Business Environment and Management Practices

This assignment delves into the world of business transformation management methodology, covering the public, voluntary, and private sectors' efforts to improve economic conditions. It discusses how companies expand their businesses using various plans and procedures, while highlighting the importance of size, structure, scope, objective, and purpose in achieving targets. The assignment also touches on finance, human resource, operation, research, and development, marketing, sales, and their interconnected roles. Additionally, it provides a range of references from books, journals, and online sources for further study.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Section 1...........................................................................................................................................3
1) Different types and purposes of organisation..........................................................................3
2) Size and Scope of various types of organisation.....................................................................4
3) Organisation structure and functions ......................................................................................6
PART 2............................................................................................................................................8
a) PESTLE model to the sector ...................................................................................................8
b) SWOT and Porter's five Force model of Mark and Spencer.................................................11
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Business environment can be defined as an environment which consists of both external
and internal elements of the factors which effects operations and profit margins of a business
organisation (Uhl and Gollenia, 2016). On the other hand, business can be defined as the
activities of making one's living or making money with the help of manufacturing, producing,
purchasing and selling of goods and services. Marks and Spencer can be considered as a good
example of a business organization which is making money through performing a range of
business process within clothing and other sectors. It consist with a range of functions like
human resources, research and development, sales and marketing and many others which is
helping in hitting targets at competitive business market. This majorly includes staff members,
government, consumers, technology and many other factors which majorly impacts over a
company where they have to make modifications as per the requirements.
Under this report, organisations that are being taken within the private, public and
voluntary are, Marks and Spencer as private, Crown prosecution as public and Oxfam as
Voluntary organization which will significantly help in getting deeper knowledge related to
different sorts of organisations and their purposes within the United Kingdom or any other
country. On the other hand, a proper interrelationship in between organization's functions are
also being enclosed within the report. Lastly the interrelationship between strengths and
weaknesses of macro environment is also going to be showed within this assignment.
Section 1
1) Different types and purposes of organisation
Within the business market, it has been analysed that there are ample number of
companies that are working at different level considering different range of offerings to the
organisations. This majorly be enclosed with profit earning organisations, not-for- profit and
voluntary organisations that majorly fulfils all the needs and requirements of customers
depending upon the duties all the offerings which are being given by the organisation. In present
context, it is being found that individuals or public could be considered as two individuals that
majorly start or run business organisation in regards to make profits or to develop the conditions
of economy. Thus, these are different kinds of organisation which are stated beneath, Profit
organisation: these are the organisations who believes in selling products and services in the
3

mean of exchange with the money. Basic aim of these organisations to earn money or to generate
profit for themselves for their own survival (Lee and Shin, 2018). These are the companies
which basically enhances the overall employment opportunities for the individuals that are
seeking for jobs. Considering this as their purpose, companies like Marks and Spencer offers
customers with different range of clothing and other sorts of products through which public can
fulfil their own needs and requirements. Alongside this, if it is talked about purpose of Marks
and Spencer then companies main aim of the purpose is to offer quality products to customers so
that it can become a leader within the market in which it is performing business. This helps them
in in giving tough rivalry to their competitors like Zara, Tesco and many more.
On the other side, if it is talked about not-for-profit organizations then it will be
considered as the sector which basically regulated over funded by government in order to
develop the country and its economic conditions as well. From roads, criminal cases, buildings,
legislations different range of services are being provided by the sector the organisations that are
coming under public. In present context, Crown Prosecution Services as public agency which
executes criminal cases in Wales and England can easily be considered as a good example of a
public organisation which conduct prosecution and investigation work in both Crown and
Magistrate court. Basically the main purpose of this organisation is to who offers support and
advise related to legislation sorry legal Publications given to the police for investigating
agencies in order to resolve the cases which are linked with criminology. Along with this if it is
talked about non-governmental organisations, then these are the companies which offers public
with different range of services in order to improve overall standardisation of Living and they
also helps to vulnerable. Companies under this do not works for earning profit and instead of that
they look forward to serve the nation and its people (Fabuš, 2017). Oxfam, could be considered
as one of the vital most example which can be taken as a voluntary organisation that are coming
under this section which offers different range of services from food to accommodation to
vulnerable in all over the world. Basically, the purpose of this organisation is to protect
vulnerable and offer them with accommodation and food and different range of services as per
the requirements of them without asking for any sort of favours from them like money.
2) Size and Scope of various types of organisation
Micro, small, large and mid level organisations are some of great examples of different
range of organisations that are present in every single country which offers customers for the
4

