Business and Business Environment

Business and Business Environment INTRODUCTION 3 Activity 1 3 Overview of the different types of organisations3 Size and scope of different organisations 6 Interrelation between organisational function and organisational objectives 8 Activity 2 9 Positive and negative impacts of the macro environment onbusiness operations 9 SWOT analysis for determining the strengths and weaknesses 11 Interrelation of strengths and weaknesses with external macro factors 12 CONCLUSION 13 REFERENCES 14 INTRODUCTION Business is defined as an activity which is performed by an individual along with taking supports from their

Business and Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Activity 1.........................................................................................................................................3
Overview of the different types of organisations........................................................................3
Size and scope of different organisations....................................................................................6
Interrelation between organisational function and organisational objectives.............................8
Activity 2.........................................................................................................................................9
Positive and negative impacts of the macro environment on business operations.....................9
SWOT analysis for determining the strengths and weaknesses................................................11
Interrelation of strengths and weaknesses with external macro factors....................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business is defined as an activity which is performed by an individual along with taking
supports from their employees for making money or profit through buying or selling products or
services. It is very essential for each organisation to take better contribution from the staff
members so that organisational goals will be achieved within a short time period. Present
assignment is based on KFC which is a multinational chain of fast food products along with
based in Texas, U.S. Organisation was established in 1930 by Harland sanders along with it have
employed approx. 21000 employees who are providing their services in different nations. This
assignment will covers size, scope, legal structures, vision and mission of various firms along
with the interrelation between different departments who provides cooperation for achievement
of organisational objectives. PESTLE analysis will also prepared along with positive or negative
influences and at the end, this report will also includes SWOT analysis and its interrelation with
macro environmental factors.
Activity 1
Overview of the different types of organisations
Various organisation are exist in a marketplace which performs different activities and
functions so that goals or objectives of firm can be achieved in successful manner. Legal
structure and purposes of different organisations are given as below:
Public organisation: Public organisations are those in which governmental authorities have
more than 51% share in it. Main objectives of these organisations are to provide services to the
citizens of nation instead of making profitability in the marketplace. Whereas, losses or debts are
bear by governmental authorities. The chosen association for this kind is NHS which is a public
organisation and controlled by central government of UK. Purpose of this are given as below:
 To gave better quality in health services through taking minimum charges on it.
 To fulfil the health requirement of needy citizens of nation with an aim of removing
diseases from the nation (Hillary, 2017).
Legal structure: Local government: It conducts its functions at lower phase in a nation. This kind of
authorities have obligation to maintain rules and regulations within a small area such as
city or towns.

 State government: It is also an essential part of government which have to adhere or
maintain code of conduct in a particular boundaries of state.
 Central government: These governmental authorities have responsibilities to formulate
rules and regulations for the whole nation so that it can be followed or adhere by whole
public organisations of the nation in a systematic manner.
Legal responsibilities which have to adhere by the healthcare firms – NHS is a public
funded healthcare system which performs duties across the UK and it have responsibility to
follow Health and social care Act, 2012 that was designed or formulated by various departments
of Healthcare, clinical commissioning groups and NHS England. Main aim behind formulation
of this kind of organisation is to provide better health services to the citizens of nation along with
removing inequalities from the health services. In order to setup a clinic or organisation in
Healthcare industry in UK there are various laws and regulations like NHS service act, 2014,
Health and social care act etc. so that inequalities from the health services will be removed and
better health services can be provided to the citizens of nation (Hamilton, 2018).
Private organisation: These organisations are regulated by single or a group of persons
whose main objective is to gain profitability along with fulfilling the needs and wants of
customers. Main complexity of these organisations are that, company can't sale-out their shares
to the general public due to facing restrictions by government. Chosen organisation under these
kind of firms is KFC which is a multinational chain and provides fast food products across the
world. Purpose and legal structure of these organisation are discussed as below:
 Purpose: Main purpose of KFC is to provide better quality of food products through
which an effective image is created in front of customers. Organisation believes in
providing healthy or hygienic food and always makes modifications in the offerings so
that good and hygienic quality in food products are provided to the customers.
Legal structure: Partnership: These kind of organisations are formed by two or more individuals in which
both have to adhere their obligations according to their signed contracts of partnership.
Debts and profits are also shared by both of partners so that functions can be performed
in more effective manner. Main complexity of these organisations are, if one partner will
take loan on the behalf of firm then both partners have duty to repay the amount of loan.

