Business Environment Of Organization : Assignment

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different type of organisation and its purpose ......................................................................1
P2 Size and Scope of different organization...............................................................................4
TASK 2............................................................................................................................................5
P3 Interrelationship of different organisational functions & their link with objectives.............5
TASK 3............................................................................................................................................7
P5 Identifying strength and weakness by conducting SWOT Analysis......................................9
TASK 4............................................................................................................................................9
P6 Interrelationship of strengths & weaknesses with macro environmental factors..................9
CONCLUSION .............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment is identified as the mixture of external as well as internal forces
which affects functioning and operations of business concern. It is a sum total of macro & micro
components that may impact positively or negatively on profitability and performance of
company (Asif, Garvare and Ahmad, 2011). Various forces that exists in business environment
involves customers, competitors, suppliers, technological changes, political, social, legal,
environment factors etc. Managers are required to consider all these factors as it assists them in
designing appropriate policies and plans which provides them direction for their future course of
actions. The present assignment is based on Halifax bank which is operating as trading division
of Scotland bank that itself a fully owned subsidiary of Lloyds banking group. The report
includes purposes and types of various organisations as well as their size and scope with their
legal structure. It also discusses about various organisational functions and their interlink with
its objectives. Apart from this, negative and positive impact of external factors along with
analysis of strengths and weaknesses of firm is defined. At last, interrelationship of weaknesses
& strengths with external macro factors are defined in this project.
TASK 1
P1 Different type of organisation and its purpose
An organization can be define as an entity made up of multiple people that has a common
goal and also linked with external environment. In simple words, it a social unit of individuals
that is managed and structured to fulfil a collective need. The main purpose of each business
association is to accomplish higher profitability ratio and competitive edge by providing innovate
goods and services to target group of customer. So as to maintain long term existence and
sustainability in market, it is crucial to fulfil needs and needs of clients. There are three common
type of industry in which an organization operates namely primary, secondary and tertiary.
Primary sector deals with acquisition of raw material like oil drilled from ground, rubber trapped
from trees. Secondary deals with assembly and production process. It encompasses converting
raw material into finished goods and services. For example: Making plastics from oil. Lastly,
Tertiary sector refers to commercial services that support distribution and production process like
advertising, warehousing etc.
Legal Structure of private organization:
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Sole proprietorship: When a business is operate and manage by single individual it is known as
sole-proprietorship. They appreciate all benefits however in the meantime, they need to hold up
under all misfortunes of organization exclusively. As the firm is solely controlled by owner, its
decision making is very effective and quick as compared to others which also aid in its smooth
functioning.
Advantages Disadvantages
 Less interference of Government
 Offer highly innovative goods and
services
 Area of interest is earning profit only
 Poor protection to members
Example: Gary J Harding is a sole trader firm that gives professional and payroll advice to its
customers. It deals in Secondary Sector.
Partnership: When any business is begun by at least two people then it alluded as organization
firms (Cavusgil and et. al., 2014). For beginning such sorts of firm, an authoritative report or an
agreement is marked by every one of its partner which considers as a lawful evidence of business
proprietorship. Benefits and misfortunes are partitioned equally among all partners on the ground
of their respective share in the company.
Advantages Disadvantages
 No legal formalities
 Easy to form
 Flexibility in operation
 Profit is shared by many people
 High chances of conflicts
 High uncertainty
For example: Clark's International Ltd deals in secondary sector
Limited Company: It is a private company whose founders are legally responsible for its debt
and also the amount of debt is extent up-to the capital invested by them. It can be classified as
limited by shares and limited by guarantee.
Advantages Disadvantages
 Limited Capital
 Separate Entity
 High cost involved
 Restricted raising capital
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For example: Burberry Plc and it deals in tertiary sector
Public Sector Organization: These are the associations that are completely overseen and
controlled by lawful specialist of particular country. They underscore more on improvement and
welfare of society rather then procuring benefits. It normally include electricity board, health
care institutions etc.
Advantages Disadvantages
 Limited Liability
 Strong availability of finance
 Loss of individual control
 High Government Interference
The example of public sector firm is TESCO which deals in tertiary sector.
