Business & the Business Environment

everything is detailed in the file I attached

Business and the
Business Environment

Table of Contents
Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various types and purposes of organisations; public, private and voluntary sectors and
legal structures........................................................................................................................1
P2 Size and scope of different types of organisations............................................................3
TASK 2............................................................................................................................................5
P3. Inter-relationship between different organisational functions and their linkage with
organisational objectives and structure..................................................................................5
TASK 3............................................................................................................................................8
P4 Impact of the macro environment upon business activities of the enterprise..................8
TASK 4..........................................................................................................................................10
P5 Internal and external analysis..........................................................................................10
P6 Relation of strengths and weaknesses with external macro factors...............................11
Conclusion.....................................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business is the activity where the buyers and sellers come together to buy and sell the
goods and services in exchange of some value. It can be of any form like private, public or both.
The motive of every organisations are different (Schaltegger, Hansen and Lüdeke-Freund, 2016).
The place where the trading activities are carried on is the external business environment. It
plays an important role in every business concern. It involves internal and external constituents.
Both the factors has an impact on the functioning of the commercial enterprise. For the purpose
of this report the private organisation Wilko is taken. It is engaged in retailing chain of consumer
goods, groceries, stationery goods, bathroom and kitchen products. The headquarter of Wilko is
at England, UK. Through this study the different type of organisations with various size and
structure, departments role and relation with other units, the impact of macro environment on
business enterprise has been discussed.
TASK 1
P1 Various types and purposes of organisations; public, private and voluntary sectors and legal
structures.
Public sector
These organisations are owned and run by the government. They are mostly not profit
oriented (Quinlan and et. al., 2019). Public Health England is the example of the public
organisation. Its headquarter is in London, UK. It is the agency of the Health and Social care
department.
Purpose- The purpose of the public organisation is to provide various services to the public so
as to improve their standard of living. Public Health England work with partners to provide
support and make improvements in health and wellbeing of the society.
Legal Structures- It comprises:-
Central government:- It holds the supreme power in its hands and regulates the overall
functioning of the country. They are funded directly from the taxes collected from the people of
the country.
State government:- It is controlled by the central government and works according to the
guidelines of the central government. It looks after the promotion of the economy of the state.
1

Local government:- This type of legal structure of local government acts within the
powers delegated to them by the legislation and higher government. Public Health England has
this legal structure.
Private sector
These organisations are owned by individuals and are not controlled by the government.
They are run by the need to make profit (Prajogo, 2016). The example of private sector
organisation is Wilko. It is retail company which sells consumer goods in England, UK.
Purpose- The basic purpose of the private organisation is to earn profit and grow in the market.
for improving their way of living. Wilco wants to sell quality products to the customer at
affordable prices so as to continuously grow in the market.
Legal Structures- It consists of
Sole proprietorship:- It is owned and controlled by one person. It is not incorporated
body. Owner is responsible for the liabilities of the business.
Partnership:- It is formed by two or more members. They also not incorporated body and
have a separate legal entity.
Limited Company:- It involves private companies which have limited liabilities. They are
generally engaged in medium and small size businesses. Wilco is a private limited company.
Voluntary sector
They are owned and run by the individual and trustees voluntarily with or without the
interference of the government (Oriesek and Schwarz, 2016). Royal Voluntary Service is
example of this sector working in England, Scotland and Wales.
Purpose- They work to provide necessary welfare services to the public, to improve the
community. Royal voluntary service engaged in helping people who are in need.
Legal Structures- It includes the four structures-
Trust- It involves trustees. It is not a separate legal entity. A trust deed is formed during
its formation.
Unincorporated association- Here a group of people with a common interest comes
together to work for the benefit of the public. The liability of the governing body is unlimited as
they are not a legal entity.
Company limited by guarantee – The directors of this type of legal structure can be the
trustees or other members. It is a separate legal entity.
2

