The Business Environment - Organisation Structures

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1)Different types of organisations...............................................................................................3
2) Size and scope of the organisations........................................................................................5
3)Organisation structures and functions......................................................................................6
PART 2............................................................................................................................................8
a) PESTEL analysis.....................................................................................................................8
b) SWOT/TOWS analysis and Porter’s five forces analysis of the supermarket......................9
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment is the combination of internal and external factors which affect
company functions including customers, employees, management, demand & supply and
regulation of business. It helps in identifying business opportunities, coping with changes,
assistance in planning. Here will be discussing about different types and purpose of organisation
along with size and scope of range. The relationship between functions which link to objective
and structure of firm. The report explaining positive and negative impact of macro environment
on operations. There are internal and external analysis for organisation to identify strength and
weaknesses. Every organisation study business environment thoroughly for achieving goal and
objective set along with sustainability and success. In this three organisation are chosen
according to report but mainly focused on Marks and Spencer. (Andersson, Forsgren and Holm,
2015).
PART 1
1)Different types of organisations
Differences between profit, not for profit and non-governmental organisations (NGOs)
Organisation is entity consist of multiple people, such as association or institution which
has particular purpose. It is process for defining and grouping activities of enterprises and
establishing authority relationship. There are different types of organisations such as:
Basis for Comparison Profit Organisations Not for profit
Organisation
Non- governmental
organisations (NGOs)
Meaning A legal entity which is
operating for earning
profit for owner is
called profit
organisation.
A legal entity which is
operating for serving
society as whole is
called non profit
organisation.
It is formed by
ordinary citizens
which operates
autonomously by
government.
Motive Its main motive is
profit making
(Babatunde and
Adebisi, 2012).
Its main motive is
providing service.
Its main motive is to
work for betterment of
society and economy
which brings

awareness for women
empowerment and
human rights.
Source of revenue The revenue is earned
from selling of goods
and services.
The revenue is earned
through donations,
membership fee,
subscription.
The revenue is earned
through running of
different NGOs.
Commenced through It is commenced
through capital
contributed by owners.
It is commenced
through funds from
donation, government
grants, subscription.
It is commerced
through saving of
money by individual
and capital taken from
individuals.
Example The example of profit
organisation is Marks
and Spencer.
The example of non
profit organisation is
fair ways
The example of NGO
in UK is Oxfam.
Business purpose and supply of goods and services
The business purpose and supply of goods and services are as follow:
Particular Marks and Spencer Fair ways Oxfam
Business Purpose The purpose of Marks
and Spencer is to
improve customers
and partners
experience, inspire and
engage large number
of people for visiting
shop worldwide.
The purpose of
Fairways is to
improving safety of
navigations where
traffic density is high
or is restricted (Belás,
and et. al., 2015).
The business purpose
of Oxfam is to help by
creating solutions to
injustice of poverty.
As it part of global
movement for change
which empowers
individual to create
future that is just,
secure and poverty

free.
Supply of goods and
service
Its products are selling
of home products,
luxury food items and
clothing.
Its goods and services
are dealing in
supermarket.
The services are
helping poor people
and poverty
alleviation.
2) Size and scope of the organisations
Difference between micro, small, medium-size and large enterprises
Micro enterprise is a small business that contains small number of employees. There
should be 10-20 employees for the business. Under this enterprises venders, carpenters, peasant
farmers and machine shop operates are include. These businesses help in economic growth,
social responsibility and equity. The annual turnover of these kind of enterprise should be not
more then €2million. These are non government enterprise (Boons and Lüdeke-Freund, 2013).
Small enterprise or businesses are owned by private corporations, partnerships and sole
proprietorships. There should be 21-50 employees. The annual turnover of these companies
should be €10million. These enterprises are work for self employment.
Medium sized enterprise are defined as in this enterprise the number of employees should
be 51-200. And the turnover should be €50millon. These enterprise have a benefit of mobility
over larger company.
Large enterprise involves large scale of corporate control they provide emplacement. In
this enterprise 250 to more employees should be under these enterprises. These enterprise has
annual turnover grater than 1.5bn.
Market share, profit share, growth and sustainability
Market share, profit share, growth and sustainability is depend on the enterprises or
companies size and its business. Micro companies are too small rather then small , medium and
large enterprises and the number of employees are also less the market share and profit depend
on their business. The business of these enterprise is carpenters, peasant farmers and machine
shop and the turnover is not much high of these kind of companies business. Small enterprise are
not much small like micro. For market share these business attract consumers by social and

