Business and the Business Environment Project

This project analyzes the different types, size, and scope of organizations, using IKEA and Tesco as examples. It examines the impact of macro-environmental factors on business operations and conducts internal and external analyses to identify strengths and weaknesses. The project also examines the relationship between organizational functions, structure, and objectives.

Business and business environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Explain different types and purpose of organisation............................................................1
P2) Explaining the size and scope of different types of organisations.......................................3
P3) Relationship between various organisational functions and their linking with structure
and objectives..............................................................................................................................5
TASK 2............................................................................................................................................7
P4) some positive and negative impacts on macro environment on the business operations
with specify example ..................................................................................................................7
P5) Conduct internal and external analysis of specific organisation in order identify strength
and weakness...............................................................................................................................9
P6) Strengths and weaknesses interrelate with external macro factors.....................................10
CONCLUSION ............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and journals ...................................................................................................................12

INTRODUCTION
Businesses environment is very important of every organisation it includes various
environmental factors. This report can be explaining the different types, size and scope of
organisation and it also includes this file macro and micro business its objectives and business
purpose. It also defining the strength and weaknesses of the company.This report explains
different kinds of business and environment in which they work, it also includes micro and
macro environment. Macro environment factors involves economical changes, technological
environment, cultural and economic factors. This files also giving a comparison between non
profit making company or profit making organisational circumstance of their businesses
structures, scope and their objectives,
TASK 1
P1) Explain different types and purpose of organisation
Business environment is considered with sum total of organisation, individuals and other
factors that are related to outside control of enterprise but corporates still depend on performance
of businesses. The main purpose of organisation is to identify business opportunities it is crucial
for solving problems of work (Bøllingtoft, 2012). Different industry measured their size, scope,
values are different types but all the firms share the same purpose to generating their profit for
society, providing good and services, giving job possibility and economic growth.
Private company
Some organisation is private they have own businesses, individual like IKEA is profit
making firm it providing their services in furniture by using new or modern techniques and it
also manufacturing several kinds of assemble accessories items (Bryman and Bell, 2015). This
industry is serving large number of consumers their variety of products.
Purpose and objectives of IKEA businesses
This company’s main motive to earn more profit and expanding their businesses with
effective providing services to their customer. Every private company aims to generate their
profit margin and so, this industry also focuses on increasing the sales through target customers.
Organisational values

The main motive IKEA is to make profit by selling their furniture items and propose to
achieve the organisational goal they main their businesses long term strategies and implement
their effective plan like how to increasing their productivity, how to maintain their businesses
stability (Cavusgil, and et.al, 2014 ). The legal structure of this company is to earn profit but
also implement government rules and regulations; they have own legal identity their rights.
Public company
Public organisation sells their shares in itself to the public to increase their capital and
main motive to earn profit as well as providing customer satisfaction to their goods and service.
Tesco is a public company; it sells their products like groceries and general merchandise retailer.
Purpose and objectives of Tesco businesses
This organisation’s main purpose is to earn their profit with providing customer
satisfaction. It is also providing a variety of their products and this firm is increasing their
business productivity (Cavusgil, and et.al, 2014). The objective of this industry is to develop
their economic growth through providing various job opportunities.
Organisation values
Tesco’s main purpose is to expand their businesses in the UK market as well as a public
company it play a very vital role in economic it main not only earn more profit as well as
providing customer satisfaction and achieving the goal of business. The legal structure of this
firm’s economic growth follow all those rules which is set by UK government.
Non-profit organisation
Non-profit company refer with raise money not for benefits the donors, they allow paying
workers it includes providing their services poor people feeding the homeless peoples, the main
motive this types of organisation is to providing their service social welfare. Help those people
who are not able to do work. So these types of company providing food, shelter, medical
facilities, schools for their children so many services for the aim of growth of economic. NHS
organisation is also non-profit organisation.
