Understanding the Business Environment

This assignment delves into the multifaceted nature of the business environment. Students are tasked with analyzing various internal and external factors impacting businesses, including economic, social, technological, legal, and ethical considerations. The assignment encourages critical thinking about how organizations adapt to these dynamic forces and develop effective strategies for success in a globalized marketplace.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Depict different form of business,purpose and ownership of two contrasting businesses. . .1
P2 Describe the different stakeholders who influence the purpose of two contrasting
organisations...............................................................................................................................2
P 3 Describe how two businesses are organised.........................................................................3
P4 Explain how style of organisation helps them to fulfil their purposes..................................3
P5 The influence of two contrasting economic environments ...................................................4
P6 Describe how political, legal and social factors are impacting upon the business activities.5
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
Business Environment relates to all the activities that are operated in a business. It can
also be defined as the combination of external and the internal environment that affect the
business internal factors and the external factors have influence on each other and they work
together so as to affect the overall environment of the business. This report is based on business
that are operated by two company which are Mark & Spencer and National Health Care. These
are business which are running for profit and non-profit (Chesbrough, 2010). The stakeholders
who affect the activities of business. There are various ways in which the business activities are
organised. Different styles of organisation which helps them in fulfilling their purposes.
Influences of two businesses on environment aspects, political, legal and social environment also
have an impact on the activities that are operated by business.
TASK 1
P1 Depict different form of business,purpose and ownership of two contrasting businesses
To describe various types of businesses, ownership of two businesses I have selected the
company which is Mark & Spencer and National Health Care.
Mark & Spencer (M&S)
It is a company which operates at an international level. Global business operates at
international level and sell its product around the world. It operates and thus have trading
activities in Europe and mid Asia. It is a public limited company, it means that shares are to be
brought by public and limited implies that its part have limited liabilities. There are many
advantages of small liabilities it makes the shareholders responsible for shares of company so
that they will not be held accountable for different liabilities that results in insolvent. Being a
part and parcel of third or tertiary sector indicates that it sell the products in different forms like
grocery, clothing and home appliances (Chow and et. al., 2012).
The basic aim of M&S is to supply products. It also offers services but that are not their
original way of running the business. They are motivated by net income which implies that they
should consider their running cost more. Running cost implies that they should cover everything
that organisation needs to spend money that is essential for company to operate its business like
salaries, utilities and rents. When the company was established at the initial level the main aim of
the company was to sell only British goods which were having good quality. The concept change
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in 1990 but still they continue to sell the products which were of high quality foods and were
sold at fair prices.
National Health Services (NHS)
These are non-profit organisations and they are also part of third sector. It is public
company and thus it is owned by government (Gecevska, and et. al., 2010). It stated in the year
1948 with the help of labour unions. Not for Profit company implies that it run its business
activities using money from taxation. Part of third sector implies that services are provided to
general public.
The main aim of NHS is to provide good care facilities to all. It has employed nurses,
doctors and other professional that are involved in health care even it is non -profit organisation.
It not comprised out of serviceman. The money that is earned from taxation is used for all the
running cost like giving wages to staff, handling of machines, equipment, construction of
buildings etc.
P2 Describe the different stakeholders who influence the purpose of two contrasting
organisations.
There are internal and external stakeholders who operates in a company. Describing
about the stakeholders who are they, what work they do, where they are. Than contrasting them
with two different companies which are Mark & Spencer and National health services they
describe about what the stakeholders needed from the business and why the stakeholders are
useful (Craig and Campbell, 2012).
Stakeholders are people who are in organisations and thus are affected by the different
strategies and projects of organisations. They operate at internal and external level which means
internally they operate within the business and externally they operates their activities outside the
business which includes suppliers and community.
Customers: They want high quality products and which are valuable to them.
Employees: They are in the company because they are getting good benefits and rewards
in their company.
Suppliers: They want that they should be recognised by business and they should get
regular orders.
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P 3 Describe how two businesses are organised
The two different business that is Mark and Spencer and National Health services are
organised with the help of business structures which help them to organise the business activities
that lead them to success. The structure that are used by organisations can be presented with the
help of charts which are used for representing line of authorities within the organisation.