Charitable incorporated organisation- It provides the charity and is controlled by the
Charity Commission. It is legal personality and has limited liability. Royal voluntary service is
Charitable incorporated organisation.
The Comparison between profit, not for profit and non- governmental organisations is given as
under: -
Profit-The profit organisations are those who carry on the business activities to make
profit. They are engaged in wide variety of activities like retailing, private companies, hospitals,
travels, education, sports, etc. Their operation field may be Large, medium and small. Goals
includes improving the standard of living of self by earning profit. For example- Greenergy,
Linpac, Unipart.
Not for profit- These organisations carry on its operation not to share profit among its
members. The revenue earned is used for the improvement and functioning of the organisation.
They are involved in specific activities only like for the welfare of child, charity, education,
religious activities, etc. They carry out small operations. Their objectives are to encourage art,
science, history, commerce in the society. Amnesty international, National trust, Water Aid.
Non- governmental organisations- They work for a particular cause. It may be Cancer
awareness, poverty elimination, safety of girl child, etc. They generally operates on Large scale.
They work on the goal to improve the quality life of people living in the country. For instance-
Transparent hands, Funding circle, Kickstarter.
P2 Size and scope of different types of organisations.
There are various organisations operating in this competitive world. They all have distinct
features which includes different goals and objectives, size, structure, strategies and management
processes (Nohria, 2017). The size and scope of different organisations are given as under:-
Public organisation (Public Health England)
Size: Public Health England employee personnel consists of 5000-10000 employees.
They work together to provide services related to health (Public Health England Overview.
2019). They offers services related with health of the public, emergency readiness,
communicable diseases, medicine, protection of health, environmental danger, intellectual health
and cancer detection in London.
Scope: It operates in fifteen local centres and provides health services across four regions
which includes London, north England, east England and south England.
3

Objectives: The objective of the organisation is to protect the population from contagious
diseases as well as from environmental hazards. To bring an improvement in the public health by
healthcare services.
Private organisation (Wilko)
Size: Wilko is one of the biggest retailer in UK. It has around 325 retail stores and has
added one more in Asia in Hong Kong. The product range includes around 25000 different
products. It has employed 337 staff in its retail (Wilko's Competitors, Revenue, Number of
Employees, Funding and Acquisitions. 2019).
Scope: It hires individuals who are skilled, unskilled and semi-skilled. The company
provides training to the employees so as to align them with scope of expanding business and
increasing activities globally. It provides household, homeware, cosmetics, kitchenware
products in its retail chain.
Objectives: The core objectives of the company are to grow in the market continuously
and to sell products with quality to the customers at reasonable prices.
Voluntary organisation (Royal Voluntary Service)
Size: The organisation have more than 20000 volunteers and about 1250 employees
working altogether in Great Britain to distribute their assistance to needy and eradicate
weaknesses from the community (Royal Voluntary Service. 2019)
Scope:Royal Voluntary services makes available volunteers to move and provide help to
people in need and encourages other people to provide their assistance.
Objectives: Royal Voluntary service has the objectives to provide practical support to the
people in need through volunteers to lessen the sufferings of the people, to make their lives
healthy, remove inequalities from the community.
Difference between micro, small, medium and large enterprises.
Micro: These enterprises includes less than 10 operating individuals. They operate to
earn for fulfilling their livelihood expenses. These enterprises invests from personal savings.
Micro enterprises are fully managed by owners. Book stalls, Ice- cream parlours, Salon, etc.
Small: It consists of 10-50 employees .They focus on earning that much amount of profit
which is required for the business. Small enterprises get the fund for their businesses through
personal savings, friends, family or small business loans. These enterprises are managed by
operating owners. Professional service firm, consultancies, real estate, etc.
4

