Business and the Business Environment Report

This report examines the business environment, focusing on Marks and Spencer as a case study. It explores different types of organizations, analyzes their size and scope, and examines the relationship between organizational functions and their link to objectives. The report also delves into the positive and negative impacts of the macro environment, conducting a PESTLE analysis and SWOT analysis of Marks and Spencer. It concludes by explaining how strengths and weaknesses interrelate with external macro factors.

Business and the
Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Explain different types and purposes of organisations...........................................................1
P2 Explain the size and scope of a range of different types of organisations.............................3
LO 2.................................................................................................................................................5
P3 Explain the relationship between different organisational functions and how they link to
objectives.....................................................................................................................................5
LO 3.................................................................................................................................................7
P4 Identify the positive and negative impacts of macro environment.........................................7
LO4..................................................................................................................................................8
P5 Internal and external analysis of specific organisation...........................................................8
P6 Explain how strengths and weaknesses interrelate with external macro factors....................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Every business operates in a defined environment which impact on its operations. The
factors can be either internal or external. Therefore, it is necessary for business to identify factors
so that its impact can be minimised. Also, in present times, changes in factors are making it
difficult for business to expand in various countries. A business has to deal with many types of
factors in which they operate. This report will describe different types of organisation on basis of
their size, scope and structure explaining their vision, mission, objectives, organizational
structure, legal structure, size, scope etc. Also, it will also lay emphasis on how functions
interrelate with their structure. It will discuss about Pestle and SWOT analysis that impacts on
business directly. Moreover, it will explain how all the strength and weakness that are
interrelated with the external factors.
LO 1
P1 Explain different types and purposes of organisations
There are different types of businesses that differ in terms of scope, size, structure, aims
and objectives. They also operate in different sectors such as public, private and voluntary. These
are types of business organisation which is as follows :-
Basis Public (Bank of
England)
Private (Marks and
Spencer)
Voluntary (UNICEF)
Types It is formed and
regulated by
government. The main
aim is to provide
services and products to
citizens of nation. Also,
objective is not to earn
profit.
By collecting tax, fines,
etc. Revenue is
generated.
It is controlled and
operated by
individuals. There can
be group or single
person. The main aim
is to earn profit by
offering products and
services.
They raise capital by
issuing shares, taking
They are formed either
by government or
individual with aim to
offer services for social
welfare.
Here, capital is raised
through charities.
Voluntary organisation
may be formed by
government or by
companies. They can
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loans from bank, etc.
Government can also
take stake in private
firms.
The areas are
education, finance,
health care, etc.
operate at national or
international level.
Organizational
structure
Bank of England
follows matrix
organizational structure
where relationship is in
the form of Grid rather
than traditional
hierarchy where main
persons are the
governor and chair of
court.
Organizational
structure of marks and
Spencer is flat
organizational
structure i.e. they have
limited levels of
management between
front line employees
and administrative
level.
UNICEF follows
hierarchical
organizational structure
with various sub
departments Where
main person is
executive director.
Legal structure The structure is defined
by government.
Usually, it is flexible
and easy to understand.
The structure of Bank
of England is formed
by UK government.
Here, by following
rules structure is
formed. It may be
different according to
nation laws.
The structure of Marks
and Spencer is formed
by as per UK
government rules. But
they have different
structure in different
countries.
The structure remains
fixed even in other
countries.
UNICEF structure is
designed by United
Nations.
Purpose They provide goods
and services to citizens.
It is formed to earn
and generate profits
Purpose is to contribute
towards society by
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Profit earning is not
priority of public
organisation.
from people by
providing goods and
services.
offering services. They
want to improve social
life of people and fulfil
their needs by offering
necessity services that
is required to live.
Legally formed It is formed by the
government in the
parliament. The rules
and regulations are
formed along with
structure.
It is formed by
individual or group of
people. The company
name is been legally
registered.
They are formed either
by government, people
or companies. Here,
organisation structure
is registered.
P2 Explain the size and scope of a range of different types of organisations.
In terms of size and scope business goals and objectives as well as nature varies. The scope
and size determines business mission and vision. The difference between types of organisation is
defined below :-
Basis Public (Bank of
England)
Private (Marks and
Spencer)
Voluntary (UNICEF)
Size Here, size depends on
mission and vision of
organisation. Usually,
they function at
national level.
As Bank of England
function in entire UK,
their size is large.
In this there are
different types as well
such as small and
medium. So,
accordingly size is
determined.
Marks and Spencer is
a MNC that operates
at large level.
It is similar to private
firms. There size also
varies according to
purpose. They can
also be small or
medium.
