BUSINESS AND BUSINESS ENVIRONMENT INTRODUCTION

BUSINESS AND BUSINESS ENVIRONMENT INTRODUCTION 1 TASK 11 P1 Different types and purposes of organisations1 P2 Size and Scope of various types of organisations4 TASK 2 6 P3 Relationship between different organisational functions | 6 TASK 37 P4 Positive and negative impacts of macro environment has upon business operations 7 TASK 49 P5 Internal and external analysis of company to identify strengths and weaknesses. 9 P6 Strengths and weaknesses interrelate with external macro factors for Santander Bank10 CONCLUSION

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purposes of organisations..................................................................1
P2 Size and Scope of various types of organisations.............................................................4
TASK 2 .....................................................................................................................................6
P3 Relationship between different organisational functions..................................................6
TASK 3............................................................................................................................................7
P4 Positive and negative impacts of macro environment has upon business operations.......7
TASK 4............................................................................................................................................9
P5 Internal and external analysis of company to identify strengths and weaknesses............9
P6 Strengths and weaknesses interrelate with external macro factors for Santander Bank. 10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment of an organisation constitutes various factors which creates a great
impact on operational activities. It includes changes in technologies, need of Eco-friendly,
ethical consideration and more which impacts either in direct or indirect more. Therefore, it is
necessary for management of a company to analyse concept of these factors so that profitability
can be increased (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). In this manner, a
report has been prepared on Santander Bank of UK for analysing impact of factors present in
business environment on its functions. In addition to this, differentiation of organisations are also
described on the basis of size, scope and purpose.
TASK 1
P1 Different types and purposes of organisations
In today's fast developing world, business environment of a company is changing at
faster rate. So, it gives different type of opportunities to firms to gain advantage of it and
enhance profitability of them. In UK, after Brexit number of chances for increasing growth of
business has raised (Business environment. 2018). Generally, organisations in nations are
distributed as per size, scope, number of people working there, turnovers and operational
activities. In addition to this, companies are also divided on the basis of purpose and area of
extension i.e. For Profit, Not for Profit (NPO) and Non Governmental Organisation (NGO). A
brief distinguish of enterprises coming in these sectors can be explained as:-
Basis of
Comparison
For Profit NPO NGO
Meaning In this sector, industries are
always focused more on
earning more and more
profitability. In this
manner, they used to
determine demands and
needs of customers as well
as provides the same in
most effective and efficient
Under this phase,
companies concern about
how to improve condition
of societies or improving
standard of people instead
of earning profit (Li and et.
al., 2011). Therefore, they
used to deliver services or
products as per basic
Companies come in
Non- Government
organisation are like
charitable trusts which
concerns more on
developing societies,
provide support to
needy people and
more. Therefore, these
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manner in a certain period
of time.
requirement of people. firms perform a variety
of functions or services
related to humanitarian
and bring minds of
people towards
governmental policies
as well as encourage
participation of
stakeholders of civil
areas at community
level.
Area of
Operations
In terms of capital
investment, companies
under this sector can be
operated their business in
either small or large areas.
As focused more on
completing demand of
society, operations
activities of these
companies are done in
limited and targeted area.
These companies are
working at large scale.
Objectives Completing demands of
targeted customers on time
and deliver high
satisfaction to them aid
these firms in generating
more revenues (Kaufmann,
Kraay and Mastruzzi,
2011).
Promotion of art, scientific
disciplines along with
commercialism can be
stated as the main aim of
organisations that comes
under this section.
Work for public
benefit and prevent or
relief them from
poverty is main
objective of such
companies. In addition
to this, advancement of
protection or
improvement of
environment is also a
part of their work,
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In addition of above, companies can be distributed on the basis of ownership also which are
generally described in three major sections, that are:-
Public Sector- Associations which are running by regulatory bodies of a country are
known as public organisations. These firms are provided various kinds of employment to citizens
as per basis of their qualifications. In UK, through statistical point of view it has seen these
enterprises comes on second number after private sector. For example- Bank of England is the
second largest public bank of UK which has established in 1694.
Purpose– The primary purpose of this bank is to raise and lend money to State. In
addition to this, it is custodian to reserve official gold of UK and almost 30 countries of
worldwide.
Advantage: These firms charges low prices and provide necessary facilities to citizens
like education, health and other.
Disadvantage: Due to lack of competition, quality of products are not good as compared
to private sector organisations.
Private Sector– Under this sector, enterprises are organised, controlled and run by
private owners with main aim is to earn profitability in business. These firms are provided high
standard and best quality of products or services (Kian Chong, Shafaghi and Leing Tan, 2011).