Voluntary Organization: It is a voluntary based firm which works and perform capacities to
decline neediness from society. Volunteers exceedingly contributes in smooth running of tasks of
firm. They satisfy fundamental needs of penniless populace of society by giving them sustenance
office.
Advantages Disadvantages
 Promote the welfare society and its
members
 Support from Government
 No assurance of financial support
 Lack of co-ordination
For example: Oxfam and it also deals in tertiary sector
P2 Size and Scope of different organization
Mark and Spencer
Size: It is a British multinational retailer that is situated in Westminster, London. It bargains in
offering garments, family unit items and luxury food product. It was established in the year
1884. It is operating in more than 10 countries worldwide covering Austria, Dutch, Germany etc.
It has solid market and customer base in UK including in excess of 615 stores that exclusive
offers only food items (Gharajedaghi, 2011). Number of workers work in M&S is close around
84,939 and its yearly income starting at 2017 was figured as £10.622 billion.
Scope: It spend significant time in conveying family unit items, apparel, nourishment items to
immense number of clients. It's fabric run regularly arrange into lady, youngsters and men and in
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addition food and household items. Aside from these, M&S likewise offers items that is made
under its home image including Indigo Collection, Collection Junior. It had 6 sub-mark inside its
men wear range and 10 sub-marks inside its ladies wear run.
Vision: "Serving great quality items to target client that qualities their every single penny".
Mission: "To make items that are made of optimistic quality and receptive to all".
HALIFAX BANK:
Size: Presently, the firm is operating in overseas market with near around 4,400 offices. It has
positioned themselves in the list of leading and most respected bank in UK.
Scope: It deals in providing services related with investment banking, commercial banking,
market personal financial services and other financial product or services.
Vision: “To render financial services that are of high quality and fulfils customer needs and
requirement”.
Mission: “To make strong customer and market base”
OXFAM:
Size: It is an autonomous charitable trust that is comprised of 20 individuals or volunteers who
give administrations to people of the nation. It have practical experience in furnishing
administrations that is mainly related with decreasing the level of poverty from all across the
world.
Scope: It also render services related with policy research, removing poverty, advocacy, pro-
migration etc. All work is finished with the best possible help and commitment of its volunteers.
Vision: "To minimise the level of poverty worldwide”
Mission: "Giving administrations that expansion the expectation for everyday comforts of
household person of the nation"
TASK 2
P3 Interrelationship of different organisational functions & their link with objectives
Halifax is a British bank which is a subsidiary of Lloyds Banking group. It is one of the
leading and well renowned bank that offers financial services to its potential customers. Main
objective of company is to deliver high quality services to their customers and maintains large
consumer base (Gilboy , 2016). Various departments are there working in the firm such as
marketing, human resource, finance, operations etc. All these are working collectively with
common purpose to attain objectives & goals of company in an effective and better manner. For
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preforming activities and operations of firm smoothly and in structured manner, it is essential for
manager of Halifax bank to ensure that all departments are working coordinate towards
accomplishment of objectives of company. Different functional departments that are working in
Halifax bank are defined below:
Human Resource Management Department: Vital role is played by manager of this
department in recruiting and selecting skilled and knowledgable candidates. Human resource are
the main asset of every business enterprise that highly contributes in its growth and success. So,
it is very necessary for administrator of Halifax bank to hire knowledgable and qualified
candidates so that high quality services can be offered to customers. For this, manager invite
applications as per the required vacancies of bank and select those candidates who meets set
criteria for that job position. They also render training to their staff members so that employees
are enable to offer best services to their customers and can have the ability to resolve all their
issues and answering all their queries (Kian Chong, Shafaghi and Leing Tan, 2011). Training and
development programme also increase their motivation level and promotes healthy work
environment. All this helps in maximizing performance of workforce and increasing profitability
of company which in turn assists in attainment of objectives of bank.
Finance department: For running activities smoothly and performing day to day
operations in proper way, funds are required. It is very necessary for managers to maintain
adequate amount of money within firm so that it becomes easy to do daily transactions
effectively and in systematic manner (Li, and et. al., 2011). So, financial manager of Halifax
bank is require to ensure that appropriate amount of funds are available within firm. They also
needs to allocate budget for each department so that activities can be run smoothly. They assign
proper funds for each activity so that its timely completion should be ensured. All this helps in
attainment of targets and objectives of firm and leads it towards high growth and success.
