Analyzing Macro and Micro Environments of Business

This assignment examines the concept of macro and micro environments in business. It delves into how these factors influence a company's performance, citing examples like globalization and technological advancements as part of the macro environment. The analysis further explores micro environmental components such as suppliers, customers, and competitors, highlighting their impact on GSK, a pharmaceutical giant. A SWOT analysis is conducted to evaluate GSK's strengths, weaknesses, opportunities, and threats in light of these environmental factors.

REPORT ON TYPES OF ORGANISATIONS OPERATING IN A BUSINESS
ENVIRONMENT
)
GSK
From: Business Advisory
Subject: An analysis of types of organisations: purpose, size, scope, legal status and structure
Executive summary
The study will focus on different types of the organisations like private, voluntary and public.
It will focus on the features of the organisation and legal structure of the ventures would be
analysed. In order to analyse the study GlaxoSmithKline (GSK) has been taken. The size,
scope and structure of organisations would be discussed here. SWOT and PESTEL analysis
would be done for developing the business structure of the venture.

1.0 Introduction
Different types of business organisations like public, private and voluntary sectors help to
uplift the economical condition of the country. The financial development of the organisation
depends on their objectives, structure and size. Therefore, the study will focus on the types of
ventures and their scope in the market. It will provide discussion about the factors that
determine the organisational size and structure. PESTEL and SWOT analysis would be done
understanding the business condition of GlaxoSmithKline plc (GSK).
Task 1
1.1 Types of ventures
a) Public sectors ventures
As commented by Van Dooren et al. (2015, p.456), the public sector organisations are
governed by government of the country. It provides service like public education, military,
police, water supply and so on to the people as they can lead their life appropriately.
GlaxoSmithKline is the example of public sector organisation and provides health related
service like vaccine to the people.
Features
The authority of the public sectors needs to take permission from the government of the
country. In case of GlaxoSmithKline, Emma Walmsley (CEO) and Sir Philip Hampton
(chairman) run the venture maintaining the regulation of government of UK (gsk.com, 2017).
Contribution of people helps to build fund for running the ventures. They cover the specific
area for providing their service. GSK provides worldwide service by preparing
pharmaceutical products.
Figure 1: GlaxoSmithKline
(Source: gsk.com, 2017)
Objectives and goals
Objectives
 To achieve best position in the world
 To provide best services as people do not face problems related to their health.
Goal
The goal of GSK is to introduce new medicines as people can lead their life properly.

Legal structure
The public sector organisations follow the rules and regulation of UK government. The
legislation is Medical Council Act 1956 for maintaining the legal structure of GSK
(learn.sssc.uk.com, 1956).
b) Private sector ventures [John Lewis Partnership]
The private sector organisations help to earn profit in the contemporary era. Private
organisations are the part of government (Jia, 2014, p.300). John Lewis Partnership is the
example of private organisation (johnlewispartnership.co.uk, 2017).
Figure 2: John Lewis Partnership
(Source: johnlewispartnership.co.uk, 2017)
Objectives and goal
Objectives
 To expand business of the organisation
 To maintain legislation for running the venture legally
Goal
The goal of the organisation is to develop the economic condition of UK.
Legal structure
The private sector ventures need to have trade licence and VAT registration for running the
business appropriately.
Types of private sectors ventures
Sole traders
The features of sole traders are owner can enjoy the entire profit of venture.
Advantages
 Received entire profit
 Maximum privacy
 Start-up cost is low
Disadvantage
 Unlimited liabilities about debts
 Boss is the responsible
Legal form
 Control
 Tax
 Considerations
Partnership
Features
Partnership business helps to share the risk and profit of venture with the partner. General
partnership indicates that partners can take joint decision and limited partnership (LLP)
reflects that partners take decision in the specific aspect of business.
Advantages

1. Share risk
2. Increasing the source of capital
Disadvantage
1. Unlimited liability
2. Share profit
3. Taxes of self-employment
Legal form
The partners of venture need to contract paper for getting profit equally in the legal way.
Joint Ventures
Features
 Argument between two or more person
 Need to share profit and loss
Advantage
 Can access new network of market and distribution
Disadvantage
 Need to share risk and profit with partner
Legal form
As per the legislation of UK, joint venture is short-term partnership and the partners need to
sign in the contract paper.
Franchising
Features
1. Entrepreneurial spirit and desire for improving skills
Advantage
 Can gather experience
Disadvantage
 Excessive cost, which is unexpected
Legal form
UK follows commercial law in case franchising business.
Companies
Features
 Limited liability
 Many shareholders
Advantage
 Stock exchange and equal share
Disadvantage
 Maintaining cost is expensive
Legal form
Public company is governed by government and the government partially governs the private
ventures.
Licensing
Features
It proves that the organisations are running in the legal way.
Advantage
 Legal organisation
Disadvantage
 Anyone can access confidential data

