Business Environment and Organizational Structure

This assignment requires an in-depth analysis of the business environment, focusing on the various components that influence a company's operations. It also involves examining the organizational structure of companies like Nestlé and Burger King, highlighting their strengths and weaknesses. The task is to identify key functions of organizational structure, such as decision-making, communication, and control, and provide examples from these companies to support the analysis.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Aim of various types of organisation....................................................................................1
P2. Size and Scope of different kinds of firms............................................................................3
P3. Different functions of company and their contribution in the firm......................................5
TASK 2............................................................................................................................................7
P4. Positive and Negative Impacts of Macro Environment on Burger King..............................7
P5. Analysis of Internal and External to know the strengths and weaknesses............................9
P6. Strengths and Weaknesses interrelate with the external macro factors..............................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment consists of various elements and factors on which the performance
of an organisation depends upon. If any firm wants to gain success over its competitors it is
necessary that they exercise full control over these components. By doing so they will able to
deal with different situations arising in their business. Normally, these factors are available in
internal and external environment. Internal factors includes employees, shareholders and etc. and
are under control of company (Agarwal, Grassl and Pahl, 2012). They can modify or update
these according to their preference but those factors which are available in the external
surrounding and are related to political, economical, social, technological, legal and
environmental subject. These are uncontrollable factors but organisation can update or develop
their strategies and plan according to these and by this they will able to adapt in the changing
situations. The impact of these elements can be better understood by taking the scenario of types
of organisation from private, public and voluntary sector (Aterido, Hallward-Driemeier and
Pagés, 2011). Burger King, Nestle and World food Programs are the private, public and
voluntary firm respectively which will be considered. With this report we will able to know what
are the goals and objectives of such companies.
TASK 1
P1. Aim of various types of organisation.
Every organisation existing in this world has some or other aims and purposes. But the
most common and easiest way to classify them is according to their legal structure and the
ownership. They all are categorised into various sectors and exercise some or other control on
them. There are public, private and voluntary firms and these holds a great significance for an
economy. So the growth of these organisations has becomes necessary if the economies have to
achieve to heights. Such firms may be small or large in size depending upon their employees
numbers, capital, turnover and etc. A detail description about these sectors are given below.
Private: This sector can be defined as the group of companies which is owned and
controlled by the private individuals. Almost more than half of the markets in the world belongs
to these private players. There can be small, medium and large sized companies in this sector.
There business are expanded into almost all industries and are not confined to a single market or
country (Auzair, 2011). The shares of these companies are traded in the market and anyone could
1

buy them. There might be variations on their production, numbers of staff and the capital level
they hold. Sole traders, partnerships and franchisee are types of structure which they practice.
Those private companies whose ownership is with a single person are considered as sole traders
and there might be some firms which are run by more than two people are called as the business
in partnerships. Their might be 50-50 percent partnerships or there might be companies whose
ownership is not equal among the owners. Partnership Act of 1980 briefs about various aspects
of partnerships. In franchisee business is traded on the name of the original owners but the
franchiser has owned some part in the business for a period of time (Avramenko, 2012). The
basic aim of these companies who belongs from this sector is to earn more and more profit. For
this they carry out business activities. With the expansion in the market their sales went up.
Those who owns some companies get financed form the bank loans, personal savings and
subsidies which are provided by the government. The other source of finance is the shares which
they sell in the stock market (Burns and Winter, 2011). American hamburger fast food chain
Burger King can be an example of private firm.
Public Organisation: They are owned and controlled by the government of any country.
It is not necessary that all the ownership is with the government but there might be companies
whose some share can be with the private individual owners. These types of firm are established
on the business model of public private partnerships. Whatever investments they do in the
business operations are funded through the taxes which they receive from the citizens of the
country. The aim of such companies is to deliver the essentials services to the public on fair
prices. Other 9objective is to bring stability in the economy of the country because with the
private firms there comes the risk of market control (Chow and et. al., 2011). Normally these
firms have monopoly in defence, healthcare, police and etc. They act as a producer, provider and
buyer also at some situations. Public companies like Nestle which is the world's largest food and
beverage company can be a perfect example of this.
Voluntary: With the growth in the financial economy it is necessary that the social
economy also get develop at the same time. The reason behind this is that it is the third sector of
economy. The companies who are part of this is busy in some kind of social work. They believes
that with the development of social factors a country can reach new heights in almost every
sector(Commander and Svejnar, 2011). Different types of NGO's, charitable trusts and various
other social groups are categorised into this category. For the finds they have top rely on the
2