 Sole trader: In this, a single individual is owned and run the whole business, it is also
very easy to setup the business in this kind of ownership because very less investment is
required for handling the business operations. Main complexity of these organisations are
that, they have to face difficulty at the time of raising funds for starting the firm
(Erasmus, 2016).
Legal responsibilities which are necessary for the Private limited to follow:
These associations have duty to provide annual report in company's house which is
situated in UK. There is also an essential responsibility which have to adhere by the owners that
they have to provide reports if any modifications are done within the structure of associations.
KFC is a multinational chain of fast food products so that they have responsibility to follow
various acts and take permissions from the UK government for running a business in UK like
health and safety act, 1971, Pest control, food hygiene certifications etc.
Voluntary organisation: These associations are formulated or created by a group of
individuals who comes together and perform similar functions for achieving a common
objective. It is an essential duty for these organisations to take permissions before starting any
type of functions or activities from government of nation. In this kind, chosen organisation is
Oxfam which was started in 1942 with an aim of eliminating poverty from the world. Purpose of
this firm are stated below:
 To raise the standard of living of needy citizens of a nation through providing them
essential things (Elegunde, 2012).
 To formulate an atmosphere across the world without poorness in it.
Legal structure:
 Trust: It is categorise in three parts such as donors, trustees or beneficiaries in which
trustees are also called employees who are working for the trust and they have no
authority to earning profits from it.
 Association: It consists a group of individuals who performs their works for accomplish
a similar project which can be determined as a work of humanity.
Voluntary firms like Oxfam have to follow some legal requirements which are given as
under: Members or volunteers of these organisations have duty to take a registration from the
government under the act of charity, 2011 so that they will not face any kind of difficulty in
performing activities. Members of these firms are restricted for making money or profitability

from the functions. If company will be dissolved in future then its capital or assets will be taken
by other organisation which is engaged in similar sector (Belás, 2015).
Size and scope of different organisations
Voluntary organisation:- Oxfam
Background details: It was established in 1942 with 20 trusts for removing poverty from
the global world. It is also called Non-profitable firm.
Services: Members of this organisation gave their services in all over the world with an
aim of fulfilling the demands and needs of required person of world.
Size & Scope: Company has 20 trusts which are located and providing services in all
over the world which shows the huge size and scope of organisation.
Mission and vision: Mission of this firm is to provide basic necessary things to the
needy citizens so that they can live their life in an effective manner. Apart from that, vision of
firm is to make an atmosphere in the world without poorness in it.
Objectives: Prior objectives of this organisation is to fulfil the basic requirements of
needy individuals so that their living standard can be raised.
Organisational structure: Management has implemented hierarchical structure in their
workplace and they have also segmented the work of the volunteers in different parts so that they
can provide more efforts for achieving the organisational objectives.
Legal structure – It is non-profitable firm so that it follows the structure which is
applicable on trusts. They raise the funds and use it in fulfilling the basic requirements of needy
individuals of country.
Shareholders- Main stakeholders of this firm are trustees, volunteers and donors.
Public organisation: National Health Services (NHS)
Background details: The firm was established in 1948 by Aneurin Bevan for providing
health care services in European nations. Its functions are regulated or monitored by department
of health and social care, UK
Products/ Services : Firm offers Eye test, Mental healthcare, Heart surgery services to
the citizens of European nations.
Size & Scope: Company have employed around 1400000 staff members which is also
called highest in the number of staff members within a public firm. Organisation also provides
free health services to the needy citizens which defines huge size and scope of the firm.

