Business and the Business Environment

This report examines the business environment of JP Morgan Finance and Investment, a leading financial institution in the United Kingdom. It analyzes different types of organizations, their purposes, and sizes, and explores the relationship between various organizational functions. The report also delves into the positive and negative impacts of the macro environment on JP Morgan, using a PESTLE analysis. Finally, it conducts an internal and external analysis of JP Morgan, identifying its strengths, weaknesses, opportunities, and threats, and explores the relationship between these factors and the macro environment.

BUSINESS AND THE BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P 1) Different types and purpose of organization-.................................................................1
P 2) Size and scope of a range of organization.....................................................................3
TASK 2............................................................................................................................................4
P 3) Relationship between different organizational functions-..............................................4
TASK 3............................................................................................................................................6
P 4) Positive and negative impact on the macro environment...............................................6
TASK 4...........................................................................................................................................9
P 5) Internal and external analysis of JP Morgan-.................................................................9
P 6) Internal relation between Strengths and weaknesses with macro factors.....................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment means external and internal factors that makes effects on
company’s functions including employees, consumers, management, policies etc. These factors
influence an organization’s strengths and weaknesses. External issues create threats and
opportunities to the business. It is an aggregate of all conditions and influences surround or affect
it (Ayios, 2018).
JP Morgan Finance and Investment is the finance institution of United Kingdom which
provides low rate loan or investment plan. This report will explain about different types of
organization, purpose and size or scope. After this, it will describe the relationship between
different organizational functions. This report will discuss positive or negative impact on the
macro environment. Lastly, it will explain about strengths and weaknesses and interrelation with
the macro environment.
TASK 1
P 1) Different types and purpose of organization
Organization- It is an organized group of people with a common and particular purpose
or objectives such as private business/ government sector. In other words, action of organizing
something called organization. It has a management structure which determine the relations
between activities and employees. Before starting a business, it is important to make a strong
leadership in an organization.
In UK, there are different organizations in this sector that exist-
Primary sector- Industries engaged in production or extraction of raw materials like
natural resources, crops and crude oil. Primary sector includes finishing, farming, mining. It is an
important part of economy in some countries. It has some issues like export revenue, monopoly
power, volatility, de-industrialisation etc.
Secondary sector- It includes the next process level of raw material, product
manufacturing etc. In this sector, man-power is used to produce goods and services (Charles Jr,
Schmidheiny and Watts, 2017).
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Tertiary sector- It is also known as a service sector. It is the third economic sector of
three sector theory. It offers tourism, insurance, loan etc. all intangible goods. It uses
manufactured products. It is helpful in selling and marketing the products which was produced in
primary and secondary sector.
Types of organizations
Organization has many types which are below-
Public organization- These are those which operated by the government and provide
services to country’s citizens. Like voluntary, public sector organization do not work for
generating profits. Tax, fees, financial transfers from other government are the methods of
funding for public services. Sometimes, it makes partnership with an organisation in private
sector to frame a public-private partnership. Education, fire services, gas and oil are few
examples of public organization. HSBC is a financial public organization of United Kingdom.
Advantages-
 Protection of public interest- It can formulate and apply those policies which promote
public organization. It would ensure that public interest is safe and promoted.
 Erase of raising funds- Public organizations are operated by the government and they
can raise required funds by issuing their bonds in market.
Disadvantages-
 Political interference- Public organization is a state enterprise. They all suffer from
political interference and have to follow their instructions or perform according to them.
 Misuse of power- It enjoys special power from the Parliament into its daily work
functions. Sometimes, few officials misuse their power and get included in corruption.
The main purpose of public organization is they maintain economic conditions of country and
provide the best facilities to citizens.
Structure- Two types of legal body; one is central government and second is state legal entity.
Private organization- It is the part of economy that is operated by individuals and
industries for profit. Government has no control or right on their business. Sometimes, it is also
called the citizen sector (Charter, 2017). Partnership, multinational corporation, trade unions are
types of private sector. TESCO is a private organization.
Advantages-
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 Making decision- Private corporations must take fast decisions. They are free to make
their own policies.
 Liability protection- They are liable to protect their own assets. There is no government
interference.