Medium: These enterprises employs less than 250 employees. It focuses on expanding its
businesses. They collect fund for investment from internal as well as external sources like
trustworthy professionals. They are managed by owners and key professionals. Advertisement
company, digital marketing company, etc.
Large: It hires more than 250 employees in its operational work. The objective of large
business entrepreneurs is to earn more and more profit. They receive funding from investors and
venture capitalists. Large enterprises are professionally managed. Microsoft company, Arcadia
group, etc.
TASK 2
P3. Inter-relationship between different organisational functions and their linkage with
organisational objectives and structure.
The objective of increasing profitability of business is not possible without the assistance
of the other functional units and departments of the organisation (Laudon and Traver, 2016).
Proper co-ordination and clear communication is required between every department to attain the
business objectives. The relation among some functions of the organisation is explained below:
Marketing and Finance unit- It is essential for the marketing function to work nearly
with finance unit so that the finance department supply suitable budget to the marketing
department to do proper planning and enforcement of marketing plan for the achievement of the
objectives of the enterprise (Kozubíková, Homolka and Kristalas, 2017). Wilko's requirement
of additional funds for tackling the competition, planning and applying a marketing plan is
fulfilled by the support of the financial unit of the company, production unit and human resource
department. The structure of the organisation directs the functional activities to achieve these
objectives.
Production management and Human Resource-The production management function
requires the aid of the Human resource at various stages of its functioning. Both the departments
work together to create strong culture and positive image of the company (Kolk, 2016). The
need of employees updated with modern skills and technology of production in Wilko is satisfied
by HRM function. It ensures that the company gets the needed employees in specified time. It is
5

the structure of the enterprise which aligns the working of the different departments with the
objective of the company.
Marketing and production management- Operation department or production
management department helps the organisation to achieve the productivity and effective
performance by systematically organising marketing workflows and processes (Khan and
Quaddus, 2015). For the attainment of competitive advantage Wilko launches a new product
with discounts and offers. It will have to do adequate research. To satisfy this need it has to
involve production management. All these activities are planned after considering structure and
objectives of the company.
Different types of organisational structures
Various types of organisational structure are described below:-
Divisional structure: In this structure, organisational functions are bifurcated into
divisions that corresponds according to product or geographic areas so as to deliver demanded
varieties of products. Top level management concentrates on long term plans and strategies by
distributing profits across products, markets as well as divisions (Hair and et. al., 2015). It is
challenging work to organize all divisions. Henceforth, it results in conflicts between divisions
regarding resource allocation and many more.
Source: Divisional structure,(2012).
Top level management of Wilco follows different structures at various locations of the
stores according to the comfort of managers (Hillary, 2017). For example, divisional structure is
6
Illustration: Divisional structure

followed in several stores and at some other stores matrix organisational structure is followed to
accommodate with ability of employees to deliver their work in teams or divisions.
Matrix structure: This structure pools several function or departments with teams made
for certain projects. In this employees have to work for completion of the projects in teams
within their areas of function. It is beneficial in decentralising the authority of decision making.
It enhances managerial motivation, problems are controlled and individuals possessing same
skills are selected for one project (Ferrell and Fraedrich, 2015). This structure is difficult to apply
because of overhead costs and conflicts between the employees.
Source: Matrix structure,(2019).
Wheel structure: This structure is adopted usually by the start-up companies. Here, the
managers are empowered to take all the decisions. The activities are organised close to the owner
of the company. The owner controls the growth with the development of enterprise. It can be
applied for definite size only and the owner and operator do not always possess knowledge
related with different functions of the enterprise (Evans and et. al., 2017).
7
Illustration : Matrix Structure

Source: Wheel structure,(2019).
TASK 3
P4 Impact of the macro environment upon business activities of the enterprise.
A PESTEL can be used to impact of the macro-environmental factors on the performance
of the organisation (Erasmus, Strydom and Rudansky-Kloppers, 2016). The following is the
Pestel analysis of Wilco:-
Wilco is one of the largest retailer who has headquarter in England, United Kingdom. It
carries on business of selling home products, kitchen products, beauty products and customer
based products.
Political factors- These factors includes the standards, rules, regulation set by the government
for every company to enable smooth flow of the work.
Positive impact- The stable economy of UK enables Wilco to carry on its activities
smoothly. The company gains the profitability with the reduction in the expenses of the
operating activity.
Negative impact- Wilco do not have the personnel who can manage the CSR. Therefore,
the improper adoption of CSR by the company may lead to action taken by the government.
8
Illustration : Wheel structure