Hierarchy structures are used by business to show how a business is organised by
showing different level of authorities the span of control and different chain of commands that
are used by organisation. In this structure the person with the greatest responsibility is at the top
position and each level in organisation has a substitute part from the bottom part (Hamilton and
Webster, 2015). Each level is governed by managers or employees who are of equal opportunity
or responsibility.
The advantages of hierarchical organisations is that it depicts the line of authority,
communication followed between managers and how many people each manager is responsible
for. There are certain drawback that it can make the organisation inflexible and thus changes
cannot be implemented according to taste and preferences of customers.
Flat organisation structure have very few levels of hierarchy and management which
have 2 to 3 levels in the organisation. It has shorter span and shorter chain of commands. Tall
structures are similar to flat organisations structures but they are also have a longer chain of
commands from the top to bottom of organisations.
P4 Explain how style of organisation helps them to fulfil their purposes
The different styles of organisations that are used by Mark & Spencer and NHS helps
them to fulfil their purposes in the following ways which are as follows.
Matrix
 The matrix structure is usually found in organisations that can deal with the special one
off type of projects, also these companies can also work on several projects all at the
same time.
 Although while all of these projects are ongoing, they have and expert team seeing it
through making sure it goes well ( Klapper and Love 2011). The experts also support the
major functions of the organisation, and by this I mean the financial, human resources
and production.
Product
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 A product structure is a way an organisation represents the parts of a product and the way
they fit together and interact, also the organized levels in the detail based on the type of
structure. Also this type of structure that is also used to manage the changes, testing and
the problem resolution for the complex products with a large number of parts and
functions.
Functional
 The functional structure is one which is related with organisational structure where all the
employees are grouped hierarchically and then these are managed through the clear lines
of authority and then only report to the only person in charge (Klapper, and Parker,
2011).
Geographic
 The geographical structure relates to organisation putting things into a geographical units
which are regional, national, and international, this means that they will need to report to
one central headquarter, by doing this is administers to the core functions such as the
planning and marketing.
P5 The influence of two contrasting economic environments
The influence of two contrasting economic environment on business activities within the
cited organisation describing about the influence of two contrasting economic environment on
business activities with in a selected organisation. The report will be looking at how the demands
and supply affect the economic and how it influences recession and excessive growths affect the
economic. The study will be also explaining the interaction of how globalisation influences
businesses. The economic is made out of two things which are the buyers demand and the
suppliers that sell goods. The types of groups who make up the economic environment are the
demands and the suppliers ( Kolk and Tulder, 2010).
Economic environment is the factor that influences the economic such as recession when
a period where the economic growth slows down and the level of output may actually decrease.
Unemployment will be likely to increase the recession. The boom factor influences the economic
by a period of fast economic growth which is a high output due to increased demands and
unemployment.
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Another factor is slump which is a period when an output slows down due to a reduction
in demand. Recovery is another factor which is a period when the economy moves between
recession and a boom. The importance of stability will keep the economic sustainable this is
because it will decrease the chance of the ripple effect and recession. For example if the
economic is booming the prices of products will increase and people will demand more money
from work and it will also cause the businesses to keep on increase the prices.
P6 Describe how political, legal and social factors are impacting upon the business activities.
The factors that affect the business activities of Mark and Spencer and National Health
services are:
Political impacts
Political stability is usually defined as the state of peace that is normal experienced in a
country from the activities from the government and also the government in this situation will
make decisions and keeping the best interests in mind for people (Pulver, 2012).
When a government chooses to Investment finance this then involves selling part of your
business to an investor. The investor will then take a share of any profits or losses that the
company makes.
The International Monetary Fund describes itself as “an organization of 188 countries
that works to foster global monetary cooperation, to then secure financial stability, facilitate
international trade, promote high employment and sustainable economic growth, and reduces
poverty around the world.
The Government may change the tax rates up or down this will be to try help boost the
economy, an example of this is VAT this means all non-food and adult clothing range will need
different prices on the shelf edge labels this then means staff will then have to go change the
SEL’s (shelf edge labels). Although this then will change the profitability and finance
department of the company as they will then need to change the profit sheets that report back to
the business.
Legal impacts
The legal impacts that the cited company must follow the law, and an example of this is
the trade description act, this is where the product most be described accurately otherwise it can
cause an issue (Vitale, Giglierano and Pfoertsch, 2010).
