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Private Organizations and Global Governance

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This assignment delves into the increasing influence of private organizations in global governance. It explores how entities like PwC, a multinational accounting firm, and Tesco, a large retail chain, engage with public policy issues. The analysis considers factors such as risk allocation in infrastructure provision, human resource management practices, and the impact of globalization on corporate behavior. Case studies are used to illustrate these concepts and highlight the complexities surrounding private organizations' roles in shaping global affairs.

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0Running head: BUSINESS ENVIRONMENT
Business and The Business Environment

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1BUSINESS ENVIRONMENT
Table of Contents
Introduction................................................................................................................................2
Task 1.........................................................................................................................................3
Public Organisation................................................................................................................3
Tesco PLC..........................................................................................................................3
Private Organisation...............................................................................................................5
PricewaterhouseCoopers....................................................................................................5
Voluntary Organisation..........................................................................................................7
American Red Cross..........................................................................................................7
Task 2.........................................................................................................................................9
Impact of Macro Environmental Factors on H&M’s Business..............................................9
Conclusion................................................................................................................................14
References................................................................................................................................15
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2BUSINESS ENVIRONMENT
Introduction
An organisation is a legal entity comprising various peoples, such as associations,
individuals, and institution that work together in a business or public serving to accomplish
common objectives. Each organisation has a management structure which determines and
maintains the relationships between different stakeholders and activities to ensure that each
role, responsibility, and authority is designed to achieve the organisational goals. There are
different types of organisations which are divided based on their characteristics such as
private, public, legal and voluntary, each of these organisations have different organisational
structure, legal framework, size, scope, and stakeholders.
This report will evaluate different types of organisations based on their characteristics and
provide various examples to understand their functions and attributes. The report will discuss
various organisational functions and assess their connection with the structure and goals of a
corporation. Further, the report will analyse environmental factors that positively or
negatively impact or influence the organisational structure of “Hennes & Mauritz”. The file
will evaluate various internal and external environmental factors to determine the weaknesses
and strengths of H&M and connect them with external sources.
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3BUSINESS ENVIRONMENT
Task 1
Organisation is a legal body which includes various parties who work together in order to
accomplish common goals. Following are explanations and legal structure of different types
of organisation along with examples.
Public Organisation
A public organisation is a company whose capital is divided into small parts called share;
such shares are freely traded on the stock exchange and a person become the owner of a
company by purchasing its shares (Luoma-aho, 2008). According to Pichault (2007), a
public organisation can be listed or unlisted. The listed companies are able to sell their shares
on stock exchange. As compared to other organisational structures, public organisations
larger in size due to their ability of raising capital through sale of shares (Coluson-Thomas,
2012).
Legal Structure
The legal structure of a public corporation is considerably complicated than compared to
other companies since it requires complying with multiple legal requirements. For example, a
public organisation is required to continuously file disclosures regarding various aspects such
as directors holding, annual statements, IPO, promoters holding, audit report, and many
others (Ng and Lossemore, 2007). The legal structure of a public organisation is complex and
strict because it involves public money. The company is requiring notifying stock exchange
of any significant change in management or shareholding.
Registration of a public company is compulsory, and without registration a public company
cannot attain its separate entity status. At the time of registration, minimum two directors and
one secretary are necessary, and the minimum share capital must be £50,000 among which
£12,500 must be paid up capital (Von Bogdandy, Dann, and Goldmann, 2010). The company
is also requiring preparing memorandum of association and article of association which
include the necessary framework and other essential details. Following is an example of
public organisation to understand its various aspects including size, scope, objectives,
mission, vision, and stakeholders.

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Tesco PLC
Tesco PLC is a British international organisation which operates in the retailing industry, the
company was founded in 1919, and its head office is situated in Hertfordshire, England. The
organisation is the largest retailing corporation in the United Kingdom, and it is one of the
world’s largest retailing chains with operations in more than 12 countries (Tescoplc, 2017).
The stakeholders of the organisation include customers, shareholders, employees, local
communities, shareholders, and government.
Size
The company has more than 6550 retail stores throughout the world that are operated with the
help of more than 476,000 employees (Tescoplc, 2017).