Therefore, conduct proper research on a targeted area in order to determine demand of public.
For example: Santander UK Plc is a British Bank of UK and wholly owned by Spanish
Santander Group.
Purpose– This bank is established in 2010 and currently have more than 3500 offices in
worldwide. It is one of the leading financial corporation which provided mortgages and savings
to people. It provides personal, business as well as corporate accounts which includes mortgages,
credit, saving investment and more.
Voluntary Sector– These firms are belong to not-for-profit organizations which
emphasizes more on relationship to societies. For example- OXFAM is a combination of 20
charitable associations who are independent from each other.
Purpose– The fundamental purpose of this sector is to provide benefit and enrich
societies rather than to earn profitability (Gilboy, 2016). In addition to this, government has little
intervention on such companies. Whatever profit these firm earn, employers used to invest back
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into the societies or communities. In context with Oxfam, motive of this firm it to help poor
people and improve their condition by providing them basic necessities.
Legitimate Structure of the Sectors:
Private Sector:
Sole Proprietorship– Companies having single owner are like unincorporated business as
well as have no different legitimate substance. Therefore, being a single owner, he/she has to
bear complete risks and liabilities of business.
Advantage: As business operated by single owner so it is easy to change legal structure of firm.
Disadvantage: Life of business of such companies is limited and complicated too.
Partnership– In this sector, a firm has two or more than two partners who make equal
investment in business (Zeng, Li and Duan, 2012). These partners have enjoyed profitability or
bear risks in equal manner.
Advantage: Operational activities of business can be organised, managed and run in proper
manner due to share equal responsibilities by partners.
Disadvantage: There is always a great risk in disagreement among partners in such business
which may harm entire activities of company.
Public Sector: In context with legal structure of government organizations, can be
described in following manner:-
State Government: Regulatory bodies in this section are used to develop policies and
implement rules in order to improve entire state of a nation.
Neighbourhood (local) government: Under this sector, governmental organisations are used to
take order from state government of a country and implement the policies to develop condition
of people.
P2 Size and Scope of various types of organisations
In UK and other countries, there are different kinds of companies are running which are
differentiated on the basis of investment they have made in business, size, scope and targeted
area. In this context, generally size of firms are described as small, micro, medium and large
whose description is given below:- Micro Scale: In this sector, owners have made a small investment to open their business
in order to earn money for livelihood (Zsambok and Klein, 2014). They focus only on
become financially strong and secured so that condition of family and relatives of them
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can be improved. In this manner, they haven't give much employment to people i.e. near
about less than 5 workers are working in such sectors. Therefore, turnover of these firms
are also much low. It includes small stores, cafes, beauty saloons and more. Small Scale: Under this sector, entrepreneurs have invested a little more than micro scale
enterprises. Before opening outlets directly, they used to conduct proper research of
market in order to see in which area profitability can be earned more. They develop
various ideas to turn the same into business concept so that high amount of profit can be
generated. In terms of employment, these firms used to provide jobs to near about 50
employees in their offices. In addition to this, small scale enterprises have given turnover
to 5 million dollars. Firms like consultancies, departmental stores, restaurants etc. are
small scale companies. Medium Scale: In this kind of sector, firms are giving employment to more than 100
employees. They have occupied a large area in a particular marketplace so, give turnover
to near about 5 to 25 million dollars (Gharajedaghi, 2011). These companies always
focus on grabbing more opportunities to expand business in other countries. Large Scale: These are the established companies of a country which have operated
business in many countries so, give employment to more than 1000 of workers. In
addition to this, these firms are always focusing on gaining sustainability and maintain
reputation in marketplace. For example- Santander Bank of UK is one the largest
institution which has more than 20,000 employees in 3500 branches in wordwide.
Scope differentiation:
Basis Scope
Micro Having less investment and earning for own
shows that there is not much scope of these
businesses. They have less chance of
development or expansion therefore, these
firms have no role in improving condition of
economy of a country.
Small As these firms have used to develop strategies
and ideas first to run business in unique
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manner. In addition to this, they use various
tools and techniques to manufacture innovative
products or services (Meiners, Ringleb and
Edwards, 2014). Therefore, there is much
scope of them in expanding business area and
improve financial condition of nation also.
Thus, in this context, government provides
much support to them in open their business.
Medium Level of scope of these companies is much
higher as they concern more on expanding
business in international market.
Large These firms have covered a large space in
market area and generate higher profitability.
So, level of scope of these firms are also good.
TASK 2
P3 Relationship between different organisational functions
A company can be run in a proper manner if all its functions are done in proper manner.