Purpose and objectives of NHS businesses
This company is main motive to providing their service for social welfare. Non-profit
organisation two important financial purpose, it exempts from some taxes, means people
contributes their money in form of donation the reason is behind that they will not ready to pay
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their tax so they show easily while providing their money on social welfare. This firm also
providing their service poor people and some many large number of people contribute their
money for public welfare. The legal structure of this company government also help to providing
fund help for public and they have liabilities of individuals.
Legal structure of different organisations
Private organisations such as IKEA have separate legal identity. Shareholders get rights
in the firm and they cannot sell their shares to general public in any circumstances. Each
shareholder has right to give vote and influence decision of the organisation. Company has to
share its profit detail at the end of fiscal year. It is very important for the private limited company
that to complete all legal documentation requirements such as memorandum of association,
article of association etc. It has to follow all requirements of company act. On other hand public
limited firm such as Tesco can sell its shares on stock exchange. Board of directors take decision
for the firm and on behalf of shareholders. Public firms are considered as actual legal firm
because shareholders get all the benefits and rights in the business. Volunteers or non-profit
firms have different legal structure as compare to limited entities. It is governed by government.
It cannot be formed as corporation. Under 501 (C)3 entity receive benefit of tax exemptions.
P2) Explaining the size and scope of different types of organisations
There are generally three types of companies like private, public and non-profit. They
have lawful identity in its own decisions. Hence, the assets and all other properties are owned by
firm but not their individual person on other hand the assets of the associate are not for company
use. The liabilities of the person is small. Size and scope of different firms given below
Private organisation
IKEA is a private company must have minimum one share holder but firm can offer large
share to their public. However, the industry can offer large number of shareholder who want to
start business in contract with this corporations. It has been noticed that public limited
organisation have started as a public limited company.
The scope of IKEA is depended on their product types, they produce large number of
furniture item for increasing their sales and they also supply their product in UK market. The
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main scope of this company to diversify their businesses and providing qualities of product to
their customers. The goal of this corporations improve their business performance and sleeting
their mission is to provide the scope of this company.
Public organisation
Tesco is a public company has maintained unique rules and regulations to maintain their
work profile with London Stock Exchanges to selling their shares to general people. This
company registered with all the legislation and the shareholders of this firm select the individual
who makes decision about matters such as marketing growth and investment. The size of this
company is wider and main mission to achieve the goal of the businesses
The scope of this company to expand their business all over nations and earning more
profit providing customer satisfaction as well. This organisation scope also depend on their
product qualities and services. The main scope of this firm in wider term to expand their work
and giving the lot of jobs opportunities.
Non-profit organisation
NHS is a charity company has broad mission is that however against a very large
business with using more resources the risk may be too much but high sustain protection to the
peoples. The size of this company large number of employees, it is fifth biggest employer in all
over world. It includes 1001 to 5000 employees in their hospital, large number of branches in
globally.
The scope of NHS is very strongly hospital belonging to the community and all most
people 8000 per day on their hospital site, it also cover small size town. This hospital play very
vital role in economic they providing best qualities services to the people the main aim of this
hospital to giving best service their patient and expand their work whole countries.
The scope of IKEA is depended on their product types, they produce large number of furnitures
item for increasing their sales and they also supply their product in UK market. The main scope
of this company to diversify their businesses and providing qualities of product to their
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customers. The goal of this corporations improve their business performance and sleeting their
mission is to provide the scope of this company.
 Public organisation
Tesco is a public company has maintained unique rules and regulations to maintain their work
profile with London Stock Exchanges to selling their shares to general people. This company
registered with all the legislation and the shareholders of this firm select the individual who
makes decision about matters such as marketing growth and investment. The size of this
company is wider an number of employees work their and main mission to achieve the goal of
the businesses
The scope of this company to expand their business all over nations and earning more profit
providing customer satisfaction as well. This organisation scope also depend on their product
qualities and services. The main scope of this firm in wider term to expand their work and giving
the lot of jobs opportunities.