Mission
The company’s mission is to enhance the value of its customers and to earn their lifetime
trust.
Vision
The corporation’s vision is to provide high-quality products and services to communities
through loyal and dedicated employees and maximise the growth and shareholders’ value by
implementing innovating strategies.
Business objectives
Trying harder for customers and fulfilling responsibilities by understanding the
requirements of customers and societies (Tescoplc, 2017).
Treating people with respect and trust and support them by working in a team.
Performing little acts of goodness to make a big difference, such as reducing wastage,
serving food to poor peoples, providing quality products and services, and positively
contributing to the society.
Organisational structure
Tesco’s organisational structure incorporate various functions including direction,
management, human resource, financial, trading, customer care and many others. The
company uses strategic planning to incorporate objective, mission, and vision into the
organisational structure (Imrie and Dolton, 2014). For example, the human resource
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5BUSINESS ENVIRONMENT
department ensures selection of qualified employees that are loyal and dedicated. The
company provide appropriate training to the workers, so they are able to assist customers in
satisfying their shopping requirements. The top-level management develops strategies in
order to accomplish organisational objectives. For example, personal management ensures
that customers are satisfied with the services and their feedback is properly received by the
company (Jones, Hillier and Comfort, 2013). The company also establish various social
welfare campaigns for the welfare of local communities and ensure that they are not polluting
and wasting resources which assist in fulfilling their mission, vision, and values.
Private Organisation
A private organisation is a company which has a relatively small number of shareholders, and
it did not offer or invite public to buy its shares (Ronit and Schneider, 2013). A privately held
corporation is not able to list its share on the stock exchange. A private company has a
separate entity from its owners, and it is mandatory to add ‘private limited’ in its name.
Legal Structure
Unlike a public corporation, the private company requires one minimum director and one
secretary during registration and at least one shareholder. There is no provision for minimum
or maximum share capital requirement in private companies (Kaasenbrood, 2013). A private
company limited by shares is not authorised to issue more share than prescribed in its
memorandum of association. A private company has to comply with relatively less
compliance than compared to public corporations because the number of members is limited
and public capital is not involved.
PricewaterhouseCoopers
PricewaterhouseCoopers or PwC is a private limited company which was established in 1998
with a partnership between two firms. The company operated in the professional service
industry, and it is one of the big four auditor corporations. The head office of PwC is situated
in London, United Kingdom. The company’s stakeholders include clients, government,
shareholders, public and others (PwC, 2017).
Size
PwC is world’s second largest professional service firm which operates in 157 countries with
more than 236,000 employees (PwC, 2017).
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Mission
To provide fair and straightforward auditing services to gain the trust of its investors and
members.
Vision
Maintaining strong ethics
Adopt as per market conditions
Providing international expertise
Becoming leading participant in auditing and accounting standards
Motivating partners and employees to perform better
Gaining specialty in many sectors
Business Objectives
Advising leaders regarding business strategies to drive performance
Implementing growth strategy in developing markets
Implementing strategic plans to fill the gap in ambition and delivery
Sustaining corporate growth
Providing local expertise to more than 170,000 peoples around the world
Organisational Structure
PwC’s organisational structure includes partners, evaluation committee, executive officers,
risk management, manufacturing and distribution department, and finance service
department. These divisions perform various organisational functions that are linked with
each other to ensure the company achieve its goals. The partners and executive officers
implement strategic policies to ensure satisfaction of organisational objectives. The primary
objective of the corporation is to provide high quality and fair auditing and consulting
services to its clients and the organisational structure focus on achieving such goal (PwC,
2017). The company’s research, design and human resource functions linked with each other
to ensure hiring of highly qualified and skilled employees, so they are able to perform their
job according to corporation’s standards.
One of the primary roles in PwC is of risk management department; it ensures that
corporation is complying with necessary legal requirements. Proper implementation of ethical
principles is significantly important for PwC since their work affects public capital. The audit

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labs, risk assessment staff, quality review and other department ensure that all the work is
performed with ethical policies. Being a private company, the regulations of PwC are
considerably low, and they maintain a strict organisational structure to meet their mission,
vision, and values.
