Business Environment and Organisational Behaviour

This report discusses how the business, cultural, and natural environments shape organizational behavior. It includes a PESTEL and SWOT analysis of Sainsbury's, a leading retail organization. The report also explores the impact of economic and political factors on the company.

Organization
and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
BODY OF REPORT .......................................................................................................................2
How do the Business, Cultural, Natural Environments shape the behaviour organization........2
PESTEL and SWOT analysis......................................................................................................2
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment is collection of all internal as well as external factors like customer
needs, employees, clients, suppliers, owners, activities by legal bodies, innovation in technology,
market & Social trends, economic changes and many more (Hassanien and Dale, 2019). All
these factors have direct impact on function of organisation as well as how company works
directly or indirectly. In simple terms, sum of these mention factors influence environment and
situation of business organisations. Moreover, business environment assist in identifying
business opportunities, aid in planning, tapping useful resources, enhance overall people and
business profitability. There are several type of business environment such as micro environment
and macro environment. Here, micro environment involves factors which have direct impact on
performance as well as decision making of business such as competitors, market intermediaries,
customers, suppliers and many more. On the other hand, macro environment is set of external
conditions which have impact on efforts made for business development in negative or positive
manner. These elements are beyond control and effect overall performance of business
(Niemimaa and et. al., 2019). It includes gross domestic product, inflation, staff members,
spending as well as monetary and fiscal policy.
For this report chosen company is Sainsbury's which is second largest chain of
supermarket in UK with 16.0% share of supermarket sector. It is part of retail industry and area
serving by them is only United Kingdom. It was founded in 1869 and its founder was John James
Sainsbury's as well as headquarter is located at London, UK. In addition to this, Sainsbury's
supermarket is offering over 30,000 products out of which 40% of these are respective company
own brand. They are offering wide range quality food as well as grocery products and several
stores are offering bread which baked in their stores, fish, meat shelves, restaurants, coffee shops
and many more. Supermarket of Sainsbury's have more than 150,000 employees out of which
60% are part time workers and remaining 40% are full time. Supermarket of respective company
providing more than 18.5 million customers within a week as well as 60% stores are located in
town centre locations. Apart from this, value of Sainsbury's is passion for health, fresh, safe,
tasty food and focus on delivering great products with fair price.
This report will going to discuss how business, culture, natural environment shape
organisation behaviour. Along with this, SWOT and PESTEL will also going to conduct for
analysing external as well as internal factors of business environment which impact company.
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BODY OF REPORT
How do the Business, Cultural, Natural Environments shape the behaviour organization
Organisational behaviour is application as well as study of knowledge related to that how
people act within an business firm. In simple term it can be said that, organisational behaviour is
human tool for the benefit f human (Yusoff, Omar and Kamarudin, 2019). It is applicable
broadly to behaviour of people in every type of organisation like business, government, school
and many more. In short, organisational behaviour revolves around mainly two fundamental
concepts i.e., nature of man and organisation.
Non economic environment
Non economical environment includes social, political, demographic, legal and
technological environment which have the potential of affecting business operations. The social
environment consist of society's beliefs, values and perception which comes under internal as
well as external social environment. The external social environment is the society whereas an
internal environment are its beliefs and customs. Every business must utilise and adapt as per
their external environment in which they must aware about all society's perception and desires.
Natural environment - The natural environment has been considered as one of the most
important factor which have a great role in affecting the shape and working of business. The
impact of natural disaster, climatic conditions, location, weather, availability of natural resources
and topographical aspect all are equally responsible in operation and administration of business.
The natural environment comprises of two major environments which are ecological and
geographical.
Demographic – This factor have wide impact on working of an organisation as it include
population, age, gender, level of income, education level, birth and death rate, brexit, supplier
relation across the world and many more. As it is important for Sainsbury’s to consider each and
every factor within their working while serving customers. Because all these have wide impact
on buying behaviour of people.
Culture - Business culture is related to the beliefs as well as behaviour which determine
how staff of organisation and management interact with each other as well as conduct transaction
which are outside of business. In simple words, company culture is related to the personality of
business firm and also define environment within that workers are working. Moreover, there are
several elements which included within this such as work environment, mission, vision, value,
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goals, ethics as well as expectations of company (Newman and et. al., 2020). For employees
company culture is important because staff like to enjoy their time within workplace only when
they get fit with culture of organisation. In addition to this, Business Culture within United
Kingdom has been characterised by business meeting etiquette, business communication,
business etiquette, social media guide, work life balance and many more. Sainsbury is largest
and well known retail industry organisation in United Kingdom. It was founded in 1869 and its
founder was John James Sainsbury's as well as headquarter is located at London, UK. In
addition to this, Sainsbury's supermarket is offering over 30,000 products out of which 40% of
these are respective company own brand. Their is wide impact of business culture on
organisational behaviour as well as it can be in both manner positive and negative. By using
model it become easy to understand how business culture have impact on behaviour of
organisation. Explanation of this are as follows :-
Hofstede model of organisational culture – organisation culture is related to several
ideologies, beliefs as well as practices of an business firm which help in creating differentiation
from others (Franken and Wattenberg, 2019). The culture of an company decide behaviour of
their staff members with each other or by external parties also. Respective cultural model is also
known as Geert Hofstede proposed which state that both national as well as regional factors have
contribution in culture of organisation and also influence behaviour of workers in company.
