Impact of Business Environment on Organizational Growth Essay

Essay

Table of Contents
PART 1............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
A)Overview of chosen organisation............................................................................................1
B) Discussion how company is governed...................................................................................3
PART B............................................................................................................................................4
CONCLUSIONS .............................................................................................................................7
REFERENCES................................................................................................................................8

PART 1
INTRODUCTION
Business means actions which is run by people or group of people in order to attain same
goals and objectives. Business runs in society, so it is essential to take actions according to
external environment. There are many factors which is present in external environment. They are
political, economical, social, etc. If managers do not take actions according to external
environment, then they can not achieve long term sustainability in industry. Organisational
structure is also one of the important aspect which affects business operations in negative or
positive manner. There must be process communication among departments so information can
be delivered to concerned department (Avramenko, 2012). This report is based on Talk Talk Plc
which deals in providing communication, internet facilities to customers. This association has
head quarter in London, UK and established in 2003. in this report, there is discussion about
structure of association, how is it governed and at last discussion about external environmental
constraints.
A)Overview of chosen organisation
talk talk PLC is a public limited company which operates in telecommunication sector.
This organisation provides pay television, telecommunication and internet services. This
association operates in all over UK. This organisation has subsidiaries i.e. talk talk business, talk
talk technology and talk talk TV store. Talk Talk PLC is listed on the London Stock Exchange
and is a constituent of the FTSE 250 Index. This organisation do not have good land-line
services which affects brand image of association. They can not compete with other associations
in their land-line services because of worst record.
In November 2002, Carphone Warehouse's acquire Opal Telecom. They provide their BT
Wholesale's network land-line in Manchester region. After three months, Talk Talk PLC provide
cheap rate land line services in competition with BT. Talk Talk PLC launched their broad band
services in November 2004. They promoted their broad brand services with “Free Broadband
Forever” tag-line. In this scheme 40GB monthly data to customers.
In November 2008, Charles Dunstone, Chairman demerge their business with Carphone
Warehouse. In 200, this organisation purchase subsidiary of Tiscali for £236 million. In 2010,
Dido Harding became CEO.
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Organisational structure of Talk Talk PLC
(Source: Organisational structure of Talk Talk PLC, 2017)
Hierarchical organisational structure is followed by Talk Talk PLC. In this structure,
there is level of hierarchy through which business operations are performed. At to level , there
are direct, at middle level deputy director, chief department study group is there. At last, there
are some workers at subordinate level. This structure is relevant to attain goals and objectives.
This organisation manage business operation's at national level with proper planning.
They perform operations with interference of employees, so it is easy to implement change in
business operations. With interference of workers, it is easy to work with their new and
innovative ideas. Apart from this, there is similarity in demand of consumers. So it is easy to
provide best quality product to customers (Bovee, Thill and Raina, 2016). There is less change in
political policies also so it is easy for managers to have knowledge about government policies
and implement it to business place.
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Illustration 1: Organisational structure of Talk Talk PLC

B) Discussion how company is governed
Talk Talk PLC is governed by top level managers because they have hierarchical
structure. Top level manages are responsible to take decisions because they have authority and
power to alter business operations. Board of directors are the key person which helps in planning
and operating business operations. There are 12 directors in Talk Talk PLC. They are working at
different designations. Chairman is Sir Charles Dunstone and CEO is Tritia Harrison of Talk
Talk PLC. There is 1 executive director and 6 non executive director in Talk Talk PLC. Charles
Dunstone was appointed in 2006.
stakeholders are the people which are associated with the company. They gets affected
because of alteration in working style of association. Stakeholders are boosters for organisation.
Hence organisation works according to norms of association. This helps to attain good image in
industry. Customers, share holders, employees, managers, competitors, etc. are some
competitors. They give positive or negative impact on organisation.
Relationship between board of directors and stakeholders-
Shareholders- Shareholders are the people who invest their money in Talk Talk PLC.