Economical factors- Functioning of Import and export, ups and down in the economic growth,
foreign exchange rates, interest rates, inflation and monetary policies are the economic factors .
Positive impact- The favourable market condition of the country in Asia helped Wilco to
open new office at Hong Kong and allowed to utilise the disposable income of the people.
Negative impact-The performance of Wilco stores in South England and Middle Eastern
England was badly affected by the fall in the prices of the groceries.
Social factors- It includes different geographic population, beliefs, culture and traditions of the
group, age, health factors. These factors are uncontrollable.
Positive impact- It introduced products in its stores in various countries according to their
culture and recent trends.
Negative impact- Increasing interest and demand of the customers in green and organic
products made Wilco to do innovation in its products from time to time.
Technological factors- It refers to the change in technology, research and development and
automation. These factors changes continuously (Bah and Fang, 2015).
Positive impact- Wilco has adopted the social marketing for promotion of the products.
This resulted in increase in the sales of the company.
Negative impact-The increase in the adaptability of artificial intelligence in the stores of
Wilco increased the expenses of the company, thus, affecting the profitability of the company.
Environmental factors- Factors like weather conditions, changing climate refers to
environmental factors (Bocken, Rana and Short, 2015).
Positive impact- Wilco adopted sustainable development which ensured the usage of
sustainable raw material, reuse of material, recycling and optimum use of available resources.
Negative impact- Wilco has to do analysis of every countries environment protection
norms and standards before setting up their establishment in the other country.
Legal factors- Legal factors includes the factors like consumer rights, law and protection, rules,
regulations, health and safety (Deasy and et. al., 2016).
Positive impact- Wilco has changes some of the terms and conditions of products like
information, cancellation and additional for the welfare of the consumers.
Negative impact- Wilco farm stores faced an allegation for neglecting the welfare of an
employee who was engaged in dispatching products. It hampered the working of the store.
9

TASK 4
P5 Internal and external analysis
A SWOT analysis is a model that can be to find out the company's internal strengths and
weaknesses as well as external opportunities and threats to make best strategy to overcome the
weaknesses, to utilize the opportunities available for the company and to strengthen the company
to avoid threats (Epifanov and et. al., 2015). SWOT analysis of Wilco is given as follows:
Strength Weaknesses
 The sales of Wilco increased by 19.8%
in 2018 as compared with the large
four supermarkets of the U.K.,
Morrisons , Sainsbury , Asda, Tesco.
 Recently market share rose to 12% as a
result of increase in new customers
visit in their stores.
 The company has better solvency as its
asset base is large.
 The market share of every product of
Wilco is not equal , most of the
products possess low market share
whereas few products possess high
market share
 The decision making process of the
company is time consuming due to
authority of decision making given to
certain officials only. This leads to
reduced flow of ideas in the company
and less efficiency in its operational
work.
Opportunities Threats
 Wilco can expand its online business
with the usage of internet and can have
interaction with the customers easily
without much investing in meetings.
 There has been increase in the wide
usage of social media in marketing.
Wilco can use Facebook, Twitter and
Instagram for the promotion of its
products and collection of feedback
from them.
 The competition has been increasing
and therefore, the company has to
reduce its products prices which results
in decrease of revenue.
 The global domination of a market by
Amazon is causing Wilco to lose the
market share in U.K.
 Asda in order to increase its visibility
and market share is going to diversify
its business by considering a takeover
10

