Business and Business Environment

This document provides an overview of the business environment, types and purpose of organizations, and the interrelationship between different organizational functions. It also discusses the impacts of the macro environment on business operations and the use of the PESTLE model for analysis.

BUSINESS AND
BUSINESS
ENVIRONMENT
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Types and purpose of organizations; public, private and voluntary sector and legal
structures......................................................................................................................................3
P2 Size and scope of a range of different types of organizations................................................4
M1 How structure, size and scope of different organizations link to the business objectives and
product and services offered by organization..............................................................................6
TASK 2............................................................................................................................................6
TASK 3............................................................................................................................................8
P4 Positive and negative impacts the macro environment has upon business operations...........8
M3 PESTLE model to support a detailed analysis of the macro environment............................9
TASK 4............................................................................................................................................9
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses...................................................................................................................................9
P6 How strength and weakness interrelate with external macro factors...................................10
M4 SWOT/TOWS analysis and justify how they influence decision making..........................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business environment, is considered to be the amalgamation of both external and internal
factors like employees, customers, management, suppliers, distributors, economic changes,
market trends etc., Therefore, business environment provides with a chance to identify the
business opportunities through which positive outcomes can be gained (Apăvăloaie, 2014). This
report will provide with an overview of the business environment of three sectors i.e. public,
private and NGOs i.e. British Army, John Lewis Partnership and Amnesty International
respectively. Purpose of operating their businesses, factors that makes them different. Moreover,
relationship between various functions of organisation and how they are linked with
departments. SWOT and PESTLE will provide with an insight of external and internal factors
that are important for business operations.
TASK 1
P1 Types and purpose of organizations; public, private and voluntary sector and legal structures
In this global world, there are many companies those who run their business with a
purpose and it can differ from businesses to businesses such as private companies for earning
profits, public for the welfare of the society like providing medical facilities and NGOs with a
purpose of providing service without any expected return.
Definition of business organisation
A business organisation, is considered to be an entity that provides good and services to
customers and in return they earn benefits or profits. However, they perform all their activities
under a formal structure focussing on achieving the aims and objectives. Moreover, companies
like John Lewis Partnership can be classified under this because their purpose is to gain
maximum profits from the market area.
Difference between the profits, non-profit and non-governmental organisation
Profit based business – their
main motive is to make
money. In order to this, they
provide with the services that
are needed by the customers.
For example: a product is
The non-profit organisation
– Companies under this
although earn profits but they
do not divide their funds with
their shareholders and instead
the profits are used the social
The NGOs – Organizations
working under this are not a
part of government but works
for the civil society. Most of
its funds are raise by the
government. For example:
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provided in an exchange of
paying a certain amount of
money.
welfare. For example:
Unilever, using its extra funds
for providing education to
under privileged people.
Amnesty International works
with the motive of protecting
human rights of people.
Public Sector organisation: They are determined as a sector which comprises
organisation that are operated and some part of shares are owned by the government and
moreover, works for providing benefits to the citizens. For example: British Army, who perform
their duty to protect the citizens of the nation from outside attacks.
Purpose and legal structure: Although, looking at the purpose of public sector
organisation, they do not work for earning money but rather do their duty of maintaining a
balance between different activities so that country can develop. Their legal structure is
according to the legislations and all the activities gets approved by government authorities.
Private Sector organisation: Companies under this plays a major role in improving the
economy of the nation which means run their business with the intention of making profits
(Armstrong and et. al., 2015). For example: John Lewis Partnership, a departmental store from
where customers can purchase their products by giving a certain amount of a certain amount of
money.
Purpose and legal structure: Businesses running under this sector works with a purpose
of earing monetary profits and to expand its business across the globe. In relation to legal
structure John Lewis Partnership is a public limited company.
Voluntary Sector organisation: The main motive is to create social impact instead of
earning profits. They work on an issue which needs to be solved. For example: Amnesty
International, work for protecting the human rights of people.
