Macro Environmental Influence on Business Operations

This article discusses the varied types and purposes of companies and their legal structures. It explores the size and scope of different types of firms and their relationship with organizational functions and objectives. It also examines the positive and negative impact of the macro environment on business operations and provides an external and internal analysis of specific companies. The article concludes by discussing the interrelation between strengths, weaknesses, and external macro factors.

MACRO ENVIRONMENTAL
INFLUENCE

Table of Contents
INTRODUCTION...........................................................................................................................3
P1-Varied types and purposes of companies and their legal structures......................................3
P2-Size & scope of range of different types of firms..................................................................4
P-3 Relationship between several organizational functions and its connection to structure &
objectives of company.................................................................................................................5
P4- Positive and negative impact of macro environment has upon operations of business........6
P5- External and internal analysis of specific companies...........................................................7
P6- Interrelation between strength & weaknesses and external macro factors........................10
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Environment of business consists of all entities, individuals and other factors that can be
impact on companies in positive or may be in negative manner. The current study will explain
about different purposes and types of companies as well as their legal structure. It will describe
scope and size of public, voluntary and private firms and also justify the relation between varied
functions of business that are connected to organizational structure & objectives. Furthermore,
this report will also clarify positive and negative impact on firm operations and explain external
& internal analysis in context of two companies. Beside this, it will define connection of
strength, weaknesses with external elements.
P1-Varied types and purposes of companies and their legal structures
Here, different types of business, companies and their aims as well as legal structures will
discussed below.
Types of business-
Profit making-
This type of business or company makes a profit after selling their products or services to
target market. They seek to increase profitability rather than business rivals operate in same
sector.
Non profit making-
It refer to form of firm or enterprise that does not earn profits, they serve for social well
being. It is tax exempt company formed for charitable, artistic and religious purposes.
Types of legal structure-
Sole trader-
It is business structure whereby one person runs and manages whole business into
specific market.
Partnership-
This legal structure is come into two forms limited & general. In general partnership both
business owners invest their profit, workers and property and are both equal liable for company
debts.
PVT Ltd company-
Private Ltd firm is a kind of privately held small business entity, in which owner liability
is limited to their profit.

Public Lid organization-
It is another type of Business Company that operates as separate legal entity from their
business owners. Public ltd firm is owned and formed by shareholders, share of this business are
traded and listed at stock exchange market effectively and freely.
Public sector firm-
It refers to part of nation's overall economy which is managed and controlled by different
government bodies. In can be said that State government runs this sector for local people. Aims
of this sector is to cater important public services and to use assets in the best way so that they
can make a profit for community or society. For example, ESPO is a company from public sector
operating within UK (Antoniou and et.al., 2019). The main purpose of this organization is to
based upon commitments and current declarations on sustainable palm oil in Europe. It has
membership structure on national level and it can be completed by governance work stream. The
aim of company is to provide public service more than with making money or increasing sales.
Voluntary sector company-
This sector refers to companies whose main purpose is to create social impact more than
profit. British red cross is voluntary sector firm in UK, it was formed in 1870 and registered
charity with over 3,500 staff and 32,500 volunteers. It is a volunteer led humanitarian firm that
aids people in crisis. The purpose of this company is to mobilize power of humanity so that
communities and individuals can prepare for difficult situations and deal with from a crisis that
affect living standards of a person (Rushton, 2018). British Red Cross can follow sole
proprietorship as legal structure that is quite beneficial for its business activities in context of
public well fare. The aim of this firm is to help local people in crisis or difficult in difficult
situations such as COVID 19.

Illustration 1: Illustration 2: Organizational structure
(Source: British Red cross organizational structure, 2019)
§
Private sector organization -
Firms work under this sector are not run by government, they are part of nations
economic system and is run by companies or individual with intention to earn profit. Asda is one
of the biggest private sector employer in United Kingdom and offer high competitive package to
benefits and pay for all roles (Stout, 2019). Firm sells their services and products for profit, they
also focus on consumers needs. The main purpose of company is to make items and other things
more affordable for everyone which in return increase their sales rather than before. The legal
structure of this company is partnership; The announcement of organization sees it become first
supermarket to open Greggs concessions. The aim of ASDA is to increase profit margin and
sales rather than its competitors.
P2-Size & scope of range of different types of firms
Meaning of a size of an company-
Organizational size is defined as number of workers at any given geographical location; it
can include total corporate company when it is one division of decentralized firm.
Types of companies on sizes-
Micro- It is very small firm or LLP that may be able to manufacture and cater products
and much simpler set of year end accounts for their workers and provide less data for public
record.
Medium-

