Business and Business Environment Report

This report explores the concept of Business Environment, analyzing the internal and external factors that influence an organization's operations. It examines different types of companies, their purposes, and the size and scope of various organizations. The report focuses on JP Morgan, a leading financial services company, exploring its organizational structure, objectives, and the impact of macro-environmental factors on its business operations. It also identifies JP Morgan's strengths, weaknesses, opportunities, and threats, highlighting the interrelationship between these factors and the macro-environment.

BUSINESS AND BUSINESS
ENVIRONMENT

Contents
INTRODUCTION.....................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1 Different types of company and its purposes......................................................................................3
P2 Size and Scope of different type of organizations..............................................................................6
TASK 2.......................................................................................................................................................9
P3 Inter-relationship between different organizational structure and objectives......................................9
P4 Positive and Negative influence of macro-environmental factors on JP Morgan’s business operation
...............................................................................................................................................................11
P5 Strength and weakness of JP Morgan...............................................................................................14
P6 State how strength and weakness are inter-lined with macro-factors................................................15
CONCLUSION........................................................................................................................................15
REFERENCES........................................................................................................................................17

INTRODUCTION
The idea of Business Environment alludes to the set of all internal and external factor that
impact organization's overall working and activity. Internal elements incorporate firm’s product
or services resources, workers etc. though External incorporate investor, client, monetary
condition and competitors. The environment of business vary from country to country depending
upon it nature and surroundings in which it operates (Avramenko, 2012). It is important for a
company to have knowledge regarding available threats and opportunities prevailing in the
market. As indicated by Moris, “Business Environment can be characterized as a sum total of all
events, forces and condition that affect it either directly or indirectly.” For smooth running of any
business concern, the prime obligation is to comprehend the business condition in which they
work that influences it’s working. This report depends on JP Morgan which is an American
based financial services company. It covers different types of organization along with its
structure and size. Internal and external factors are determined through undertaking Pestle
analysis and strength and weakness of chosen firm is also identified in the given report.
TASK 1
P1 Different types of company and its purposes
A business enterprise can be organized in one of different ways, and it is completely
depend upon entrepreneur which way he/she prefers. It is primarily important to choose it
correctly as it directly affect company’s liability as well as owners. Discussed below are some of
the common options that needs to be taken into account by business owner:
1. Public Enterprises: Companies under this sector are mostly run, controlled and overseen by the
Government Bodies. Individuals pay duties to Government and they additionally utilize this cash
for the welfare and enthusiasm of society as it were. The whole execution and working of
organization is ruled by local, state or national government. They deliver products remembering
the interest and welfare of society. Along with this they also laid stress on various others factors
like providing shelter to homeless people, water management, waste management etc.
Legal Structure: It is generally of two types i.e. Central and State

•Central Government: They manage the whole working of country. In US, all rules and
regulation are made by central government for the welfare of company as well as local residents.
Their primary object is to gather taxes from local residents and progress use it for their benefit
only (Cheng, Yip and Yeung, 2012).
•State Government: From the central point of view, state government have political nature. They
share their capacity and experts with national government. Their primary reason for existing is to
control and screen the exercises of instruction division in order to give better training to local
residents.
•Local Government: Local bodies needs to control the working of small geographical area, for
example, town, state or city. Their principle objective is to care of individual’s interest and
welfare.
Aims:
• To provide services keeping in mind the welfare and interest of local population
• To utilize assets in an ideal way that prompts benefits the community.
Public Sector is otherwise called as buyer, provider & purchaser. Like JP Morgan falls under the
classification of this division. As a provider, they have opened schools that provides learning and
training to kids. As a producer, they are fabricating a portion of its financial services in health
and education care sector.
2. Private Enterprises: These sort of association are for the most part claimed and keep running
by private person. They are considered as free undertaking in the nation. It is significantly less
demanding for private firms to adjust or change themselves according to the dynamic market
changes. The principle preferred standpoint of this area is to create merchandise and enterprises
according to the changing requests of target audience. The commitment of privately owned
businesses in US is close around 89% i.e. the target of the greater part of the association is to win
benefit. The case of private endeavor is Virgin Group.
Legal Structure

