Impact of Culture and Natural Environment on Organizational Behaviour

This report analyzes the impact of culture and natural environment on organizational behaviour using Sainsbury as a case study. It explores how culture shapes and drives behaviour, and how natural environmental factors affect business operations. The report also includes a PESTEL analysis of the political, economic, sociocultural, technological, environmental, and legal factors impacting Sainsbury.

Contemporary Business
Environment

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Impact of culture on organizational behaviour......................................................................4
Impact of natural environment on the organizational behaviour...........................................5
PESTEL AND SWOT ANALYSIS...........................................................................................6
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................9

INTRODUCTION
Business environment refers to the combination of all individual and other forces over
which the organization has no control. But still the businesses have to depend upon these
factors because it affects the overall business performance and sustainability. These forces
include suppliers, competitors, customers, investors, competitors, changing market trends and
technologies. It is the most important part for any business organization as it helps in
evaluating the ongoing changes taking place so that business can adapt to the changes and
consider it as an opportunity. It presents not only opportunities but also threats. The main
features of business environment are that it is dynamic in nature, complexity, uncertainty,
multi-faceted and far reaching impact. All these salient features of it makes it importance for
the business to carry out environmental scanning in a regular period in order to avoid any
sudden change for which organization is not ready and may directly affect its profitability and
growth. A good business with best practices will not only evaluate the environment but will
also give a respond to it. Analysing the business environment will not only help in identifying
opportunities but it also helps in grabbing useful resources, facing the challenges, it provides
assistance in business planning and further it will help in improving the performance of the
business which helps in attaining growth.
In this report, Sainsbury is taken as an organization. It is the one of the largest
supermarket chains, headquartered in London, UK. It was founded in the year 1869 by John
James Sainsbury and has three divisions Sainsbury’s Supermarkets Ltd, bank and Argos. It
comes under big four retail giants in UK. It provides everything from groceries to clothing,
electronics, home products and financial services. Sainsbury has more than 1500 stores across
UK. It has its presence as hypermarket, supermarket, forecourt shops and convenience stores.
It has provided employment to over 116,400 in 2018. Approximately, 90% of UK households
have access to the online services of Sainsbury. This report presents a deeper insight into the
factors that impacts the business behaviour and Sainsbury has paid attention to the changing
business environment and internal business operations. It provides a detailed analysis of how
business, culture and the environment can impact and shape the business behaviour. Along
with that for conducting external analysis Pestel is used and for internal analysis Swot is used
along with relevant examples.
MAIN BODY
Over the past year years there has been a drastic change in the behaviour of the
organization. In the past few years, there has been an increase in the usage of the concepts
such as corporate governance and corporate social responsibility which has affected the
business culture of the organization. Taking the example of Sainsbury, over the past few
years, with the progress in the international trade and with the advancement in latest
technology, no big organizations wants in remain in the single market or location which is
why Sainsbury has entered into multiple locations across the globe (Di Stefano, Scrima and
Parry, 2019). It has also taken various initiatives for showing their concern to the customers.
It has also introduced shift in business environment by promoting online deliveries to their
customers. This is how management has changed itself with the changing needs of the
business world. This is the reason why Sainsbury has been as popular as it understands the
changing pulse of the customers.

Impact of culture on organizational behaviour
After understanding the behaviour of the organization, it is important to identify the
culture that brings changes and shapes and drives the behaviour of the business organization.
It has become the important topic as now leaders have recognized that culture drives changes
in the organization in terms of employee’s behaviour, customer service etc. The
organizational culture is based on the values and assumptions of the organization. The
organizational culture puts emphasize on the company’s values which helps in shaping the
behaviour and attitude of the individuals in the organization (Warrick, 2017). The strong
organizational culture enables the organization to be more effective. The main function of
culture is to bond, make sense and control the internal and external factors of eth
organization. Sainsbury has implemented such a culture that brings employees together and
also directs them to achieve the organizational goals. It has such a strong culture which helps
it in retaining and attracting the individuals who are right fit for the organization. The
organizational culture is thus act as a control system which makes employees or persuades
them to behave in such a way which are in align with the organization’s expectations. Culture
not only exercise control over behaviours or helps I building bonds but it also enables
employees to sense their workplace environment (Buchanan and Huczynski, 2019). When the
business managers struggle to lead employees to a particular direction, culture empowers
them to understand the what behaviour is expected and also clarifies the perception of the
role.
Culture is the way of life. Both the business and cultural environment determines the
organizational behaviours. The business environment includes elements such as political,
economic, social, technological, legal and environmental factors. These environmental
factors determine how the organization should response to run the business. The political
factors determine the legal issues, rules and regulation of the company (Polychroniou and
Trivellas, 2018). On the other hand, the cultural factors such as perception, attitude, beliefs,
values etc. It might seem to be an easy task but is the most challenging one. It is essential for
the business organization to deal with these cultural factors properly. For example, Sainsbury
is selling grocery products to the customers then it is essential for it to identify the changing
needs of the customers, perception of the customers towards its products which can have a
direct impact on the business operation of the Sainsbury. Another example, there is a shift in
customers perception in food products as they are demanding more healthy products which
will lead to decrease in the demand of the high fate and calorie products. Thus, these cultural
activities affect the behaviour of the employees in the organization (Guchait,
Paşamehmetoğlu and Madera, 2016). But at the same time, it is also important to ensure that
culture is aligned with the environment. The values and assumptions of the organization is
required to be aligned with the marketplace which helps the organization in achieving the
success. Even though, strong culture can be valuable for the organization it is important to
prevent it from becoming overbearing and also there are several challenges to be considered.
When the organizational culture becomes strong it might become difficult for managers to
change the behaviour of the people in the organization. It may also take a long time for the
behaviour to be changed.
The benefits of cultural strength depend on the environment fit, moderate strength and
inclusion of the adaptive strength. These three has a direct impact on the functions of the
culture which in turn determines the outcome of the organization. The only major thing that is