donations which they get form different resources. A food assistance branch of the United
Nations called as World Food Program is an example of this.
P2. Size and Scope of different kinds of firms.
These all organisation has brought drastic change in the economy and every year it is
experiencing new heights. They have been successful in improving the lifestyle of people and
employing a large number of individuals for their business operation. Below mentioned is the
detail about these organisation related to their size, scope, products & services, legal structure
and business objectives.
Burger King: This brand was founded in year 1954 and today it has become the second
largest food hamburger chain in the world. There menu offers various types of burgers, French
fries, sodas and milkshakes. Its “Whopper” has become the signature product all over the world.
They operates in more than 14000 locations of almost 100 countries. With the income of 363
million US Dollars it has been a successful fast food restaurants. All over the world they have
employed almost 34000 people and almost 100 percent of Burger King restaurant are owned and
operated by independent franchisees (Cronan and et. al., 2011). They have $23 billion sales in
over 19000 restaurants. It has changed its market strategy in 2011 and changed its male oriented
menu and introduced new products and packagings. In UK it become the first fast chain to be
allowed to sell alcohol in the country. UK has been a big market for the company always and
understand this they had been successful in opening 700 plus restaurants in UK. UK burger
market in 2016 was of £3.28b and seen a rise of 22% from the year 2011. In Britain they target
the age group of 16 to 34 years of people. In simple term it can be said that they are focusing on
the needs of this age group. They have to beat their competitors like KFC and Subway. They are
focusing on delivering fresh and innovative products to their customer. In the same they are also
willing to focus more on the Gourment burgers.
Stakeholder analysis will help them in knowing who all people are important to them.
They focus on the concept of “ Food, People, Environment and Corporate Governance”. Based
on this priority stakeholders of Burger King is as follows:-
 Customers (highest priority): They are considered as the top priority stakeholders and
this group is interested in quality goods and suitable pricing.
 Employees: This group of stakeholders looks for career opportunities and fair
compensation.
3

 Communities: Burger King knows the importance of community development because
they shapes the customer perception and employee perception.
 Investors (lowest priority): They are interested in Burger King's higher financial
performance.
Nestle: It is a Swiss transnational food and drink company and is considered as the
largest food company in the world. Founded in 1866, today it operates 447 factories in approx.
194 countries. The employees number has reached up to 339000 people. There products ranges
from baby food to coffee, dairy products, breakfast cereals, bottled water, ice cream, pet foods
and etc.
There aim is to enhance the living standard and contribute their share into a healthier
future. They always focused on making people aware about living healthier lives. Their goal is to
assist 50 million children live healthier lives. Other than this they are willing to improve 30
million livelihoods who are directly connected to their business. By 2030 they are striving for
zero environment impact in their activities (Dahan and et.al., 2010). Stakeholder groups of
Nestle are as follows:-
4
Illustration 1: Nestlé timeline 1866-today. 2016

Communities: They are indulged into various social causes like in 2003 in South Africa
they had support groups who were facing the effects of droughts. They focused on reducing their
water facility to zero till 2018.
General public: They have launched a youth initiative which is helping almost 60000
your European people to find jobs and training opportunities.
Customers: Nestle is working with retailers and food service provider to foster
environments which will promote healthier diets and lifestyle. They are making sure that
customers choose healthier way of checkouts.
Employees: They have adopted the concept of quality employees survey so that they can
reach up to 62000 staff and with this they are are able to satisfy their employees.
Government: It has partnered with the government to work on the issue of hunger and
poverty.
Trade Unions: Company know that each and every person has the right to put forward
their views so they are adopting high standard communication methods.
Shareholders: Every year Nestle company comes out with a annual report, corporate
governance report and Nestle in Society so that their shareholders are aware about them.
Suppliers: It included farmers as well as smallholders. They has been successful in
opening approx. 650 farmer field schools which is giving training to almost 20000 farmers on
good agricultural practices.
With this they are developing a trust and mutual understanding between their stakeholders.
World Food Program: It is a food assistance branch of United Nations and is the world
largest humanitarian organisation. They are focused on improving hunger problems and promote
food security. Formed in 1961 it provides food assistance to an average 80 million people in
approx. 75 countries. With the stakeholder analysis their purpose is to encourage various
stakeholders to work collectively on a single goal.
P3. Different functions of company and their contribution in the firm.
In a business environment every organisation performs some operations and these are
done so that they can achieve the goals and objectives which they have desired for. With this
they make sure that all the tasks are managed in better and all the work is done in time. The
organisational functions are set according to the demand of the goals and the organisational
5

