Global Business Environment Analysis

This assignment requires a comprehensive analysis of the global business environment, focusing on how it influences firms' strategic decisions. Students will delve into concepts like political, economic, social, technological, legal, and environmental (PESTLE) factors, as well as utilize SWOT analysis to evaluate the strengths, weaknesses, opportunities, and threats faced by businesses in a dynamic global landscape. The assignment draws upon various academic sources and real-world examples to demonstrate a thorough understanding of global business dynamics.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure. .1
P2 Size and scope of different organisations..............................................................................4
TASK 2............................................................................................................................................5
P3 Interrelation between different organisational departments and their link to objectives.......5
TASK 3............................................................................................................................................7
P4 Impact of macro-environmental factors.................................................................................7
TASK 4............................................................................................................................................8
P5 Internal analysis of organisation for identification of strength and weaknesses...................8
TASK 5..........................................................................................................................................10
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
...................................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment is sum of external and internal factors which have influence over
the business operations. It is an obligation upon manager of organisation is to keep these factors
in mind while making decisions. Internal factors are related to organisational capacity which are
under control of the management. To attain success and accomplish their objectives required to
adopt such measures which strengthen their internal position. External factors are such which are
not under the control of management such as political, economical, social, technological, legal
and environmental. It is important to oversee the impact of all these factors to attain
sustainability in future period of time. Unilever is consumer goods company which is
headquartered in London (Avramenko, 2012).
In the present report explain about different types of organisation along with their
purposes and legal structure, size and scope of various organisations, relationship exist between
different functions performed within the organisation along with their link with objectives and
positive and negative impact of external factors. Also, Internal analysis to identify strength and
weaknesses and interrelation of strength and weaknesses with macro environmental factors.

TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
There are different type of organisations are working in environment. These organisations
are known as public, private and voluntary. All the organisations having their different objectives
and legal structures. It is the duty of the manager of organisation is to follow such structure while
performing their functions. Types and purposes of all these public, private and voluntary
organisation is defined below:
Private organisation
This will includes all the organisations which are working or the purpose of earning profit
for the benefit of their different stakeholders. These kind of organisations are privately owned by
individual and government of country is having no significant control over them. There are many
restrictions are imposed by the government on the working of such organisations and they are
required to follow while operating their functions (Bovee, Thill and Raina, 2016).
Unilever is consumer good company which was established in 1930 in London UK. The
main products which are delivered by organisation includes food and beverages, cleaning agents
and personal care products. It is analysed that Unilever is Europe's seventh most valuable
organisation and also world's largest organisation in terms of revenue by 2012. It provides their
functions in more than 190 countries with the help of more than 169000 employees.
Purpose of Unilever
 To earn huge amount of profits for the benefit of stakeholders
 Attaining the target of zero impact upon environment through their business functions
 Improvement in the living standard of individuals of society
 Development of the highest standards of corporate behaviour
Legal structure of private organisation
Partnership: It is a type of business which is formed by the group of individuals for the
purpose of attaining common business objective (Cai and Yang, 2014). All the partners are
equally liable for the liabilities which are created as per the performance of business functions.
The profit and loss is shared equally among all partners or as per the ratios which is decided in
the agreement. The liability of all the partners is limited in nature.

Sole proprietorship: This kind of business is setup by single person. The main objective
of this type of business is to survive in market. The liability of this single person is unlimited
towards the business. The owner of organisation has total control over business operations.
Limited companies: This will be of two types limited by shares and guarantee. The
liability of all the members is limited to the extent of unpaid amount of shares and guarantee
which is required to pay off at the time of call. Such organisations are separate legal entity from
their owners (Chavis, Klapper and Love, 2011).
Advantages and disadvantages of private company
Advantages Disadvantages
Less interruption by government authorities More legal restrictions imposed by
governmental authorities
Total control possessed by individuals Restricted to invite public to subscribe their
shares so, difficult to raise funds.
Public organisation: The will includes such type of organisations upon which
government of nation has significant control over functions. The different type of activities
which are majorly covered under public sector is related to police, military, transport, education,
infrastructure, healthcare etc. These organisations are working with the aim of providing
maximum benefit to the individual of society.
NHS is public organisation which provides services in all over the world. The main aim
of organisation is to provide free medical facilities to the poor people of society. The other
services which are provided by NHS includes optical and dental care. They wants that no body is
deprived from the basic medical facilities (Commander and Svejnar, 2011).
Purpose of NHS
 Provide basic medical facilities to the individual of society
 Attainment of quality in their services fro the optimum care of patients
 Act as the voice of different health providers to provide information regarding different
policies related to health aspects
Legal structure of Public company
 Central government: They provide functions related to operation of the department of
state and central government departments
2