Medium size firms are defined as business with up to 250 workers who are able to cater
their services to target market. It may be managed businesses and family owned but by virtue of
their size they can be also complex companies where ownership is separated from
administration.
Large-
Large companies are those in most manufacturing and mining sectors that employ more
than 500 or those that do not produce products and have an average of 7 million in annual
receipts.
Basis ESPO (Public) British red cross
(Voluntary)
ASDA ( Private)
Size It estimated revenue is
more than 12.93
million annually and
established in 1981.
ESPO has around 203
to 508 workers (Chen,
Ayoun and Eyoun,
2018).
It have 17 million
volunteers which
makes them become a
part of the world's
biggest humanitarian
network. Company
serve their services
across 191 nations in
ethical and effective
manner.
It was founded in the
1960s in Yorkshine.
Organization have
more than 165,000
workers. Recently firm
is owned by US retail
giant Walmart.
Basis Public Voluntary Private
Scope Organization offer
one stop shop solution
of more than 27, 000
catalogues goods, 120
frameworks and
customized
procurement services.
In recent time, it is
British red cross
employs more than
4,000 individual with
skill and appropriate
talent. They all work
in home town as well
as overseas to help
people in major crisis.
As one of the biggest
supermarket retailers
in UK, firm is
recognizes
significance of their
employees. With
strong workforce
company serving over

one of the UK's
biggest PBOs,
managed by 6
member authority
councils.
Firm is able to quickly
respond to disasters
and performing with
international societies
to prepare for further
crisis.
19 million consumers
in a week and
generating more than
13 billion of revenue.
After going through above analysis it can be said that structure, scope and size of all
above firms are linked to business services, products and objectives. For example, ASDA
according to their business structure divided work and give responsibility of different
departments who are able to accomplish their duties in effective manner. Workers with clear
directions and their roles act and then focus on manufacturing products according to target
market needs. By working hard and communicating with each other employees can achieve set
aims and objectives of company and makes them able to obtain desire outcomes. Goods,
objectives and services of firm is directly connected with their structure or other elements.
Scope, role and size of voluntary sector firm British red cross support give overall
overview of company. They cater emotional, mental and physical supports to people who need
help in crisis.
P-3 Relationship between several organizational functions and its connection to structure &
objectives of company
Every company has a hierarchy of individual that need a well planned structure to fit in
organizational operations and size. Here, different functions of ASDA discussed below that are
connected to other things as well-
Marketing with IT department-
It can be said that marketing department work more closely with IT as it help them to
operate each system affectively (Gummerus, von Koskull and Kowalkowski, 2017). Information
technology is one of the best function of ASDA which makes their marketing team able to
perform appropriately by solving their technical issues. It simply connected with company
structure and objectives, by working together both functions help firm to achieve their set
objectives and cater better quality products.
Finance with production function-

Finance department to achieve firm objectives allocate fund to different section available
in organization structure. Team of production area provide clear list in which they mention all
require things with actual cost (Ogbuabor and Nwosu, 2017). Then finance team give money
accordingly which manufacture department can use to produce quality goods which in return aid
business to retain their client that is the main objective of company.
HRM with production-
Human resource manager and their team plan to increase productivity level of production
department which makes them able to achieve set objectives of company. Skilled applicants hire
by HR management is capable to perform towards achieving business aims by working
effectively and delivery products on timely manner.
The interrelation between all function provide many benefits as it help to accomplish
work in systematic and efficient manner. When employees work with other worker, it permits
knowledge sharing so that individual can learn new skills. But connections between all
departments put negative affect because all workers does not have same opinion which may be
created conflict at workplace.
P4- Positive and negative impact of macro environment has upon operations of business
First thing is to be considered in macro environment is technological factors that impact
on business operations of ASDA in positive manner. Organization is able to update their
technologies time to time which makes them able to survive and sustain within retail sector for
longer period to time. It also allows them to become competitive retailer who is capable to give
tough competition by providing quality products or services to consumers. For example,
organization to keep their buyer satisfied and improve their production operations uses mobile
applicants. It helps them to identify target market needs by taking their feedback through
applications and then make further changes accordingly.
In macro environment, second things is to be considered is demographic forces which
influenced ASDA production and marketing operations on many grounds such as education
level, lifestyle, household, age and other things. In recent time, instead of purchasing products
that grow by using chemical consumers prefer to buy organic food items. As it put negative
impact on firm inventory management operations as well as marketing and manufacture. To
retain clients for long organization had to put certain changes which takes a lot of time and
money as well to keep everything according to buyers needs or preference. These types of

changes put high pressure on workers to do their work quickly and manage everything
appropriately.
Beside with this, it also analysed that trade policies under political factor also influence
business trading operations negatively when government increase cost of trading procedure. At
that situation when ASDA wants to expand their venture and supply products from other place
had to pay high charges according to trading policies. It directs effect financial budget of
company which is not good for its long term growth.
PESTLE analysis-
Political factors-
Political stability is one of the factor that affects firm in positive manner. It is useful to
company as it means that they can aid government achieve their aims by changing supplies that
firm use and operations that they carry out.
Economic factors-
Unemployment covers under this factor that does not affect firm much because they are
already hired qualified and local people who are able to work with firm.