Marketing department: The department whose contribution is high in growth and
success of firm is marketing. It is the department by the assistance of which firm communicates
value and benefits of its services and products to customers. In order to aware clients about their
products and services and communicate its benefits to them, manager of Halifax bank use
various tools to promote its goods and services. One of the tool that they utilize at large is
advertisement. They advertise on television by using cartoon characters which assists in
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attracting large group of customers. It helps in attaining objectives of bank and increasing its
profits and revenues.
Customer relationship: This department assists in maintaining good relationship with
customers and helps Halifax bank in maintaining large consumer base. By this, firm is able to
sell their products more and administer best services to customers. Mainly, the major
responsibility of customer relationship manager is to maintain a strong relation between bank
and its potential consumers. If a good relation is maintain among them, it assists in attaining its
targets and objectives.
Above mentioned are all the functional departments Halifax Bank which are highly
interlinked with its objectives. Collective working of all these departments assist in maximizing
performance and targets of company.
Different types of organisational structure:
Functional organisational structure: It is a structure that is commonly used in many
firms. In this, functions are divided in smaller groups as per the specialized functional areas
(López-Gamero, Molina-Azorín and Claver-Cortés, 2011). This will assists in bringing higher
efficiency and effectiveness in operations as individuals are grouped by function and share
diverse skills and knowledge.
Matrix organisational structure: Under this structure of organisation, people grouped
together by various operational perspectives. These structures are complex and implementation
of these provides advantages to large organisations.
TASK 3
Halifax Bank is a comprehensively prestigious British banking organisation which is a fully
owned subsidiary of Lloyds banking group. In UK, it is the biggest and one of the well known
banking organisation. Nonetheless, there are some outside components that are accessible in
commercial centre that have either positive or negative effect on its general business task and
exercises (Meiners, Ringleb and Edwards, 2014). External variables incorporate social, political,
ecological, technological, environmental and legal variables that are characterized beneath;
Political:
There are some laws and legislations that has been settled by government for business
elements related with chance evaluation, chance control and risk distinguishing proof. In any
case, if by one means or another organization was not able take after these predefined control or
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norms then they need to experience antagonistic result in the shape substantial punishment or
compelled to shut down now and again. Notwithstanding that, political flimsiness in nation
because of Brexit additionally influence Halifax Bank business activity.
Positive Impact: Due to political precariousness that may happens because of Brexit, the
organization laid weight on satisfying client prerequisite as well as spotlights on giving them
such products that they require .
Negative Impact: The negative effect can be in kind of not complying with regulations
constrained by Government. Halifax bank was disregarding the laws related with British
Standard .
Economical:
The economic standpoint of United Kingdom is exceptionally questionable and it is
firmly affected the transactions of bank as their residents are not having satisfactory time or
money to invest (Sekaran and Bougie, 2016). As of late, the firm experience recession and
subsequently, approx. 70,000 individuals loses its activity. Notwithstanding that, Halifax bank
has chosen to provide loans to people at low interest rates.
Positive Impact: The organization has to consider all economic variables so that
appropriate policies can be framed and operations can be performed effectively.
Negative Impact: Many of its employees loses their job that in a roundabout way
increment the rate or level of unemployment in the nation.
Social:
In 2006, Halifax Bank CEO had chosen to extend its image by offering various loan schemes to
clients. Presently, buyer are abundantly affected by social, psychological, cultural and personal
qualities and giving items as indicated by this is the principle motivation behind Halifax Bank.
Positive Impact: The bank was popular for offering products according to the present
needs and needs of clients which help in influencing their client and market to base substantially
more grounded (Tayur, Ganeshan and Magazine, 2012).
Negative Effect: Taste and likes of clients are changing much of the time which may
make trouble for to continue changing its business practices on visit premise.
Technological factors:
In order to make operations and processes of business more compelling and proficient, it
is vital for each organization to implant top of the line technology. Taking the upside of most
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recent and propel innovation, Halifax Bank has chosen to introduce its online application.