 State government: They provides functions related to oversee of the functions of state
government agencies (Cuervo‐Cazurra, 2011).
 Local government: Their main aim is regarding functioning of different operations of
public organisations
Advantages and disadvantages of public organisation
Advantages Disadvantages
Make the society better place to live Highly controlled by government authorities
Helps in improvement of the living standard of
individuals
Large number of legal requirements are
imposed upon public organisations
Voluntary organisation: This will includes all such organisations which are operates
their business activities for he purpose of development of society and not for earning profits. All
the functions are provided with the helps of volunteers. To form such kind organisation required
to take the approval of government and follow the guidelines provided by them.
Oxfam is voluntary organisation which formed with the aim of removing poverty from
the society. There are many activities which are simultaneously provided by this organisation
includes advocacy, disaster relief, policy research, pro etc. This organisation was established in
1942 and now provides their services in all over the world. They also provide food relief to the
poor individuals of society with the help of volunteers and government of England (Gebauer,
Paiola and Edvardsson, 2010).
Purposes of Oxfam
 Helps in removal of poverty from society
 Provide secure future to the individuals of society which is free from poverty
 Holding up educational programmes which helps to spread awareness among th
individual of society
Advantages and disadvantages of voluntary organisation
Advantages Disadvantages
Large number of volunteers are working to
serve their services
Not having any guarantee about coherence of
transaction
3

High financial support from government
authorities
Large number of conditions need to be fulfilled
to carry business in voluntary sector
P2 Size and scope of different organisations
It is observed from the above analysis that organisation is of three types mainly which are
defined as public, private and voluntary. The size and scope of organisation depends upon their
nature (Halbert and Ingulli, 2011). Size of organisation covers about the business operations
which is have in different nations along with their capacity of earning revenue. On the other
hand, scope of organisation provides the information about different type of services which are
provided by them. The size and scope of these different type of organisation is defined below:
Unilever
Size: Unilever is transnational consumer goods company which provides diversified
products such as food and beverages, cleaning agents and personal care products. The total
number of brands which carried by this organisation is around which helps in earning the
turnover of 50 billion euros in 2016. In terms of profit, this organisation is considered as world's
largest organisation in 2012. The revenue which is earned by organisation in 2017 is around
$62.622 billion.
Scope: This will defines about the products and services which are provided by the
organisation. The different type of offerings which are provided by Unilever includes personal
care products, food and beverages and cleaning agents.
Vision: The main vision of Unilever is to build sustainable living common place which is
proved as the best way to to grow business with continuous rate. Here, more emphasis provided
on sustainability in terms of consumer services (Hamilton and Webster, 2015).
NHS
Size and scope: NHS was founded in 1948. The total number of employees working in
NHS is around 1.5 million. They provide health facilities irrespective of their wealth. The other
services which are provided by NHS includes Optical and dental care. The services which are
4

provided by organisation is free of cost to the poor individuals of society for improvement of
their living standard.
Oxfam
Size and scope: This organisation is established in 1942. The total number of charitable
organisations which works under common brand name are more than 20. all these working for
removal of poverty from society. The type of services which are provided by them includes
advocacy, disaster relief, policy research, poverty eradication and pro-migration (Hilton and
Platt, 2013).
Stakeholder analysis
This will includes determination of different stakeholders along with their power of
influence upon business operations. This can be understood from points given below:
 High power – fascinated people
 High power – less fascinated people
 Low power – less fascinated people
 Low power – fascinated people

TASK 2
P3 Interrelation between different organisational departments and their link to objectives
The major objective of any organization is for all its workers to work as a team. In large
organization workers are organized into their department, according to a specialisation. The
organizational structure defines the relationship and interaction between the employer and
employees to identifies how the chain of command runs through at different levels.
Organizational structure can be categorized into two different dimensions that is vertical and
5

horizontal (Klapper, Lewin and Delgado, 2011). The vertical organization structure can flow in
two ways such as downward. It includes top to bottom, whereas, in upward the direction flows
from bottom to top. In a horizontal organizational structure involves the flow of direction in
different department. The major objectives of an organizational structure are describe in detail
as:
 Flexibility: Through, organizational design helps to provide flexibility for decision
making, in their authority and departmentalisation. This will increase the efficiency level
of an individual in the Unilever company and bring the accuracy or effectiveness among
the employees.
 Coordinating the components: In the organizational structure, managers need to tie all
the departments together to ensure coordination and collaboration across the departments.
It assists in arranging the employees according to the internal environment of an Unilever
organization (Osterwalder and Pigneur, 2010).
 Integrates elements: This includes growth, evolve and respond to changes. For instance,
the strategic need to enhance the quality services and creating teams or re-delegating
authority.
The interrelation between the different departments are as:
Marketing Department: This department is the main part for producing the sale in a
marketplace. Hence, Unilever will responsible for the demand of products in a competitive
world. It focuses on the demand and the needs of a customers, targeted sales and research of the
marketplace (Pikka, Iskanius and Page, 2011).
Financial Department: It will responsible for the financial budget of a company. This
includes the allocations of resources, resource estimation and scheduling as per the requirements.
Organizations are set up in specific ways to accomplish the different goals, it helps to overcome
from the hinder and its progress towards completes their goals. The different organizational
department in the organization structure of Unilever are discussed in below:
Organization department includes the following department are as: Functional Department : This type of organizational structure works on the
management functions in a specific manner. The common departments are as follows:
6