environmental values. For profit share they provide product according the requirements of
society and environment. For the growth make plan and use strategies in their businesses. These
enterprises are made those products which can easily fulfil the demand and needs of the
customers so that can make sustainability on the market by providing the good quality products.
The small companies are not sometimes sustainable when they do not designed for corporation.
3)Organisation structures and functions
Different kinds of structures relating to size and scope of operations
There are 3 types of organisation structure such as functional structure, divisional
structure and matrix structure (Carroll and Buchholtz, 2014). Functional structure is based on the
companies specific tasks and roles. In this structure there is a common goal and organisation is
divided in to smaller groups and they work for achieving that common goal. M&S follow a
hierarchical functional organisational structure because it is large in size. In this organisation the
organisation divide in small groups. The CEO is the head of the department. He divided its
employees in different groups these groups are different department of the organisation like
marketing department, finance and HR department. These all are help in the growth of the
organisation.
Oxfam use a flat organisational structure because there not much employees because this
is not a large company and the employees number is less and they paid their employees not much
their cost would be much lower. Fair ways is not a large enterprise it is a foundation. It provide
care and offering to families and the children according their needs. It is also flat structure
because it not so much big in the size as much M&S (Charter, 2017).
Complexities of transnational, international and global organisation structures
Complexity means hurdles and briers or problems which is faced by a company on a
international, transnational and global market. M&S a big company and follow functional
organisation structure. When it face import and export issues. And in finance, the exporter and
importer have no investment outside of their home country. It is a big complexity which is face
by the company in its business. If the company have invested and are available in various
country, it is done by global companies. It create impact on volume, cost management and
efficiency.Transnational companies face many complex because they invest in foreign
operations. They have a central corporate facility but provide foreign market research and
development, marketing power.

Oxfam and fairways are not much big organisation as M&S. But they face complexity
related to economy of that company, complexity in that system which the company adapted. The
complexity in the system is individuals behaviour, related to plan and strategies which the
company follow. The issues for company can be related the society and product which can be
internationally, transactionally an globally (Chen, Chiang and Storey, 2012).
Overall organisation mission and objectives
Vision is an idea and a plan which a company want to convert and plan to make them in
reality. It can be a dream of some one related to start a business and a product. Mission is an
important task which the company provide to its employees. It not a simple description of an
organisation by an external factor. Objective is that for which a company plan to achieve it. It
can be related the product and organisation growth.
The mission statement of M&S is make inspirational quality of the products which are
accessible for to others. The selling strategies of M&S attract the consumers which help in
achieving its mission. Corporate Vision statement of M&S is inspire emotion and reflects the
values of the consumers and it guides decision making and strategy. The vision of the company
is to crate a best image in the mind of the consumer so that they provide best services to their
customers. M&S objective is to regain their leadership in clothing and speciality food. It can
achieve its objectives by providing superior quality, value and appeal.
Oxfam vision is to make the world without poverty where people are have value and
treated equally. And they can use their rights and enjoy their life. Mission of Oxfam is to
provide solution for the poverty. They are doing work for removing the globally and locally
poverty. The objective of Oxfam is every person have right to live a life which is poverty free.
Fairways mission is to provide the high standers of the care for all the customers and their
families. Vision of Oxfam is providing security to the consumers rights and assisting people to
resolve their problem. Objective of Oxfam is providing better services to the customers to make
their trust by providing their fair and good services (Cohen and Kietzmann, 2014).
PART 2
a) PESTEL analysis
PESTEL is a tool for doing strategic analysis and it acronym stand for political,
economical, social, technological, environmental and legal factors.