Mission and vision: Mission of the organisation is to enhance the wellness of the
citizens of country along with eliminating infectious diseases. Apart from that, vision is to
providing better health services to the individuals of nation so that brand image of firm will be
maintained in UK (Chang, 2016).
Organisational structure: This is an independent governmental body who has to
regulate healthcare services in UK. Its organisational structure is categorise in three parts like
local, state or central which is regulated by Healthcare department of UK.
Legal structure-NHS have to follow all the rules and regulations which are applicable
on the public organisations of UK and perform its duties on national, local and state level.
Stakeholders- Stakeholders of organisation are investors, governmental authorities,
investors, patients.
Private organisation:- KFC
Background details: Company was founded in the year of 1930 by Harland Sendars
along with headquarters in Texas, U.S.
Products: Products of organisation includes Sandwiches, Chicken Burgers, French Fries,
soft drinks, Desserts etc.
Size: The company is second largest multinational fast food chain along with a global
presence in approx. 20000 locations.
Scope: Company have employed 20,500 employees who are providing their services in
various nations which shows the wide scope of firm.
Mission and vision: Mission of firm is to gave better quality food products to the
customers and vision of KFC is to create global presence along with implementing hygienic
features in their food products.
Objectives: Main objectives of the organisation are to develop a strong chain of fast-food
restaurants across the world so that better returns will be provided to the investors of
organisation.
Organisational structure: It also follows hierarchical structure at their workplace in
which their management have authority to formulate or take decisions and it will be essential for
every division to follow it.
Legal structure- As company is performing its duties in private sector due to which it
have responsibility to follow the legal structure which is applicable on the private limited firm.

Shareholders- Investors, stakeholders, customers are the main stakeholders of it.
Interrelation between organisational function and organisational objectives
Illustration 1: Organisational Chart of Company
 MARKETING AND PRODUCTION- There is an important relationship in these two
department because without marketing production is not possible. These two departments
are interrelated with each other such as production department manufacture the goods or
services and marketing department have duty to sale those products in the marketplace.
Before sales, Marketing is the process through which an organisation attracts a large pool
of customers towards the offerings and enhance the sales figures of firm. Marketing team
also provide support to the production department that what are the market trends and
basic needs of customers in the market. Through this information, production department
can also make the products as per the demand of market which is beneficial for the firm
in achieving their preset goals or objectives (De George, 2011).
 HUMAN RESOURCE & SALES- These two are also interrelated with each other
because when there is a requirement of human bodies in department of sales then the
marketing head have responsibility to take support from HR department. So that,
experienced and knowledgeable persons are hired and need of workforces will be
fulfilled in easy manner. For example- sales person are required at various outlets of KFC
then the sales manager will be provide a list of requirement to the HR manager that
includes necessary qualifications, experiences, skills and capabilities which are required
for the position of sales person. In return, HR manager will recruit some candidate as per
the requirement of the sales department. When experienced and knowledgeable

employees will be hired then sales team will be able in providing better satisfaction to the
customers which is beneficial for the firm in achievement of organisational objectives.
Advantages
 It provides mix contribution towards growth and sustainability of a firm.
 The work is divided between the departments in equal manner so that maximum efforts
can be gained by the organisation from their employees who are working within various
departments (Iansiti, 2014).
Disadvantages
 If one department will not provide support to other department then it influences overall
performance of the organisation.
 If management structure is week and staff members are not supportive then it provides
negative influences on the decision making of organisation.
Impact of Interrelation on organisational structure- Organisational structure can be defined
as a system which defines that how are the functions are performed by departments for achieving
the goals of firm. It also determines that in what structure information is flowing within the
departments. Therefore, management of KFC have to adopt matrix structure in their workplace
so that maximum contribution can be gained by the employees and there is less impact of
interrelation is devolved on the profitability of organisation.
Activity 2
Positive and negative impacts of the macro environment on business operations
External environment is the only factor which affects the performance of company in a direct
way because it can not be controlled or maintain by an organisation. So the only thing KFC can
do is analyse the external factors on a regular basis and then make their strategies accordingly.
KFC can analyse it by using Pestle framework which is explained below with positive and
negative impact of it,
 Political factor: It refers to all the aspects which are affected by the ruling party in the
country. For instance, Brexit is affecting KFC performance in a negative way as now they
have to modify their import and export policy according to the new rules. Moreover, KFC
also have to change their employment contract according to the rules which will attract
more cost and time for company. But on the other side, KFC has sound relation with the