Positive Impact: By presenting its own portable application, the organization can broadly
build the proportion of its potential purchasers.
Negative Impact: Large cost or investment is related with adopting top of the line
technology.
Environmental:
With current situation of environment, each association is detailing plans and policies with point
of promoting awareness regarding environment among overall population. Truth be told all
organizations are required to change its direction with regards to developing services and goods.
Positive Impact: Halifax bank have built up its own Green Policy called as "Plan A".
Under this arrangement, firm needs to re-design itself in order to end up zero-squander to
landfill, carbon impartial and so forth.
Negative Effect: Any non compliance to environmental related strategy may bring about
making terrible picture of the organization in the psyches of customers (Türetken and et. al.,
2011, June).
Legal:
Legislations are continue evolving much of the time. In this manner, it is important for all
business venture to keep up-dating its laws and enactment. For example: With change in re-
preparing laws, Halifax Bank has change its policy regarding training. This infers, the alluded
firm is proceeding to adjust new laws and approaches.
Positive Impact: By playing out the business task according to new laws, the
organization can enhance its altruism and brand picture (Vaiman, Sigurjonsson and Davidsson,
2011).
Negative Impact: Non-consistence of legitimate laws may brings about influencing client
to move to some other banks.
P5 Identifying strength and weakness by conducting SWOT Analysis
Strength:
 It is the largest provider of saving
account and residential mortgage.
 It has a strong support of its parent
company i.e. Llyods banking group.
Weakness:
 There are some negative perception of
the company in the mind of customer.
 During financial crisis, company face
major credit crunches
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 Providing wide services under one roof
including share dealing, credit card,
insurance, loans etc.
 Provide convenience in the form of
online baking system.
 Facilitates different modes of payment
to customers
 Frequent change in overdraft charges
cause resentment in customers.
Opportunities:
 Expand business operation through
program like Cash Back Extra
 Targeting elderly people so as to
increase its customer base
 Business expansion mainly through
acquisition of insurance firm and
smaller bank
Threats:
 Strong market competition
 Chances of customer retention is low
TASK 4
P6 Interrelationship of strengths & weaknesses with macro environmental factors
Qualities and shortcomings of a business undertaking is to a great extent interlinked with
full scale variables of outside condition. For misusing openings and increasing high aggressive
edge in showcase, assurance of their interrelationship is extremely assistive for firm.
Political:
All authorizations and directions are required to be executed by organization which
permits them in building viable groups (Wack, 2017).
Strengths: Consideration of political factors helps firm in running their tasks adequately
and effectively.
Weaknesses: Ignorance of these powers may hampers exercises and tasks of business as
Halifax bank works in numerous nations and it is exceptionally hard to see all laws.
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Financial:
Loan costs, swelling, GDP, emptying and so on are the constituents that influences
working of business.
Strengths: Strong economy of nation encourages being developed and development of
organization and also helps in creating high benefits.
Weaknesses: At the season of expansion, client's purchasing power is low which very
influences request of item in advertise.
Social:
For enhancing society's expectation for everyday comforts, it is fundamental for big
business to satisfy its needs.
Strengths: Various social exercises are directed by firm which helps with making its
great picture in market and psyches of clients.
Weaknesses: Manufacturing of lower quality merchandise may decrease offers of items
and benefits of organization.
Technological:
Awareness in regards to technological changes is extremely vital for firm with a specific
end goal to achieve high upper hand (Yu and Ramanathan, 2013).
Strengths: Keep refreshing with most recent innovation gives focused edge to
organization in showcase.
Weaknesses: Ignorance of innovative changes and utilization of out of date innovation
may decay development of organization.
CONCLUSION
According to the above mentioned report, it can be concluded that business operation and
activities either directly or indirectly influenced by forces that exist in internal and external
environment such as employees, investors, customers, management etc. Size and structure of
company varies from one another and on the ground of that it's entire functionality depends.
Apart from this, the inter-relation between organizational function and its structure aid in
carrying out work in an effective and efficient manner. PESTLE and SWOT analysis has also
been discussed in the above report, which determines how company's operation is affected
positively and negatively through both micro and macro forces so that it can be control in a
better manner.
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