Voluntary Organisation
A voluntary organisation is an association of a group of individuals who enter into an
agreement to provide their services to accomplish a specific objective voluntarily. These are
non-profit corporations which focus on benefiting specific part of society rather than
maximising its profits (Easton, Atkin and Hare, 2007). For example, environmental groups,
trade unions, professional associations, self-help groups, charity organisations and many
others.
Legal Structure
In order to provide voluntary and no profit service, an association can choose different
structure such as limited company, charity, community interest company and co-operative.
The community interest companies (CIC) include a community interest statement which
included its future plan and objectives. The assets of CIC are locked and can only be used for
social purposes, and there is a set limit for the amount provided by the corporation to the
shareholders. The legal provisions of limited company apply to non-profit organisations as
well (Butler and Wilson, 2015).
American Red Cross
The American Red Cross is a charitable corporation that provides various non-profit services
such as disaster relief, emergency assistance and education in different parts of the United
States of America. This association was formed in 1881 and its head offices situated in
Washington, D.C., United States (Briones, Kuch, Liu and Jin, 2011).
Size
The company operated throughout different states in the United States and helped peoples in
danger. The corporation has more than 500,000 volunteers along with 30,000 employees. The
company also train 12 million people’s necessary medical skills so that they can help others
in a disaster.
Mission
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The company’s mission is the lead safety operations by volunteers and provides relief to the
victims who suffered loss due to natural disasters and emergencies.
Vision
Becoming an outstanding nationwide provider of tissues, blood, and plasma.
Providing blood, tissues, and plasma to required peoples and providing safety,
medical, scientific, business and manufacturing services to individuals who are in
need.
Business Objectives
Providing necessary services to victims in disasters and emergencies
Reduce the number of causalities caused due to natural disasters
Giving necessary medical skills training to peoples, so they are able to heal others
Promoting good conscious, helping nature, support, and diversity
Enhancing moral values of its volunteers
Organisational Structure
The organisational structure of ARC include directors, chairman, general secretary, fund
generating department, internal auditing team, logistics, training department, budget, legal
officers and voluntary member support staff. These members perform different organisational
functions that are collaborated with each other to accomplish corporate goals. The top-level
management ensures that corporation is achieving its organisation objectives by fulfilling its
moral duties (Redcross, 2017). The company provides only a specific amount of its profits to
the shareholders and staff members and use rest to provide necessary services to the victim.
Most of the members in ARC are voluntary which means that did not take any salary to
provide their services. The internal auditing committee ensures that the money donated by the
people are only used in disaster and emergency situations, it allows company to accomplish
its mission, vision, and values.
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Task 2
Impact of Macro Environmental Factors on H&M’s Business
Macro environment defines major external factors that are uncontrollable and has a
significant influence on the operations, strategies, and performance of a corporation. Before
formulating new business policies, management thoroughly assesses and examine these
factors. According to Gupta (2013), these factors positively or negatively influence the
performance of an enterprise, therefore, management carefully evaluate these factors. The
macroeconomic environment includes various factors such as political, economic, social,
legal, technological, and ecological. The acronym PESTEL is used to define the external
factors that influence a company’s business, operations, and performance. Globalisation has
increased the level of competition among multiple industries, and corporations can attain a
competitive advantage by formulating business policies after thoroughly assessing external
factors (Chen et al., 2014). These external factors are affected due to major changes and
development in the microenvironment of a business that is outside the control of management
(Barkauskas, Barkauskiene, and Jasinskas, 2015). The example of macro environment
includes natural disasters, change in customers’ preferences, competitors, government
regulations, growth in interest rates, and many others.
Hennes & Mauritz (H&M) is Swedish international clothing retailer chain; it was founded in
1947 by Erling Persson. Currently, the company has more than 4,500 stores in over 62
countries, and it employs more than 148,000 individuals (H&M, 2017). The corporation
manufactures fast fashion clothes for women, men, youth, and children; the firm sells its
clothes in both online and offline stores. The corporations head office is situated in
Stockholm, Sweden; it had revenue of US$21.73 billion in 2016. The first store of H&M was
situated in Sweden that only offers women clothing; the company started its international
expansion in 1952 and began offering men clothing. H&M provides its services under six
separate brands which include ARKET, & Other Stories, H&M, Collection of Style, FaBric
Scandinavien AB, Cheap Money, Weekday and Monki. In H&M, women managers hold
more than 75 percent of management positions, and they represent around 50 percent of the
board (Peck, 2016). H&M is world’s second-largest clothing retail chain, following ZARA.