political party of UK due to which laws are made accordingly (De George,Doppelt,
2017).
 Economical factor: It is related to all the economic factors of the country where
company is operating like inflation rate, interest rate, GDP etc. For example, pound
sterling is getting stronger day by day due to which company is earning more money as
expected. But on the other side, KFC now have to invest more in the company due to
strongness of the currency of UK.
 Sociological factor: It is related with the factors like growth rate, disposable income of
people, attitude towards life etc. Due to increase in obesity problems in UK, customers
are now more concerned about the health due to which they avoid visiting KFC as it
provides various types of foods which are considered as a junk food. But on other other
side, due to low inflation rate of UK, customers disposable income is increasing which is
a positive sign for KFC future growth.
 Technological factor: This factor includes aspects like R&D, automation of process,
advancement in technology etc. As UK is a hub for many international players, all the
latest technology are available in the market due to which they can improve their quality
and quantity of product to a certain level. But buying or using of technology is cost
expensive in nature and besides this return on investment is low due to which KFC could
face shortage of funds for some period of time.
 Environmental factor: All the factor related to society and environment is related. KFC
has always faced criticism due to usage of animals as it is affecting the populations of
animals in a negative way. But to cope up with that, company is regularly doing CSR
activities with the aim of enhancement of society.
 Legal factor: Every company must follow rules and regulations set by the local
authorities as it makes the environment healthy in nature and avoid any type of legal
issues. As company is facing severe factors due to change in law after the news of Brexit
as KFC have to fully changed their laws related to their business. But it also makes their
working environment favourable due to which employees motivations remains always
high resulting in better productivity of KFC.
Impact of Pestle analysis- If managers of KFC will considers whole factors while taking any
decisions then it will positively impact the business performance and operations. When the

management of the firm will consider the above discussed factors in taking their decisions, then
they can determine the impact of such factors on the business performance and operations. The
consideration of these factors will positive impact the decision making as they have the
understanding of these factors which can influence their decisions. Also the management have
the idea of changes in law and regulations of the country due to which they can formulate better
strategies for tackling the changes (Strydom, 2016).
SWOT analysis for determining the strengths and weaknesses
SWOT analysis is helpful in determining the internal capabilities of an organisation
which can assist the firm in gaining success. The managers of the KFC can use the SWOT
analysis which is discussed below:
Strengths Weakness
 The KFC is providing both veg and non
veg products to their customers which
are attracting more customers towards
the firm.
 KFC is the world’s 2nd largest
restaurant chain who has implemented
latest technologies such as voice
activated training test and amazon echo
show through which the employees are
working efficiently. technological
 The financial position of the KFC is
very good under the brand YUM!
Foods which is also a strength.
 Criticism over the use of trans fats in
the cooking of non-veg items is a major
weakness for the firm. social
 Franchisee management is also a major
issue faced by the KFC which is
considered as Weakness.
 Low pay to workers is also a weakness
for the firm.
 Some of the outlets have not
implemented latest technologies due to
which supply chain management is
affecting in negative manner
technological
Threats Opportunities
 Strong and growing competition from
the brand such as McDonald and Pizza
hut is a threat for the KFC.
 Also the consumers are moving
towards healthy eating habits which is
 The company has opportunities in the
Veg segment of their food products as
consumers are moving towards healthy
food.