Structure- Private sector has a legal body structure like CEO- BOD-Management-Employees.
Disadvantages-
 Costly registration process- To open a private organization it is not easy. It has lengthy
and costly or time consuming process.
 Load of procedural formalities- Every company has to follow some legal formalities
like annual return, income tax, shareholder meetings.
Earn more profit is the main purpose of this organization.
Voluntary sector- It is the responsibility of social activities operated by those sectors
that work as a non-profit or non-governmental organization (Cook, 2017). It is also known as a
third sector. Wellcome trust is a non-profit organization.
Advantages-
 Employee commitment- Many people work as an employee in this organization for non-
profit.
 Intrinsic rewards- Some people work with non-profit corporation for their inner
satisfaction.
Disadvantages-
 Limited funding- Some non-profit organization discontinue their services because lack
of funds.
 Social pressure- This type of organization has social pressure when they take some
actions against society.
Purpose of this corporation help those people who are not able to help themselves.
Structure- It has a free legal body. Trusted members work for it.
P 2) Size and scope of a range of organization
Public organization- This corporation entity works under the government control. It
follows business laws which are defined by central government of country. It also has a legal
management body. Public corporation sell its shares on stock exchange to members of general
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people and raise funds from it for country. Board of directors' members and management use
available resources for growth and diversification. This is also known as divorce of ownership.
Scope of public sector in United Kingdom that it is a fast growing and developing
corporation sector. People show their interest and like to buy government shares (Cramer, 2017).
They can take advantages of this sector when share value high in market. Government takes such
steps which are beneficial for country economy and people.
Private organization- This is run by individual or companies to earn profits. They give
some part of their profit to government in terms of tax and annual return. They do not have any
legal body interruption. This sector makes their own business policies and rules. It can easily
expand business around the world. Sole trader, partnership or limited companies part of this
sector. It also has a legal body structure who make and take decisions. Private organization legal
body size is- CEO-- Board of directors- share/stakeholders- Top Management-Employees.
Before taking any decision everybody has to follow this chain system.
Private sector is the largest working area of the world. It can easily expand business and
make more profit. TESCO is a private organization of United States as it delivers grocery and
banking services online across the world and earn profits. Private organization world has large
and competitive market. It is quite difficult to maintain business value in this field. United
Kingdom has a great opportunity to expand its private business sector.
Voluntary organization- It is a non-profit corporatisation, which work for the society
development. Government and private both sector helps to do their social work properly (Ayios,
2018). They provide financial support and take some responsibility along with them. It works as
an NGO or trust/ charity foundation organization. It helps those people who are helpless. Old-age
home is example of social corporation (Falkner, 2017).
Wellcome trust is a non-profitable organization of United Kingdom. It’s management
combination of private and public sector group. Many people build a trust and appoint a head
who can take decisions.
TASK 2
P 3) Relationship between different organizational functions-
An organization has different departments which play a role in its development and
productivity. Without them, an industry can't work. They all have their own contribution in
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company’s growth. They are different but their goals are the same (Ayios, 2018). It makes profit
and increases the market value as a common object of all department. An organization have HR,
finance, IT, operations and marketing department. They work differently to achieve a single
goal. They are depended on each other for their functions and requirements. Organization
management have the power of decision making but they asked their employees for suggestions
before making anything.
Relationship between all departments functions is described below-
Human Resource- This department is one of the main parts of an organization’s
management. It has its own responsibilities. It appoints the skilled or qualified employees who
are profitable for business. Some functions of HR department are hiring talented candidates,
conducting training and development session for workers, keeping their record of performance,
organizing rewards and recognition ceremony etc.
But it relays upon other departments to perform their functions. JP Morgan Human
Resource depended on finance, IT, marketing etc. Finance structure gives a brief idea of
investment fund in organizational cultural activities, or for development or grooming workshop.
Marketing zone provides the information about market values and promote company or
encourage people to become part of growing business entity (Charles Jr, Schmidheiny and Watts,
2017).