bid on British discount chain. This will
lead to decrease in customers and sales
of Wilco.
P6 Relation of strengths and weaknesses with external macro factors.
Interrelation Strength Weaknesses
Political factors Wilco got benefit with the
stability in UK. The sales of
the company boosted and the
profitability increased with the
favourable market conditions.
Wilco did not implemented the
CSR technique properly due to
lack of knowledge in managers
handling CSR function.
Economic factors It opened a new store in China
due to availability of good
market conditions.
The decrease in the prices of
some of the products in the
market lead to decrease in the
sales.
Social factors The adoption of products with
respect to the culture of the
several countries helped Wilco
to increase their market share.
Regular need of evaluation and
innovation in products
increased the costs of the
company.
Technological factors It changed the promotional
strategy and implemented
social marketing . Hence, 5%
sales of Wilco increased.
Excess fund requirement for
experimentation of new
technology artificial
intelligence created shortage of
fund.
Legal factors The relaxation in some of the
rules of the company for the
goodness of customers
The dispute between the
family of employee and the
Wilco farm retail disturbed the
11

increased greater customer
satisfaction.
relationship between
customers and Wilco.
Conclusion
From the above given subject matter it can be concluded that the internal and external
environment has an influence on the operational and functional part of the business. In this
competitive world several organisations are operating like private, voluntary and public. These
organisations have different goals and objectives as per their area of interest. Among them some
are engaged in increasing the profit of the business, while some have objectives of providing
services to the public. Pestle and SWOT analysis is conducted to evaluate the external and
internal environment for the fulfilment of business objectives.
12

REFERENCES
Books & Journals
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp.
393-420). Palgrave Macmillan, London.
Bah, E. H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics. 114. pp.159-171.
Bocken, N. M. P., Rana, P. and Short, S. W., 2015. Value mapping for sustainable business
thinking. Journal of Industrial and Production Engineering. 32(1). pp.67-81.
Deasy, S. and et. al., 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Epifanova, T. V. and et. al., 2015. Modernization of institutional environment of
entrepreneurship in Russia for development of innovation initiative in small business
structures.
Erasmus, B., Strydom, J. W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Evans, S. and et. al., 2017. Business model innovation for sustainability: Towards a unified
perspective for creation of sustainable business models. Business Strategy and the
Environment. 26(5). pp.597-608.
Ferrell, O. C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson
Education.
Hair Jr, J. F. and et. al., 2015. Essentials of business research methods. Routledge.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Khan, E. A. and Quaddus, M., 2015. Examining the influence of business environment on socio-
economic performance of informal microenterprises: content analysis and partial least
square approach. International Journal of Sociology and Social Policy. 35(3/4). pp.273-
288.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1),
pp.23-34.
Kozubíková, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness.
Laudon, K. C. and Traver, C. G., 2016. E-commerce: business, technology, society.
Nohria, N., 2017. Fast forward: The best ideas on managing business change. Business
Review. 9. p.10.
Oriesek, D. F. and Schwarz, J. O., 2016. Business wargaming: securing corporate value.
Routledge.
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.
Quinlan, C. and et. al., 2019. Business research methods. South Western Cengage.
Schaltegger, S., Hansen, E. G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
13

Online
Divisional structure. 2012. [Online]. Available Through:
<https://kfknowledgebank.kaplan.co.uk/divisional-structures->.
Matrix structure. 2019. [Online]. Available Through:
<https://www.pmi.org/learning/library/matrix-organization-structure-reason-evolution-
1837->.
Public Health England Overview. 2019. [Online]. Available Through:
<https://www.glassdoor.co.in/Overview/Working-at-Public-Health-England
EI_IE702918.11,32.htm?countryRedirect=true >.
Royal Voluntary Service. 2019. [Online]. Available Through:
<https://volunteering.royalvoluntaryservice.org.uk/volunteering_ga=2.42302887.32383
5302.1567070105-1383622342.1567070105>.
Wheel structure. 2019. [Online]. Available Through: <http://coriolis.co.uk/expressing-org-
structures/->.
Wilko's Competitors, Revenue, Number of Employees, Funding and Acquisitions. 2019. [Online]
Available Through: <https://www.owler.com/company/wilko >.
14