Purpose and legal structure: Works with the purpose of providing welfare to the society.
Moreover, they take permission from the regulatory bodies so that better application of resources
can be done.
P2 Size and scope of a range of different types of organizations
Scope of micro, small and medium and large-sized business:
Microbusiness- These
are determined as
Small business- They
independently own
The medium-sized
businesses-
Large Business-
They are the real
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small business that
earns to feed their
families. which
includes a limited
number of employees
like 1-10.
their business which
can be started with
less capital and
operates at local areas.
Includes a workforce
between 10-25 people.
Companies that have a
certain amount of
fixed capital and
works to provide
services and facilities
under the limited
sources. They have a
workforce of less than
250 people.
contributor in the
economy because
the profits earned
from the market
puts an impact on
the economy.
Operates its
business across
the globe and have
a large number of
workforces.
Size, legal structure, and scope of different business:
The Sole Traders: People who run this kind of businesses are also known as sole
proprietorship and with the help of simple arrangements they do their business and earn profits
by their own. This includes businesses like restaurants, electricians, hairdressers etc.,
Partnership Business: It is a kind of general agreement which is done between two or
more parties such as government and non-profits organisations. More probably shares equal
profit as well as loss. Partnership businesses can further be classified into three categories
general, limited and limited liability partnership.
Private entities: Those organisations which doesn’t have link with the unit of government
moreover, they are considered to be a private limited company that run its business for earning
more and more profits (Baesens and et. al., 2014).
Scope of national and international organization:
Companies that are run under the national business can only operate their activities
within the countries because of which their scopes are confined to the country only. Firms
categorised under this mainly use sole proprietorship as their strategy. On the other hand,
international businesses operate its business across the globe which creates a wider range of
scope and along with this helps the company in increased its sales and profitability. For
example: John Lewis Partnership, has its business activities outside United Kingdom.
Franchising, joint venture and licensing:
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While operating the business at internal level companies can collaborate with other firms
and provides it services to its customers (Bah and Fang, 2015). Moreover, for doing this they can
use these three-market entry options Franchise: In this, successful company allow the other
party to sell their goods and products under the business name. For example: McDonalds, a big
brand name has sold its franchise to other firms because of which they have businesses across the
globe. Joint venture: In this, an agreement is made between two or more companies and
moreover, agree to use each other’s resources for fulfilling their business targets. Licensing: In
this, a company provides the other company with a license for using their intellectual rights for a
temporarily time period.
M1 How structure, size and scope of different organizations link to the business objectives and
product and services offered by organization
In business environment, every organization have their own specified size, scope and
structure that make them different from others. In this regard, the owner of the company is also
responsible for managing all the flow of information, evaluate the situation of market and
external business environment. As the company is focus on serving quality products to its
customers as per their needs and wants. This can be beneficial in attaining all the set goals and
objectives in specified period of time. In addition of this, organizational structure is also help in
meeting all the needs of the customers and employees as well. It also supports in empower all the
workers in determining all the situational needs and at the same time also enhance the
possibilities of attaining competitive success by meeting all the current needs of market.
TASK 2
P3 Relationship between different organizational functions and how they link to organizational
objectives and structure
Organisational structure is referred as a system that highlights certain activities which
needs to considered so as to attain the goals and objectives of the company. Basically, it includes
the rules, role and responsibilities (Botha, Kourie and Snyman, 2014). In relation with John
Lewis Partnership, they follow a democratic organisational structure which means every person
has equal right to participate in a discussion and offer their views and thoughts.
Organisational Structure of John Lewis Partnership
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Figure 1: Organisational Structure
Mission and Vision of John Lewis Partnership
John Lewis Partnership, is a multinational company and they have the ability to sustain
the market place for a longer period of time by providing excellent products and services to its
customers. The mission statement of John Lewis Partnership is “to consider the happiness of its
employees so that with the help of them they can provide effective service to its customers”.
