Role of Business, Cultural and Natural Environment in Shaping Organizational Behavior

This report explores the impact of business, cultural, and natural environment on organizational behavior. It includes a detailed analysis of Bentley Motors, including a SWOT and PESTLE analysis.

Contemporary Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Role of business, cultural as well as natural environment in shaping the behaviour in
organisation............................................................................................................................4
SWOT and PESTLE Analysis of Bentley Motors.................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
A business environment includes all those internal as well as external factors which
impact operations and functioning of a business either directly or indirectly (Schweigert, 2016).
It is necessary for business to continuously keep a check on all these factors so that businesses
might identify threats to it, if any. In order to formulate strategies for a business it is necessary to
analyse all such factors. This analysis helps businesses to convert negative effects into
opportunities. In order to know about future plans, strategies and steps of their competitors. It is
important for company so that they are not left behind their competitors.
Impact of economic environment on organisational behaviour, economic system,
economic policies and economic conditions have been discussed in this report. Apart from this
non- economic environment and its impact on behaviour are also studied. Various characteristics
of non-economic environment studied are demographic, natural and cultural. Other than this
Swot Analysis and PESTLE analysis have also been shown which clearly states the effects of
internal as well as external factors on an organisation.
In the given report Bentley Motors have been considered for analysis. It is a very
famous company dealing automobile sector in United Kingdom. This company is indulged in
development, research, manufacturing as well as distribution & promotion of luxury and
premium class cars in all of United Kingdom as well as different parts of world. This report
includes a deep analysis of economic as well as non-economic factors which have an effect on
business and its working (Gorostidi-Martinez and Zhao, 2017). Economic environment in these
studies considers factors which include economic conditions, economic systems and economic
policies.
A study of non-economic factors that have an influence have also been done in this study.
The factors which are included in non-economic factors include cultural, demographic as well as
legal factors.
Bentley motors has it headquarter in Crewe, England. It was found be W.O. Bentley in
year 1919. Most of Bentley’s cars are assembles in its Crewe factory. Bentley have gone through
a number of mergers and acquisition since it was founded in 1919. Main models of Bentley
include Bentley Speed Six, Flying Super, Continental GT, Bentyaga and the Mulsanne. The
Intellectual property right of Bentley yet stays with Rolls Royce Plc. It was a part of aerospace
company; however, Rolls-Royce aerospace company was sold to BMW AG.

Role of business, cultural as well as natural environment in shaping the behaviour in organisation
Cultural Environment:
Cultural environment is said to be a combination of belief, customs as well as practices that are
followed by people living in geographical location where business operates its functioning. It is
also responsible for developing personalities as well as ideologies in people of certain region and
culture. Immediate physical or social setting in which people live and a number of other
institutions in which people work and function is also included in cultural environment (Maoxing
and Qi, 2017). This takes into consideration society as a whole along with individuals and their
relation.it is also very important for organisation in order to build good relationships with their
customers and make them loyal towards the brand or towards companies. In cultural
environment crime, social cohesion and safety is also included. When United Kingdom is studied
with this relation there are a number of people who belong from different communities, culture,
values, beliefs and social setting. It is important for company to study this in order to understand
thinking and perception of consumers. In context Bentley Motors is advanced enough to bring a
number of innovations as well as new technologies in various cultures as per their requirements
and needs. Bentley Motors have taken steps in this context and brought together a number of
successful women entrepreneurs, owned a French racing team and provide bomber ski
experiences to people.
Natural Environment:
All living as well as non- living things that survive in surrounding that are natural and not
man-made are all included in a natural environment. When talking about it everything included
in ecological as well as geographical environment includes resources such as minerals, water, oil,
climatic conditions etc. There are also a number of resources such as iron, wood, coal etc.
Global warming is another major problem in world including United Kingdom. The lifestyle
which people follow these days have a major effect on natural environment is depleting
resources in an increasing speed. An example of it can be seen as fossil fuels present in
environment. The reason behind this is that every machine running in todays world require
petrol, diesel or fuel in any form. Heavy demand of this fuels is leading to depletion of fossil fuel
in nature. Taking Bentley Motors into consideration it is necessary for company to make sure
that method through which they produce their vehicles do have much negative impact on nature.
It is necessary for companies to use a number of sustainable methods for growth through which

