Business Environment Concept PDF

Business Environment

Executive Summary:
Business environment consist the external and internal factors which includes the goods
and services which are offered by company and labour, resources and many more. Business
environment includes external factors which helps in expanding the business and also influences
the business by conducting research and development. The primary purpose of this study is to
analyse those factors which affect the company and its operational activities. This report is based
on the Barratt developments which is a property development company in UK and operates a
network of over 30 divisions. This report covers knowledge and understanding of an organisation
and how it is structured and managed. It also describe the abilities of external environment and
for this PESTLE analysis is evaluates which describes the opportunities for the company.

Table of Contents
Executive Summary: ......................................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
(A) Analyse how selected company is structured and governed................................................4
(B) Brief discussion of how firm is governed.............................................................................6
TASK 2............................................................................................................................................7
Importance of PESTLE analysis for business organisation........................................................7
TASK 3............................................................................................................................................8
(A) List of PESTLE factors that influence environment of selected organisation.....................8
(B) Examples in relation with selected organisation.................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business environment is the sum total of all internal and external factors which involves
customers needs, employees, clients, suppliers, clients, innovation in technology, activities by
government, owners, social trends and so on. All of these factors always influence overall
functions and operations of an organisation and also observe that how a firm works indirectly or
directly (Avramenko, 2012). These factors also influence entire business environment of an
organisation as well as their situations. This report is based on Barratt Developments PLC
company which was founded in the year of 1958 and one of the largest residential property
development organisation within the UK. Further discussion will be based on overview and
structure of selected organisation. After this it will focuses on importance of PESTEL analysis in
context with organisation. At last, PESTEL framework in order to analyse external environment
of selected organisation will get covered appropriately.
TASK 1
(A) Analyse how selected company is structured and governed.
Overview of selected organisation
Barratt Development Plc is a wide organisation within the UK and deals with residential
properties forms by operating a specific network across 30 divisions. It was formed in 1958 and
controlled by Sir Lawrie Barratt. This business firm headquartered in the Coalville, England,
UK. Whereas, CEO of this organisation is David Thomas and Chairperson is John Allan. Along
with this, it has been listed on the London Stock Exchange since 1968. on the other side this firm
always make unique strategies and techniques for satisfying their overall customers needs and
wants.
History: During 1962, Lewis Greensitt (Newcastle builder) and Lawrie Barratt (an
accountant) opt few different strategies and tools in order to control overall functions of an
organisation with the expansion plan of 5 years. In 1968 respective firm was display on Stock
exchange as Greensitt and Barratt through which they achieved effective success and growth of
company appropriately. After all this, respective firm was renamed in 1973 as Barratt
Developments. This firm has been made huge series of acquisitions and transforms the
organisation from a local housebuilders to national firm building approximately 10,000 houses in
a year. One of the largest acquisition from this company were the Manchester firm of Arthur
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Wardle and Luton-based Janes. Few years ago expansion of this company was high-profile
marketing with the national advertising to fulfil clients needs and wants. After having some
information about this firm in January 2016 it has announced a specific plan in order to open
new sites by covering 1400 new homes across the Scotland. After a year it was observed that
Barratt Developments had various plans to make lots of properties by having 2500 homes at 14
different sites in Scotland. Therefore, they achieved 5 star ratings within the Home Builders
Federation unique homes by giving better satisfaction to customers through which they can
survive for long duration of time at marketplace (The 5 Types Of Organizational Structures: Part
1, July 6, 2015 The Hierarchy).
Organisational structure: For managing overall function and business operations at
marketplace this firm uses hierarchical organization structure. With the help of this structure they
can run its business in a smooth way by giving better satisfaction to their employees. The main
motive of this structure is to provide better coordination between each and every employees
within the firm so that they can work according to decided hierarchy and not needed to face any
type of difficulties at workplace (Ghezzi, 2013). On the other side it is usually concerns as the
power of group with stipulated levels to manage overall work of an organisation in a simple way.