There are various department in a firm which are divided on the basis of functions, roles and
responsibilities but focus on single concept i.e. to achieve targeted goals and objectives of
business in a predetermined period of time (Sekaran and Bougie 2016). In context with
Santander Bank of UK, it has number of divisions whose functions are interrelated with each
other. Therefore, if any one department has failed to carry its operations in appropriate manner
then it will impact on performance of others also. This can be depicted as-
Human Resource Management: It is the main function of a company in which managers
are needed to consider demand of human resource in all sectors. In this process, they used to
conduct different type of methods of recruitment and selection in order to hire employees as per
requirement of other departments. In addition to this, to get right efforts and whole commitment
of people, they used to provide training and development program to them as well as different
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type of benefits like compensation and reward to get their retention. As main objective of
Santander Bank is to increase customer base therefore, with the support of talented and
experienced workers it can achieve its objectives.
Marketing: As many financial institutions are running in UK and other countries
therefore, marketing department of them plays an important role in promoting their services.
Marketing managers use various strategies, policies and techniques to grab attention of
customers and promoting business of a firm in an appropriate manner (Saleem, 2017) . In this
way, managers of Santander Bank used digital technologies, traditional radio, TV and
newspapers advertisement to promote services like online banking to grab more attention of
customers.
Finance: This department also performs various activities like bookkeeping which
includes day-to-day transactional accounting as well as management of government reporting.
This would help managers of other departments in making proper strategic decisions as well.
This division is responsible for managing cash flow of business and ensure in allocating enough
funds to meet payments on regular basis. In case of insufficiency, managers used to lend debts
from central bank and share issues from private investors.
TASK 3
P4 Positive and negative impacts of macro environment has upon business operations
Due to innovation and fast developing world, factors present in environment impacts on
every kind of business in both positive and negative manner. Macro environment constitute
various external factors which are generally beyond out of control from management of an
enterprise. It includes fluctuation in economical terms, development of technology, requirement
of ethical business, concern on protection of environment and more. Thus, it is necessary for
every company to analyse concept of these features as well as measures through which impact of
the same can be reduced. It will help in grabbing opportunity to enhance productivity and
profitability of business in a higher way. Therefore, in this context PESTLE analysis has been
done on Santander Bank of UK in following manner:-
Political factors: Business of banking sector looks most powerful but governmental laws
acts as bigger giant in increasing profitability (Tayur, Ganeshan and Magazine, 2012). It includes
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corruption between political parties, rules and regulations like labour laws, tariff policy, political
stability, trade restrictions etc. Positive impact: New 8% government surcharge on banks of UK generate high
profitability. In addition to this, price strategy of goods and services can be done in
efficient manner with the development of policies made by regulatory bodies of a nation.
 Negative impact: New taxation policies, trade and tariff controls, social and employment
legislations etc. create a great impact on business of banks. Any company cannot rise or
decrease price rates of products unnecessary due to political laws. So, it creates a
negative impact on profitability of such firms. Similarly, interest rates of saving account
cannot be increased by Santander Bank in order to enhance minds of customers.
Economic factor: Economical conditions of a nation and banking industry are
economically tied with each other. In recession period, income flows of banks much affected. In
this manner, income of customers, foreign exchange rates, GDP and more also impact on
strategies of a company in both positive and negative way. This factor puts a large impact on
operational activities of banks in following manner:- Positive impact: If economical condition of people is not good then they used to borrow
loans from banks. Similarly, when their level of income is high then they used to save it
in accounts which also increases profitability of such financial institution. In addition to
this, financially state of nation also matters a lot i.e. if its strong then large number of
people would like to acquire services of an association.
 Negative impact: Due to fluctuations in currency rates, inflation period, stability and
more, banks experiences the backlash. Recession period of a nation also consider as
major issue in sales performance of a company.
Social factors: Purchasing behaviour of people and necessities reveal the way they used
banking services (Türetken and et. al., 2011). In addition to this, level of education of citizens
related to saving accounts, credit card, investment and more. Apart from this, every organisation
is need to introduce corporate social responsibility in its its business so that good perception of
consumers can be gained. Positive impact: When society of a country develop more and have high educated then
they use much banking options which create a positive impact on financial institutions.
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By carrying out business with CSR and CVM (Customer value management) activities, a
company can attains minds of customers in more economic manner.
 Negative impact: Similarly, when education and level of knowledge of people is low then
they ignore to use services of banks like depositing their money or taking loans and more.