UNICEF function at
global level as their
purpose is to serve
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children at worldwide.
Scope Organization scope is
decided by its size.
This is because scope
varies with size.
Usually, scope of
public companies are
larger as compared to
private one
Here, on basis of size,
scope differs. This is
because goal and
objectives are
developed
accordingly.
Marks and Spencer is
a MNC. Therefore, its
scope is big as
compared to other
companies.
It is similar to private
firms. There size also
varies according to
purpose. UNICEF
scope is big as they
function worldwide.
Vision Vision statement of
bank of England is to
adopt all the changes
that will advance the
future financial
system and help the
nation to spend
wisely.
Vision of Marks and
Spencer is to become
one of the leading
retailer brands which
sells high quality
products to their
customers.
Vision statement of
UNICEF is to build a
world where rights of
every child are
realized. All the works
done should help in
achieving equal
opportunity for
children to thrive and
survive.
mission Mission statement of
Bank of England is to
promote good of
people of UK by
maintaining financial
stability and
monetary. Their
monitory policy
objective is to deliver
Mission of Marks and
Spencer is to make
aspirational quality
accessible to all and
this is a true care with
companies
technology. Another
mission of marks and
Spencer is to become
Mission statement of
UNICEF is to insist
the survival,
development and
protection of children
for the integral
progress of humans.
An other mission of
UNICEF is to
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price stability in order
to support economic
objectives of the bank
for employment and
growth.
fit for growth. advocate protection of
children's right, help
them to meet their
requirements, needs
and develop
opportunities in order
to reach their complete
potential.
Goals and objectives Bank of England has
two main objectives
which are: monetary
stability and financial
stability. Goal of
Bank of England is to
promote financial
stability in UK.
Main goal of Marks
and Spencer is to
inspire customers to
shop at every turn.
Objective of Marks
and Spencer is to
promote value, quality
of their products for
their customers.
Main goal of UNICEF
is to devote
themselves completely
to children and
promote their rights
and well beings
Objective of UNICEF
is to fight for
children's rights to
meet the basic needs.
LO 2
P3 Explain the relationship between different organisational functions and how they link to
objectives
In every business there are different types of functions performed. It depends on its size
and nature. But there are some common functions that exist in every organisation. The
organisation functions are related to each other as it helps in attaining goals and objectives.
Moreover, operation of each function is different as it depends on roles and responsibilities
assigned. In order to attain objectives it is necessary to integrate overall functions. Furthermore,
company structure defines relationship between functions which are as follows :-
HR- This function is related to managing and recruiting HR that will perform activities.
It includes hiring, making payroll, etc. of employees in an organization. They analyze need of
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employees in each function like finance, sales, etc. and accordingly recruit people. Moreover,
training is provided on basis of job roles defined in each function.
Finance- It is also important function of an organisation. This is because it includes
regulating and controlling overall capital of business. Here, different activities are done such as
recording transaction, making balance sheet, profit and loss account, etc. besides this, it analyses
needs in each function and allocates resources accordingly. So, on basis of it, performance of
each department is measured and funds are allocated to them. It maintains and regulates inflow
and outflow of cash. Finance department is related to all other as it helps in managing cash
inflow and outflow. Furthermore, daily transactions are recorded which helps in evaluating
performance of each business unit.
Research and development – In this research is been conducted to identity needs and
analyse behaviour of people so that change in trends can be identified and accordingly products
are developed. Also, it gathers information about market and analyzes it. They coordinate with
marketing and sales unit. They coordinate with production unit so that changes in product
features are made.
Marketing – it is completely related to promoting and advertising of products in the
market. This is done by analyzing market conditions, formulating plans, etc. they interact with
sales to gather data on each market. Moreover, R&D helps marketing unit to share information
regarding competitive market against favourable brands so that making strategies become easier
for management team. Marketing unit need to coordinate with production, operation, sales team
for better growth and productivity of organization. It indirectly related to market share.
Sales – It is related to selling of product in market. Here, salesperson interacts with
retailers, wholesalers, etc. and provide products info to them. It is completely different from
marketing as in this no promotion is done. Sales team interacts with customers attractively either
through phone calls or face to face. They try to convince public to promote their product which
increase market share of industries. Sales team make the product popular and effective. Product
can be sold direct or indirect i.e., from producers to consumers or from producers to retailers and
then retailers to consumers.
Production-This function unit is to produce goods. The main role of production unit id to
manufacture products within specified time by maintaining quality as per customer expectations
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and demands. Production unit coordinates with R&D unit to analyse the customer demands and
maintains taste of products accordingly.
