Business Organisation and Environment

This essay examines the concept of business organizations and their environments, focusing on Amazon's operations in Austria. It analyzes the company's background, financial performance, and international expansion plans. The essay also examines the external factors influencing Amazon's business environment in Austria, including economic, cultural, political, legal, and technological factors. It utilizes a PESTLE analysis to identify opportunities and threats for Amazon's e-commerce business in the Austrian market.

BUSINESS
ORGANISATION
AND
ENVIRONMENT

INTRODUCTION
Business environment refers to the combined total of institutional, individuals and other
forces, on which business organisation has no control or forces that are beyond from the
organisational control which influences the overall performance of the business and
sustainability of the business organisation. The forces which are combine and constitutes the
business environment are its market and economic conditions, suppliers, competitors, media,
government, investors, new trends, rapid technological changes etc. these forces form the
business environment and over these forces business has no control. Besides this there are
several business forces and dimensions that affects the business environment. These forces and
dimensions are different components of the single concept called Business environment.
This study pertain the business environment information and also comprises with the
business scenario of Amazon (Austria) which is exploring the Foreign Direct Investment in
Austria, also the information regarding its expansion of its current business operations with in
the home country, background of this business organisation and also the information regarding
the background of the business environment which includes the several factors and dimensions
that influences the business performance of the Amazon Ltd. in Austria (Android, J. and et.al.,
2017). Although, this report is to provide the necessary information regarding the current
business operation of the Amazon(Austria) and analysis of the general business environment in
the country and for the documentary support there are some appropriate frameworks like
PESTLE analysis, demand and supply schemes (for showing the market affecting forces) which
provides the information regarding the business environmental affecting factors.
Background Information of Amazon (Austria)
Amazon is an American e- commerce trading company by Jeff Bezos on 1994 in Seattle
Washington. The Amazon started its business activities as an online Book store after some time
it diversifies in selling video downloads, MP3 downloads, audio book download/streaming,
software, video games, electronics, apparel, furniture, food toys and jewellery. Not only the
Amazon organisation also holds the Publishing arm, Amazon publishing, a television and film
studios which produces consumer electronics lines including kindle e- readers, fire tablets, fire
TV and echo devices etc. and after some year of establishment it becomes the world's largest
providers of cloud infrastructure services through its AWS subsidiary. Not only this it also sells
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slow end products under its in house brand Amazon basics. No doubt in present times, the
Amazon is the leading or expanding brand across its other competitive businesses throughout the
entire world. As amazon had developed several separate websites for trading in different nations
like, United states, the United Kingdom and Ireland, France, Canada, China, Japan, India,
Singapore, Spain, Netherlands, Australia, Brazil, Turkey etc. also in translation of different
languages like Dutch, Polish and Turkish for the convenience of the people living in that regions.
These versions are of German amazon website provided by the Amazon. Moreover, the Amazon
is the third most valuable public trusted company in USA (Cavusgil and Knight, 2015). Besides
this Amazon had acquired whole food market for approximately 13 million. In context of size the
Amazon is expanding across the different countries throughout the entire world and its main
headquarter is in USA.
In ownership structure context, as per the latest Security Exchange Commission the
Amazon has its four major shareholders including its founder, the major shareholders are Jeff
Bezos, Andrew R. Jessy, M. Blackburn and Jeffery Wilke. Besides this, the Equity owners of
Amazon has of three types such as, Institutional holdings (759,776 Million USD), Mutual fund
holdings (712,414 Million USD), Insiders holdings (135389 Million USD). Besides this, in
context of institutional holdings of Amazon, there are five major holders of institutional holdings
namely, Vanguard Group INC, Blackrock INC, FMR LLC, Price T Rowe associates INC/MD
and State Street Corporation.
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(Source: Yahoo finance, 2018)
Moreover, in context of financial performance the capital structure of the Amazon
company is quite impressive as the debt/ equity is in their most appropriate manner. The Equity
(39,125 Million USD) and the debt of the organisation is (24,684 Million USD). As the equity is
over the debt means company has more equity ownership and less obligations which shows that
this is the financially sound company and liabilities.
The above chat is showing changes in the performance of the Amazon by the help of
using external factors. Such as environment, social and governance are the primary aspects those
are associated with the company.
From the above bar chart which is showing the performance of the company for the last
two years. it has been seen that growth level is much effective as compare to the last year 2017.