Whereas, the vision of this company is become one of the renowned retail company across the
globe so that with just the brand name people can recognise the services they are providing (Cai
and Yang, 2014).
Interrelationship with the different department:
As John Lewis Partnership, is a big organisation and is successful in the global market as
well. They are popular for the goods and services they are providing and in order to do this,
company has maintained a perfect balance between various departments and its functioning.
Therefore, to understand this better it has been explained below:
Marketing and Sales department: the prime motive of this department is related to
promotions so that they can easily provide information about the products they are selling to its
customers. In relation with John Lewis Partnership, they work in collaboration with the research
and Development that provides the information about the demands of customers and offers
services accordingly.
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HR Department: Important part of an organisation and performs various functions such as
conduct the recruitment process, provides benefits, etc., this department maintains a relationship
with every department and assist them in fulfilling the requirements (Cascio, 2018).
Operational Department: Manages and organise various functioning of an organisation
like production process, maintaining a coordination between suppliers and distributors etc.,
Finance and accounting department: Responsible for developing budgets as per the
various departments and their functions. They have a link with each and every sections of the
company because they provide funds for executing a task effectively.
M2 Advantage and disadvantage if interrelationships between organizational functions and the
impact that can have upon organizational structure
In business, every organizational function is interrelated with each other’s as workers are
also share their ideas and also work in a team. In this regard, John Lewis partnership follow
democratic structure in which each employee is work in a team and also share their views with
their managers. As the main advantage is that it helps company in attaining all the set goals and
objectives in an effective way without any kind of conflict and issues. On the other side,
disadvantage of this is that it also creates conflicts among employees in group activities. That
create negative impact over the business activities and its performance level as well.
TASK 3
P4 Positive and negative impacts the macro environment has upon business operations
Political Factor: United Kingdom has a stable government and impose different kinds of
rules and regulations according to the global situation. For different businesses they have
different policies, taxations system and legal requirements. Therefore, UK is an ideal place for
opening a new business because following some laws and legislations they can gained desired
benefits.
Economic Factor: This includes certain elements like inflation rates, economic growth of
a country, employment rate etc., After the incident of Brexit and recently Covid-19 the economy
has slow down than usual but John Lewis partnership, with the help of new marketing strategies
can contribute in the economy of United Kingdom.
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Social Factor: With the change in course of time, the perception of customers has changed
so as the demand. According to the different geographical area John Lewis Partnership, is
providing its goods and services.
Technological Factor: Unlike other companies John Lewis Partnership, has also make use
of latest technologies for manufacturing their products. Moreover, they are also using latest tools
and technologies for connecting with its customers such as proper use of social media platforms
for making their customers aware about the products they are selling (Congleton, Hölzel and
Lazar, 2015).
Legal Factor: In relation to the business environment this factor helps an organisation in
maintaining a peaceful environment at workplace. Legal factors can be the laws and legislations
for establishing a new business, norms to protect the individual working in an organisation etc.,
therefore, John Lewis Partnership, follows all the rules and regulations for a better outcome.
Environmental Factor: Company is concern about the environmental factor and they
work for in such a way that no natural resources are harmed. Moreover, for providing goods and
services they provide eco-friendly packaging so that it doesn’t harm the environment.
M3 PESTLE model to support a detailed analysis of the macro environment
To analysis external environment of business organization, PESTLE is one of the
important models that help company in evaluating macro environment and at the same time also
reduce its negative impact. In context to this, macro business environment in the John Lewis
partnership make huge impact in relation to the strategic decision-making activities because it is
beyond control of the company. For reducing the negative impact, firm is responsible for
implementing as well as follow all the external factors. This can be support organization in
improving the overall positive performance at competitive market place.
TASK 4
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses
SWOT analysis of John Lewis Partnership
STRENGTHS WEAKNESSES
 The company has a good brand image and
it is the biggest strength and embodying
 Recently, company was having an issue
with their stakeholders because of which
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quality.