environment can also remain secure and safe. These rules have helped organisations in a way so
that they not harm nature in any way (Roy and et.al., 2018). Along with it another necessity is
that every effort of company is well dedicated towards all the objectives and goals. Bentley
Motors is also being using a number of Solar Panels that will help in decreasing emission of air
pollutants in environment. It also helps in better functioning of organisation.
Business Environment:
A sum total of customer, employees, supply and demand, needs and expectations,
management, governmental activities, technology, legal factors, owners, technology etc. is
business environment. Forms of business, scale of business and emerging trends in business is
also included in business environment. When taking Bentley Motors into consideration it is
largest supplier in automobile industry. Company is now affected a lot after signing of BREXIT
between United Kingdom and European Union. After 2016, and signing of referendum business
between these two regions have became very difficult. This decision has hit economy of both
these places negatively in a number of ways. Effects on its economic environment are mentioned
below with regards to Bentley Motors.
1. Economic System:
Economic system can be considered as a system of a country which consists of factors such as
excise duties, inflation, taxes, foreign exchange rates, per capita income, GDP, disposable
income etc. a number of new trends have been seen in market which are majorly affecting
functioning of an organisation. Major such trend is electric cars which would not require any fuel
for its operation. Bentley is successful in developing one such prototype of an electric car. These
electric cars will now be tested in target markets by Bentley (Dülger, 2018). After the testing is
successful company will make required changes in product if any and then launch it in the
market. There are some factors like inflation as well as taxes which have been negatively
affecting the company. Inflation in country is rising rapidly leading to growth in prices of
product. Also, additional custom duty on international trade is limiting company expansion to
other regions in world. This are some effects positive as well as negative of economic system on
Bentley Motors.
2. Economic Condition:

The head quarter of company are set up in United Kingdom. Therefore, whatever political or
economic relation country have with any other nation directly effects Bentley motors as well.
The example can be seen by effects of BREXIT on company and how have this policy turned
companies’ relation with European Union (Drynochkin, 2016). These two nations are not in
good terms now. As custom duties between these two nations have increased. Export prices have
raised a lot resulting in rise in price of company’s product in various parts of world. Sales and
profit in that market is affected because competitors are taking advantage of this condition. Even
though Bentley is a company that comes up with most innovations and technological
advancements in its products, still it requires to import some of its major part from other parts of
the world. This imported product is also rising. This results in an increase in overall price
because company does not want to short its profit margin. This is having a negative effect on
operations of Bentley Motors.
3. Economic Policies:
Various rules and policies are there which have a direct effect on automobile industry. There
are a number of such policies which effects functioning and trade of Bentley with European
Union. It has been seen that Bentley spent almost 20 million euros on its research and
development so that its market scenario could also be improved. But due to uncertainty of
BREXIT the effect of such huge investment cannot be seen yet. Some negotiations are still to be
cleared between both the nations which may have some more negative effect on Bentley in near
future.
Another important aspect of changes in Bentley due to BREXIT is it affecting workforce of the
company. There are a number of labours from EU working in UK (Verbeke and et. al., 2019).
Due to uneven agreement and no finalized decision they are afraid that they may be stuck in
between war of these nations. They have left work and are moving back to their homes in EU.
This have left Bentley with very less skilled and experience employees. To retain employees is
very crucial function in any organisation. And to fill gap with an equally talented one is
impossible. Also, recruitment of new labours and employees will require a lot of time and cost
which is not good for the company.
These factors clearly state all the negative impacts of BREXIT on the company. There
have been a number or conditions already which are totally against Bentley’s operation and
functioning. There can still be some more effects as speculations are still being made. Fair

negotiation has not been finalised in BREXIT. Due to this Bentley and a number of other
companies are stuck while making strategies as factors affecting them are still not clear.
Company needs to wait for a final decision to be made. Till then they can easily make some
strategies which are flexible enough to manage the changes brought due to BREXIT (Cvijanovic,
Vukotic and Vojinovic, 2017).
SWOT and PESTLE Analysis of Bentley Motors
SWOT Analysis-
With the help of SWOT analysis all the internal factors within an organisation which are
affecting it majorly can be analysed. It includes analysis of strengths, weaknesses, opportunities
and threats. Below mentioned is SWOT analysis of Bentley Motors:
Strengths Weaknesses
Differentiated advantage over its
competitors is one of major strength of
Bentley Motors. High quality of its
vehicles gives it this advantage. Durability,
strength, innovation and speed of its
vehicles are also its strengths.
Bentley has not expanded much. Its target
market for its vehicles is very limited. Its
segmentation is done for only those
customers who have high disposable
incomes. Also release of pollutants from its
production unit is very high (Gainochenko,
Kurbatova and Kurbatova, 2019). Due to
this company have to face criticism from
government as well as social environment.
Opportunities Threats
Opportunity for company is its new
electric car which have been developed by
it. Prototypes are developed but its testing
in market is still continuing. Although
product will need some changes but it is a
great opportunity for company. Also, its
new sports car for millennials is a great
advantage for company (Serova, 2017).
Another opportunity can be use of better
marketing and promotion tools in order to
For time being company have threats from
BREXIT rather than any of its competitors.
Signing of this referendum have put
company in dilemma as company can no
more freely trade it goods across EU. EU
was one of its major markets. And due to
heavy duty imposed on export of vehicles
prices of its offering in EU market have
increased.

