Global Business Environment Analysis

This assignment requires a comprehensive analysis of the global business environment based on eight given texts. The primary focus areas include the impact of globalization, gender, and firm size on business environment factors such as finance, growth, exports, ownership, performance, and product lifecycle management.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................4
P1. Describe the type of business if it is a sole trader, partnership or private limited
organisation, mention the purpose and ownership of two contrasting businesses. This must
include: an accurate and brief highlight on owners liability and debt........................................4
P2. Describe the different stakeholders who influence the purpose of two contrasting
businesses....................................................................................................................................5
TASK 2............................................................................................................................................6
P.3 Describe how two businesses are organised in terms of their structures and functioning
areas.............................................................................................................................................6
P.4 Explain how the style of organisation of your chosen businesses helps them to fulfil their
purposes.......................................................................................................................................7
Task 3...............................................................................................................................................8
P5. Describe the influence of two contrasting economic environments on business activities
within a selected organisation.....................................................................................................8
TASK 4............................................................................................................................................8
P6. Describe how political, legal and social factors are impacting upon the business activities
of the selected organisations and their stakeholders...................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business Environment is the combination of internal and external factors that influence a
company's operating situation. The business environment can include factors such as : clients and
suppliers; its competition and owners; improvement in technology; laws and government
activities; and market, social and economic trends. As a PR officer the role as given to me is to
make descriptions of two contrasting organisations that is Marks and Spencer Plc and National
Health Service. Through these two profit and non profit organisation respectively we will be
giving detailed information what kind of business environment exists in the market (Wetherly
and Otter, 2014).
TASK 1
P1. Describe the type of business if it is a sole trader, partnership or private limited organisation,
mention the purpose and ownership of two contrasting businesses. This must include: an
accurate and brief highlight on owners liability and debt.
Marks and Spencer(M&S)
It is an international company and is part of the tertiary sector. An international business is a
business that operates and sells products around the world, M&S trades in Europe, Middle East
and Asia. It is a public limited company, the public part of it means that shares can be brought by
the public and the limited company part means that it has limited liability. Having limited
liability has many advantages as it protects a shareholder from being responsible for more than
their share of the company so they wouldn't be accountable for the liabilities resulting from the
bankruptcy. Being part of the tertiary sector means that M&S provides services in the form of
selling groceries, clothing and home products (Fernando, 2011). The purpose of M&S is to
supply products; M&S also offers services but that isn't their primary way of doing business.
M&S is driven by profit meaning that they make sure that their sales cover all of their running
cost and more . Running costs include anything that the organisation needs to spend money on in
order fro the company to operate. When M&S was founded the main goal was to only sell British
made goods that were of a high quality, that started to change in the 1990s but they continue to
aim to offer high quality food at fair price.

M&S is a private company meaning that it is owned by its shareholders, the shareholders do not
run the business, instead they have a senior management team (De Jonge, 2011). The
shareholders put capital into the business buy buying shares they then receive a dividend
payment depending on how many shares they own.
National Health Services (NHS)
It is a national not-for-profit organisation and is part of the tertiary sector. The NHS is a public
company meaning that it is owned by the government, it was set up in 1948 by the labour
government. The NHS is a not-for-profit business it is run mainly using money from taxation and
provide service to the general population (Klapper and Parker, 2011).
The purpose of the NHS is to provide high quality care for all and employs doctors and nurses.
Money from the taxation is used to pay for all the running costs-staff wages, medicines,
equipments, buildings etc. NHS is owned by the government, the department of the government
that is responsible for the NHS is the Department of Health which is led by the Secretary of State
for Health. NHS is part of the public sector and as it a not-for-profit organisation they try to
make the services as efficient as possible.
P2. Describe the different stakeholders who influence the purpose of two contrasting businesses.
A stakeholder is a party that has an interest in a company, and can either affect or be
affected by the business. Interest of the stakeholders can clash resulting into the conflict with
each other over some issues. Customers, employees, suppliers, owners are the stakeholder of a
company but in modern theory of the idea behind the original notion to include additional
stakeholders like trade unions, employer associations, communities and government (Chavis,
Klapper and Love, 2011).
Customers
Customers are also known as buyer, client or purchaser of a good, service or product. Customers
usually buy products or services from Marks and Spencer. Customers want Marks and Spencer
to produce high quality products. The customers are interested in buying products from Marks
and Spencer because they have a interest in the companies products (Aterido, Hallward-
Driemeier and Pagés, 2011). They want value for money and also want quality price to be
competitive. If the customer is satisfied with its product then they will recommend to others.