Figure 1PESTLE Framework
(Source: PESTEL Analysis, 2019)
Social-
Increase in demand for services that are offered when population of UK starts to grow. It
put positive impact on British red cross as they are always focusing for new individual to
volunteer with rise in population which means that move volunteers can become accessible and
more individual can be supported because of it.
Technology factor-
Technology advancement and development put positive impact on firm as it makes firm
able to identify area where crisis happen and then workers reach to help local people. It increases

abilities of their employees to cater services in effective and timely manner. Overall external
analysis is quite beneficial for organization in term of improving living standards of individuals.
Environmental-
It also influences firm positively because company is actively seeking to reduce plastics
consumption, and they are taking concrete steps to consider this in all their operations which help
to save nature from land, water and air pollutions.
Legal-
Consumers act is one of the legal factor that put positive impact on BRC as firm treat
their patients without making any differences between them.
PESTLE analysis in context of ASDA-
Political factors-
Brexit is one of main political factor that impact on ASDA negatively because it changes
overall procedure and policies related to trade.
Economic factors-
It can be said that, many people in nations where company operates their business have
good means of earning. They can purchase products with set prices which in return increase
profitability of company.
Social-
Changes in needs of buyer put negative impact on firm as they feel high pressure on
make further changes by considering consumers needs and then manufacture products
accordingly.
Technology factor-
This factor also impact on ASDA in same way, it provides firm the best opportunity
which they can use to gain attention of new consumers towards purchasing groceries and fresh
food products (Ibrahim, Wang and Bourne, 2017). With digital marketing platforms company
generate their brand awareness across UK and all over the world.
Environmental-
Consumers concern towards environment safety and sustainability affect business
practices of ASDA in positive manner because company take their step towards reducing carbon
footprint that is very important for them to retain buyers for long. They create Eco-friendly

environment without all its outlets which makes them able to sustain within competitive
environment.
Legal-
Equality act 2010 put pressure on company to make changes within their current
employment policies.
P5- External and internal analysis of specific companies
SWOT analysis for British red cross-
Strength- Strong brand equity is one of the strength of this company as it help them to
build trust among people.
Weakness- Lack on online presence is the weak point of BRC that effect its services,
operations and management practices in negative manner.
Figure 2SWOT Analysis
(Source: British Red cross analysis, 2019)
Opportunity- By taking benefits of digital tools they can grab the attention of people
who need helps to improve their living standards.

Threat- Firm faces serious competition from other non-profit firms that impact on its
services.
SWOT analysis for ASDA-
Strength-
The biggest strength of this company is wide range of products offered by them
according to preferences of target market.
Weakness-
Limited international presence is one of Asda weakness that affect overall practices of
business, and they can loss consumers.
Figure 3 ASDA SWOT ANALYSIS
(Source: Swot Analysis Of Asda, 2020)
Opportunity-
Company by taking one step ahead towards business expansion grab opportunity as they
can gain competitive advantages.
Threat-

ASDA also posses threat from intense competition within retail sector where number of
players serving their best services or products to buyers.
P6- Interrelation between strength & weaknesses and external macro factors
It is true that the strength and weakness of the company are linked to other external
influences. For example, ASDA is able to satisfy their consumers by providing their quality
products to them according to their needs. When firm is capable they can give the best within
any situation. Organization is much more influenced by their external factor because it sometime
not easy to determine issues in outside of company which affect decision-making procedure of
business. Strength makes company able to overcome their weakness and allow them to handle
business functions when political, social, economic and other factors affects on firm. All above
elements are connected with each other because they put high impact on management activities.
It can be said that competition level within retail sector due to globalization posses threat for
ASDA and British red cross.
CONCLUSION
From above analysis it has been concluded that ASDA, British red cross and ESPO
achieve their business aims and objectives by offering their services to people according to their
preferences and needs. It has been analysed that ASDA and British red cross both are able to
operate their business by using PESTLE and SWOT analysis model.

REFERENCES
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Stout, P.A., ASDA Ltd, 2019. Sampling stand for food products in a retail store and method of
operating a sampling stand. U.S. Patent 10. 168. 608.
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