They are the people who purchase share of Talk Talk PLC. Share means division of whole
capital in small units. Managers of Talk Talk PLC are responsible to perform operations in best
way because in case of negative profits, they withdrawal their money and sale shares. Directors
of Talk Talk PLC has to plan annual general meeting which is important and significant for
knowing financial position of company (Cavalcante, Kesting and Ulhøi, 2011). Shareholders are
the people who have right t take part in decision and have voting rights. If some changes are
taking place in Talk Talk PLC, then it is mandatory to take consent and deliver information
related to it.
Employees- Employees are the crucial factors which helps to perform business
opweartions on effective and relevant manner. They are the source which is significant for
performing commercial activities. There are some benefits such as monetary or non monetary
which motivate them to give best. This motivates them and give best. Managers of Talk Talk
PLC must take knowledge of employees related to work place. For instance: when change in
technology happens, then training method must be according to consent of employees. When
good profits are earned by organisation, then bonus must be distributed. This helps to keep
employees satisfied and maintain long term relations.
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Public- Talk Talk PLC runs in society. It is essential to work according to social
changes. There are many factors which are taken from society, so it is essential to give back.
Concept of corporate social responsibility talks about giving back to society. There must be use
of natural energy more such as use of solar heaters, etc. this is beneficial for society. Managers
must think about activities through which they can provide benefit to society such as opening
orphans, old age homes, school for disables, etc. This helps in providing benefit to society.
PART B
Importance of conducting PESTEL analysis:- PESTEL analysis is essential to analyse
the external or macro environment which directly influences the organisation. Its results are used
to determine weaknesses and threats of a firm. It reduces possible threats effects and impact in an
organisation. Within the organisation it motivates process of strategic thinking. It provides
execution which helps organisation to determine and achieve new opportunities. It helps to asses
implications for entering various markets across the nation and worldwide. It provides essential
data and promotes strategic planning which helps in attaining prescribed goals. It helps to
identify changes related to social, political, economic , technological and legal environment. All
these environment affects an organisation's future. It is a foolproof plan to grow and expand the
business. It helps in determining political factors like – government policies, tax policy trade
policy, political stability, different rules and regulations impose by government. Various
economic factors like – exchange rates, interest rates, inflation, economic growth, etc. helps in
determining product costing, demand, growth and expansion (Hair, 2015). Social factors like
target consumers and demographics helps to identify prospective market size. Although it
provides customers information related to its age, background, attitude, preferences, etc. With
the help of further information consumer can be targeted easily and production can be done
according to their requirements. Legal factors like – consumer laws, product safety and labelling
helps in starting business according to the rules and regulations. Companies doing their business
in foreign countries will get valuable results of PESTEL analysis. In Talk Talk Plc applying
PESTEL will be beneficial and helps in determining various factors relating to economic, social,
political, legal and technological environment. By considering all these factors company can
determine where business can grow and expand according to different situations. In Talk Talk
Plc it gives better perspective for establishment of business.
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Political factors:- Political factors involves tax policies, government policies,
employment law, government stability, trade unions involvement, tariffs, bureaucracy,
corruption level, etc. These factors effects business organisations by influencing economy,
political stability, changes in regulations etc. Political condition of a country influences its
economic background, hence business performance is affected by economic environment. If
rules and regulations are changed by government than it put direct impact on business. Country
lacking political stability has big influence on its business operations. For example government
could be overthrow through competitive takeover. This results in robbery, riots and broad
disorder in the surroundings. Companies performing international operations manages and
reduce their risk exposure using political risk insurance. Observing political environment is
essential, as it affects business operations through various changes. Political system stability
impacts particular market appeal and it is one of the reason to track political environment.
Government's legislations affects the firm's relationship with suppliers, customers and another
companies. If an organisation is assessing to operate in Middle East or parts of Asia then,
political dimension must be considered seriously. An organisation can't enter into other territory
because of their different formal policy. So an organisation must consider all information related
to rules and laws before establishing business (Hamilton and Webster, 2015).
Economic Factors
Economic factors make an important effect on the profitability of a business enterprise.
This factor includes interest rate, inflation, economic growth, national income, gross domestic
products and disposable income of business and customers. This factor can be divided into two
parts:- micro economical factor and macro economical factor.
Micro factor:- This factor deals with demand and supply in economy. It is all about the
way of people in which they spend their income in different sources. It make large impact on
business to customer organisations.