•Sole Trader: These kind of organizations are overseen by single individual known as Sole-
Proprietor. Little measure of capital is required to run such business. Their primary object is to
procure benefit that fulfills the need and want of their relatives.
•Partnership: Such sort of undertakings are typically kept running by two individuals or more
than that. Under this, every one of the accomplices have measure up to rights and liabilities and
furthermore share benefit and misfortune in break even with proportionate
•Private Limited Companies: Such organizations keep running with a point of procuring benefit
and catching vast piece of the overall industry. The risk of their part is restricted and benefits are
isolated based on profit.
Aims:
1. Profit
2. Maximize Sales
3. Growth
4. Increased market share
3. Voluntary Enterprises: Such kind of association are not possessed or kept running by any
single person. These are otherwise called NPO and their principle objective is to enhance the
monetary and living state of individuals. Their individuals are regularly known as volunteers.
Nonetheless, it isn't important for such type of organizations to get themselves incorporated. The
primary reason of their reality or survival is to serve the general public and its inhabitants or
individuals. For instance: Oxfam
Aim: Their fundamental design is to destroy destitution from the nation and also, raise the way
of life of individuals.
Legal Structure: Unlike Public and Private, these kind of association does not have a specific
lawful structure. Their whole business working and activity is in the hand of its individuals.
Charitable Organization: It is a kind of Non-benefit Organization, whose point is to provide
financial assistance to individual and furthermore centers on enhancing the way of life of

individuals. Administrations given by NPO benefits whole society and its occupants independent
of premise of ground of standing, religion, age, sexual orientation and so forth.
P2 Size and Scope of different type of organizations
Size of JP Morgan: It is an American based multinational investment bank and financial services.
It falls in the list of America’s big four company along with other big companies like Citi Group,
Bank of America and Wells Fargo. Basically it considers to be a custodian bank and universal
bank. As of 2017, it is one of the leading asset management company in the world with over
US$2.789 trillion in assets under management and US$30 trillion in assets under custody. In-fact
it is one of the leading and most valuable bank in context of market capitalization.
Scope of JP Morgan: Presently it operates in more than 20 countries with over 4400 offices
worldwide. Vast range of financial services are given by JP Morgan to its target audience
including investment banking, commercial banking, market personal financial services and other
financial products or services.
Size of Virgin Group: It is a multinational organization investment combination established by
proprietor Sir Richard Branson and Nik Powell. The headquarter of this association is in London,
US. It was built up in the year 1970, very nearly 48 years prior. The organization for the most
part bargains in keeping money, books, travel, retail, cell phones, purchaser hardware, human
services and so on (Hämäläinen, Näyhä and Pesonen, 2011).. The measure of Virgin Group is very
substantial as they are working business rehearses in various fields and in various nations. The
quantity of laborer utilized in Virgin Group is approx., 71000.
Scope of Virgin Group: The business concern bargains in different center customer part, for
example, Health and Wellness, Music and Entertainment, Telecom& Media, Financial Services
and so on. Like their shifted administrations, they work in various nations, for example, Northern
Ireland, Scotland and so forth.
Size of Oxfam: It is a non-gainful association under which in excess of 19 altruistic trust are
working under them. Their primary goal is to destroy neediness from all over the globe and these
19 trust are giving help to them. It was first established in England that begins their philanthropy
or administrations by giving free nourishment to individuals.

Scope of Oxfam: The quantity of offices given by Oxfam is worried about enhancing the
expectation for everyday comforts and prosperity of individuals. Volunteers additionally give
help to them and they centers around decreasing destitution, backing, and absence of education
from the nation.
Stakeholder’s Analysis: It alludes to the procedure of efficiently dissecting and assembling
subjective data to recognize whose intrigue ought to earlier considered when executing or
creating arrangement or program (Kelly and Scott, 2012). They are for the most part classes into
two sections one is Internal and other is External
Internal: Such people or gatherings are the piece of the organization and have effect on its
working and activity. They possesses essential duty towards the organization, for example,
workers, proprietors, supervisors, financial specialists and so on.
•Employees: They are in charge of executing out specific errands in a precise way that prompts
achieve goal of organization in a viable way. Accomplishment of association relies on the
aptitudes and capacities of their workforce (Teece, 2012). They are reflected as an advantage of
the organization that produces higher benefits and income for them. They are the person who
interface every day with shoppers.
•Managers: Managers are the person who oversee and run whole division, for example, Sales
Manager, General Manager. They take care of the considerable number of exercises assume
takes position under such office in a powerful and effective way.
•Board of Director: They will be they gathering or board of part who manage the joined
association. Such individuals are chosen by the individual from organization itself in their yearly
broad gathering.
External: These are those gatherings and gathering that are not considered as a piece of
association, but rather yet gets influenced by its exercises. Such individuals holds auxiliary
obligation towards organization. For instance: Customer, Vendor, Government, contender and so
forth.
•Customers: Success and development of business concern chiefly relies on its enduring
association with its objective clients. The vast majority of the organizations are utilizing client