Legal form
In time of establishing the ventures, the authority needs to fill the license agreement paper.
c) Voluntary sector ventures [Cancer Research UK]
The voluntary organisations are made by group of people to enrich the condition of the
society (Kolk, 2016, p.23). Cancer research UK is the example of voluntary organisation.
Figure 3: Cancer Research UK
(Source: cancerresearchuk.org, 2017)
Objective
 To reduce various problems like health, education from the country
Goal
The goal is to enrich the society.
Types of voluntary ventures
Non government organisations (NGO) are established by the ordinary people of country and
earn profit whereas; non-profitable organisations (NPO) do not receive any kinds of profit or
loss (Bahand Fang 2015, p.170).
2.0 Scope of venture
The scope of the organisation helps to determine the subject matter of the venture that can
increase profit in the contemporary market. In case of GSK, their scope is that they are able
to expand their business in the world.
2.1 Identification of the factors that can determine the organisation’s
size
Important factors that can determine the size of the organisation are followed by-
 Entrepreneurial ability
 Labour availability
 Market extension
 Business nature
 Finance availability

Entrepreneurial ability: It reflects the skills, resourcefulness, and initiatives of the
organisations (Belás et al. 2015, 97). In case of GSK, the skill of employees helps to expand
business in the world.
Financial availability: The financial profit helps to increase the size of the venture. As GSK
is able to increase their sales, it assists to develop their size of venture.
2.2 Medium and small sized enterprise (SME)
Small and medium sized enterprises (SME) are independent firm and the owner can recruit
employees less than 250 employees. Their annual turnover is within 50 million euro and
annual total of balance sheet is within 43 million euro (stats.oecd.org, 2014).
a) Importance of SME
SME helps to uplift the economic standard of the country. In UK, 99.9% are medium or small
size business, it helps to develop the economic condition of UK (stats.oecd.org, 2014).
Figure 4: SME in UK
(Source: stats.oecd.org, 2014)
2.3 Different organisation’s scope
Local company
It is able to know the requirement of customers in local area for earning profit.
National company
The authority of national company tries to sell the benefitted package for developing
economic condition of country.
Multinational company
It helps to develop the economic condition many countries by running their business.
Global company
Global companies are able to operate more than one country for increasing profit.

International company
Online transaction is considered as the scope for the international company.
2.4 Analysis and explanation about the objectives of ventures, based
on size, structure and scope of the venture
Structure
The effective structure of ventures helps to achieve their objectives appropriately. In case of
GSK, as they follow divisional structure, it brings positive outcome.
Scope
The organisations need understand their scope for fulfilling their objectives. In case of GSK,
as they are well known organisation, it is considered as their scope.
Size
The organisations need to set their objectives maintaining their size. In case of GSK, as they
provide worldwide service, the authority can set long term objective. For the medium
venture, it is not possible to provide service. Hence, structure effects on the objectives of
venture.
2.5 Functions of the organization
a) Importance of organizational function
Organizational function depends on-
 Co-ordination
 Clarifies authority
 Specialization
 Effective administration
If the employees can work in the cooperative way, the authority can increase the production.
However, if the organizations do their work in the specialise way, it helps to improve
working procedure of the venture.
b) Structure of the organization
As mentioned by Belás et al. (2015, p.95), the organizational structure is a system, based on
which, the hierarchy is defined. It helps to describe the job role, its function of the employees
effectively. In case GSK, they follow the divisional structure for running business in the
appropriate way.

Figure 5: GSK’s organizational structure
(Source: gsk.com, 2017)
c) Organizational structure’s type
 Functional structure- When people do the same task in the venture is called
functional structure.
 Divisional structure- When organization create inter group for different task, is
called divisional structure.
 Project organization structure- The team needs to understand the products quality
and manufacture it appropriately.
 Matrix structure- In this structure, employees need to take responsibilities in time of
working. The team needs to be innovative and creative.
d) Organisational Structure Glaxo SmithKline plc’s structure (GSK)
The organisational structure determines the operational activities of any organisation which is
evident from the above discussion. This is applicable in the context of GlaxoSmith plc (GSK)
as the organisational structure of this company is going to determine the execution of the
different strategies in the different sections of the organisation. This is directly related to the
organisational objective of the GlaxoSmith plc (GSK) which is to provide quality products
and services and achieve competitive advantage within the industry. The gaols and the targets
that are related to the achievement of the organisation can be achieved only through the
proper implication of the strategies developed as per the requirements. The organisational
function is related or rather dependent on the organisational structure includes the different
sections and functional departments. All the different departments operate differently in
different levels which are driven to the achievement of the same shared goal. The advantages
and the disadvantages will be mentioned hereafter so as to emphasis more on the
interrelationship of the duo.