 Planning: It refer to the planning for a future. It involves what to do, when to do, how is
to be done and by whom should be done. This bridges the gap between the present and
the future needs. Organising: It refers to the arrangement of the department which can help in improving
the efficiency as the work is in organised form. This will enhance the abilities and the
skills of the subordinates. It includes the authorities, responsibilities and accountability of
an individual employee. Staffing: This function of an organization is the most important structure in the business.
It includes the manpower and human resources of the company which will increase the
productivity for expanding the business organization (Prajogo, 2016).
 Controlling: It measures the actual performance with the standard performance of a
company. Through, this corrective measures can be taken for controlling the performance
of the business.
 Divisional Department: This structure is a set of division in which a business is divided
into a smaller groups, which can easily managed by the supervisors of the organization.
It offers greater flexibility to a large company with many divisions.
 Matrix Department: The third main type of organization structure, it is a hybrid of
divisional and functional structure. The advantage of a matrix structure is that employees
have responsibility not only for their department but for organizational projects. It
focuses on the company's resources on the specified project, thus enabling better planning
and controls.
 Line and Staff Department: In this type of organization structure, it is used for large
enterprises. It is a modification of line organization and it is more complex than line
organization. But, the power of command always remains with the line executives and
staff supervisors guide, advice and council the line executives. The whole organization is
divided into different functional areas to which staff specialists are attached.
7

TASK 3
P4 Impact of macro-environmental factors
Macro environmental analysis helps in ascertaining the impact of external factors upon
business operations which is understood from the points defined below:
Political and legal factors :-
Positive Impact :- In many country's government offer trade free facility to men for
economic development of nations. Maintain good relationship with government give opportunity
to Unilever company for enhancing and rising business at internationally ,With the help of
stability in political factors like tax benefit.
Negative Impact :- Purchasing power of buyers are weak so that they are not buy
expensive goods. Consumers demanded for a cheap products are big problem to Unilever
company because negative impact on net profit and cash flow. In environment tax reforms,
policy and regulation are changes according to government they factors are negatively affected
to company product ( Pulver, 2012).
Economical and social factors
The factors which are included in this point are related to education, flow of cash, age,
inflation and deflation rates etc.
Positive impact: If education is good and flow cash is high in an economy then this will
have positive impact upon business. This will provides opportunity is to easily expand business
operations.
Negative impact: Presence of deflation in an economy has negative impact upon demand
and sales of product.
TASK 4
P5 Internal analysis of organisation for identification of strength and weaknesses
Internal analysis is the process which includes the activities related to identification of
aspects which are present within the organisation and turns into their strength and weaknesses.
The tool which is basically used by the management of organisation regarding internal analysis is
known as SWOT analysis (Reed and et. al., 2013). This will enables the manager of organisation
is easily know their strength, weaknesses, opportunities and threats. This will provides the
8

opportunity is to rebuilt their strategies according to their capabilities and attain success in future
period of time. Unilever is multinational consumer goods company which deals in diversified
goods such as food and beverages, cleaning agents and personal care products. There are large
number of employees are working in organisation which is around 169000 who serve their
services in more than 190 countries. It is observed that Unilever is seventh most valuable
organisation in Europe and oldest multinational companies. The SWOT analysis of Unilever in
respective of identification of strength and weaknesses is defined below:
Strengths
Global organisation having operations in more than 190 countries: It is observed that
Unilever is enjoying their business activities in more than 190 nations which is beneficial in
making of high international brand image of organisation (Reinhardt and Stavins, 2010).
High brand recall among customers: Unilever is established their business in 1930
which facilitates over the years is to create their unique image in the mind of customers which is
results in great strength for organisation as their brand products are first preferred over others.
Deep brand portfolio with various range of products: There are large number of
products are provided by Unilever n market such as personal care, cleaning, food and beverages
etc. They work with having the aim that no body goes empty handed. Such kind of deep portfolio
is always the strength of organisation.
Heavily funded research and development activities: There are large number of funds
are invested by the organisation on research and development activities to produce new and
innovative products as per the preferences of customers. This will provides the opportunity to
become most loved organisation in between customers.
Expertise in distribution channels: There are large number of distribution channels of
Unilever which enables them to serve in every corner of different nations. This will be great a
strength for organisation to effectively cater the needs customers on arrival of demand.
Weaknesses
Imitable products: All the products which produced by organisation are imitable in
nature which is easily copied by others in terms of features, design and utility. Such kind of
issues has direct impact upon their brand image and sales figure.
9