LO 3
P4 Identify the positive and negative impacts of macro environment
Macro environment refers to factors that can not be controlled by business. Therefore, it is
essential for business to analyse it so that effective strategies can be developed (Nahar and et.al.,
2018). The pestel analysis of Marks and Spencer is as follows :-
Political – These are the factors that are made, run and changed by the government. These
factors shows the anticipation level by the government in different businesses and various trades.
It is related to change in political situation, trade and tariff policies, etc. that highly impacts on
business operations. If government changes then new rules and legislations are formulated. For
example- Brexit will negatively impact on Marks and Spencer operations. Whereas it’s positive
impact is emerging markets of BRICS countries. Negative political effect on Mark and Spencer
was that they were accused of not following the safety regulation standards after the door fell on
an employee (Bocken., 2017). Positive effect of Marks and Spencer was that their organization
was the first to achieve fair trade policy route which was to cut fat and salt in Marks and Spencer
food and increase the overall quality of their food.
Economical- It is related with inflation rate, currency, GDP, per capita income, etc. of a nation.
Any fluctuation in all these directly impact on company operations. Marks and Spencer operate
in various countries so global shift in economic power will impact on their growth in positive
way. Its negative impact will be on economic crisis in some nations such that marks and Spencer
cannot operate their work in those countries because their investment rate is too high. Mark &
Spencer must concentrate on fashion arena so that chances of interest by young generation also
held which lead organisation to better growth.
Social – The social factors are in context to taste and preference, needs, etc. of society that
prevails within a country (Kuznetsov and et.al., 2018). It is also related with culture and ethics
of people. Any shift or change in this affects company growth. Now, people are focused towards
living a high social life so it will benefit Marks and Spencer. But in many developing nations,
customers still prefer low price products to fulfil their needs. Marks and Spencer also need to
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focus on their fashion and clothing area in order to change the perception of youngsters and they
can spend more of their disposable income on fashionable section or clothing section of their
organization.
Technological – This factor will play a significant role in development of organisation. With
technological advancement businesses have to implement new IT infrastructure. The rise in
cyber security will force Marks and Spencer to update technology (Rangel and et.al., 2015). On
other hand, there will be positive impact of social technology on people. It will help in rise in
online shopping.
Environmental – This factor include laws related to environment which has to be strictly
followed as it is imposed by government. Therefore, any change in laws and regulation will
impact on Marks and Spencer operations. Its positive impact is sustainable growth that allows
Marks and Spencer to adopt changes and work accordingly. It encourages employees to supply
and distribute goods and services eco-friendly so that consumers feel comfortable to use
products. Mark & Spencers also look forward to use non renewable resources to generate
electricity so that in can be included in green building and have advantage against other brands.
Legal – It consists of laws related to employment which differs in difference countries. Change
in these laws enforces organisation to formulate new policies and rules. For example, Mark &
Spencer need to follow health and safety act because at a time it failed to protect staff from
asbestos that is a high reactive silicate (Porter and et.al., 2015). To work under rules and
regulation is must for company so that employees feel comfortable and have insurance regarding
safety.
LO4
P5 Internal and external analysis of specific organisation
Internal factors exist within business that defines strength, weakness, etc. and can be easily
controlled. Also, the factors impact is limited as it can
Strengths
 It offers varieties of goods in and is having a strong brand image in the market.
 High quality and luxury goods makes it a highly recognised brand.
 It helps the company in focusing on enhancing customer experience and develop
relationship with customers.
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 It offers the most reliable source of financial growth for any company (Oh and et.al.,
2016).
Weakness
 Highly prices goods restricts middle class customers to buy it which decreases the overall
customer segment of the company.
 Company is highly dependent on UK for generation of sales and profits.
 Fixed or non changeable image of the company affects it reputation.
Opportunities
 Emerging developing countries like China, India, etc. for expansion
 Involvement in social media can help in attracting more customers and generating
revenue (Roth 2017).
 The company can simplify their operational model to make it more flexible.
 Expanding their product segment which will attract more customers and help them to
gain competitive advantages.
Threats
 Occurrence of Brexit can highly impact on its relation with European countries affecting
their growth
 Shift of people towards more economical products
 Changing trends in clothing segment.
 Emerging new brands has also increased the competition in their sector.
Pestel analysis
Political- it is related to political changes which can affect company to a great extent. It is related
to change in political situation, trade and tariff policies, etc. For example- Brexit will negatively
impact on Marks and Spencer operations
Economical- It is related with inflation rate, currency, GDP, per capita income, etc. of a nation.