structure. All the targets can be only achieved when their employees work properly in
coordination. Following are the functions which Burger King has to follow:-
Marketing: It is an important function which defines a relationship between a customer
and the products of the company. With this they can make a concept reach to the target audience.
It involves activities like selling, branding, advertising, promotion, customer interaction and
collection of the feedback. With this Burger King can increase their sales and earn more profit.
They are focusing on almost every age group and make sure that everyone gets something
special. Occasionally on the festival season they brings new advertising campaign so that more
number of customer can be attracted. At the same time they also gives them a big discounts.
Finance and Accounting: This is a crucial function because on the basis of this only
managers take decision at Burger King. All its shareholders rely on this before they make any
investment in the company. If all the reports regarding accounts and financial it will be easy for
the company officials to take long as well short term decisions (Fernando, 2011). The finance
department survey the whole company and allocate budget to various functions on the basis of
estimation. In the business environment where Burger King is facing tough competition from its
rivals the finance area of the company has to be strong enough.
6
Illustration 2: Burger Lad, 2016

Human Resource: If Burger King wants to achieve long term goals it is compulsory that
they proper manage human resources available to them For this they have made a separate
department who will be focusing on hiring, selecting, training, motivating and addressing the
conflicts arising in the company. If they properly perform these functions they can increase the
productivity as well as profitability(Gebauer, Paiola and Edvardsson, 2010). They make sure that
all the staff of Burger King is performing well and they have enough knowledge about their
work.
Research and Development: With a research on markets Burger King can know what all
things customers expect from their side. They will able to identify their strengths and weaknesses
in the market. By analysing all the crucial details they can develop products and strategies which
could overcome certain things which are coming in their way.
Customer Care: Customers are the people to whom Burger King sells their product. So
it is necessary for them to take care of all the needs and requirements of them. Any complain
form the consumer side should be taken care properly (Halbert and Ingulli, 2011). All the
customers who are coming at the stores should be given a feedback form and should ask them to
rate different areas of Burger King. Following are the points to be rated:-
 Temperature
 Sales Staff
 Product Location
 Point of Sale
 Illumination
 Comfort
 Cleanliness
 Amenities
TASK 2
P4. Positive and Negative Impacts of Macro Environment on Burger King.
Burger King has made its mark in the fast food industry and toady it has become of the
largest fast food restaurant chain. This all has happened because for their strategies and policies.
Over the year they have been successful in attracting more and more customers as they are
catering them products which are made by keeping their demands and requirements in mind. But
7

every time things are not same and this is the industry where markets can change any time and
this will have the bad impact on Burger King. It is observed that mostly companies face a
decrease in their market share because of the external factors which are existing in the macro
environment. The reason behind this is that they companies don't have much control over these
elements. If Burger King have to survive in this competitive environment they have to
developing their policies and strategies according to them(Hamilton and Webster, 2015). With
that they can adapt according to the external environment but for that they have to identify those
factors. A PESTLE analysis can be done for such thing. PESTLE is the analysis of political,
economical, social, technological, legal and environmental factors which are affecting the
business of Burger King.
Political: This shows the condition of business in political environment. With this they
can identifies governmental impact on their business. There are lots opportunities which they can
crab like support of the government in globalization. It is necessary that there is political stability
ion the countries where they are doing their business operations. The governing body should
show their interest in making digitalization important as this way they can grow their e-
commerce market. There might be new issue if they don't follow Market and Research Social
Research Society (MRSRS) guidelines (López-Gamero, Molina-Azorín and Claver-Cortés,
2011). Whatever food and health safety act should be considered they should regularly check the
quality and this will make them aware that whether quality norms are followed or not. By
following the taxation and food quality norms they will able to attract more customers.
Economical: In this era where globalisation has taken over the business as also increased
the international trade agreements. They are continuously on the line of expanding their market
in new countries and they can also adopt the concept of global supply chain enhancements. They
are multi-nation organisation so in whatever country they have restaurants they should seriously
follow the economic trends. With this they will get more opportunities to grow their market and
increase their profit (Mahmood, and Hanafi, 2013). Sometimes it happens that they are not able
to adapt into the economic environment thus lose lots of customer base. They can turn their
business model to developing countries like India and China, as these two are the rapidly
growing economies.
Social: This is one of the factors which experience a lots of variation on time to time
basis and this is also of the elements which decides the number of customers coming at the
8