Therefore, it is beneficial for Barratt Development Plc to gain huge sales and revenue within
competitive world.
Illustration:1
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Source: Hierarchical Organisation Structure, 2016
From the above information this can be said that respective firm manages their business
at both national and international level by following appropriate market analysis as it is the main
element of business in order identify overall needs and demand of firm at marketplace. Analysis
of market is always based on quantitative or qualitative assessment of market. As per the national
level respective firm usually target their local customers who can be depends on this business.
These sort of customers helps them to reach their targeted goals and objectives. Whereas,
internationally they used so many thing in market like segmentation of people in various
categories so that they can provide more better services accordingly. Along with this, they
always able to understand customer's needs first and make unique services by which they can
make good value in front of customers across the globe. Therefore, they manage its market in a
easy way for both national and international level.
(B) Brief discussion of how firm is governed.
According to the overall research on the history of this respective firm that it uses
hierarchical structure and governed by Board of directors. By following appropriate chart of
Board Of Directors this firm has 9 BOD among them 6 are executives directors and remaining 4
are non executive board of directors in this firm. With the help of these sort of BOD respective
firm can develop unique brand value in front of people so that they can purchase their services in
a simple way (Glova, Sabol and Vajda, 2014). Together with, firm designs lots of different
financial terms and make customers experience better. It helps to enhance overall operations of
business at higher level. Apart from this they always used innovative sales and marketing tools
by which they can construct effective efficiency for targeting its potential customers and find
better opportunities in future.
For instance, the chairperson of this firm is John Allan, he is the business person and
reputed chairmen of housebuilder Barratt Developments plc. He has very good experience in
retail, logistics and housebuilding. He took business chairperson position in the year of 2015 By
having amazing experience in numerous fields. he managed each and every working function of
this respective firm and made unique strategies to deal with any kind of situation in business.
Whereas, Davis Thomas is the CEO of this organisation who was born in the 1963 and he is a
British businessman within Barratt Developments plc. He was appointed as CEO in 2007 within
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this respective firm. By having experienced persons in firm Barratt Developments plc able to
make unique relations with its customers and satisfy their overall needs and wants accordingly.
On the basis of this, relationship between Board of Directors and Stakeholders are given below:
According to the instructive roles and ownership perspective between BOD and
Shareholders, it has been clarify that relationship in corporate partnership is the simple term, in
which board of directors have responsibilities to overseeing several affairs in firm and protect
them with the help of stakeholders. In reference with Barratt Developments plc, BOD and
Stakeholders together makes unique strategies in order to achieve appropriate business
organisational goals and gain huge sales and profits (Tho and Trang, 2015).
Responsibilities of BOD to Stakeholders, it is mainly related with duty of care, duty of
loyalty and so on. All these sort of duties are needed by BOD by which they can develop their
interest for betterment of an organisation. As per the respective firm BOD always follow specific
structure of several duties and consult with stakeholders to take effective decisions for
betterment of future. Therefore, board of directors and stakeholders are interrelated with each
other and plays crucial role in respective firm. They are also helpful to increase firm's
productivity and make them attractive in front of their overall employees & customers as well
(Iyer and Henderson, 2012).
TASK 2
Importance of PESTLE analysis for business organisation.
PESTLE analysis refers to the appropriate framework which is used by different
marketers and business firms to evaluate overall macro environment appropriately. Those factors
have directly impact on organisation's business and functions. With they help of this they can
also identify overall treats, weakness, opportunities and weaknesses. In reference with Barratt
Development plc this is very helpful term by which they can make its potential customers and
able to gain huge profit by gaining competitive advantages.
Significance of PESTLE analysis:
PESTEL plays very important role to increase overall business growth every day. It is
also known as the key of planning and overall strategies of marketing. Some following
importance are given below:
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 It is helpful for every organisation in order to make best strategic planning for expansion
of their business.