also a threat.  KFC can use the online delivery for
providing their products which is a
opportunity for the firm.
Impact of SWOT on decision-making- Through this analysis, management can determine the
internal strengths of the firm which can be leveraged by the management in taking the decisions.
Also through the weakness, management can take decisions for converting the weakness into
opportunities which will positively impact their decisions and strategies developed by the
managers. The firm can also determine the threats on the basis of which they can develop
strategies for getting an upper competitive edge. Whereas the opportunities are helpful for taking
the decisions which can proved beneficial for the firm in long run and in increasing the market
share along with the productivity and performance (Hamilton, 2018).
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- These factors are consist of trade policies, stability of government etc.
Major strength of the company is that, it is providing its services in most of the nations
across the world due to which the customer base and market-share of company is
relatively high than its competitors. Whereas, the company is facing management issue
because most of their outlets are not managed and not providing effective contribution for
achievement of their goals.
 ECONOMICAL- Company is performing its operations under the YUM food which
makes the growth of financial position of firm that is also considered as a major strength
of firm. Apart from that, major weakness of the firm is that, company is facing employee
turnover issues because loyal and experienced employees have left their jobs due to less
pay and incentives are provided to them by the management. Therefore, management
have duty to make effective plans and policies for overcome this issue because it can
provide negative influences on the profitability and decision-making of firm.
 SOCIAL- Major strength of company is that company has gained 2nd position across the
world therefore, they are providing both variety of food products like veg and non veg so
that demand of themselves can be fulfilled in easy manner and they will always attracted
towards the offerings of firm. Whereas, weakness of organisation is that it is facing

health related issues in various countries because due to health consciousness, most of the
customers are not preferred to buy fast food products. Therefore, managers of KFC have
duty to consider such issues which can negatively impact on their decisions of expansion
and taking growth in the market-share (Shenkar, 2014).
 TECHNOLOGICAL- Management of KFC has implemented latest technologies such
as voice activated training test, pay per click option in their various outlets so that better
services can be provided to the customers which defines major strength of the
organisation. Whereas, management has not implemented latest equipments and tools in
some of their outlets due to which supply chain management is not working in proper
manner that can influences the profitability of firm in negative manner. Therefore,
managers have responsibilities to make suitable strategies to improve their each outlets
by fulfil their requirements so that it can't impact on the decisions of making expansion in
new market areas.
CONCLUSION
It has been summarised from the above report that business environment includes various
factors which have to considered by each organisation for taking growth and sustainability in the
marketplace. There are various kind of organisations like public, private or voluntary whose
objectives are different in nature and they provides their services as per their organisational
structure. Without taking contribution from the departments organisation can't achieve its
objectives in proper manner. SWOT and PESTLE analysis also helps the managers in analysing
capabilities and influence of external factors that can influences the operations and functions of
firm in positive or negative manner.

REFERENCES
Books and journals
Adeoye, A. O. and Elegunde, A. F., 2012. Impacts of external business environment on
organisational performance in the food and beverage industry in Nigeria. British Journal
of Arts and Social Sciences. 6(2). pp.194-201.
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420).
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
Chang, J. F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
De George, R. T., 2011. Business ethics. Pearson Education India.Bernstein, M. H., 2015.
Regulating business by independent commission. Princeton University Press.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
Iansiti, M. and Lakhani, K. R., 2014. Digital ubiquity: How connections, sensors, and data are
revolutionizing business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Neelankavil, J. P., 2015. International business research. Routledge.
Palgrave Macmillan, London.Goel, S. and Jones III, R. J., 2016. Entrepreneurial exploration and
exploitation in family business: A systematic review and future directions. Family
Business Review. 29(1). pp.94-120.
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.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Online:
Organisational Chart of Company. 2013. [Online]. Available
through:<http://www.innovationmanagement.se/2014/04/03/for-all-departments-how-
can-ip-help-hr-rd-sales-and-marketing-production-finance-purchase-ceo-or-owner/>