Today, perception of customers matters a lot in order to measure effectiveness of
products of an association. Thus, if industries are failed to gain a good perception of
targeted audience then it will directly impacts on production and profitability of them.
Technological factors: Innovative and updated technology aids banks like Santander in
providing much beneficial services to customers like online banking, pay bills on smartphones,
transfer funds etc. Thus, it is compulsory for every enterprise whether deal in small or large
sector to introduce latest technology in business which may aid them in conducting activities in
more effective manner. Positive impact: Due to development of technology like ATM, scanning cheques by
smartphones and more help banks to get retention of clients in a better manner. Negative impact: It negatively impact on employment as adoption of latest technology
reduces requirement of human resource in banks and other organisation which increases
unemployment (Vaiman, Sigurjonsson and Davidsson, 2011). In addition to this,
implementation of new technologies demands much cost and money which is not
possible majorly to small firms.
Legal factor: Legislation laws made by regulatory bodies of a nation are much based on
improving condition of people as well as save personal information of them. It also helps in
reducing corruption and other illegal activities occur at enterprises by strictly imposing laws on
them. Positive impact: Laws and regulations help banks and other organisation in carrying
business operations in a legal and smooth manner. Negative impact: By strictly following rules related to privacy, trade structures and
consumer laws etc. affect profitability of business.
Environmental effect: Due to global factors and rise in globalisation, organisations as
well as government care less about environment (Wack, 2017). It leads to rise to global warming
therefore, to reduce it regulatory bodies of UK has imposed various laws on enterprises which
may put both positive and negative impact in following manner:-
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 Positive impact: The greatest positive impact of environmental factors is that using online
banking and mobile app techniques help in reducing usage of paper.
 Negative impact: As online applications, usage of smartphones and more reflects techno-
friendly behaviour rather than Eco-friendly so it shows negative impact.
TASK 4
P5 Internal and external analysis of company to identify strengths and weaknesses.
In order to analyse internal and external analysis of business environment management of
a firm like Santander Bank used SWOT technique in following manner:-
STRENGTHS:
 It is one of the largest bank of UK in terms of giving mortgages and taking deposits.
 Having retention of 25 million customers as well as more than 20,000 employees shows
greatest strengths of Santander Bank.
WEAKNESSES:
 Due to presence of various banks in a single street, it results of various mergers and
acquisition.
 This financial institution has rated recently as one of the worst bank in UK due to
ineffective customer service.
OPPORTUNITIES:
 Through introducing innovative schemes like 123 product range, improving services and
opening new branches in urban areas give opportunities to this bank in improving its
reputation and expanding business.
 Adoption of latest technologies and giving better facilities to customers aid this firm in
grabbing more attention of them.
THREATS:
 Presence of many competitors like HSBC, Royal Bank of Scotland, Barclays and more
creates a major threat in increasing growth of Santander Bank (Crane and Matten, 2016).
 If interest rate move against liabilities then this bank will face various issues in running
business properly.
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P6 Strengths and weaknesses interrelate with external macro factors for Santander Bank
For analysing relationship of different components, management of Santander Bank
needs to analyse factors of micro and macro environment (Yu and Ramanathan, 2013). In this
process, PEST/PESTLE
Political: Due to changes in government rules and polices, it creates a great impact on
growth of business and its operational activities. Strength: It helps in conducting business operations in a proper manner.
 Weakness: Control over activities of business has shown major weakness of external
environment on enterprises.
Economical: Changes in Interest rate, currency rates, inflation and deflation period etc.
impacts on economical condition of people which affects business of banks also. Strength: If economy of country is good then banks of other countries used to lend loans
from financial institution from them (Chetwood and et. Al, 2014). This would enhance
growth of business of Santander Bank also.
 Weakness: But if interest is high then people will avoid to take loan from finance
institution.
Social: Preferences, education ad background level of people also impact on business of
banks. Strength: Change of lifestyle and status of people, they used debit and credit type
facilities instead of keeping cash which increases efficiencies of bank.
 Weakness: Demand of ethical business from banks impacts on operational activity of
banks and other institutions.
Technological: Using latest tools and innovative techniques, Banks can deliver better
services to customers. Strength: Usage of technique like 123 product range has aid Santander Bank as third best
firm in UK.
 Weakness: Introduction of latest technologies in business demand more finance.
CONCLUSION
From this mentioned report, it has concluded that business environment of a company is
filled with various opportunities through which a company can gain advantage to expand its
operations in major sector. It depends majorly on size, scope and type of business in which a
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firm carry out its operations. In this manner, management of a firm needs to analyse impact of
micro and macro environment by using SWOT and PESTLE techniques.
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