 It can defines as the start up or an organisation as well by which business owner can take
help to analyse overall significant changes within the political, environmental, legal,
social, technological and economical.
 With the help of this firm can operate different types of business departments such as
sales, marketing, accounts and so on. Along with they can can generate overall sales or
revenue inside the organisation. Therefore, PESTLE is much essential and plays
important role into the each and every business.
Significance of PESTLE analysis in context with organisation:
According to the organisation perspective it is much essential to analyse overall factors
which influence them. Therefore PESTLE impact on all operation of Barratt Development plc in
a positive way. By having this analysis they can think about negative or positive aspects before
entering in new market and able to examine several method which can be beneficial for them.
Therefore, this analysis is very helpful for evaluating different types of forms of business in
order to gain better profits in future. So that every firm is needed to carry this analysis (Nofal and
Yusof, 2013).
TASK 3
(A) List of PESTLE factors that influence environment of selected organisation.
Business environment refers to the internal and external factors which mainly influence
overall situation of an organisation. This factors includes in different types of elements like
clients, owners, innovation in techniques and so on. With the help of this sort of environment
Barratt Developments Plc is able to make unique tools and strategies by which they can treat
their employees and customers in a better way. In order to known more about this business
environment there is PESTLE analysis for every business firm, explained below:
PESTLE analysis refers to the specific framework which is mainly used to identify
various sort of key factors such as political, economical, sociological, technological, legal and
environmental. All these factors influence overall organisation from the outside. Somewhere, the
analysis of this form is very flexible so that firms can easily use this structure in a several ratios.
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Political: This factor plays very important role in order to define those factors which
directly influence overall system of an organisation. In context with Barratt Development plc, it
proved as a profitable factor in certain countries. As this firm deals in different locations so they
expose its various political environment. With the help of this they achieved huge success in a
dynamic way across the various countries. By having this firm can get idea about political
stability and their importance, level of consumer's needs and wants and so on. Therefore, it
influence this industry in a positive way. Along with this, they also focuses on their employee's
benefits in order to run its business at smooth level.
Economical: This system includes inflation rate, taxation rate, interest rate as well as
economic cycle which defines overall aggregate investment in the economy. In reference with
Barratt Development plc, they can use this factor for knowing appropriate growth rate, inflation
of industry's economy in order to spend their money for better expansion. It impact on this firm
positively by which they have ideas about education level in the economy, infrastructure quality
and so on (Palepu and Healy, 2013).
Social: It refers to the way of doing so many things which impact on overall business
operations of any firm. In context with Barratt Development plc, it plays great role which helps
to understand overall customers needs so that they can design accordingly. Along with this it is
helpful for them to analyse demographic levels of population, education standard within this
industry, broader nature of the society and so on.
Technological: This is an important point across the globe. From few year ago respective
firm is not giving any chance to another firm for bring some changes. This is because respective
firm always makes unique services with huge techniques to gain competitive advantages
effectively. For maintaining this identity at marketplace they used effective tools and techniques
like modified electric cars to its clients for visiting any other site and so on. It influence all over
the people worldwide. Therefore, technology impact on goods and services offering as well as
overall value change of consumer goods industry (Theodorakopoulos, Kakabadse and
McGowan, 2014).
Legal: In numerous countries, legal framework are not enough to protect intellectual
property rights within the organisation. Therefore, Barratt Development plc is required to
identify overall market condition before expending business any other place. There are some
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factors which should analyse this company first before entering like intellectual property law,
discrimination law, data protection and so on.
Environmental: At present world, there are different types of norms, market and
environmental standards which can influence overall profitability of an organisation. As per
Barratt Development plc, before expanding its business they should analyse overall rules and
regulation of another country by which they can make their term accordingly. This factor
generally based on climate change, environmental pollution and laws etc. by having this
knowledge they can make them better and able to give better performance within the
organisation.
(B) Examples in relation with selected organisation.