Finance department- It is the bank of an organization, who has financial status. It helps
other departments in momentary term or give fund whenever they required. HR requires fund
during training and development program, annual functions, official trip etc. IT department has
financial needs when they are going to buy new technical equipment and tools, expanding
technologies in an organization. Marketing function requires money for company promotion,
organizing external activities etc. JP Morgan finance sector provided money to accomplish needs
for different zones. To manufacture more qualitative and quantitative products and services, the
operations' department require the financial support for growth and development.
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Marketing- This is promotional department of organization. JP Morgan invested a large
amount of money in their marketing. It conducts canopy in the field to attract more customers
towards its financial investment institution, to manage promotional activities, increase image
among competitors etc. are function of marketing. Finance, HR, IT, Operations all depended for
their promotional activities (Charter, 2017). Marketing at large scale of financial organization is
a sign of more customers' investment. They easily attract towards company’s product schemes
and ready to invest their money in reputed organization. HR department appoint skilled
candidates from such promotional programs.
IT department- It provides and solve all technical issues of company. JP Morgan is a
financial organization who has to maintain customers and employees’ records. It is not easy to
keep all data in an appropriate way. It helps HR to keep records of employees and their
performance monthly or yearly basis. Marketing department has needs of IT for company
promotional activities and adopt new technical applications which helpful to promote
organization. Finance area of JP Morgan maintain all financial records in a single system with
the use of latest technologies. Operation requires technical help in production activity.
Operation department- It is the manufacturing zone of an organization. It works for JP
Morgan as a back office department, which handle all official issues. It gives employees
feedback to HR and after that, they took action against them (Cook, 2017). Operations
manufacture products and services which sell out in market with the help of marketing
department. IT functions give new techniques to produce efficient and qualitative products.
TASK 3
P 4) Positive and negative impact on the macro environment
Macro environment factors generally affect the overall business operations. These are
external factors which make an impact on organizational activities rules and regulations or
procedures drastically. To analyse the macro environment effects, PESTLE model is a useful
method. In this model, each character has its own meaning, P stands for Political, E for
Economic, Social stands for S, T with Technologies, L stand for Legal E and for Environment .
JP Morgan Finance and Investment is a financial sector leading organization of United
Kingdom, by using PESTLE analysis, they try to make an impact on its business policies.
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Political factors- Government policies, rules, stability, taxation rate, trading policies,
import-export business, crude oil prices are those factors which influence an organization. In
brief, the governmental policies or rules and regulations which change quickly can make impact
on organization policies.
 Positive Impact- Government policies in order to increase the productivity of business
entity operating in country. Changes in organization procedures, international trade
policy, flexible business rules, encouragement for new entrants are positive impact
factors (Cramer, 2017).
 Negative Impact- Rules and regulations of the government are dynamic in nature. They
make policies for nation growth which could impact negatively on the business
productivity. After BREXIT referendum, JP Morgan operations affected drastically. Its
customers and client decrease after BREXIT.

Economic Factors- This factor includes interest rate, taxation policies, investment of
public and private sector, customers’ expenditure, infrastructure costs or resources availability
like energy, communication etc. These factors affect the country’s economic policies and rules
(Falkner, 2017). JP Morgan Finance and Investment business operations are influenced by all
those factors.
 Positive Impact- Financial sector and economy are interconnected. If the economy is
prospering in country, it will give positive impact on business entity. Global finance
crisis of 2007-2008, economic conditions of United Kingdom declined. But with changes
in policies, economic situation of country starts to flourish once again.
 Negative Impact- If the economy is declining and higher rate of inflation will surely
impact negatively on an organization. When inflation is high, then financial factor
experiences the backlash. Recession in the economy of United Kingdom can effect
negatively on operations of JP Morgan Finance and Investment or affects the currency
and values, causes instability.
Social factors- Country's demography, consumerism, education, health, attitude, social
mobility and income distribution comes under social factors. Consumers taste and preferences
are dynamic in nature. With innovative products and services, an introduction in market, buying
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decision making of customers changes (Foss and Saebi, 2017). Financial products and service
sectors are affected by changes in customers taste or preferences. But to sustain in the
competitive market, it is important and essential for management to accomplish needs,
requirements or expectations of users.
 Positive Impact- Cultural impact, purchase behaviour and necessities influenced that
how public see and utilized financial resources. Customers like to visit financial
organization to take right advice for investment. JP Morgan consumers prefers to gain
financial suggestion after visiting the organization. They can be provided sufficient
information regarding the way of return on investment.