Macro factor:- This factor deals in taxation policy, national income, government
expenditure and interest rate. It make impact on economic condition of whole nation
(Karagiorgos, Drogalas and Giovanis, 2011).
Talktalk Plc can use economic factor to indicate inflation, growth rate of
telecommunication industry. It forecast the growth not only an organisation but also the country.
Economic factor make a great impact on Talk Talk PLC in exchange rate and stability of
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currency, unemployment rate, international trade etc. There are some positive and negative
impact of economic factors are as follows:-
Positive impact:- If the skill level of workforce increases then it make a positive impact
for telecommunication sector.
Negative impact:- If unemployment rate is increasing in economy then it make a negative
impact on Talk Talk public limited company.
Social factors:- Social factors involves profile, age, education, health, attitudes,
employment patterns, social attitudes, lifestyle choices, growth rate of population and socio
cultural changes. Considering social factors is essential for an organisation to identify customers
needs, preferences and all information related to their background. Identifying these factors help
to understand what customer wants and what should be introduced in market to satisfy their
needs. In Talk Talk Plc the manager should consider all these factors to offer best services to
customers because social factors influences business in different ways. Th company should
consider attitude for different issues related to career, health and environment (Kolk, 2016.).
Cross-cultural interaction and social factors have essential role in global and international
markets. Succes of an organisation is dependent on research of social factors. Customers
demographics , job trends and their attitude towards work must be determined effectively so that
products according to their requirements can be produced. Keeping all these factors in mind will
help in making effective long term strategic planning. One benefit of analysing social factors is
that it helps in determining prospective dangers and threats, which affects the company's
performance. Although it helps company in identifying valuable opportunities.
Technological Factor
Technological factor refers to new innovations and inventions in technology that affect
organisational activity. It is a mechanisation, research and development and awareness of
technology that make a market product more innovative. These factors affect both marketing and
management. It is an innovative way of producing and distributing of goods and services. It
focus on communicating target market related with technical aspects, barriers, innovations and
incentives.
TalkTalk plc is highly affected by technological factor because it is a telecommunication
company which deals in internet television. Its all work is depends on technology. Company has
to use updated technology by which they can perform their work effectively and efficiently. It
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make both positive and negative impact on TalkTalk company. If a firm using recent technology
then it give competitive advantage and improvement in product offering, reduction in cost of
production and increase value in supply chain management.
Positive impact- When company use updated technology then it increase efficiency in
working performance and create a positive impact of an organisation.
Negative impact- When company using outdated technology then increases production
cost and reduce efficiency and create negative impact impact on Talktalk public limited company
(Nishitani and et. al., 2012).
Legal:- Talktalk telecom group plc must carefully evaluate the regulations and law of
particular area before entering into market that may leads to theft of organisation's secret sauce
which provide competitive advantage. These laws include copyright, property law,
discrimination law, employment , health & safety law etc.
Environmental factor:- There is distraction in telecommunication services because of change in
season. This affects customer satisfaction and it impacts on organisational growth and
development.
CONCLUSIONS
From the above discussion it is clear that external factor of business environment has
negative or positive impact on organisational growth. Managers of organisation has to take care
about it so they can achieve goals and objectives. Change in political parties affects working
style and managers has to implement in better manner. This helps to maintain good brand image
among stakeholders.
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REFERENCES
Books and journals
Avramenko, A., 2012. Enhancing students' employability through business
simulation. Education+ Training. 54(5). pp.355-367.
Bovee, C.L., Thill, J.V. and Raina, R.L., 2016. Business communication today. Pearson
Education India.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
for developing markets. Long range planning. 43(2). pp.326-342.
Hair, J.F., 2015. Essentials of business research methods. ME Sharpe.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
audit in Greek Hotel Business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on Japanese
manufacturing firms. Journal of environmental management. 105. pp.121-130.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Pulver, S., 2012. Business and the Environment.
Reed, O.L. and et.al., 2013. The legal and regulatory environment of business (p. 328). McGraw-
Hill/Irwin.
Reinhardt, F.L. and Stavins, R.N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Online
Talktalk Telecom Group PLC (TALK.L). 2018. [Online]. Available
through:<https://www.reuters.com/finance/stocks/companyProfile/TALK.L>.
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