Employees
The employees of Marks and Spencer seek security of employment, promotion opportunities
and good rates of reward.
Suppliers
The suppliers will have an influence on the price because if they sell it as an expensive rate to
Marks and Spencer then Marks and Spencer will also have to increase the value of their product.
Owners
These are the shareholders of the business they have an interest in the profit Marks and Spencer
makes. Owners are often thought to be the most important stakeholders because they have set up
the business and give a lot of time into the company to make it successful (Commander and
Svejnar, 2011). Owners like to see their share of profit increasing, and the value of their business
rising.
Local and National Communities
The actions of business can have a dramatic effect on communities. A
community leader represents important interest groups.
Governments
The government wants businesses to become successful, to create jobs and to pay taxes. They
want to see good businesses that take a full responsibility on looking after the welfare of society.
National Health Services (NHS)
The NHS stakeholders are internal stakeholders.
Donators
The people who donate to NHS are major stakeholders as NHS would not be able to be a
successful charity without the donations as they are the key to the money that is raised. Donators
are major stakeholders as they’re also the largest investors to NHS and influence it greatly
(Gecevska and et. al., 2010). The donators would not be concerned about how much they spend
as they know that the money goes donated is going for a good cause.
Employees
If the organisation is a non profit organisation then this provides a sense of generosity for those
who work for free.
Managers

The job the manager does is to build relationships and deals with customer issues. Their job is to
manage daily operations which are to meet the needs.
The Trade Union
The Trade Union are the people who try to make good working conditions for the staff who are
employed by NHS.
TASK 2
P.3 Describe how two businesses are organised in terms of their structures and functioning areas.
Organisational structure is the way in which the internal stakeholders of a business are
organised. Both Marks and Spencer and the NHS organise their structure by functional areas. A
functional area is a group of people within a company that have a particular purpose, so each
department has its own speciality. They are different ways that companies can use the
organisational structure, these ways are based on; function, geographical areas, product groups
and types of customers. M&S and the NHS are both big organisations and to ensure the success
of both businesses the work that needs to be done needs to be divided up. Both M&S and the
NHS divide their organisation up in the same way this is; finance, marketing, production,
customer service, sales, human resources (Aula, 2010). Dividing a business up into financial
areas helps business to establish lines of control to help with communication. Dividing up the
business also helps as it divides up the work to be done and ensuring the work to be done is
possible. The lines of control are useful for employees so they know what they are responsible
for and what other employees are responsible for, which helps departments to work smoothly.
P.4 Explain how the style of organisation of your chosen businesses helps them to fulfil their
purposes.
The aims of organisations depend on the type of business they are. For example, the aims
of a charity organisation will be quite different from those of a for-profit global business. A
business needs to have a clear sense of direction, which must be clearly communicated to all
stakeholders (Oh, 2010). This is the aim of the business which can then be broken down into
smaller aims and objectives.
Marks and Spencer
There are previous suppliers that Marks and Spencer have had a positive relationship
with and some of which the suppliers have been kept at the current present time. Some of which

supply resources and products that are sold, others services to clean and fill up petrol for
example. Yes it is likely to be achieved as it is communicated to all other employees in every
single department across many of Marks and Spencer stores not only in the UK, but on an
international level also. Yes it is realistic but it needs to be more specific in order for people to
value the statement, so maybe Marks and Spencer should set a target and specify when they want
to have this increase in profit, by how much and by when (Ishengoma and Kappel, 2011). This
objective can be long-term related as it doesn’t need any long time periods as it doesn’t use any
calculations for profit, it just states that Marks and Spencer want to build long-term close
business relationship.
National Health Service
NHS is a not-for-profit organisations whose aim is to provide aid to the residents of UK.
They only focuses on the health and sanitation making policies related to health so that citizens
should be healthy and free from any diseases. They make sure that there are proper hospitals and
health care facilities available in UK.
Task 3
P5. Describe the influence of two contrasting economic environments on business activities
within a selected organisation.
These economic factors are: employment, income, inflation, interest rates, productivity,
and wealth. These economic factors can be effected by consumers, suppliers, bankers and
lenders, the government, and the monetary policy committee (Harrison, 2011). These people all
make decisions that can affect the economic environment, although some affect it more than
others. The effects on the economic environment can cause a period of economic growth or a
period of recession. Economic stability is liked by business people because it means that they can
forecast what is going to happen. M&S is influenced by changing economic environments.
When the economy changes M&S have to respond to make sure that they can continue to grow
as a company, this changes can include them changing the way they run their stores (cost-
cutting), changing their suppliers and/or changing what sort of goods they sell.
What occurs when the economic environment changes?
Recession is a period of economic decline, and is the opposite of economic growth. A recession
occurs when people become more cautious, customers cut back their spending and manufacturers