relationship administration which help in social affair information related their client loving.
Alluded firm continues changing or adjusting their item go according to request of target
gathering of people.
•Stockholders: Their fundamental part is to give capital or subsidizing to business endeavor for
their extension or development.
•Government: They essentially stress on keeping the enthusiasm of clients and spotlight on
offering standard items or administrations. They likewise force different principles and
enactment that specifically or in a roundabout way affect the working and execution of an
association (Li and et. al., 2011).
Category 1: Low power and Low interest Stakeholder
Under this classification, individuals who have put less in the organization and have less
enthusiasm among them falls. Dozing accomplices goes under this. They gangs little worry
towards proposed methodology of the organization (Wetherly, 2014). For instance: Customers of
JP Morgan
Category 2: Low power and high interest stakeholder
Under this classification, partner have little enthusiasm towards organization however they holds
satisfactory power that is adequate for affecting organization's activity and working. For
instance: Employees of JP Morgan
Category 3: High Power and low interest
Under this, partner claims less enthusiasm towards organization's activity yet they hold high
power as far as giving budgetary help. Indeed such sort of individuals have capacity to square or
at least back off a proposed advancement. Here the point of JP Morgan is to fulfill these partners.
For instance: Investors.
Category 4: High Power and High Interest
Under this class, CEO, MD and Top administration level of JP Morgan’s comes who are quite
keen on recognizing what's happening in the organization. Additionally, they have specialist to
control the general working and activity of the firm.

TASK 2
P3 Inter-relationship between different organizational structure and objectives
Function of one organizational department varies from one another. Successful
connection among a few division advances positive workplace, better co-appointment, group
building, enhanced correspondence and so forth. This further help the organization resembles JP
MORGAN’S to perform its functions and achieve objective in a successful way. Between
connection among capacities and branch of alluded firm are depicted beneath:
Human Resource Department: This is considered as the most basic division of each business
undertaking. The primary capacity of this office is to outline compelling techniques for its
workforce with the goal that they can accomplish errand in financially savvy and auspicious way
(Moutinho, 2011). They laid worry in enlisting most gifted and qualified who with their abilities
and effectiveness accomplish target of other office also. Capable faculty with their creative
abilities returns higher benefit for the organization.
Finance Department: This office manages giving budgetary help to organization with the goal
that they can play out its everyday task in a successful way. It additionally perform different
capacity in regards to readiness and course of action of spending plan. These spending go about
as standard for different office as they perform as per that standard. Ideal distribution of assets
and assets help in accomplishing target of firm. Legitimate designation of reserve empower other
division to set their standard in like manner.
Marketing Department: The principle duty of this division is to look into about necessities and
want of market and furthermore distinguishes the perspectives of potential purchaser in regards
to the perspectives of the client as far as item, administrations and so on. The data gathered from
the client will be gainful creation office as they will additionally produce the products in like
manner (Vaiman, Sigurjonsson and Davidsson, 2011).
All these are the major functions perform by a business enterprise to achieve its set goals and
objectives. It is very important for manager to examine the interrelationship between all these
functions in order to increase effectiveness of business operations. For example, activities
perform by marketing department directly increase the effectiveness of sales department and
many more. Further, structure of organization also affects the activities perform by company

toservie its customers. Different type of organization structure can be understood by the
following points:
Type of organization structure
 Line organizational structure: This type of organization structure has vertical relationship
with other functions perform at workplace. Under this, line departments remain directly
involved in complete the goals set by company.
Above given image is indicating the line organization structure in which authority follows the
chain of command.
 Divisional organizational structure: Under this type of organization structure,
organization has various basis such as product, function, geographic territory, and project
on which department are formed.