public with various offerings (from products to services). Basically, these are the organisations
which consist with different sizes and scopes with market share and many other things that stays
different from each other. Micro organisations comes under the smallest section but majorly
impacts upon economic conditions of a country there are things do not stays really very high but
they offer customers with different products or services for their own survival (Noe and et. al.,
2017). If it is talked about their size then it stays small like a shop and mainly consists with one
or two employees or the owner himself provides customers with what they want. Market share of
micro organisations stays really very low. if it is talked about one but whole pack of micro
companies holds really very big market share within the country like United Kingdom. These
organisations hardly sustains which means a company coming under this sector has no future
until and unless provider is offering customers with what they are actually looking for. This
undoubtedly affects their growth and the profit margins stays really very low and owner of a
micro company invest to survive within the market (Cumming and Zahra, 2016). Within this
sector, scope of an organisation stays high because, after earning a certain amount, this type of
company could expand itself, but this might take them to make wrong decisions as well for the
organisation due to limited funds.
On the other side, a small business organisation consist with small market share but
larger than the micro organisation. Along with this, small organisation basically earns profit
more than micro organisation which means the owner of the business can have more than two or
three stores with minimum 5 employees. Again the growth of these organisation stays limited
which means small business organisation can operate within a specific and small area only.
Since every single citizen of United Kingdom of any other nation are looking forward to become
an entrepreneur they basically start business within this only which impacts positively up on
economic conditions of a country. Scope of a small business organisation or within this sector,
stays high as well because, this is the section which helps a country to grow and offers half of the
employment within United Kingdom. Medium sized organisations carries high market share
which means these companies can make or Break economy of a country like United Kingdom.
Profit margins of these companies stays high because of the competition as these companies
works at a specific level like national where small sized organisations compete with each other
and offer customers with modified products and services based on their requirements. Growth of
these companies stays highest well because of the offerings (Ross, 2016). Scope within this
5

sector stays low for the companies to grow because, large organisations do not lead them to do so
because they already grabbed a good market share in all over the world. This can be considered
as the organisations that can sustain for a longer period of time because of the competition which
are been given by them to International organisations like MNCs. Large organisations are the
one which basically performs businesses across the borders. Under this, Marks and Spencer can
be considered as an example which is performing well among different nations like Asian and
African countries. Due to ample number of stores these companies profit margin stays really
very high for huge. Since these organisations offers employment, government also supports them
to sustain which helps them in becoming a stronger brand at international level. Growth is
particularly related to expansion, organisation like Marks and Spencer would required to expand
its business in order to improve overall growth of the company. There scope always stays low
because of high competition which stays in a sector. This impacts upon their profit margins as
well of these business organisations.
3) Organisation structure and functions
Organizational structure can be defined as a system which helps in outlining a range of
activities or it aid in directing the services in order to attain different range of goals within a
company. Here, activities can be anything from roles, rules, and responsibilities. It also show,
how data or the information is going to be transferred from one individual to another.
Organisation structures could be from functional, matrix, project and many more which
company can adopt depending over the size. If it is talked about micro-level, the organisation
structure which the owners basically follow is functional because they do not have many
employees which means direct communication will take place under micro level. Since the scope
of these organisations stage really very small to grow within the international market the
structure that follow is functional because there is a two way communication can be done
because of the small number of employees (McDowell, Harris and Geho, 2016). On the other
side if it is talked about small business organisations that the employees of these companies take
from 5 to 25 that means they can follow functional Matrix as their organisational structure.
Along with this, it can be said that scope of these organisations stage specific where change
cannot be seen hardly and here majorly owners of these organisations adopts functional
structure just because it is one of the easiest and simplest way of transforming information from
top level to lower level management. On the other side, For the middle level of organisations,
6