 Non profit organisation
NHS is a charity company has broad mission is that however against a very large business with
using more resources the risk may be too much but high sustain protection to the peoples. The
size of this company large number of employees, it is fifth biggest employer in all over world. It
includes 1001 to 5000 employees in their hospital, large number of branches in globally.
The scope of NHS is very strongly hospital belonging to the community and all most people
8000 per day on their hospital site , it also cover small size town. This hospital play very vital
role in economic they providing best qualities services to the people the main aim of this hospital
to giving best service their patient and expand their work whole countries.
P3) Relationship between various organisational functions and their linking with structure and
objectives
Organisational structures are dependent upon the enterprise functions, the objective of the
companies to serve their customer as well as earning profit. The function of IKEA organisation is
is given below.
 Product development
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IKEA focus on their product services, this company expand their business through large number
of stores available in all over the world. The aim of this organisation providing well designed
home furnishing products at possible prices means low prices that as many customers are easily
afford them. They also focus on product qualities, they develop their product through effective
plan and strategies like they follow social media page, through best advertisement. The main
function of this firm to design home based items, in according to customer demand. Qualities
and function are the most important but these are not compromise with consumer, similarly
prices never agree function and technical quality.
 Communication
IKEA maintain their relationship with existing customer as well target customer through
effective communications. It is very important function of the organisation, it helps to increasing
their sales, productivity of the businesses. They also maintain their relation each department
with their workers.
 Specialisation
IKEA produce their product in using modern techniques, this is the best idea for improving the
performance their businesses. They promote their work all over the world with providing
effective goods and services. This function is very smooth it gives the different elements for
growing their work by experts and their efforts are organization to attain the desired and product.
 Research and development
IKEA also focus on developing their new product services or improving their existing
product items through research and development function. It is very important function ,
it helps to identifying the demand of customer as well as which types of technologies are
used for developing their services. This function is referred with new ideas activities this
company is developing new product, it is the main function to grow their business
potential for the production process.
These are function are interrelated with organisational structures, IKEA company main motive to
increase their work performance according to customer demand. This firms can make their
decision for maintain their organisational structures. It is very helpful for defining the character
of firm mean organisation structures giving the information of the company like, business
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growth, particular employees, positions, department, worker responsibility. Some important this
firms structures given below.
 Functional structures it refers with the people who do similar work are team
together based on speciality so all the manager are placed in the human resources'
department and so on other placed in financing department. IKEA make a
decision very fast because the team member can easily communicate with their
seniors, they can also learn from each other and complete their task on time and
improve their skills.
 Divisional structures it also related with IKEA company group of employees into
work in team, they divide their duties on different department and particular
object or product. For example this company operate different furniture product
item sell through whole sellers, retails department. The division of labour in this
types of structures sure employees making similar product can achieve their work
efficiency and higher outputs.
 Matrix structures it is related with IKEA organisation is more flexible than other
company. It includes each staff work in a function based department such as
human resources or marketing , they will work under group on specific task. The
team leader providing the work in very employee's in different sections. It is a
mixture if functional business structures and divisional organisational structures.
Most of the time this company adopting this structures for changing their work
system. Every department work together and they communicate with each other,
discus all the problems, and identifying their actual challenges. They exchange
their information before making plan and providing employers motivations on
time to time.
TASK 2
P4) some positive and negative impacts on macro environment on the business operations with
specify example
Macro environment are related with those external factors which is unmanageable and also
affects in decision making, strategies and performance of the businesses. External factors refers
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with economic, social, cultural, legal, natural forces and technological changes. It also changes in
customer choices, changes in government polices, change in interest rates, these are the example
of macro environment. IKEA is also affected with these factors, it also consists with new risk
factors and they identifying the business problems.
Political factors: it includes government rules and regulations means government changes their
policies like changes in taxes rates, authorities provides subsidy, decrease rate of taxations of
retailer business then it impacts on positive on marketing decision of this organisation. This
forces include possibility of election and the environment will peaceful or there will be chances
of political transformation. If governance increasing their tax rate or make sticky policies so it is
difficult to run their business long time. So it is also the big issue and its over all impact on
IKEA business strategies.