As GSK follows cooperative functions, it helps to bring positive outcome in the market. As
their motto is to develop their product quality, cooperative function brings positive impact.
Advantages and disadvantages
As GSK follows divisional structure, it helps to increase productivity of the venture. It is
considered as the advantage of the venture.
As they follow divisional structure, many a times, they are not able to get appropriate
information. Hence, it leaves effect in the business of GSK. This is considered as
disadvantage of the organizational structure.
Task 2
3.0 Introduction
Microenvironment is a surrounding in a business that may affect the performance in the
business that involves suppliers, internal environment, customers, and competitors and so on.
With the assistance of microenvironment analysis, this venture will be able to analyze the
process by which customers can be served so that better outcome can be ascertained. The
business has numerous competitors like Abbott and 3M in the market that is leading to
change the scenario of business (Kim et al. 2013, p.45). That is why, customers retention is
very necessary to sustain competition in market.
LO3 Analysis of PESTEL
Macro environment factor like political, social and many more factors influences business
environment that leads to bring a change in the processes of trade and commerce. This will
help to grab more customers towards their product.
Political  The tax rate of high-income group in
UK has been reduced to 50%.
 UK is one of the important nation that
applies law rule, corruption control
and government effectiveness.
Economic  UK interest rate has grown up in 2008
after the inflation report of BOE. They
have raised the expectations of the
financial market to deliver the report
before the end of the year.
 The inflation rate has increased in
2007 and has again reduced to 3.72%
in 2015. This reduced graph continued
for a long time.
Social  It has been found that the standard of
living for the UK people has risen
from the US people for the first time

in the last 100 years.
 The education venture in UK is known
to be standard. Most of the people in
UK are qualified and are recognized
all over the world.
Technological  UK is very advanced in the world of
technology and telecommunication.
The infrastructure of telephone
involves a system of fibre optics. The
mobile market has rapidly grown in
the year between 2004 and 2012.
 It has been found that broadcasting
and the network service of telephone
has made more than 50 billion $
profit. The users of internet
connection are tremendously
increasing with a growth rate of
36.2%.
Legal  In respect to labour law, 48 hours is
the maximum working hours in 7 days
that includes 11 hours in every 24
hours period.
Environmental  The government department that is
Defra is responsible for controlling the
food industry in UK. It is responsible
for motivating the public to live in an
environmental society.
Figure 6: PESTLE analysis
(Source: learner)
GlaxoSmithKline plc has organized all the positive and negative impacts of the above
mentioned in the most effective way. This has led to add more efficiency in the business of
GSK. It has help to understand the overall business environment and help to maintain the
overall structure of the organization. Pestle analysis has helped the owner of GSK to develop
strategic and external thinking.
Bah and Fang (2015, p.159) has mentioned that the environment where process of buying and
selling a product is done is termed as macro environment. It encourages the company to serve
the customers the best medicines and treatment in the organization. Macro environment help
to control the events and performance of the company. The factors of macro environment
involve globalization, demographical technologies and so on. It helps to influence the health
of the company in the entire economy.

Importance of the environment analysis of macro
Macro environment help a business to expand by improving the economic, social and
technological factors. Technology improvement like use of internet in the company for online
transaction of bills and other necessary items has improved the environment and has also help
to do all the work in a short span of time. The laws and other policies that are implemented in
the company have developed a number of positive affect. The economic and other factors
should be looked out as high tax and price can led to the decrease of consumers towards their
company.
Evaluation of Impacts in macro and micro factors for getting success
in venture
Belás et al. (2014, p.22) has stated that Micro and macro factors has a great impact in
enhancing the health of the organization. Micro environmental components like suppliers,
customers and so on are the focus of the company. Suppliers help to control the victory of the
business. They are considered to be the power of the company. It is important to target the
appropriate customers in the business because they are the one who help to gain profit in the
organization. Microenvironment and microenvironment both have a significant impact in the
success of the company. These factors must be considered for making the appropriate
decision. This help to maintain the status and image of the company.
LO4 SWOT analysis
Strengths
· Omnipresence all over the world is a
major strength of GSK
· Rate of sales is very high for this entity
Weaknesses
· Fraud allegations have adversely
affected the image of the venture
· Immense of competition in market has
influenced the rate of sales recently
Opportunities
· New innovative products launching is
impacting largely
· Demand is getting enhanced among
people
Threats
· Competition in pharmaceutical sector
has been enlarged recently.
· Pricing strategy might impact the
business extensively
Figure 7: SWOT analysis
(Source: learner)
Analysis

The organization has evaluated all the strength and weakness of their company that has
helped them to enhance their business in a more effective way. This analysis has helped the
company to recognize their targeted customers. It has also help to analysis the main
competitors of their business. This analysis has done to achieve the operational and
organizational goal.