market condition, objectives, size, scope are various tactics which determine distribution of staff
members in department. And this is a factor which contains uncertainty is as well which means
these organisations mainly adopts project organisation structure just because competition space
present in the market. Along with this, scope of these organisations stays hi as they directly e
gives rivalry to business organisations that are looking forward to expand their business in their
own sector. The scope of these organisations stays high, which pushes them towards adopting
project organisation structure rather than any other. Retail business organisation named as
Marks and Spencer which is coming under large business organisation has adopted divisional
organisational structure for conduction of business internationally. Thus, resources are utilised
efficiently and position of firm is maintain in respect to competitors.
Figure 1: Divisional Organisation Structure
(Source: Divisional Organisation Structure, 2018)
On the other side, if it is talked about complexities then it can be said that a transnational,
International and global companies structures organisational structures basically consist with
uncertainties and it is required for business organisations like Marks and Spencer to keep on
altering them as per the requirements. Away with this, it is being found that there are a range of
department which helps Marks and Spencer in expanding business at international level or for
conducting the operations as well. Human resource, finance, production, marketing, sales,
research and development are various divisions which are formulated by top authorities of
Marks and Spencer. Human resource department, HR duty is to manage manpower for having
sufficient staff members for conduction of activities. Recruitment, selection, compensation,
7

employee relations, training and development are various practices which are executed by
management of Marks and Spencer. Along with this, research and development department’s
duty is to conduct survey for gaining information about demands and need of public and rival
firms. It is necessary that products and services are provided by company in according to
requirements of people (Fineman, 2017).
Along with this, Marketing department is another important unit whose duty is to inform
people about firm and its product. For this, marketing plan is formulated in which marketing
mix, target market, budget and other information is defined. Product, price, place, promotion,
people, process and physical evidence are 7 P’s which are defined by marketing team.
Advertising, sales promotion, publicity are conducted by them which help sales people to
convince buyers of production services of Marks and Spencer.
PART 2
a) PESTLE model to the sector
PESTLE analysis can be considered as a tool which can be used to analyse the market
conditions of a sector of a business organisation which is related to Macro environment. This
majorly be enclosed with a range of factors like Economic, Technology, Political,
Environmental, Legal and social which majorly impacts upon business sector (Falkner, 2017). In
present context, business sector which has been chosen is the retail Supermarket which consists
with many companies like Tesco, Marks and Spencer, Sainsbury’s and many more which could
be considered as some of the major and the largest business organisations of United Kingdom
and of other nations which are continuously looking forward to expand their businesses at
international level. Every single business environment considering any sector stage enclosed
with uncertainty which impacts upon overall working and functions of a business organisation. It
has been analysed that changes required to be made within an organisation in production services
here in the same way these organisations which has been named above has restructure
themselves in order to give competition to each other and to other business organisations.
Political factor: Government basically designs policies of taxation, licensing and other for
regulating business companies that are working in a sector like retail. This can be understood
without good example where Asda shows the use of cost cutting approach where they
announced to cut down 300 jobs out of 2500. This took place because government has asked to
8