Currently, the company operates in more than 62 countries, and various external factors

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10BUSINESS ENVIRONMENT
influence its performance, the management is required to analyse these factors to sustain
future development of the company (Islam and Deegan, 2010).
H&M is a global brand that provides services in numerous countries, and they are
continuously under pressure to ensure proper compliance with international laws. Being a
global brand, H&M is required to continuously monitor and track various political risks that
possess threat to its operations (Hiltunen, 2008). For example, people reacted negatively
against the decision of H&M to open its first store in Israel because Israel did not comply
with international laws. The Israeli officers provided that H&M will help them economically
by opening its store; the store was situated near a controversial area where Palestinians were
brutally killed and expelled. More than 22 organisations protested against H&M’s decision
and many customers boycotted them. The economic condition of different countries influence
the business of H&M; the company offers competitive pricing on their products by efficiently
maintaining inventory system and negotiating best prices from the suppliers.
The change in interest rates, currency rates, and inflation make it difficult for the company to
keep their prices stable in each country. Although, despite negative influence of Brexit, the
company reported 7 percent increase in its sales. The primary reason for that being emerging
BRICs markets which increases the number of customers for the corporation. The BRICs is
an acronym for Brazil, Russia, India, and China; these countries provide potential new market
share and customers to the corporations (Holtbrugge and Baron, 2013). Modern organisations
are requiring maintaining various socio-cultural policies to keep their positive brand image;
the companies are requiring maintaining transparency in their business to ensure they fulfill
corporate social responsibilities. H&M is required to various laws provided by labour laws
and maintain a hygienic, safe and healthy environment for its workers. H&M analyse its
customers demand from social media sites and other sources to maintain its prices at a
reasonable level to attract a large number of employees.
The digital revolution has changed the retailing industry; corporations are required to
implement the latest technology into their operations to ensure they satisfy their customers’
requirements (Berman, 2012). The fashion industry is constantly changing, and new trends
are coming every season, successful companies stay one step ahead of their competition by
using the latest technological advancements into their operations. The implementation of
modern technology also increases the risks of cyber-attacks on H&M which increases the
requirement of cyberspace security. H&M is known for their online facilities and excellent
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online shopping experience and to maintain its security, company is required to invest heavily
in cybersecurity software. The role Corporate Social Responsibility in increasing in
international markets and customers analyse whether corporations are fulfilling their moral
duties before using their products and services. H&M has been involved in various legal
disputes in past two years, for example, the company lost a patent dispute for infringing Bra
designs against a UK corporation (Cockroft, 2015). Other than proper compliance with
international laws, H&M’s legal team is required to examine and implement various domestic
and customary laws while operating their business in BRICs markets. H&M is a global brand,
and the company maintains its reputation by formulating necessary environmental protection
regulation.
The company analyses and formulate policies for its external environment after evaluating its
strengths and weaknesses. The strengths of H&M include a wide variety of products, unique
identity in the market, diversified global presence, and strong financial condition. The
company is second largest clothing retailer in the world, and it has a strong brand image
between people; the corporation focuses on diversifying its operations by adding new
products and services to provide the latest trend to its customers (Trompenaars and
Hampden-Turner, 2011). The company offers its products at reasonable prices by using few
middlemen in supply chain and purchasing material at high volume. H&M also has various
complementary businesses that offer flexibility and control over operations; use of celebrities
and designers in marketing campaigns increases firm’s global reputation. Along with
strengths, the company has various weaknesses as well, such as, dependence on third party
suppliers, following after trends, and maintaining affordable pricing adversely affects its
products quality.
