfying
their needs which defines positive
sign of economic factors for M&S
and its growth.
Infrastructure development of
firm can improve the
profitability and economic
development of nation.
Negative Company is highly dependent on
UK's economic conditions due to
which profit margins of firm in other
nations are reducing regularly.
It also affect an adverse
manner such as unemployment
rate can be increased within
the nation that can reduce the
buying power of customers.
Social Factors – These factors comprises of needs, wants, preferences of customers that
can affect the sales figures and profitability of organisation in positive and negative manner.
Basis M&S NHS
Positive Due to Digitalisation, company have
raised their profit share up to 7% in
UK which defines positive impact of
Nowadays, Citizens in UK
nations are more concerned
about their health that can

social factors on firm. provide opportunity to NHS in
enhancing their revenue
figures.
Negative Company is highly based on
traditional clothing due to which
company is failed is providing
products as per the needs of
customers. Due to this, 22 stores of
firm were closed by the managers in
2018 (Neelankavil, 2015).
Due to lower management
structure, patients does not get
expected medical services
which is affecting the whole
profitability of firm in negative
manner.
Technological Factors – These factors are related with R&D techniques, advancement
in techniques etc. that can impact the sales figures and profitability of firm in positive and
negative manner.
Basis M&S NHS
Positive Due to adoption of digital
technologies and wide presence on
internet have raises the sales figures
of firm.
Development of IT systems
live chat and e-mails allows
the patients to take treatment
online which is a positive sign
of technological factor for
NHS.
Negative Company is highly based on
traditional clothing due to which
company is failed is providing
products as per the needs of
customers. Due to this, 22 stores of
firm were closed by the managers in
2018 (Neelankavil, 2015).
Most of the citizens who have
health issues are illiterate or
not understand that how the
techniques will be used that
can become a negative impact
of technological factor.

Legal factors – These factors includes laws, legislations which are framed by UK
government that should be consider by the company for maintaining growth and sustainability in
market. Positive and negative aspects of this factor are given as below:
Basis M&S NHS
Positive Company is following each laws and
legislations of each nation where they
are operating so that growth and
sustainability can be maintained in
marketplace.
NHS is a public body so that
they should follow each laws
or legislations of healthcare
effectively for maintaining
brand value and good image in
the mindset of customers.
Negative Due to Revised tax duties and
legislations after Brexit, company has
faced high loss figures in market.
New healthcare laws are
formulated by healthcare
department of UK so that it
can lead adverse impact on the
overall profitability.
Environmental factors – Factors that are related with environment of a particular place
such as climates can posse either positive or negative impacts on the growth of firm. Positive
and negative impacts of these factors on M&S and NHS are given as below:
Basis M&S NHS
Positive Company is following Environmental
act, 2010 which is formed by UK has
made improvement in the sales
figures of firm.
NHS is following Green
policies of government due to
which company's brand value
or sustainability is maintained.

Negative M&S is a multinational organisation
but they have to made some policies
related with waste management so
that profitability can't be affected in
negative manner.
Not consideration of
environmental laws can leads
the firm towards downfall
position in market.
SWOT analysis of M&S:-
Strength
 Provide high quality products is the major strength for M&S that makes it successful.
 M&S try to make customer more comfortable by providing proper shopping environment
to the customers.
 It has more than 1000 stores which are present in 40 countries.
 More than 80,000 people are employed by mark & Spencer.
 They have their own labels of brand almost all categories (Palgrave Macmillan,
London.Goel and Jones III, 2016).
 They deliver the product at cheaper interest rate to every customer.
 They have adopted new e-wallet system which is helpful for customers.
Weakness
 decreasing sales due to non trendy stores and bad publicity that increase the business
rates and higher staff cost.
 Increasing cost due to manual working because M&S following old techniques rather
than adopting new techniques.
 Experience employees are not being connected with company for longer period of time.
Opportunities
 Developing internet technology provide an opportunity to increase product demand in
online market.
 Develop innovative clothing segment by increasing outlets all over the world will
increase the business.
Threats

 changing taste and preference of the customers towards clothing.
 Great competitor available in the market in comparison to M&S like Zara,united col ors
of Benton, Tommy high-flier etc.
SWOT of NHS
Strength
 Range of medical services are provided by firm which makes its strengthen in
marketplace.
 Loyal and Dedicated staff workers are providing maximum contribution in healthcare
services of organisation.
Weaknesses
 Less funds are provided by government which have restricted the firm in improving
healthcare services
 NHS is a public health organisation but due to poor management structure company is
not getting attraction of large number of patients.
Opportunities
 Company can introduce online appointment and prescription about treatment via online
methods which will helpful for firm in improving its brand image in healthcare sector.
 Segmentation of healthcare services with desired employees can provide opportunities of
expansion of business operations.
Threats
 Due to less support from the government company's profitability can be reduced in
marketplace
 Tough competition can be faced by private healthcare organisation that can reduce the
brand image and revenue figures of firm.
Influence of swot in decision making
All organisation have target that include creating a sustainable competitor advantage
over their rival. This require organisation to formulate effective strategies that will help to grow.
An effective strategic decision making depends on the organisational internal strength, weakness
and external opportunities and threats analysis. Every business must utilize all its strengths,
improve weaknesses and protect against their threats.

Interrelation of strengths and weaknesses with external macro factors
The interrelation of strengths and weakness with the macro external factors is discussed
below which can be used by the managers of KFC as discussed below:
 POLITICAL- In this factor various government policies do come where it do checks
whether government is stable or not and if not then it will directly impact on the
company. The main strength of an organisation is they have almost 1000 and that is just
because of political stability which one of the main strength. When it comes to
weaknesses, thy are unable to handle most of the store in systematic manner.
 ECONOMICAL- The main strength of organisation is the that are delivering the
products to customer at minimum interest rate. When it comes to weaknesses, that they
are lacking the experience employees the company which is creating negative impact on
a company.
 SOCIAL- The main strength of a company is that they are being able to deliver health
environment for customer while shopping with M&S. When it comes to weaknesses, that
are unable to do better advertisement which has increased the overall cost of a company
and even it has a negative impact too.
 TECHNOLOGICAL- The main problem of the company is that they are unable to
adopt any of the new techniques which shows that how weak the organisation is in
current scenario. While talking about the strength company has started e-wallet system
which has been providing better result to M&S.
Conclusion
From the discussed informations, it has been concluded that determination of internal and
external factors are very important as they helps the company in effective decision-making.
Along with it, for determining these factors in effective manner company can conduct PESTLE
or SWOT analysis.

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