Divisional organizational structure can be better understood by the given image in which
organization and its various functions are based on different basis.
P4 Positive and Negative influence of macro-environmental factors on JP Morgan’s business
operation
JP Morgan is an American based multinational investment bank and financial services
company. In-fact it is one of the America’s Big Four bank along with Wells Fargo, Citigroup and
Bank of America. Because of execution of different activity in various nations there are various
macro-environmental factors which impact distinctive business procedures of organization.
There are diverse sort of external factors like political, economical, social, technological,
environmental etc. All these component have positive and negative effect on the different
business activity of JP Morgan (Welford, 2013). It is the primary duty of respective organizational
manager to identify these component and execute diverse kinds of strategies so as to tackle
issues which are concerned with various business operation. By identifying such factor helps to
enhance execution of association in stipulated era. Moreover marketing condition of each
country varies from one another which enables company’s management to determine prevailing
condition and formulate strategies accordingly. Discussed below are the positive and negative
impact of these factor on JP Morgan’s operation are mentioned below:-

1. Political Factor: This factor determined the extent to which government is allowed to
interfere in company operation. Political factors plays crucial role in determining the factors
that can influence JP Morgan's long term profitability in a specific market or country. It is
operating in money center bank in more than 12 countries and reveal itself to distinctive
types of political environment and system risks. In order to achieve success and stable
growth in money center bank sector risk of political environment needs to be identified.
There are certain factors like rest of military invasion, favored trading partners, level of
corruption specially in financial sector, pricing regulation, tax rates and incentives and many
more that needs to be closely analyze by JP Morgan before investing or financing in a certain
market. However in order to work in an effective manner, company needs to follow all laws
and legislation formulated by government body. On the contrary, any political instability in
the country adversely affect money sector banks and its operations.
2. Economic factor: This dimension in terms of financial sector includes population growth,
rate of unemployment, urbanization rate, financial crisis etc. Analysis of these factors assist
in formulating country's economic policies, interest rate and financial services given by firms
under this sector. Along with this JP MORGAN can also consider other economic indicators
like money centre bank industry growth rate, spending of consumer etc. to anticipate the
growth trajectory of industry as well as company. JP Morgan provides ample work
opportunities to large number of people. This implies that company is significantly
contributing towards improving the economy condition of the country. Thus, by increasing
the rate of employment. On the other hand, any change in inflation are interest rate puts an
adverse impact one company's overall operation and activities (Wetherly, 2014).
3. Social Factors: Social culture and manner of doing things affect organizational culture in
an environment. Shared attitude and believes of the population play key role in how JP
MORGAN'S marketers will understand the consumers of a given market and how they plan
& design the marketing message for consumers of money sector bank industry. There are
several other strong competitors of JP Morgan like Citi group incorporation, Bank of
America, Barclays etc. In order to work against these big shot companies, it is important for
JP MORGAN to approach the current and potential future customer. Providing services that
ultimately benefits customer automatically gives high competitive advantage to firm.

However if somehow company feels to satisfy its target customers than it creates bad
impression in the mind of customer. As a result, brand image and goodwill of firm gets
adversely affected.
4. Technological Factors: Today, technology is vastly disrupting among various other
industries worldwide. Latest and advanced technology not only help company in improving
its operation but also help in establishing great relationship with its customer. Effective
communication with customer in this modern technological world is very important. Also
with the help of high end technology, banking services has become much easier and faster.
By taking the advantage of latest technologies, JP MORGAN is doing and giving best over
its rivals. In fact company can gain competitive advantage by embedding latest and
innovative technology. Its negative impact can be the cost require to implement these latest
technologies (Yoon, 2012).
5. Environmental factors: Environmental standards or norms of different market varies from
one another and also impact firm's profitability in that particular market. Even within a
country, environmental laws and liability are different from state to state. For example:
Liability clause of Florida and Texas are completely different in case of environmental
disaster or any mishappening. Similarly lots of other European countries give healthy tax
break two organizations that operate or deals in the renewable sector. Before starting any
new business or entering into new market, it is important for every form to critically and
carefully evaluate all environmental standards that are needed to be taken into account while
operating in those markets. Some of the environmental components that JP MORGAN needs
to consider includes weather, recycling, waste management in financial sector, endangered
species, attitude towards ecological product, laws regulating environmental pollution and
many more. Considering these factors help company in building strong image and goodwill
in the minds of customer. However if in case, company fails to compliance with
environmental laws and legislation it will result in impacting its business operation and that
too negatively.
6. Legal factor: In many countries, the legal Institution and framework are not robust enough
to secure the intellectual property rights of a company. Thus, an organization needs to
evaluate such factors carefully before entering any such market. This can further lead to theft