There are different types of factors names as PESTLE which influence overall function of
this organisation in a positive way. Those are following as under:
Political factor: with the help of this factor Barratt Development plc can use few
examples for understanding overall impact, given below:
Political stability/ Instability: This factor brings few changes within the industry which
directly impact business activities. It is based on legal framework which is originated by
government. By having this factor respective firm can increase their cost and able to face any
risk to gain international competitive advantages appropriately. Therefore, it is very helpful for
firm which helps them to gain better opportunities in future by observing overall condition of
market (Sena Ferreira and et. al., 2012).
Economic factor: This factor shows various rates, which is used by respective firm to
better existent at marketplace. Example of this factor is given below:
Inflation rate: It is the process of increasing consumer pride index which is the weighted
average of overall prices for several goods and services. This is used by respective firm in order
to represent their overall services to its customers. Therefore, it is beneficial for them to achieve
goals (Savrul, Incekara and Sener, 2014).
Social factor: This factor consist age distribution, population growth and so on. There is
one point in relation with Barratt Development plc, given below:
Age distribution: It is also known as age composition in order to study about overall
population by having knowledge about number of persons in country respective firm can make
their service at that level in which they can satisfy customer's needs.
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Technological factor: It consist so many factors but herein, one factor of them is given
below:
Level of innovation: This is mainly used by every firm in order to use existing method.
Therefore, this is also used by respective firm to make their every operation different and good in
front of customers.
Legal factor: This factor involves in various forms, one of them is described below:
Employment law: It is the act of law which is mainly related with working age of people
in firm so that respective firm can give hourly wages as per their performance.
Environmental factor: This factor involves in lots of changes whereas 1 change of this
factor given below:
Environmental policies: It refers to the values of persons in which respective firm can
make better relations with their customers by following all government rules and regulations. At
last this can be considered as a social values and morals (Schaltegger, Lüdeke-Freund and
Hansen, 2012).
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CONCLUSION
According to the above mentioned report it has been concluded that, business
environment is the process of combining internal or external factors together which mainly
impact on business activities or situation in every firm. As per this assignment Barratt
Development plc has been used this scenario in a perfect way. By having different types of
PESTEL analysis they can get better options for gaining better success in future. Whereas, it is
very important for every organisation to achieve organisational goals effectively. By having sort
of examples from PESTEL they can make them attractive and able to fulfil every customer's
demand appropriately.
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REFERENCES
Books and Journals
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision. 51(7).
pp.1326-1358.
Glova, J., Sabol, T. and Vajda, V., 2014. Business models for the internet of things environment.
Procedia Economics and Finance. 15. pp.1122-1129.
Iyer, B. and Henderson, J. C., 2012. Business value from clouds: Learning from users. MIS
Quarterly Executive. 11(1).
Nofal, M. I. and Yusof, Z. M., 2013. Integration of business intelligence and enterprise resource
planning within organizations. Procedia Technology. 11. pp.658-665.
Palepu, K. G. and Healy, P. M., 2013. Business analysis and valuation: Using financial
statements, text and cases.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150.
pp.35-45.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2012. Business cases for sustainability:
the role of business model innovation for corporate sustainability. International Journal
of Innovation and Sustainable Development. 6(2). pp.95-119.
Sena Ferreira, P. 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.
Theodorakopoulos, N., K. Kakabadse, N. and McGowan, C., 2014. What matters in business
incubation? A literature review and a suggestion for situated theorising. Journal of
Small Business and Enterprise Development. 21(4). pp.602-622.
Tho, N. D. and Trang, N. T. M., 2015. Can knowledge be transferred from business schools to
business organizations through in-service training students? SEM and fsQCA findings.
Journal of Business Research. 68(6). pp.1332-1340.
Online
The 5 Types Of Organizational Structures: Part 1, July 6, 2015 The Hierarchy.[Online].Available
Through;<https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-
organizational-structures-part-1-the-hierarchy/#2c9b03ee5252>
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