build brand image.
PESTLE Analysis-
PESTLE analysis is a study of all the external factors that are seen to have a negative
effect or positive effect on business. It includes various factors such as political, economic,
social, environmental and legal. Below mentioned is PESTLE conducted on Bentley Motors:
 Political Factors- There are a number of political factors which are responsible for
changes in functions and operations of Bentley Motors. BREXIT is a major reason in it.
There have been a number of changes due to affected change in trade between European
Union and United Kingdom. Most of these changes have only negatively affected
Bentley and are proving to be a threat for company.
 Economic Factors- Bentley also had to face a number of challenges economically.
Country have seen a major rise in inflation after BREXIT. The major issue arises as these
rises in prices have caused increase in prices of raw materials. The reason behind this is
custom duties now charged between UK and EU (Yang and et. al., 2018).
 Social Factors- These refers to current trend in market as well as changing perception of
people. There have been seen a trend of developing electric cars by a number of
automobile companies. Bentley have also developed samples of it. These prototypes will
be tested in target market and then will be launched after required changes made.
 Technological factors- It becomes necessary for a company to be technologically
advance. Being backward technologically leads to downfall in shares of company.
Bentley is coming with a new innovation in which it will launch a car with an auto-pilot
feature in it.
 Environmental Factors- There are a number of factors which can affect company under
environment. It includes following all rules related to release of pollutants in atmosphere
while production use of resources in production etc. Company needs to focus on fact that
an increase in global warming is harming environment and they must nor contribute to
this harm

 Legal Factors-Bentley Motors can be seen to have largely affected by BREXIT. It is
seen that sales of Bentley in EU are declining. Due to this company is facing major
losses. Also there have been an increase in bargaining power with suppliers due to which
company now have to purchase products at higher prices which is now increasing its
selling price.
Following is analysis of external factors on Bentley. It has been seen that major issues
arising in Bentley is due to BREXIT. It has had a major effect on economy of UK and all
its big companies including Bentley Motors. SWOT on the other hand describes effects
of internal factors on Bentley and how can company take advantage and turn all its
threats into opportunities and its weaknesses into its threats.
CONCLUSION
The above report concludes that it is very important for a company to analyse business
environment effectively so that functions and operations in a business can be carried out
smoothly. This brings in knowledge of company strategies of their customers as well. It helps
companies in sustainable growth for long term. It is also necessary taking into consideration all
of industry while conducting this study. Internal as well as external both the factors are studied
and analysed carefully in order to gain advantage from this evaluation of business factors (Collis,
Anand and Cheng, 2018).
Impact of natural environment cab be effectively seen on any organisation.
Environmental factors are also included in these natural environments. It is important for
businesses to take care of natural environmental as well. It is also necessary for Bentley to keep
regular check on amount of pollutant it releases in environment while production as well as by
vehicles on road. Respect towards environment is important for every business to work
successfully. Demographic environment is also seen to have negative effect on Bentley as
millennials these days are preferring to travel by public transport. Company still is taking
advantage of this condition and is planning on launching some sports car specially for customers
of their age group at affordable prices when compares to other competitors. It has already been
seen that cultural environment is affecting Bentley Motors. Thus, in order to attract customers
and maintain a good and healthy environment in organisation it is necessary to study cultural
beliefs and values of people in a region because employees as well as customers need to feel
sense of belonging with the company.

Economic environment is also included in business environment. Economic cultures,
systems and cultures are also included in it. It is necessary to study and critically analyse every
factor that have an affect on business either directly or indirectly. Economic factors help firms to
know about all those factors that have a negative effect on business and its functioning. It lets
company to predict future and changes that might happen in future. They may also tell about
various benefits that company may have in near future (Lim, 2019). For business of Bentley
company have taken a number of steps in order to make sure that less omission of pollutants is
released by company in environment, they are also developing electric cars and trying to use a
number of better tools for promotion of business.
At the end report concludes with an analysis of all the internal factors that are affecting
business positively or negatively. SWOT analysis is done of Bentley for this. This explains all
the strengths of companies with a number of drawbacks of companies. It is also explaining a
number of benefits that company have in form of opportunities. Other than it also tells about
limitations which company might have to in form of threats in near future. PESTLE analysis of
company is done at the end so that company also comes to know about external factors which
might affect it in future (Damian, 2018). There are a number of external as well as negative
effect that might affect company in positive or negative way. It is necessary for business to use
all the strengths with it and turn them into opportunities. Businesses need to study cultural
behaviour of people in order to position their product in competitive environment. All these
factors will altogether let company work efficiently generate profits and sustain in marketplace
for long term.

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