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Although, in context of the business international operations the Amazon focuses mainly
on its International expansion. Amazon's expansion is not only beneficial for the Amazon
company but also beneficial for the sellers to expose their products to new markets and increase
sales. But these opportunities for amazon involves huge risks and costs that are to be calculated
before the rushing into different foreign markets. Amazon also starts focus on sports and outdoor
gear which is beneficial for organisation, to successfully expand to 7 amazon market places on 3
continents within one or two coming years. Besides this, there is the rapid international growth
tactics, which involves the advertising that contributes success of the organisation on Amazon
market place (Clegg, Kornberger and Pitsis, 2015).
Background information on the business environment of Amazon Ltd.
Business environment can influence the operations of the business and it involves both
internal and external factors which can affect the management of the company. Business
environment involves various factors which are as follows: suppliers, competitors, technological,
social, environmental, legal etc. These factors cannot be predicted by the organisations so if any
changes are occurred in these environment factors than company will get influenced by it.
Amazon wants to do foreign direct investment in Austria and before doing this it wants to
analyse the environment factors of that country so that they can run its business and its
operations efficiently and smoothly. There are following factors which can affect the business of
Amazon and these factors are as follows:
Economy factors:
Economic factors can influence the business of an organisation and these factors includes
GDP, inflation, interest rate, employment rate etc. These factors can determine the economic
performance of the organisation. In context to Amazon, rise in the inflation rate in Austria can
affect the investment proposal of the company because it has required more fund to invest. If it
has shortage of amount than it cannot do business in that country. To establish a business in a
country, it is required to consider all economic factors so that it cannot affected from it. To enter
in a country than it is essential for the organisation to analyse these economic factors so that it
can effectively do its business and operations. Management of Amazon should evaluate these
factors so that is does not get influenced from the environmental factors and perform its
operations efficiently and smoothly (Crane and Matten, 2016).
Culture:
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Culture can also influence the business of the organisation so it essential for the company
to maintain the culture which is required to be followed. In context to Amazon, If it want to enter
in Austria and do foreign direct investment than it is important to follow the culture of that
country. The culture which is accepted by the society and which are mandatory to follow by the
companies if they want to run its business effectively and efficiently. If Amazon follows the
culture of that country than its investments be successful and organisation will able to generates
the returns from it. So for a successful business it is important to maintain and follow the culture
of that particular country.
Political factors:
Political factors are those factors which can influence the business environment of the
organisation. It involves tax policy, environmental law, foreign trade policy etc. In context to
Amazon, if government has increased the tax policy in Austria than it can affect the foreign
direct investment of the company. In that situation organisation has to pay more taxes which can
reduce the profits of it. If it is not earning sufficient profits as per its requirement than
organisation does not able to survive for a long period of time. So it is essential for the company
to effectively analyse the business environmental factors so that its business does not affected
from it.
Legal factor:
Legal factors are those factors which can influence the business environment of the
organisation. It involves consumer’s rights and laws, advertising standards, product safety etc. In
context to Amazon, if it is doing foreign direct investment in Austria than it is needed to follow
the legal factors of that country. If products of company do not follow the product safety
standards as per the requirement of country than people does not buy the products of
organisation. In that case investment of company does not generates returns because product is
not safe for the consumers and they will not purchase it. So it is important for the organisation to
analyse the legal factors so that its investment can be successful (Hamilton and Webster, 2015).
Financial system:
Financial system can also affect the business of the organisation so it is essential for the
organisation to follow the effective financial system. In context to Amazon, if it is making an
investment in Austria and according to that country law if there is any specific requirement
regarding the foreign direct investment. If country set the investment limit and organisation is
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not able to fulfil that investment criteria because company does not have that much finance to
start its business than it can get influenced by the financial system. So it is essential for the
company to maintain and follow the financial system so that it can get success from foreign
direct investment.
Business Scenario Analysis of Amazon (Austria)
Business scenario analysis is done on the basis analytical approach that is PESTLE
analysis approach is used for the its e-commerce business and macro environment. PESTLE/
PESTEL analysis approach is technique used for the identification of external factors that affects
exploration Amazon's business and it will also affect the operational performance of the or
Amazon online business in Austria or shapes the conditions of remote and macro environment.
In case of Amazon, the situation of retail marketing online is termed as the largest organisations
in market, the organisation enjoying the benefits of high turnover and establish the popular brand
of online services. Although, the online retail market is of dynamic in nature and creates new
challenges for Amazon (Osborne and et.al., 2014). By using the PESTLE model of analysation,
identification of significant opportunities and threats arises because of external factors, is
described below.
Political factors that affects the Amazon's e-commerce business
Political factors influence the business operations of the Amazon e-commerce business.
This approach beneficial in identification of the governmental activity or political interference in
operational activities of the organisation. As in case of Amazon there are some factors that
affects the development of the e-commerce business of Amazon in Austria.