Environmental factors: every corporations use some natural resources for their business such as
sea product, agricultures, forests. There are some non renewal that is used by businesses purpose.
IKEA also take decision after considering the accessibility of these natural resources. If this
industry are miss use their nature resources or over wastages so it is also the bigest negative
impact on their work.
Technological factors: it includes new technologies, knowledges, skills are required for
producing the good and services. IKEA also using new technologies in their businesses for
earning more profit at low cost. This is very important factor it will help in organisation decision
making process. If this organisation is not adopted new technologies so they people are not
expand their business.
Social and cultural forces: these factors are related with the target of consumer means, it
depends on customer taste and preferences, clients attitudes and values (Bryman and Bell, 2015).
These factors are change businesses demand and supply, if organisation produces their good as
per consumers' taste and preference that it affects on positive in IKEA firm. But if they people
are not produce their good and services in according the customer demand so its effect their
business negative like they decrease their sales, demand of their product are low, customer are
not ready to buy their produce items, if they are not focus on quality of their services it is also
negative impact.
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Legal factors: it is related with IKEA legal policies, this factor affect marketing strategies of
the company, if government help to raise this industry funds and reducing the tariff rate so
company easily earn more profit and expand their business worldwide. But if government
increasing their taxes rate so it overall negative impact on businesses.
IKEA face these macro environment causes it includes many changes outside the
business so it is important for management of the organisation analyse the effects of these factors
so they make effective decision for stability of the business (Popescu, 2013). This firm main
aim to increasing their businesses productivity for long run. These factors are very necessary in
work, it shows the positive impact or negative impact. It also focus on how to earn more
profitable for long time.
P5) Conduct internal and external analysis of specific organisation in order identify strength and
weakness
Internal analysis helps to identifying the organisation particular features like its
capabilities and availability of resources. It shows business activities which are related with
performance of company mission, vision and the objectives. Internal analysis IKEA sure that it
has optimum amount of resources for holding their working activities. It helps to maintain
internal environment of the businesses band resources like it includes plant and machinery,
human resources, cultural resources, financial resources (Popescu, 2013). It also helps to control
all these factors and analysis in effective manner. Macro environmental factors impact on IKEA
organisation decision making policy, it has the important impact on the success of the business
so these factors always considered during the policies decision making process by the top level
manager of this industry.
External analysis is the process of studying the environment in which organisation operate, it
uses to identifying the current trends in market and event that affect the strategies of the IKEA
organisation, it also helps in decision making for long run business. Analysis of economic factors
whether there is in changing interest rate, increasing prices (Pulver, 2012). It also analysis
technological factors it shows the changes in product it is necessary for updating existing
product or replacing their services. Legal analysis are also helped for identified the changes in
rules and regulations related with any change taxation polices. Cultural and social analysis ate
very help ful for search the current trend, fashions, lifestyle other factors of culture.
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Strength: it involves special characteristics of the IKEA organisation. The biggest important
strength of this company is earning profit and providing customer satisfaction through quality or
product or their services (Sørensen, 2012). IKEA strength depend on their qualities of product
and their profit margin, this industry producing several products and selling their target market,
they increasing their sales and generating high profit.
Weaknesses: it includes those factor of IKEA company which has to do more work so that it can
improve their capacity of business. This organisation operates its work in many nations so it is
weakness is that, it is more difficult to manage all work or it is uncontrollable.
Macro environment is referred with those external factors which direct effect the IKEA
organisation (Sena Ferreira, et.al., 2012 ). This company make their internal or external decision
with the help of effective planing. Internal and external analysis are very helpful for identifying
the strength and weaknesses of the businesses, so it is important for every organisation as well
as this firm also.
P6) Strengths and weaknesses interrelate with external macro factors.