The negotiation ability of company is low because it is depended on third-party suppliers to
maintain consistency in their products; rapid change is fashion and technology also risks
corporation position in the market. Buying material in high volume can create the problem of
overstocking in the company; the company uses complex machinery to maintain high quality
in their products, and their maintenance costs are considerably high. Modern market
condition possesses multiple opportunities for H&M such as expanding its e-commerce
operations, potential market share in BRICs market, improving lifestyle of peoples, and focus
on expansion of operations to improve profitability. The company can attract potential
customers from the BRIC market and increase its market share (Biggemann and Fam, 2011);
the lifestyle of customers is changing, and they prefer to pay extra for products that are not
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12BUSINESS ENVIRONMENT
made by killing animals and which are environment-friendly. People are attracted towards
high-quality fashion products, and company can charge extra prices for such products.
H&M already successfully provide e-commerce services in more than 38 countries, and they
can expand its online facilities in other markets as well, especially in BRICs markets
(Lindner, 2015). The changing market condition possesses various threats for H&M such as
evolving fashion trends, intense competition, e-commerce attract new entrants, increasing
labour costs in developing countries, and fluctuation in foreign exchange rates. The
competition in the retailing industry in fierce and popularity of e-commerce websites has
increased the number of competitors. H&M’s management assesses the business strategies of
ZARA and other competitors to ensure its products are adequately priced and according to
the market trends, otherwise, H&M can lose its market share to its competitors. Significant
political or social actions, such as Brexit, fluctuates foreign exchange and bank interest rates
adversely affects H&M’s performance in several countries (Busch and Matthes, 2016).
The strengths and weaknesses of H&M are interrelated to its macro-environmental factors
that influence operations and business of the company. For example, H&M has been involved
in various controversies in past few years, but its strong brand image helped its business to
survive in difficult conditions. The decision of UK to exit EU (Brexit) affected many stores
of H&M situated in European countries and the United Kingdom, but the company reported
growth of 7 percent in global sales because of its expansion in BRICs countries (Dhingra,
Ottaviano, Sampson and Van Reenen, 2016). ZARA decided to expand its business in BRICs
countries; the number of ZARA stores in China has increased 60 percent between 2007 and
2012, in the UK the growth is 3 percent (TranslateMedia, 2016). Following ZARA’s strategy,
H&M expanded its business in China by opening 490 stores; it shows the effect of competitor
strategy over business (H&M, 2017). The economic factors, like Brexit, did not affect
business of H&M as it reported a growth of 7 percent in worldwide sales.
The digital revolution has both positive and negative influence on H&M ‘s business. For
example, the popularity of e-commerce enables the company to offer its services through
online portal which increases its sales and market share, whereas, e-commerce also allowed
new competition to emerge in the market since it requires low start-up cost (Kalathil and
Boas, 2010). The popularity of Corporate Social Responsibility principles and global shift
towards ethical standards has increased companies’ responsibility towards their stakeholders
(Lindgreen and Swaen, 2010). H&M maintain transparency and promote gender and racial

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equality in its operations; the company also publish yearly suitability report which contains
evaluation of directors’ decisions and their contribution towards sustainability of
stakeholders’ value and company’s growth (H&M, 2016). The fulfillment of corporate
responsibilities and transparency in operations assist in building a strong brand image of
H&M in international markets which eventually increases its growth.
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14BUSINESS ENVIRONMENT
Conclusion
From the above observations, it can be concluded that public, private and voluntary sectors
are different type of organisations, based on their features and legal structure. Example of
three different corporations has discussed in the report to clearly understand the difference
between legal, scope, objectives and functions of different organisations. Hennes & Mauritz
is an international fast fashion brand that offers its products and services worldwide. The
company’s operations are influenced by various macro environment factors such as political,
technological, legal, environmental, economic and social. These factors have a significant
impact on the business and operations of H&M because they are interrelated with its
strengths and weaknesses.
The political, economic and social factors affect the reputation of H&M; a strong brand
image provides them a competitive advantage. The growth in digital advancements affects
the business of H&M both positively and negatively because it increases online customers
along with competitors. The management assesses policies of competitors such as ZARA to
before formulating its organisational strategies. The economic and social factors increase the
requirement of proper implementation of ethical principles by the management of H&M, the
fulfillment of corporate responsibilities and maintaining transparency in operations help in
sustain future development of H&M.
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15BUSINESS ENVIRONMENT
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18BUSINESS ENVIRONMENT
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