 Political stability of the countries like Austria, then it will be the opportunity for the
Amazon e-commerce business. But if there is instability of governmental rules then it
becomes more difficult for the companies to acquire the market of that country.
 Governmental support for e-commerce is also essential factor for the Amazon e-
commerce business in Austria. As if governmental support is not available then it affects
the business operations.
 Increasing governmental efforts for cyber security is termed as opportunity as it reduces
the chances of frauds and unfair trade practices.
Economic factors that affects the Amazon's e-commerce business
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Economic factors also influence the business operations of the Amazon e-commerce
business. As the Amazon's business performance is depending on the economic situations of
Austria, where it starts to operate the online retailing business. The economic trends and its
changes forms the affecting business environment. There are some external economic factors are
as follows.
 Economic instability of developing markets will lead to bad impacts on business
performance of the Amazon online retailing business.
 Disposable income if decrease it also affects the e- commerce businesses in developing
countries but, increment in disposable may be termed as great opportunity for the
specified business.
 Economic recession badly affects the businesses of all kinds as it is termed as the biggest
threat for the running and operating the business like Amazon business stream.
Social/ sociocultural factors that affects the Amazon's e-commerce business
social conditions examine Amazon's business performance as a leading online retailing
brand. This model of analysis determines the impacts of sociocultural changes or trends that
leads to remote or macro environment (Tregidga, Milne and Kearins, 2014). Some external
factors that affects the operations of Amazon are as follows.
 Increasing wealth disparity gives the bad impact on the long survival of the retailing
businesses like Amazon.
 Decreasing consumerism in developing countries.
 Decreasing online buying habits of general public, it is the main sociocultural factor that
affects the business of the organisation badly as online buying habit of potential
consumers are very essential for the running of business activities and for generating
sales and revenues for the business.
Technological factors that affects the Amazon's e-commerce business
Technological changes and obsolescence also affects the business operations of the
Amazon, as the online retailing business or e- commerce business is depends on the technology
and its advancement. Technological advancement directly affects the Amazon, considering
centrality of technology in its e-commerce business (vom Brocke, Zelt and Schmiedel, 2016).
The circumstances of technologies and related trends on the macro business environment.
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 Rapid technological changes and obsolescence of old technology leads to threat in
running of the business operations.
 Slow or no improvement in IT technology also results in slow growth of technological
innovations and inventions.
 Increasing the cybercrime leads to threat and bad impact on the business operations.
Ecological/ environmental factors that affects the Amazon's e-commerce business
Environmental factors also affect the is the online retail business and its operations.
Environmental factors influence of the conditions of business operations and life cycle. This
aspect of the PESTEL Analysis model presents how the company’s macro-environment relates
with ecological changes.
 Decreasing interest of public in environmental programs leads to bad effects on the
workings of Amazon e- commerce business.
 Business sustainability is the important factor for the economic support and threat.
 Decrease in popularity of low carbon life cycle may affects the online retailing business
of Amazon in Austria.
Legal factors that affects the Amazon's e-commerce business
Amazon's e-commerce business operations must address to legal requirements. The
effects of legal rules and regulations forms a macro-environmental factors that influences the
business operations, are determined in this aspect of the PESTEL analysis model (Barak, 2016).
 Declining in products regulations, may affects the quality of the products and results in
fall of online buying habits of customers.
 Easing of import and export regulations and vice-versa.
 No rise of environmental protection regulations affects the business of Amazon in
Austria.
CONCLUSION
The above report summarises the concept of business Organisations and Environments in
a Global Context with reference of Amazon organisation. The essay mainly defines the concept
of organisational report for determining the process and managing the skills for business
development. The introduction to organisation and operations across the country are analysed.
The skills are mainly convicted to determining the future sustainability and market share of
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organisation. The process also consolidates the changes with required adjustments. There is an
expansion of organisation across another nation was introduced in this report. Some of statistical
analysis and evaluation was considered for better development and analysis process.
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REFERENCES
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Barak, M. E. M., 2016. Managing diversity: Toward a globally inclusive workplace. Sage
Publications.
Cavusgil, S. T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization. Journal of International Business
Studies. 46(1). pp.3-16.
Clegg, S. R., Kornberger, M. and Pitsis, T., 2015. Managing and organizations: An introduction
to theory and practice. Sage.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Osborne, S. P. and et.al., 2014. A sustainable business model for public service organizations?
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Tregidga, H., Milne, M. and Kearins, K., 2014. (Re) presenting ‘sustainable
organizations’.Accounting, Organizations and Society. 39(6). pp.477-494.
vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
management. International Journal of Information Management. 36(3). pp.486-495.
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