enhance the job securities and redevelop there health safety and security policies which impacted
negatively upon them and use them towards making this decision. Government of United
Kingdom Effectively played an important role within this decision which has been made by the
company which is coming under retail sector (Yashkova and et. al., 2016). Positive impact: Political stability of United Kingdom advantage retail sector of United
Kingdom to operate business with the range of approaches like cost cutting. This has
helped business organisations leg as that are coming under retail sector to improvise
internally through offering jobs to the new Employees with innovative minds. Negative impact: almost 300 individuals ask to leave the jobs from the company because
of the approach that they have chosen. Therefore comma making a decision like this
within a retail sector may sometimes become more difficult for organisations that are
performing business under this sub sector that is retail company (Ruël and Wolters,
2016).
Economic factor: another crucial element of external environment which consists with
different range of components like interest rate, growth, exchange rate and inflation which
depend on economic conditions of country like United Kingdom. If it is talked about UK retail
sector, any change among above components like interest rate inflation rate or exchange rate it
directly impacts upon working of business organisations that are performing and this sector.
Example can be taken is of Marks and Spencer where company had faced decline in their profit
margins which made them to close 14 shops and all the employees that were employed within
these stores become jobless (Lee, 2017). Positive impact: GDP rate of United Kingdom is strong at the moment which directly
impacts upon companies that are performing in supermarket sector of this Nation because
the purchasing power of consumers is high. Negative impact: usually interest rate of this Nation related to loans gets changes rapidly
which might impact upon companies market value that are performing business within
Supermarket industry of UK.
Social factor: perceptions, feelings, and many other thoughts of public stays involved
under this factor. Which means, organisations that are performing in supermarket industry of
UK it will be required for them to offer customers with quality products with minimal rate in
order to become successful in short span.
9

 Positive impact: Tesco is a business organisation which is performing and Retail Industry
of United Kingdom and at international level as well most of the time quality of its
products is very high then the consumers Expectations which directly impacts positively
upon consumers loyalty.. Negative impact: buying behaviour of consumers has changed where they might go for
alternatives as well. Therefore, organisations like Tesco that are performing in
supermarket industry required to manage the quality and the prices of products and
services that they are offering to the customers.
Technological factor: It is another component which determines that technology benefits
whole retail sector in conduction of operations effectively. Positive impact: This could be understood the good example of Sainsbury’s which has
targeted to who adopt new machines that will aid buyers in billing process. This has
given Opportunity to the customers to purchase products in much more faster ways. Negative impact: since there were many of employees were not aware of the technology
which organisation has adopted coming under retail sector, This made then jobless which
recently impacted negatively upon Sainsbury’s on performance level but for short time
frame.
Legal factor, factor which is enclosed with legislations which are made by government of
United Kingdom and this benefited to the retail sector and affected as well both at the same time. Positive impact : Recently, United Kingdom has become as the open business market
due to Brexit which took place because of this many business organisations like Tesco,
Marks and Spencer, Asda had faced an opportunity to enhance themselves and restructure
as well to improvise profit margins. Negative impact : Due to brexit, which was the action taken by government most of
employees that were from European Union started resigning from their jobs which
impacted negatively account supermarket as well.
Environmental factor : Another crucial factor of external environment which is linked
with pollution and healthy environment. Basically this factor is connected directly with the
organisation that are coming underscore markets because what they are offering to the customers
are somehow polluting the environment due to their manufacturing plants many other things.
10

 Positive impact : Companies like Marks and Spencer, Tesco and more has taken a range
of initiatives in regards to reduce the pollution level like recycling of various used clothes
and so on (Laursen and Thorlund, 2016).
 Negative impact : Many acts can be seen of green washing and other acts which
impacted upon overall performance level of the business company, because initiatives
like recycling and more were being taken to save themselves from the emission of
pollution that they were making.
b) SWOT and Porter's five Force model of Mark and Spencer
SWOT analysis is a tool which is used to to assess or examine strengths, weaknesses,
opportunities and threats. The outcomes of analysis depicts the competitive position in the
market which can be improved through appropriate strategies.
SWOT Analysis of Mark & Spencer :
Strengths Weaknesses
 It offer variety of products and
services such as clothing, furniture,
food, financial services and many
more to capture larger share in the
market.
 It is considered as largest company in
UK by sales and also it has huge
 Many customers do not try its product
because of the perception that all the
goods are being offered at high price.
 It has substitute as the number of
rivals have increased in the past few
years.
Opportunities Threats
 It has more opportunities in expanding
its business internationally which can
increase its customer base.
 Alliances with already established and
successful companies.
 Economic recession is a huge problem
in carrying the business efficiently.
 Also, fluctuations in the prices of raw
materials due to the number of factors
can possess a huge threat.
Henceforth, it is being summarised that Marks and Spencer, is weakened among different
places and this has impacted upon their own performance level as well. Along with this, it can be
said that Marks and Spencer would require to focus upon different regions as well in order to
meet all the desired goals and objectives.
11