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Consumer protection is when a group of laws and organisations have designed to ensure
that the rights of consumers, these are put in place to hopefully prevent businesses that engage or
are planning on engaging in fraud or specified unfair practices to try and gain or taking an
advantage over competitors.
Health and safety standards are the most important, and for all the new workers will have
a full day having an induction before that are allowed to start their job, they are also shown
around their work place and they are also shown the areas that they won’t be allowed to go due
the dangerous machinery (Wild and Han, 2014).
The legal frameworks is where the business chooses the way it operates, this will then
determine who has what role and share to the business, this will also determine the relationships
between investors, employee’s customers etc.
Social impacts
The social impacts of cited organisation may face are the difficulty to recruit the right
people for the job in the stores or the offices depending on where they will be based, also most of
the workers that are in the stores are an unskilled workers on the minimum wage given .
The company cannot discriminate anyone from having a disability, different religion or if
they are pregnant and other things on this terms and when they are employed by the company or
if they are in the HR Department they are then recruiting they are also not allowed to ask
questions in these areas.
In this era, society plays important role in performing business activity. In market, social
factors have to be analyse effective for making organisation performance. In social factors, age,
gander, education and family are included. A manager of company has to analyse the age sectors,
ratio of the gander and family cultures. This will give impact on buyer behaviour. By this market
manager will be able to do market segmentation, which will assist in identifying the targeted
customers of firm. Then products and services will be manufactured according to targeted
customers’ needs. This will aid in making strategy and this will give help in making survive in
the market.
The business related activities like recruitment of staffing, transportation of goods and
services, product design impact on organisation in accomplishing the goals and objectives. If
company will not hire good and capable candidates, then it will affect business environment.
Sometimes, the product designs also impact on business operations and its productivity, so it is
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necessary to make products attractive and of good quality. If these companies make products
with good quality and at standard reasonable price, then from this customers will be attracted
towards their products, from this the productivity, growth and profitability of these business
organisations will be increased. The brand or product promotion is very helpful at the time of
launching new products or services. Company can promote with the help of newspapers,
television, holders, banners, radio etc. Through this, it gives information to all people about their
products and its specifications.
CONCLUSION
From the above report it can be concluded that the investigation of business environment
is requisite as it will helps in the effective working of the business. The companies like Mark &
Spencer and NHS make use of various strategies to analyse the business environment. The
external macro environment which consists of the political, legal, social, economical,
environment and technological factors help the company to analyse its strengths, weakness,
opportunities and the threats which will help the company to manage its operations effectively
and efficiently. Lastly the legal, social and political impact on the business activities.
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REFERENCES
Books and Journals
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning, 43(2), pp.354-363.
Chow, A.T and et. al., 2012. Computer readable medium with embedded instructions for
providing communication services between a broadband network and an enterprise
wireless communication platform within a residential or business environment. U.S.
Patent 8,155,155.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Gecevska, V. and et.al., 2010. Product lifecycle management through innovative and competitive
business environment. Journal of Industrial Engineering and Management, 3(2), pp.323-
336.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
havis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on young
firm financing. The world bank economic review, 25(3), pp.486-507.
Klapper, L. and Parker, S., 2010. Gender and the business environment for new firm creation.
World Bank Research Observer, 26(2), pp.237-257.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp.
108-123). Palgrave Macmillan UK.
Klapper, L.F. and Parker, S.C., 2011. Gender and the business environment for new firm
creation. The World Bank Research Observer. 26(2). pp.237-257.
Kolk, A. and Van Tulder, R., 2010. International business, corporate social responsibility and
sustainable development. International business review, 19(2), pp.119-125.
Pulver, S., 2012. Business and the Environment.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning,
43(2), pp.172-194.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management, 30(2), pp.125-134.
Vitale, R.P., Giglierano, J.J. and Pfoertsch, W., 2010. Business to Business Marketing: Analysis
and Practice in a Dynamic Environment.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Wild, J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
Online
What is business environment 2015. [Online]. [Available
through:<http://study.com/academy/lesson/what-is-business-environment-definition-
factors-quiz.html>. [Accessed on 5 may 2017].
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