There are five major factors of culture which influence behaviour of organisation. Explanation of
these in relation of Sainsbury are as follows :-
 Power distance – As per power distance, within staff member of company power has
distributed equally irrespective of their designations. This creative positive culture within
Sainsbury working as well as also on its staff members which result in health
organisational behaviour. Along with this, there are some companies in which special
treatment enjoyed by manager and team leaders only (Ward, 2019). They delegate
responsibility to each and every employee's as per position within company. Thus, power
distance index have both positive and negative impact on organisational behaviour as per
the delegation of power within staff members.
 Masculinity vs Feminity – It is related to the effect of differences within male and
female values within culture of company. As organisation where males are dominated
and female counterparts are following different policies in comparison of companies in
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which female play major role in decision making (Lu, Wang and Xu, 2019). As already
discussed that, in Sainsbury mainly women's are working this create positive culture and
also have optimistic impact on organisational behaviour.
 Individualism - There are several organisation which focus on working in team. Here,
individual come with some common interest and started working in in team as its
member. Sainsbury also believes in working within team because outcomes are always
more when particular person exchange ideas as well as conduct discussion among
themselves for coming out with some innovative ideas. Within such environment staff
member share healthy relation with each other and help them if needed. Such practices
create positive culture in company and behaviour of employees also become optimistic
(Malinen and et. al., 2019).
 Uncertainty Avoidance index – It is related to the culture I which staff members know
how they have to respond unusual as well as unforeseen situations. Thus, uncertainty
avoidance index deal with the tolerance level of staff members in both favourable and
unfavourable condition. Sainsbury create such culture and prepare their employees to
deal with situation in appropriate manner.
 Long term Orientation – There are several type of organisation which focus on long
term relation with staff members. In these type of business firm people have steady
approach as well as strive hard for fulfilling the expectations (Štrukelj and Gajšt, 2019).
As staff member of Sainsbury get attached with it and focus on long term objectives
which have positive impact on organisation behaviour and result in accomplishing goals
as well as objectives within effective manner.
Economic Environment
Economic system - An economic system is a way through which many societies and
government dispense and coordinate available resources, their product and services across
geographical region. Economic system potentially regulates production which majorly includes
labour, capital and entrepreneurs. There are different types of economical system which has its
own unique set of assumptions and concept. Market economic system may be utilised by
respective company which confers the strategies related to distribution of their products and
services.
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Economic condition – It includes interest rate, relationship supply and demand, price
elasticity, country economic stability. If economic condition of particular nation is stable then it
will have positive impact on working of business firm. On the other hand, it is important for
Sainsbury’s to analyse all these factors in effective manner because they have negative impact on
company when unstable.
Economic policies – For an business firm it is important to follow all the laws and
regulation which introduced by government. If company will not follow these they will result in
negative impact on the working of company.
PESTEL and SWOT analysis
Sainsbury's ls one of the leading organisation in retail industry and they maintain their
dominant position within business environment by properly analysing as well as reviewing
SWOT analysis (SWOT analysis of Sainsbury's, 2017). It is an framework which provide
assistance to company in identifying internal factors as strength and weakness, external factors
which are opportunity and threats.
Strength Weakness
 Sainsbury's have high level of customer
satisfaction as they are dedicated
towards customer relationship
management through which they able
to achieve high level of their customer
satisfaction (Marijs and Hulleman,
2019). Along with this, good brand
equity among potential buyers.
 Automation of activities bring
consistency of equality to offering of
respective company as well as enabled
company to scale up and down based
on demand condition within market.
 As retail sector have growing
competition as well as risk of online
retailers result in losing volumes of
other retailers. Thus, for attracting
customers to shop Sainsbury's trying to
cut cost and also keep price of their
offering lower than competitors which
is not sustainable for long term.
 Brand Switching is also one major
weakness of Sainsbury's as they also
face risk related to same (Groskovs and
Ulhøi, 2019). After conducting loyalty
and promotion programs for respective
company it is still challenging to retain
their customers.
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Opportunities Threats
 Sainsbury's have several opportunities
on of them is growth in villages
because people living there are not
using branded products (Alevizou,
Henninger and Spinks, 2019). Thus, it
result in growth of supermarket culture
for retailers.
 Along with this, lower inflation rate
will also opportunity for Sainsbury's as
it bring more stability in market as well
as enable credit at lower interest rate to
their customers.