restaurants of Burger King. They can show innovation in the product development because there
has been increase in the consumer diversity and this will attract more foodies to them. In this
today's era people are also become health conscious so this may impact their sales drastically.
Technological: Business of Burger King relies a lot on the technology they use for
different tasks. They can take an advantage of this in great way as they can use it more
marketing. With the use of internet they can reach a large number of people in quick time. They
give option to the people to order the food from their smartphone which takes just two minutes.
Burger King can use various different technologies to bring efficiency in their business
(Siewiorek and et. al., 2012). They can allocate more budget to the research and development
and bring new ideas in the fast food industry.
Legal: They believes in doing things legally and follows all legal norms made by the
government of that country. Burger King needs to take care of all the import and export
regulations which will help them following international trade agreements. They can increase
their stability by following all the environmental laws. It is observed that GMO regulation is
impacting the business of Burger King normally in Europe. A lot of GMO is founded in these
foods.
Environmental: It can put limits on the business of Burger King. The changing climate
can effect their supply chain but with this they can improve their sustainability status. They have
an opportunity to attract those customers who bel
ives in low carbon lifestyle. They can adopt CSRT model to improve their image and with this it
will show that they can work rely on sustainability and efficiency.
P5. Analysis of Internal and External to know the strengths and weaknesses.
Internal and external study of the firm is basically termed as SWOT analysis. In this
internal analysis involves the strengths as well as weakness of the company which is required to
understand their actual position in the market. Where as external analysis basically involves
opportunities and threats which tends to create pressure and provide new methods for enhancing
their skills. These factor help in improving their condition in the market place according to the
scenario of their competitors(Teece, 2010). Some kind of information is required for carrying out
internal as well as external analysis. Management system of Burger King is responsible for
carrying out analysis of the information of its strengths and weaknesses for improving their
industry conditions. There can be so many aspects on which the improvement can be carried out
9

it includes cost position, competence as well as competitive advantage and their status in the
market place. Along with all this there is also a dynamic part of these procedures which helps the
management to carry out process in proper order.
Strengths: It is usually defining those capabilities of the organisation in which it can
compete with any other company and still can succeed. There can be so many theories and
concepts which define the fact of strengths. It is defined as the qualities and attributes which are
power of that organisation(Ullah and Lai, 2011). This quantity is basically tangible in nature but
at times also has some intangible aspects. Burger king is the company which is largest fast food
chain in the world. It has it own strategies advantages which includes financial support from
many trading partners.
Weaknesses: This quality is basically defining the disabilities and incapabilities which a
company consist of and can loose due to which from its competitors. This factor is basically
responsible for preventing this organisation to achieve its aims and objective as it can lack their
skills and techniques. So normally a weak firm is used to be characterised by its lack of power to
achieve some goal and become outdated to have old technologies(Wetherly and Otter, 2014).
Burger King's business has one biggest weakness that it is highly dependent on franchise
revenue.
Opportunities: This factor basically termed as those situations in which company can
have great source of income or enhancing capabilities which the company can draw maximum
benefit from. They can rise in the competition from the competitors as the condition becomes
favourable and some extra advantages are provided to them. In this case Burger King can take
the advantage of the time of holidays where it can launch many new schemes of combos and
dishes which will attract so many new customers especially children (Wild, Wild and Han,
2014). At this point of time this organisation can make maximum money and status in the
market.
Threats: These factors are most important factors as it includes those features which
would affect the market of the company very badly or adversely. It shows the vulnerability of the
company's condition and its incapabilities of making any sort of profit. The major threat which
this company Burger King has from the market place is the type of market it is conducting is
similar to so many new ventures which are uprising in the market on daily basis. There is large
amount of competition which brings lot of pressure so it either helps in improving the market
10