 Company has a qualified workforce that
work in collaboration for achieving their
goals and objectives.
 Business structure the company is
following is providing every employee
with an opportunity to express their
thoughts and views. As a result, they have
numerous ways for doing an activity and
thus, their production level is increasing
and so their profit margins.
they miss out the prominent shares and
faced loss. Thus, recorded a slow rate in
the market area.
 From past few years, company was not
being able to manage its operational cost
and ultimately it was increasing day by
day.
OPPORTUNITIES THREATS
 Increasing target group is one of the major
opportunities for John Lewis partnership
as it may increase the possibilities of
enhancing strong customers base.
 Increasing purchasing power of customers
is also helpful in improving lifestyle and
at the same time also increase overall
profitability level of company at market
place.
 Company also focus on healthy foods that
support in inviting more and more
customers towards its offerings that
increase the positive image.
 Intense competition in market form corner
stores, grocery stores are major threat
Infront of John Lewis partnership that
reduce its demand in market.
 Along with this, rigorous laws and
regulations is create issues within the
company by changing its activities.
P6 How strength and weakness interrelate with external macro factors
While operating the business at global context, there is a possibility that external macro
factor has its strengths and weaknesses (Doh, McGuire and Ozaki, 2015). Thus, during the
implementation of various elements it is important that they have proper analysis of the external
macro factors like whether the development of new products is done according to the rules and
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regulations provided by the regulatory bodies or not. However, to understand this point are
mentioned below:
Strengths interrelated with external macro factors:
 Company has an excellent market image so they have considerably a better platform for
selling its products and increasing its sales and profitability. Therefore, it is providing with
the leverage to different parts of the country to expand their business and fulfilling the needs
and demands of customers
With their effective workforce, they are being able to convert all their negative
consequences into the positive ones which is moreover, helping them in adding value to its brand
as a result, they are getting good response from its customers (Huang-Horowitz, 2015).
 Companies business structure is according to the external macro factor that means giving
equal chance of saying their believes and thoughts for a specific activity. Moreover, helping
the organisation in providing a peaceful working environment.
Weakness interrelated with the external macro factors:
 The biggest weakness is the conflicts between different stakeholders thus, John Lewis
partnership needs a panel that can help them in negotiation process so that issues can be
resolved.
 Increasing in the operations cost form past few years simply indicate towards the skills and
knowledge acquired by the employees so with an effective training and development,
workers can manage the work efficiently.
M4 SWOT/TOWS analysis and justify how they influence decision making
SWOT analysis is an important internal aspect of company that define the overall internal
performance of the John Lewis partnership at market place. With the help of this, organization
can improve the necessary areas to attain competitive success. As it is also may contributes in
determining the weakness and at the same time also support in handling the same (Klapper, Love
and Randall, 2015). By analysing internal performance, organization can easily take right
decision or sustain in market place for longer period of time and also attain competitive success
as compare to its rivals.
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CONCLUSION
From the above-mentioned report, it has been concluded that business environment is
consider the collection of all the internal and external factors that directly put impact over the
company in both positive and negative manner. As business environment is dynamic in nature so
that organization is responsible for analysis overall environment and its impact. This can be
beneficial in improving overall performance. In addition of this, it is also important for company
deal with all the changes that arise in business environment. Along with this, political
environment is also stable in nature which help in improving the overall performance of the
company. Furthermore, it also helps in taking right decision and at the same time it may assist in
reaching larger number of customers. This will directly contribute in attaining competitive
success at market place.
REFERENCES
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Doh, J., McGuire, S. and Ozaki, T., 2015. The Journal of World Business Special Issue:
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Online
Organisational structure and culture of John Lewis. 2019. [Online]. Available Through:
<https://hizitywopajeb.accademiaprofessionebianca.com/organisational-structure-and-culture-of-
john-lewis-35962hb.html >
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