 Negative Impact- The result of negative impact that users frequently change their taste
and requirements. JP Morgan Finance and Investment management could have a negative
impact with business environmental changes. These things make negativity on the
organization productivity. They all affect final performance of business and decrease its
value in market. People will lose their beliefs on financial institution.

Technological factors- Government expenditure on research of new technology, new
products adoptions and developments all are comes in technological factors. Its development
greatly affects nearby all industries (Grayson and Hodges, 2017). With new and innovative
software, management could calculate humongous data set in limited time period. Increase in
technologies and advance software financial institution and business greatly influenced. It is
helpful in saving time and money to organization or management both. JP Morgan Finance and
Investment affected by technological factors.
 Positive Impact- Positive impact of these factors are that it enables the business
organizations to use of the newest technologies which helps in decrease time, efforts and
cost of industry. JP Morgan management use artificial or data mining applications to
analyse large number of data effectively and qualitatively.
 Negative Impact- The main negative impact of this factor that it is more expensive. This
can increase organization cost. Management needs to put extra efforts to give training
about these technologies to employees and sometimes it is costlier for business empire.
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Environmental factors- This factors includes environmental pollution, planning
policies, trade policies, export-import rules, transports policy etc. In today's world pollution rate
high drastically which is the main reason behind global warming and other environmental
challenges. JP Morgan Finance and Investment continuously give their contribution towards
protection against pollution or preservation as a part of CSR rules. It is a great step of
organisation to keep safe our environment.
 Positive Impact- It increases the reputation and wealth growth of an organization.
Follow government environmental laws and rules is a part of every business entity work.
JP Morgan Finance and Investment always try to decrease pollution from the society.
 Negative Impact- Tradition work process is the main reason behind pollution. Earlier
use of paper, carbon is essential part of work culture. JP Morgan if use more paper for
work it will harmful for the environment.
Legal factors- Elements of laws, employment rules and regulation in organization,
company law, union policies, health and safety law, industry policies etc. are comes in legal
factors (Hillson and Murray-Webster, 2017). In the case of avoid these legal consequences,
organization needs to adopt presided law in country. JP Morgan follow all laws to protect
employees work power.
 Positive Impact- To protect its image, JP Morgan follow regulations like data protection
laws, health and safety, employment laws etc.
 Negative Impact- If JP Morgan fails to follow all these laws, and they can become a big
challenge for the organizations.
TASK 4
P 5) Internal and external analysis of JP Morgan-
SWOT-
With the help of SWOT analysis, one can evaluate organization position. It is a frame of
any industry which show what a company do and can't do.
Strengths- This shows how an organization is unique and different from others. Brand,
huge number of customers, high return profit are the strengths of company. JP Morgan finance
and Investment is a financial institution of United Kingdom. It is different from competitors
because of its uniqueness.
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Strengths of JP Morgan-
 JP Morgan has huge number of customers, high share in stock market.
 It has strong capital and increase deposit and reduce the expenditure.
 It has good, diversified and strong revenue in market. All its products like loan,
insurance, investment all are demanding among consumers. JP Morgan has huge market
investors comparing to competitors.
 Investors and people have faith in this organization and like to invest their savings with it.
Weaknesses- It is the negative factor for an organization in its growth. It is an area where
the company has to improve (Jarach, 2017). Low productivity, number of users are less, need of
talented employees etc. are the weakest points of financial institution.
 JP Morgan expenditure management is weak, along with its non-profit as well as
operation expenses.
 It is depended on few market segment. Dependency on limited market share reduces its
revenge and values.
 JP Morgan fluctuates the market is a barrier in its marketing growth and position.
Fluctuations in the market make a negative impact on revenue. It is not a healthy
condition for a financial institution that its market influenced its growth negatively.
 High expenditure, low return rate is another weakness.
Threats- Those elements which are not useful for company or say is beneficial to
competitors is called as threats. High competition level, new entrant in market, low number of
users etc. are the threat for the company (Ledgerwood, 2017). JP Morgan also has threats from
competitive market environment.