Any fluctuation in all these directly impact on company operations. Marks and Spencer operate
in various countries so global shift in economic power will impact on their growth in positive
way.
Social – This includes change in taste and preference of people, their needs, cultural norms, etc.
Now, people are focused towards living a high social life so it will benefit Marks and Spencer.
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Technological - With technological advancement businesses have to implement new IT
infrastructure. The rise in cyber security will force Marks and Spencer to update technology.
Environmental – any change in environmental laws and regulations directly impact on company
market value. Its positive impact is sustainable growth that allows Marks and Spencer to adopt
changes and work accordingly.
Legal – they are related to unemployment laws and regulations. When laws and regulations are
changed it impact on Marks and Spencer.
P6 Explain how strengths and weaknesses interrelate with external macro factors.
There exists relationship between internal and external factors. It describes how change in
external factor can directly impact on internal one. Moreover, it can have either positive or
negative effect on business growth. The interrelationship is described below :-
 Marks and Spencer strength is that it offers high quality and luxury goods to people so
any social change in living standard of people will have a positive impact on its growth.
It will allow company to target them and generate more sales.
 In country like India, government can allow FDI investment so it refers to political
change in BRICS. Through this, Marks and Spencer can easily enter in other countries.
But on contrary, UK can allow other companies to invest in the country. This will result
in rise in competition in retail sector (Mondol., 2019).
 Advancement in technology can allow Marks and Spencer to use social media as
effective tool for marketing. With help of it, they can attract new customers and gain
competitive advantage.
 The strength of Marks and Spencer is it offers products at high price, thus change in
needs of people may force them to buy economical goods. Therefore, it will affect
negatively in company sales and profits.
 Bringing changes in changing trend of clothing segment will strengthen the brand image
of the company however it will affect the overall strategy of the organization.
 Company depends on UK for earning huge profits, thus any fluctuation in UK economy
will adversely impact on their market share as well as growth (Arya., 2018).
CONCLUSION
From the above report it has been concluded that there are public, private and voluntary
organisation that exists. They operate according to their mission and vision. Also, on basis of
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their scope, structure is formed. There are different types of functional department in business
that are marketing, sales, HR, etc. Each one of them is interrelated with one another in different
ways. This helps in attaining overall goals and objectives. Marco and micro are factors which
impact businesses. The impact differs as per size and scope of organisation. Also, it is
summarised that macro and micro factors are interrelated to each other.
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REFERENCES
Books and Journals
Arya, P., 2018. A Study of Consumer Buying Behaviour of RS Jeans and Gap Analysis of
Declining Sales of RS Formal. NIFT.
Bocken, N., 2017. Business-led sustainable consumption initiatives: Impacts and lessons
learned. Journal of Management Development. 36(1). pp.81-96.
Kuznetsov, V.I., and et.al., 2018. General method for rapid purification of native chromatin
fragments. Journal of Biological Chemistry. 293(31). pp.12271-12282.
Mondol, P., 2019. Performance Analysis of GlaxoSmithKline Bangladesh Limited.
Moreno, E.F., Contreras, R.G. and Ávila, M.M., 2017. Organizational Performance:: the
mediating effect of the knowledge sharing. OBETS: Revista de Ciencias Sociales, 12(1).
pp.169-189.
Nahar, N., and et.al., 2018. The Globalization of Malaysia National Cuisine: A Concept of
‘Gastrodiplomacy'.
Oh, S., and et.al., 2016. Development Direction Research Of Korean Lifestyle Brands Through
Analysis For Global Lifestyle Brands-Focused On The Trend Analysis. The
International Business & Economics Research Journal (Online). 15(2). p.41.
Porter, S.H., and et.al., 2015. Structural and magnetic properties of RTiNO2 (R= Ce, Pr, Nd)
perovskite nitride oxides. Journal of Solid State Chemistry. 226. pp.279-285.
Rangel, J., and et.al., 2015. Endopolyploidy changes with age-related polyethism in the honey
bee, Apis mellifera. PloS one. 10(4). p.e0122208.
Roth, S., 2017. Parsons, Luhmann, Spencer Brown. NOR design for double contingency
tables. Kybernetes. 46(8). pp.1469-1482.
Sosnovskikh, S., 2016. Toyota Motor Corporation: Organizational Culture.
Online
Pestel and swot analysis. 2019. [Online] Available through :
<https://www.swotandpestle.com/marks-and-spencer/>
Difference between public and private organisation. 2017. [online] Available Through : <
https://keydifferences.com/difference-between-public-sector-and-private-sector.html>
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