Impact of Economic and Non-economic Environment on Organizational Behaviour

TASK DESCRIPTION-
PROJECT 1

Table of Contents
1. INTRODUCTION.......................................................................................................................3
1.1 Company overview................................................................................................................3
2. LITERATURE REVIEW-...........................................................................................................3
2.1 Economic environment and its impact on organizational behaviour.........................................3
2.1.1 Economic policies...............................................................................................................3
2.1.2 Economic systems...............................................................................................................4
2.1.3 Economic conditions...........................................................................................................5
2.2 Non-economic environment and how its shapes organizational behaviour...............................5
2.2.1 Natural environment...........................................................................................................5
2.2.2 Demographics.....................................................................................................................7
2.2.3 Cultural...............................................................................................................................8
3. Discussion....................................................................................................................................8
3.1 SWOT Analysis.....................................................................................................................8
3.2 PESTLE Analysis..................................................................................................................8
4. CONCLUSION..........................................................................................................................10
REFERENCES..............................................................................................................................11

1. INTRODUCTION
Organizational behaviour (OB) is the study of human performance, their nature and
attitudes, it is considered as study of what individual do in firm and how its behaviour affects
productivity of business (Barry and Wilkinson, 2016). It is learning of group performance and
activities within company, that affect profitability and operational efficiency. In other words,
organization behaviour is included two different terms, organization and behaviour. There are
different aspects of this concept which has to deal with, to know performance of specific firm.
Some fundamental aspects of OB is people, structure, technology and environment. The current
report explain economic environment and its impact on organizational, non-economic
environment that shapes organizational behaviour and also clarified SWOT as well as PESTLE
analysis.
1.1 Company overview
This study is based on Sainsbury company located in UK and known as one of the
biggest supermarket chain in all around the world. They are able to offer great quality of
products to its consumers that help in generating revenue. This firm is founded by John James
Sainsbury, they grow to become one of the biggest food retailers in UK with over 600
supermarkets, nearly 250,000 online orders every week and 800 convenience stores. In 2019,
organization market share sits at 15.3%, this is marginal dip as compared to last years when it
had 15.4% of UK grocery market. The sales of company compared to same period a year earlier
was shrunk by 2.3%. Sainsbury generate revenue more than 29.007 billion and its operating
income is 312 million.
Firm survive in high competitive environment, due to increasing and existing number of
its competitors, who give tough competition to Sainsbury. It includes Asda, Morrisons, Boots,
Tesco, ALDI, Amazon and Debenhams, they all are considered as top 7 competitors of firm.
With 116,400 number of staff, organization sustain in retail market, they had 16.0% share of
supermarket sector.
2. LITERATURE REVIEW-
2.1 Economic environment and its impact on organizational behaviour
2.1.1 Economic policies
According to the Rubio, (2019) economic environment refers to all economic factors that
impact on company performance and its behaviour. Economic policies is the course of action

that intended to control or influence behaviour and functions of firm. Under this, consumer laws
affect organizational behaviour, under this law, customers are entitles to free of charge
replacement, refund or discount by seller, consumers law includes all the statutes and regulations
that seek to create more equitable balance for buyers in marketplace and secure sellers from
using dishonest strategies. It affects positively on organizational behaviour because firms already
coincide with provision of law and offer quality products to its consumers that reduce chances of
any negative complain against business. In UK, consumer law protect people right, and they all
relied on laws that protected consumers of services and products.
On the other hand, Brühl, (2018) highlighted that Brexit regulations is one of the factor
that directly affect organization operations management and business performance negatively.
Brexit refers to the UK leaving EU, it makes changes in trading and transportation regulations
and rules that negatively affect organizational behaviour as profits margin plunge more than past
few years. When UK leaves European Union there are many changes to happened for placing
come products of retails sector on UK and EU markets. It directly impacts on trading and
transportation function of firms. To sell products to consumers in EU companies has to pay high
amount of taxes that impact on their profit margin and operational efficiencies negatively. It
creates the level of uncertainty, and also create difficulty situations for retail industry
organization in UK to how to operate its business in other nation after Brexit.
2.1.2 Economic systems
Discussed by Clayton and Radcliffe, (2018) economic systems are means by which
nations and governments distribute resources and trade services & products. Trade policy is
included in economic system, refer to imposition of import traffics on imports and exports of
certain goods as well as subsides for local producers to aid them against global competition. It
has been pivotal to UK economy, the sum value of exports & imports represents mostly half
nations GDP. But after Brexit the system and rules of trading has been changed which affect
Sainsbury and other firms who are operating in UK retail industry since for so long. In order to
delivery and supply products from other nations, firm has to pay extra amount due to changes in
trading system that decrease current profit margin and increase level of efforts they had to be
done for trading effectively.
Golmohammadi and Hassini, (2020) stated that supply & demand impact on
organizational behaviour negatively. Every firm provides its services and products to consumers