essential is proper review of the organizational culture which assists in effective management
of the organization and its employees and their behaviour.
Impact of natural environment on the organizational behaviour
As every organization is required to work within framework which is surrounded by
environmental factors and there is a continuous interaction between the same. The business
environment is divided into economic and non-economic factors. On the part of economic
factors, it includes the economic policies, condition and performance of the country. The
major economic factor that is affecting the organizational behaviour of Sainsbury is the
Brexit effect. If UK leaves European Union then it will lead to increase in the cost of import
and export. Also, because of long years of depression and food price inflation, the many
households in UK have become price conscious which is highly affecting the shopping habits
of the consumers (Borca, Draghici and Suciu, 2019). Another factor is the increasing fuel
cost and raising salaries of the staff of Sainsbury will lead to the increase in the price of the
product which will be carried by end consumers. This has led to the slow growth of
Sainsbury which has consequently led to the change in the organization behaviour.
The other than economic factors that can impact the business behaviour are the
availability of natural resources, changing weather and climate conditions, location,
technology, political etc. the two major factors affecting the most and needs special focus by
the organization. As and when latest technology emerges the organization is required to make
a quick decision about the same in terms of whether to implement it or not because if the
other competitors adopts the technology before then it will weaken the competitive positive
of the business of Sainsbury (Shape culture. 2016). In terms of environmental factors, the
organization is required to take various initiatives for the betterment of the environment in
which it is operating. As the business operation have a negative impact on the environment
which lead to increase in carbon footprint, more waste disposal, pollution, unhealthy
environment which are hazardous to the normal living beings (Inoni, Salami and Olannye,
2019). These changes have been brought by the organizations itself and now it is affecting the
business. For example, climate change like extreme heat or extreme cold will affect the
products of the business. Also, it may increase the demand of air conditioning and higher
demand for energy which will result into increased use of natural resources. Consequently, it
will lead to depletion of fossil fuels and which may lead to scarcity of resources for the
organizations like Sainsbury (Factors Affecting Organisational Behaviour. 2016). Currently,
the issues faced by the organizations like Sainsbury includes the rise in ethical and
environmental conscious consumers who are demanding and pressurizing the firms to adopt
the practices such as recyclable material, renewal sources of energy, reducing and replacing
plastic packaging with paper. Also, there is trend of emerged in the supermarkets is zero
waste supermarkets. In response to this, Sainsbury and other retail organizations have opened
zero waste retail stores.
These issues can be taken as an opportunity by the Sainsbury and other organizations.
This is the time when the organization can stand up show to its employees and market that
they are concerned about the environment and are taking up the initiatives to mitigate the risk
or causes (Alharbi, 2019). These factors along with the actions taken by the organizations
influences and reshaped the organizational behaviour in a positive way and boosts the
motivation among the employees and also enhances the goodwill of the organization in the
eyes of public. Thus, natural environmental factors affect the behaviour of the organization in

respect to employees and other stakeholders. It can be positive and negative which is
completely dependent upon the actions taken by the organization.
Thus, organization has to ensure proper management of the culture in which it is
operating and also the factors that can have an impact on it which will subsequently lead to
change in the workplace environment. Organizations needs to make sure which factor should
be invited which is not. It is also essential to make sure that the culture should not imposed
too strongly that employees will resist to change (Wilson, 2018). Also, environmental factors
should also be considered as an important part in changing the organizational behaviour.
Businesses is required to integrate both non-economic factors and business operation as it
also have a huge impact on the changing organizational behaviour and can also act as an
opportunity to the business for achieving greater success. Thus, Sainsbury needs to be more
careful.
PESTEL AND SWOT ANALYSIS
PESTEL Analysis
Political factors
Currently, there is uncertainty in UK due to the Brexit. This issue has a direct impact
on the business of retail industry. It will make it difficult for retailers to import products other
European nation as there are chances that cost of import will increase which will directly
affect the price of the product. This means that either Sainsbury has to increase the price of
the product or reduce its profit margins. Thus, it will have a high impact on the business
operation and functioning of Sainsbury.
Economic factors
In UK, in the past few years there has been an increase in fuel prices of both petrol
and diesel. The diminishing fossil fuels and the imposition of fuel tax will lead to increase in
the price of the fuel more. Subsequently, the increase in fuel price will affect the
transportation cost making it more expensive which will result in increase in the cost (Bush,
2019). Also, the rising salary expectation is another issue Sainsbury is facing. Employees
who are performing simple tasks like stocking shelves are demanding raise in their salaries. If
Sainsbury increases the pay then it will lead to increase in expenses. Thus, this factor is also
having a high impact on the Sainsbury’s business operation.
Sociocultural factors
There has been an increase in the trend of healthy food eating as people are become
more health conscious. Consumers are demanding more healthy products like shakes, salads,
snacks etc. This factor is very important for Sainsbury to keep track of it. Sainsbury has
already started working on it thus it will have less impact.
Technological factors
There has been a drastic change in the field of technology. The most companies in UK
retail industry has adopted analytics which helps in learning more about the business
functioning. It might be useful in identifying the how the product is expected to be sell and in
determining the price as well. The emergence of online shopping is also spreading very fast.