 One of the major threat for Sainsbury's
is competition from several companies
like Tesco, Lidl, Asda ALDI and many
more.
 Demand of highly profitable products is
not regular and any type of unlikely
event take place during peak season
may have wide effect on profitability of
Sainsbury's in short to medium term
(Somers, 2019).
PESTEL analysis – It is an framework which marketers use for analysing as well as
monitoring external factors which have direct or indirect impact on company. PESTEL stands for
political, economic, social, technology, environment and legal. In relation of Sainsbury's
PESTEL analysis are as follows :-
 Political factors – In UK, political factor have wide impact on performance of
Sainsbury's. As in United Kingdom government as well as consumers debts are very high
which will impact on attitude of customers and business condition will also experience
high pressure (Caputo and et. al., 2019). In addition to this, respective organisation is not
operating only within these market condition but also have to develop business
continually. Thus, political factors are not in favour, Sainsbury sustain in market for long
term because of their long heritage of providing high quality products at competitive
prices.
 Economic factors – In any type of industry economic play play crucial role as it have
impact of demand, profitability, cost, price and many more. There are some economic
factors which affect Sainsbury significantly such as economic slowdown, inflation in
food price and rising unemployment rates. Result of this will be negative because
unemployment as well as high food prices reduce demand for Sainsbury which in turn
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decrease production of food products. Moreover, increasing supermarket chain in UK is
always a strong economic factor through which respective organisation have to deal.
There are some old competitors of Sanisbury such as Asda and Tesco as well as few new
also like Lidl and Aldi.
 Social factors – In present scenario, customers prefer one-stop shopping which simply
means that customers want all the product under one roof (Sewchurran, Dekker and
McDonogh, 2019). This is the reason that customers shop from super market instead of
local retail stores as well as there is one another reason also that they come with some
special schemes which includes several discount benefits. Thus, it provide high
satisfaction to customers by saving their few bucks and in supermarket such as Sainsbury
customers purchase more than what they required.
 Technological factors – This factor have wide impact on working of retail companies as
Sainsbury introduced their eCommerce store which is helpful in catering present tech
friendly generation. In addition to this, there are several other technology which help
respective company in providing better satisfaction to customers such as data based
analytical systems i.e., big data and AI. This will help Sainsbury in understanding
customer demographical needs in more effective manner and also in catering them. These
will also help company in increasing sales as well as run better marketing campaigns.
 Environmental factors – On organisation it is high pressure to act in social responsible
manner for keeping environment safe. Because operations of business firm have impact
on environment in both direct as well as indirect manner (Tirabeni and et. al., 2019). In
elation to this, Sainsbury has taken initiative in relation of environment factors such as
reduce, recycle and reuse approach which help them in managing waste, packaging and
recycling. Along with this, they also work for reducing operation carbon footprint.
 Legal factors – Policies and legislations given by government have direct impact on
performance of an business firm. For instance, legal bodies introduced new tax on
advertising highly processed as well as fatty food. Thus, Sainsbury have to adapt this by
implement changes in their products and also complied to legislation needed.
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CONCLUSION
After going through entire discussion it has been summarised that, business environment
is dynamic in nature and modification take place in this gives impact directly as well as
indirectly on working of organisation. In simple term it can be said that, business environment is
sum of internal as well as external factors such as customer needs, employees, clients, suppliers,
owners, activities by legal bodies, innovation in technology, market & Social trends, economic
changes and so on. Moreover, business environment is of two type i.e., micro and macro
environment. Here, micro environment involves factors which have direct impact on
performance as well as decision making of business such as competitors, market intermediaries,
customers, suppliers and many more. On the other hand, macro environment is set of external
conditions which have impact on efforts made for business development in negative or positive
manner. These elements are beyond control and effect overall performance of business. It
includes gross domestic product, inflation, staff members, spending as well as monetary and
fiscal policy. For analysing these factors in effective manner Company conduct SWOT analysis
through which internal as well as external factors both identified in effective manner. Internal
include strength and weakness as well as external are opportunity and weakness.
In addition to this, for analysing macro environmental factor PESTEL analysis company
conduct. Here, PESTEL stands for political, economic, social, technological, environmental as
well as legal factors. It is essential to analyse these factors in effective manner because it have
both positive and negative impact on working of an business firm. Apart from this, Organisation
behaviour is study of the way people act within group. Principle related to this are applied
primarily for making operation of business more effective. In simple terms, organisational
behaviour study behaviour of individual within their organisational roles. There are several
factors which affect behaviour of an organisation such as business culture as well as natural
environment. Within this geographical and ecological factors included which influence
organisational behaviour. It involve availability of natural resources, weather, climate condition,
topographical factors, location aspect and many more.
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REFERENCES
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Online
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SWOT analysis of Sainsbury's, 2017.[Online].Available
through<https://www.howandwhat.net/swot-analysis-sainsburys/>
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