Porter’s five forces :
Porter’s five forces of Mark & Spencer: It is used to analyse competition exist in the
industry and how attractive it is to the entities operating in the same industry or sector. Porter's
five forces of Mark & Spencer has been given below:
 Threats of new entrants: Tesco, Morrison, ASDA and many more firms have entered
the UK market to explore opportunities to become successful and gain profits by
increasing the customers. Thus, threat of new entrants is ever increasing.
 Suppliers bargaining power: The entry of new companies in UK market has increased
the bargaining position of the suppliers which is a problem for Mark & Spencer. It has to
negotiate and agreed to buy raw material at the price of word by the suppliers.
 Threat of competition: Competition is very high in UK market because entities like
Primark, GAP, New Looks, NEXT etc. Have managed to attract customers to buy its
products. Hence, there is a huge competition for Mark & Spencer.
 Buyers' bargaining power: Existence of variety of companies has increased the
bargaining power of buyers because they can buy products from various alternatives.
Earlier, Mark & Spencer was one of the options preferred majorly by the customers
(Laursen and Thorlund, 2016).
 Threats from substitute: There is an enhanced threat of substitution due to the
development of corporations like Sainsbury, John Lewis etc. Customers can have similar
products at more cheaper prices.
CONCLUSION
Considering the above mentioned report, it can easily be said that public, voluntary and
private are continuously helping economic conditions to get improved. Along with this,
companies has expanded their business as well considering a range of plans and procedures as
well. On the other hand, size, structure, scope, objective and purpose are some of the components
which aid in hitting targets in specified time frame. Away with this, finance, human resource,
operation, research and development and marketing, sales, are department which have
interconnection with each other.
12

REFERENCES
Books and Journals
Uhl, A. and Gollenia, L. A. eds., 2016. A handbook of business transformation management
methodology. Routledge.
Lee, I. and Shin, Y. J., 2018. Fintech: Ecosystem, business models, investment decisions, and
challenges. Business Horizons. 61(1). pp.35-46.
Fabuš, M., 2017. Current development of business environment in Slovakia and Czech
Republic. Entrepreneurship and Sustainability Issues. 5(1). pp.127-137.
Noe, R. A. and et. al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Cumming, D. J. and Zahra, S. A., 2016. International business and entrepreneurship implications
of Brexit. British Journal of Management. 27(4). pp.687-692.
Ross, D. F., 2016. Introduction to e-supply chain management: engaging technology to build
market-winning business partnerships. CRC Press.
McDowell, W. C., Harris, M. L. and Geho, P. R., 2016. Longevity in small business: The effect
of maturity on strategic focus and business performance. Journal of Business
Research, 69(5), pp.1904-1908.
Fineman, S., 2017. The business of greening. Routledge.
Falkner, R., 2017. Business power and conflict in international environmental politics. Springer.
Yashkova, E. V. and et. al., 2016. Development of Innovative Business Model of Modern
Manager's Qualities. International Journal of Environmental and Science
Education, 11(11), pp.4650-4659.
Ruël, H.J. and Wolters, T., 2016. Business diplomacy. The SAGE handbook of diplomacy.
Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
Laursen, G.H. and Thorlund, J., 2016. Business analytics for managers: Taking business
intelligence beyond reporting. John Wiley & Sons.
Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
13