Limited business diversification: It is observed that Unilever has weak diversification
of business operations. They have broad product mix but deals only in consumer goods which is
limited nature.
Huge dependence upon retailers: The sale of the products of Unilever is highly
depends upon the retailers as they have direct impact upon the buying behaviour of consumers.
Such dependency turns into their weakness.
Availability of substitutes and low switching costs: It is observed that large number of
substitute products are available and cost efficient to switch from one brand to another. This will
results in the weaknesses of organisation as they have to face high amount of competition in
market.
Opportunities
High demand in growing economies: There are large number of developing nations
where Unilever has the opportunity to place right products in right time for improvement of
overall living standard of the individuals of society.
Growing demand of health conscious products: The Unilever has the opportunity is
manufacture healthy food items as the large number of people in community becomes health
conscious and like to consume healthy food which is good for health. This will provides the
opportunity to explore new area.
Threats
High amount of competition: It is analysed that competition is highly increased in
market. There are many big retail outlets which comes up with their own brands and Unilever is
still dependent upon retailers which is a big threat in future period of time.
Growing popularity of Ayurveda products: The growth in Ayurveda products is seems
to be high in current period of time which is big threat for commercial organisations like
Unilever. In this this regard they takes one step forward and launch Ayush lever but still need to
go long way to sustain in market in this segment (Savrul, Incekara and Sener, 2014.).
10

TASK 5
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
Macro-environmental factors are such which are present within external business
environment and not under the control of the management of organisation. Such factors are
basically known as political, economical, social, technological, legal and environmental. From
the analysis of these factors it is observed that there is significant relationship is present of these
factors with the strength and weaknesses of organisation. This will improves the understanding
of manager in respect of different aspects which enables them to formulate new and innovative
strategies through which future objectives are easily achieved within stimulated period of time.
The relationship between both these macro-environmental factors with strength and weaknesses
is understood from the points which are defined below:
Strength-opportunity strategy: It is observed from above internal analysis that Unilever
has wide product portfolio and business operations in different nations. This strength of
organisation provides the opportunity is to expand their business in many other developing
nations where more demand is present regarding consumer products. This will enables the
organisation to attract the new customers and improve their customer base to earn large number
of profits through increase in their number of sales.
Strength-threat strategy: The major threat which is faced by Unilever is related to high
amount of competition and emergence of Ayurveda products. It is seemed that the core strength
of organisation is heavily funded research activities and effective distribution channels. This will
provides the chance to overcome from threats regarding high amount of competition through
production of new and innovative products which are unique in nature and having different
identity in between consumers.
Weakness-opportunity strategy: The weakness of Unilever is that they are highly
dependent upon retailers. From this analysis it is clear that power of retailers is high and having
significant influence over the operations of organisation. But in future this will helps to grab the
opportunities in developing nations through optimally utilise the power of their distributors.
Weakness-threat strategy: The weakness which has adverse impact upon the business
operations of Unilever is imitablity of their products. The products which are manufactured by
organisation are general in nature and easily copied by competitors. This will turns into threat as
number of competitors is increased due to imitable nature of products (Shigang, 2010).
11

CONCLUSION
It has been concluded from the above report that business environment is wide in scope
where different type of organisations are working such as public, private and voluntary. All these
organisations are different in nature and purposes. The main aim of public organisation is
provide optimum quality products to society and private organisation is having the aim of
earning large number of profits for the benefit of stakeholders. There are different departments
are functioning within an organisation which are known as marketing, finance, human resource
etc. which are interrelated to each other and helps to achieve organisational objectives. Internal
analysis of organisation helps in identification of strengths and weaknesses through which
potential opportunities are easily grabbed in future period of time.
12

REFERENCES
Books and Journals
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Cai, S. and Yang, Z., 2014. On the relationship between business environment and competitive
priorities: The role of performance frontiers. International Journal of Production
Economics.151. pp.131-145.
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics.93(1). pp.309-337.
Cuervo‐Cazurra, A., 2011. Global strategy and global business environment: the direct and
indirect influences of the home country on a firm's global strategy. Global Strategy
Journal.1(3‐4). pp.382-386.
Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service business development in small and
medium capital goods manufacturing companies. Managing Service Quality: An
International Journal. 20(2). pp.123-139.
Halbert, T. and Ingulli, E., 2011. Law and ethics in the business environment. Cengage Learning.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Hilton, R.W. and Platt, D.E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan, London.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Pulver, S., 2012. Business and the Environment.
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
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.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
13