 Worldwide new financial institutions are the biggest challenges for JP Morgan Finance
and Institution growth and market share. They offer loan at low rate, low interest rate
compared to JP Morgan.
 Recession and crisis are two other factors which have an effect on its growth and
generation of low profit. These situations are not good for any investment institution.
 High competition and shortage of skilled employees compared to other financial services
is a threat for JP Morgan.
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 If other competitors provide all services in less time period and JP Morgan consumes
much time, customers would like to prefer other.
Opportunities- Negative point of any organization is like an opportunity for another. If
any industry grip such chances it can earn more profit from market. JP Morgan is part of more
competitive and growing market sector (Leipziger, 2017). It has more chances to overtake
market.
 The most and valuable tool of JP Morgan that its management assessment is growing
faster compared to others. It is helpful to capture more market shares and ready to
compete competitors.
 Credit card distribution around the entire world especially in the host country can
increase the number of users. Allocation of cards at low interest rate attract more
consumers and build a healthy economic status. JP Morgan circulate its cards to get
benefits and increase value among the customers.
 Forecasting and future prediction of JP Morgan is good. It always look for growth or
business expansion across the world. It covers all beneficial market and increased
revenue or make profits geographically.
P 6) Internal relation between Strengths and weaknesses with macro factors
Macro environment of any country make impact on its strengths and weaknesses.
Organizations positive or negative factors related with external atmosphere (MARKETING
THEORIES – PESTEL ANALYSIS, 2016). Political, economic, social, technical, environmental
or legal all factors affect company.
Political factors- This factor affects the organization strengths with governments policies
for business. High rules and regulations make environment difficult. JP Morgan can't easily
perform under these policies. It shows negative side of organization.
Economic factors- Strong economic present strength of business. An organization who
has great economic status is more famous in market (Lopez-Acevedo, Medvedev and Palmade,
2017). They can easily attract customers towards it. JP Morgan has good financial condition and
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this the reason that people have their trust on it. They do not have investment fear with this
financial institute.
Social factors- Education, health, income distribution, social mobility etc. are the social
issues. People have frequently taste changing nature and this attitude is problem for JP Morgan.
They change their requirement according to needs and demand. It is difficult for any business
organization to predict customers taste. It is the weakest factor of industry which look like a
barrier in company growth.
Technological factors- Use of technology in business is common fact of today's world.
The newest and innovative technology is expensive. JP Morgan has to conduct training session
for employees which is a type of company expenditure. Lack of skilled or technical worker is
weakness of company. If competitors have talented staff, it is a big problem for JP.
Environmental factors- Pollution control, trade policies, tax rate etc. are the issues for
JP Morgan. Sometimes it behaves like opportunity and sometime threat. When organization want
to expand business in other country high trade rate become a challenge. It offers smart salary
packages to skilled employees or they want to become a part of such organization, it will show
weakness of JP.
Legal factors- Country employment law, company law, health and safety of employees
comes in it (Luftman, Lyytinen and ben Zvi, 2017). If organization do not follow these
regulations' nobody wants to join it. It has to create safe or healthy working environment for
worker and if it fails to adopt them individuals can't have trust on organization.
Micro environment
 Competitors- The competitive environment is the basic thing which every
organization has to face. JP Morgan has large numbers of competitors. The most
common competition of a company's product faces differentiated goods and
services from other organization.
 Customers- Main purpose of any business that is create huge numbers of
customers. JP Morgan also has same targeted to earn more profit compare to
competitors.
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 Suppliers- Regarding supplier, business think the required material or labour
according to producing programme. It can adopt purchase policy which provide
bargaining power to company.
 Public- It refers to general people. It is a group who has interest in a company
ability to accomplish its goals and targets.
CONCLUSION
Above report is related to organizational types and scopes and also told about its
advantages in different sizes.. It showed an internal relationship of different departments. JP
Morgan is a financial institution of United Kingdom which provided loan, policies and
investment to people.
This report described the role of external environment in business operations. Macro and
Micro factors affected this industry and became an opportunity as well threat for it. These issues
such as strength or weaknesses of an organization were also discussed briefly. The Government
policies and rules are the most impassive challenges on industry’s profit and market values. A
good sharing in market and huge numbers of users are positive sign of business growth.
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