of company's secret sauce thus the overall competitive advantage. Some of the legal factors
that JP MORGAN'S is required taken into account while entering a new market includes
discrimination law, employment law, health and safety law, intellectual property law, data
protection and consumer protection. Compliance to these components also assist firm in
running and performing its functions and operations in an effective and efficient manner
(Stroke, 2016). However, if somehow company's fails to follow these laws than as a result
brand image of company gets negatively affected.
P5 Strength and weakness of JP Morgan
Strength: This aspect indicates the specific
features of a business or its project that
provide an advantage to a company over its
competitors (Moutinho, 2011).
• Strong brand name and great
financial position
• Operates globally and employees
more than 250,000 around the
globe
• Excellent services for clients
through broad retail arrange
(Hilton and Platt, 2013). For
example, as per the feedback
collected from its customers, it is
found that company provide
customized services to its clients
and do various efforts to fulfil
their requirements.
• Good brand visibility in the B2B
section
• Largest bank in US regarding
deals, advertise esteem, resources
Weakness: This refers to those characteristics
that place a disadvantage to a company over
its rivals.
• Overdependence on USA
• Stiff rivalry from other monetary
specialist organizations (Kelly
and Scott, 2012).
• Fluctuating markets result in
unsteadiness. For example, so
many fluctuations in exchange rate
affect the profits of company.

and benefits
Opportunities: This factor highlight the
elements exist in business environment of
which company can exploit its benefits (Li, Q.
and et. al., 2011).
• Expansion in different nations. For
example, today company is
operating in different areas of
world.
• Diversifying portfolios for clients
• Investments over the world
• Business keeping money, and JVs
Threats: It define those elements that could
cause trouble or can create issues before
business.
• High instability in mortgage
market (López-Gamero, Molina-
Azorín and Claver-Cortés, 2011).
For example, Market in which
company operate suffer by so
many changes that affect the
functioning of enterprise.
• Situation like recession affect
company’s operation adversely.
P6 State how strength and weakness are inter-lined with macro-factors
Political Factor: Since the organization is working their business activity the whole way across
the globe, which has turns into its significant quality as it help in increasing high upper hand over
its adversaries the whole way across the globe. Because of progressing budgetary unsteadiness in
US, government bodies urged retailer to make more openings for work which turns out as a
quality for them as they will get more gifted and qualified individuals without spending much on
work chasing process.
Economical Factors: Any adjustment in the financial approaches prompts affect the general
working of the organization, for example, frequent change in tax collection influences the
budgetary availability of firm which turns out a soft spot for them. In spite of the fact that the
organization is developing globally, however they are as yet much depend upon USA for
majority of operation and profitability which is one of its biggest weakness as any change in
USA will ultimately affects its operations (Hauer, 2014).
Social Factors: Due to visit change in the taste and way of life of individuals, JP MORGAN is
persistently changing their products or offering which is making issue for them. In any case, JP
MORGAN is managing this circumstance in a powerful way. Considering the welfare and
interest of customers, company formulates its plans and strategies.

Technological Factors: It one of firm’s biggest strength as it help in attaining high competitive
advantage. Taking the advantage of this, JP MORGAN has invest good amount of money in its
promotion campaign so as to make people aware about the services (Chamorro, 2015).
CONCLUSION
According to the previously mentioned report, organization's administrators and higher
specialist assumes a vital part in overseeing and controlling all business exercises in precise way
in order to enhance its general efficiency and benefit. The primary centered zone of every last
business is to fulfilling the necessities and requests of target clients through offering huge
assortment of products and enterprises in reasonable costs with high caliber. Partner are known
as the capital financial specialist of the organization as their part is to spend immense measure of
cash in executing all business activities in savvy and opportune way.

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