status of this company or sometimes it becomes a bad example of pressure build up with
degrades the performance (Yoon, 2012).
P6. Strengths and Weaknesses interrelate with the external macro factors.
All the operations and activities of the Burger King are interrelate to each other like its
Pestle factors are related to the Swot strategy. The managers of Burger King needs to make sure
that they are following various rules and regulations framed by the parliament. With this they
will be able to bring m ore customer because they know whatever they are selling is legal. Brexit
would have an impact on the business of Burger King because now trade agreements would be
changed and EU countries might not allow them for free trade. They should be prepared for this
and need to shape different business styles(Zeng, Li and Duan, 2012). With adoption of new
technology there has been rise in the sales of Burger King. It is seen that small business are not
able to adapt in the changing technological advancement because they lack fund this can be an
opportunity for Burger King to acquire those small business which are in the same sector. With
the change in the social factors it would directly impact them in negative way if they don't follow
the trend which is going on. So it can be analysed that macro environment might have negative
as well as positive impact on Burger King.
CONCLUSION
From the above report it can be concluded that various organisations are categorised on
the basis of their ownership and their aims. Every one has some or other functions and these
functions are framed according to the goals & objectives. If Burger King wants to get success in
the business they have to set a relation with all their departments because all are important at
their level. Any low performance of any department can result into decrease in the sales of
products. They have to regularly analyse their business environment whether it is internal ore
external. This way they will be able to identify the factors which are influencing their business .
Burger King has to increase their strengths and reduce weaknesses. Whatever opportunities they
have should be crabbed as quick as possible.
REFERENCES
Books and Journal
11

Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
tool. Journal of Business Strategy. 33(2). pp.12-21.
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Auzair, S., 2011. The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels. International Journal of Business and
Social Science. 2(13).
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Burns, C. and Winter, S., 2011. Introduction. Australian Farm Business Management
Journal. 8(2). p.iv.
Chow, A. T. and et. al., 2011. Broadband network with enterprise wireless communication
system for residential and business environment. U.S. Patent 7.944,948.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Cronan, T. P. and et. al., 2011. Decision making in an integrated business process context:
Learning using an ERP simulation game. Decision Sciences Journal of Innovative
Education. 9(2). pp.227-234.
Dahan, N. M. and et.al., 2010. Corporate-NGO collaboration: Co-creating new business models
for developing markets. Long range planning. 43(2). pp.326-342.
Fernando, A.C., 2011. Business environment. Pearson Education India.
Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service business development in small and
medium capital goods manufacturing companies. Managing Service Quality: An
International Journal. 20(2). pp.123-139.
Halbert, T. and Ingulli, E., 2011.Law and ethics in the business environment. Cengage Learning.'
Hamilton, L. and Webster, P., 2015.The international business environment. Oxford University
Press, USA.
López-Gamero, M.D., Molina-Azorín, J.F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study. Journal
of Business Research. 64(4). pp.427-435.
Mahmood, R. and Hanafi, N., 2013. Entrepreneurial orientation and business performance of
women-owned small and medium enterprises in malaysia: competitive advantage as a
mediator. International Journal of Business and Social Science. 4(1).
Siewiorek, A. and et. al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
Ullah, A. and Lai, R., 2011. Modeling business goal for business/IT alignment using
requirements engineering. Journal of Computer Information Systems. 51(3). pp.21-28.
Wetherly, P. and Otter, D. eds., 2014. The business environment: themes and issues in a
globalizing world. Oxford University Press.
Wild, J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
Yoon, J., 2012. Detecting weak signals for long-term business opportunities using text mining of
Web news. Expert Systems with Applications. 39(16). pp.12543-12550.
12

Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing environment.
Information Technology and Management. 13(4). pp.297-310.
Online
What Are the Functions of Organizational Structure?, 2016. [Online]. Available through:
<http://yourbusiness.azcentral.com/functions-organizational-structure-2141.html>.
[Accessed on 8th August 2017].
Nestlé Timeline: 1866-today, 2016. [Online]. Available through:
<http://www.nestle.com.sg/media/pressreleases/AllPressReleases/nestle-historical-
timeline>. [Accessed on 8th August 2017].
Burger Lad, 2015. [Online]. Available through: <http://burgerlad.com/2015/12/burger-king-
wish-list-2016.html>. [Accessed on 8th August 2017].
13