and sellers reduce their investments so do not produce as many goods or do not buy as many
goods. Economic growth and recessions both cause a ripple effect, this is because when a big
decision is made it effects everyone else and how they make their decisions. CPI takes into
account price changes for consumer goods and services, such as transportation, food, and
medical care.1 Cost of credit fluctuates constantly (Teece, 2010).
TASK 4
P6. Describe how political, legal and social factors are impacting upon the business activities of
the selected organisations and their stakeholders.
Political impacts –
Political stability is usually defined as the state of peace that is normal experienced in a country
from the activities from the government. Also when the government chooses to Investment
finance this then involves selling part of your business (‘shares’) to an investor. The investor will
then take a share of any profits or losses that the company makes. The Government may change
the tax rates up or down this will be to try help boost the economy, an example of this is VAT.
There are different type of campaigns that the supermarkets will try to support to then try get
more funding or advertising for the company from the government. Also the government are
also offering support and funding to business that will or are offering apprenticeships, to then try
getting more people in to a job and working life.
Legal impacts –
The legal impacts are that Marks and Spencer must follow the law. It is extremely important that
it describe the product well and accurately if not then the trading standards will have no other
choice but to get involved. Consumer protection is when a group of laws and organisations have
designed to ensure that the rights of consumers, these are put in place to hopefully prevent
businesses that engage or are planning on engaging in fraud or specified unfair practices to try
and gain or taking an advantage over competitors (Bill Pasmore and CMC, 2010). The legal
frameworks is where the business chooses the way it operates, this will then determine who has
what role and share to the business, this will also determine the relationships between investors,
employee’s customers etc.
Social impacts -

The social impacts that Marks and Spencer may face are the difficulty to recruit the right people
for the job in the stores or the offices depending on where they will be based, also most of the
workers that are in the stores are an unskilled workers on the minimum wage given. Marks and
Spencer has a company cannot discriminate anyone from having a disability, different religion or
if they are pregnant and other things on this terms and when they are employed by the company
or if they are in the HR Department they are then recruiting they are also not allowed to ask
questions in these areas.
CONCLUSION
This is to conclude that if any company wants to penetrate in the market the first step
they should follow is to research the market or should go for deep analysis of the business
environment. Because business environment is uncertain so by having a knowledge of its will
definitely help them to grow their businesses.

REFERENCES
Books and Journals
Wetherly, P and Otter, D., 2014. The business environment: themes and issues in a globalizing
world. Oxford University Press.
Fernando, A.C., 2011. Business environment. Pearson Education India.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Klapper, L.F and Parker, S.C., 2011. Gender and the business environment for new firm
creation. The World Bank Research Observer. 26(2). pp.237-257.
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.
Aterido, R., Hallward-Driemeier, M and Pagés, C., 2011. Big constraints to small firms’ growth?
Business environment and employment growth across firms. Economic Development
and Cultural Change. 59(3). pp.609-647.
Commander, S and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Gecevska and et. al., 2010. Product lifecycle management through innovative and competitive
business environment. Journal of Industrial Engineering and Management. 3(2).
pp.323-336.
Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy &
Leadership. 38(6). pp.43-49.
Oh, S., 2010. New role-based access control in ubiquitous e-business environment. Journal of
Intelligent Manufacturing, 21(5). pp.607-612.
Ishengoma, E.K and Kappel, R., 2011. Business environment and growth potential of micro and
small manufacturing enterprises in Uganda. African Development Review, 23(3),
pp.352-365.
Harrison, R., 2011. Learning and development. Development and Learning in Organizations: An
International Journal. 26(1).
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Bill Pasmore PhD, S.V.P and CMC, T.O.S., 2010. Leadership agility: a business imperative for a
VUCA world. People and Strategy. 33(4). p.32.
Online
Marketing Environment: Definition, Micro & Macro. 2017. [Online]. Available through
<http://studiousguy.com/marketing-environment/>. [Accessed on 5th June 2015].