Strengths and weaknesses of the IKEA organisation are related with macro and micro
environment forces (Popescu, 2013). This company management compares their strength
prevalent with macro factors like political, technological, cultural, economical and social and
implement all those business strategic which is existed long term. Environment factor helps to
make decision and interrelates with macro environment , IKEA company strength and
weaknesses. These factors are very useful for making effective decision and it also helps to
maintain businesses stability. It also very utilise for increasing the market share.
Economic factors: it includes inflations rates exchange rate in market, change in interest rates,
if IKEA business is financially good it has enough financial resource for this company then
changing the rate will not affect the pricing of this firm and not any affect its marketing
strategies (Prajogo, 2016). This industry also liable to face financially crisis when change in
economical forces.
Social and cultural: it refers with social and culture factors changes IKEA company serve their
service through best employees, viable financially resources and natural resources (Healy, and
et.al 2012). This organisation has great strength to fulfil their customer taste and preference as
per their demand or needs or wants which is based on their trust and value.
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Environment factors: IKEA company use natural resource for producing their furniture
products, if organisation manufacturing wooden then they follow environmental laws and do not
misuse the natural sources so top level manager make these strategies and implement it.
Political and legal factors: these factors are related with the rules and regulations and
government policies (Hair, 2015). Changes in these policies IKEA face these legal factor
challenges. So this organisation have well experienced employee's means they know if policies
are changes so they know how to changes in their marketing strategies, how to follow all the
legislation.
Strength and weaknesses, macro environment factor are interacted with each other and
their affect is also same (Drucker, 2017). If IKEA organisation fails to identifying its strength
and weaknesses than they cannot analysis macro environment factors, they also fails to making
strategies regarding this company, they do not make effective plan . The weaknesses also
showing the negative effects on this firms, if this industry not fulfil their client demand or not
providing their consumer satisfaction so company decreasing their demand. So every businesses'
organisation make effective plan for long term run stability of businesses and also identifying
the threats and opportunities of the industry. If any firms make appropriated decision so
company earn more productivity and attaining more profit.
CONCLUSION
it can be concluded that this report providing the deeply knowledges of macro and micro
environmental factors in which IKEA organisation operates these factors. It also defining the
different business analysis tools like strength and weaknesses of this company, it also includes
political, economical, social, technological, environmental and legal factors. This company main
motive to use these factor in efficient manner. It also describing different types of organisational
structures. It also explains the different types or organisation and their environment.
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REFERENCES
Books and journals
Bøllingtoft, A., 2012. The bottom-up business incubator: Leverage to networking and
cooperation practices in a self-generated, entrepreneurial-enabled environment.
Technovation. 32(5). pp. 304-315.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Cavusgil, S.T., Knight and et.al, 2014. International business. Pearson Australia.
Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard
Business Press.
Griffin, R.W. and Pustay, M.W., 2012.International business. Pearson Higher Ed.
Hair, J.F., 2015. Essentials of business research methods. ME Sharpe.
Healy, P.M. and Palepu, K.G., 2012. Business analysis valuation: Using financial statements.
Cengage Learning.
Jiménez, G., Ongena, S., and Saurina, J., 2014. Hazardous Times for Monetary Policy: What Do
Twenty‐Three Million Bank Loans Say About the Effects of Monetary Policy on Credit
Risk‐Taking?. Econometrica. 82(2). pp.463-505.
Popescu, G. H., 2013. Macroeconomics, Effective Leadership, and the Global Business
Environment. Contemp. Readings L. & Soc. Just.. 5. p.170.
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.
Sena Ferreira, P., Shamsuzzoha, A.H.M., Toscano, C., Cunha, P., 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.
Sørensen, H.E., 2012. Business development. In Palgrave Encyclopedia of Strategic
Management. Macmillan Publishers Ltd.
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Storey, D.J., 2016.Understanding the small business sector. Routledge.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing
environment.Information Technology and Management.13(4). pp.297-310.
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