Sainsbury has started using the analytics and also has its online shopping site thus this factor
will have less impact on the business.
Environmental factors
With the increasing awareness among consumers about the well-being of the
environment and the increased pressure from the government has forced organizations to take
corrective steps. The supermarket chains have a huge contribution in increasing the carbon
footprint and plastic waste crisis. This factor has a huge impact on the retail industry.
Sainsbury has come up with the idea to reduce the plastic waste by providing incentives to
customers who bring their own bags. It will have less impact on Sainsbury.
Legal factors
The introduction of new sugar tax levied by the UK government with the aim to
reduce the sugar content in drinks by 20%. This issue is having a direct impact on the
supermarket’s own brands. Also, there is a ban imposed on the advertisement of high-fat, salt
and sugar food and drink products for the children under the age of 16 which restricts the
marketing and promotional efforts. Along with that post Brexit, the legal ramification the
brands have to face which might require changes in the organizations policies. Thus, all these
factors have a direct and high impact on the Sainsbury.
SWOT analysis
Strengths
 Having strong market share and
profitability.
 Differentiated products with high
quality.
 Employee diversity and great place
to work.
Weaknesses
 Low margin food products.
 Single presence only in UK.
 Argos losses (J Sainsbury SWOT &
PESTLE Analysis. 2019).
Opportunities
 Global market expansion.
 Increasing online presence.
 Using latest analytical technologies.
Threats
 Impact of Brexit.
 Tough competition from big giants.
 Increasing hard discounters.
CONCLUSION
It can be concluded from the above that business environment analysis is very
important to the business organization. It is very essential to analyse the changing
environmental factors. The cultural factors have the huge impact on the organizational
behaviour. It is important to manage it carefully because if the culture becomes too strong
which may resist the employees to see the new coming opportunities which will consequently
lead to suppress the culture in the organization. The organisation is required to implement
adaptive culture in the organization to brings openness among the employees with respect to
change. Effective management of it creates a sense of ownership among the employees which
results in taking responsibility for the organizational performance and facing the external
environmental factors. Also, apart from culture, there are other factors that likely to affect the

behaviour within the organization. First is political factor, which states about the effect of
political instability in the country. The impact of Brexit has over the business operation of
Sainsbury. Second is economic factor, it includes the economic growth of the country. The
impact of increase in fuel cost and salary has on the pricing of the products of Sainsbury.
Third is social factor, where the changing customers tastes and preferences are considered
like increasing health consciousness which led to increase in demand of healthy products.
Fourth is technological factors, where the impact of technology has over the business
operation and functioning of Sainsbury and ways in which it can affect the business and
organizational behaviour. Fifth is legal factors, which includes the changes in the legal rules
and regulations, policies of the country with respect to change in trade after Brexit. Last is
environmental factors, which covers the negative impact business has over the environment
while performing the business operation. The increase in carbon footprint and plastic wastage
has increased the need for organizations to take initiatives in order to reduce the negative
impact caused by it such as sudden change in climate, weather conditions, depletion of fossil
fuels, lack of availability of resources etc.
All these factors have a bigger impact and influence over the business then it is
expected and sometimes even overlooked by the organizations. Sainsbury has taken
initiatives for the same and has come up with new and innovative ways to face the challenges
effectively. Sainsbury can effectively use its internal factors based on its strengths and
opportunities in order to face its weaknesses and threats prevailing in the market. The strong
market share, high quality products, increasing profitability can be used in grabbing new
opportunities available in order to take competitive advantage. Key opportunities available
are effective use of latest technology, expanding the business across the globe. Thus, all these
internal and external factors along the with the culture have a huge impact on the business
and the organizational behaviour. It very crucial to manage it properly by analysing and
evaluating the business environment from time to time so as to get prepared for the future
challenge to come and to reduce its negative impact on the business. Sainsbury has been close
to success in following these business and environmental factors in business.

REFERENCES
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cohesion, stress, and turnover intentions. The Service Industries Journal. 36(3-4).
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Inoni, O. R., Salami, C. G. E. and Olannye, A. P., 2019. Effects of Internal and External
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