Political Factors: M&S has a large expansion and significance due to which it has
interruption of politics. The main reasons for interferences of the politics were its enforcement to
gain a positive impact of politics on business. In 2013 it was found that the company was forcing
workforce to contribute to republicans and is being positioned between the top 100 political
donors. Moreover, it has been affected by various political factors such as firmness in the areas
where company operate, doing corruption to an extent and many more.
Economic Factors: During the time of recession the people enforced to cut the costs
rates which led to drastic change in the businesses regard to profits and revenues and decline in
the economic slope of the company had stop the growth of the retailing industries . The changing
trends in economic has proven to give benefits to M&S, but the competition is also increasing as
most of the companies are competing for their share in the market. Along with small and reputed
US brands some of the non US brands are also launching their products in the market which can
be a threat for company (Crane and Matten, 2016.).
Social Factors: It includes the taste and preferences of the behaviour of customer which
will impact profitability of brands. The demographics of customer has declined from previous
years due to penetration for online shopping by more use digital technology and usage of smart
phones which is treated to be a disadvantage for M&S because they have still not entered the
online shopping world.
Technological Factors: Technological factors plays a vital role for M&S as technology
is required by the company at every level that is from marketing to HR management as well as
in management of supply chain. Company is investing in technologies to give satisfaction to the
customers and sop that they can experience a good shopping and are using this in an innovative
way to increase productivity and profit of company (Gupta, 2013).
Environmental Factors: M&S is concentrating on sourcing which is responsible to slow
down supply of chain and is aiming to reduce wastage of resources and bringing innovation in
packaging. Environmental factors are necessary because they help the brands to manage better
reputation and do consumption of energy and helping them save on sourcing and other areas
(Hilton and Platt, 2013).
Legal Factors: Retail industries requires various laws to indulge within organisation for
smooth running of business. Not abiding with rules and regulations will lead to decline of
reputation of company as reel as it will face a loss. M&S have faced many legal issues regarding

discrimination to low wages and it concentrates on making the environment peaceful and better
working conditions for workforce. Although give satisfaction to employees they still faces issues
related to labour within company. Legal factors are crucial because pressures due to laws does
not only affect the losses of business but also give financial losses to organisations.
b) SWOT/TOWS analysis and Porter’s five forces analysis of the supermarket
SWOT analysis of UK supermarket
SWOT analysis is used for evaluating company's competitive position by identifying
strength, weaknesses, opportunities and threats. It is assessment tool which measures
organisation use and find out potential.
Strengths- It is strength which contribute in achieving set objectives. It lies within the
company itself. It is attributes and resources internally which support fruitful outcome. M&S has
a clear brand image, create innovation in its products and make diversification in products.
Weaknesses- It is weaknesses of company or organisation which have negative impact on
achieving goal and objectives. It is also within firm which could be easily identifies. It is
resources and attributes which work against successful outcome. M&S have opened stores in
Asia but they are not achieve success because most of the designs are western and not traditional.
(Prajogo, 2016). the digest weakness is that it has poor scalability of the supply chain.
Opportunities- The new challenges and chances which are available in environment for
company. This is created outside organisation. It is capitalizing entity and using it as advantage.
M&S have various opportunities if it make its products according the country's culture because
in Asia, there is a huge demand for ethnic and traditional wear. If it manufacture its product
according the consumers needs and wants, it get more opportunities.
Threats- The possible obstacles which negatively influence organisation in market. The
threat of M&S are small scale/ individual online selling, aggressive competition and healthy
lifestyle trend. The big threats are competitors like GAP, Tommy Hilfiger and others.
Relation between strength and weakness of the organisation
In M&S it is related to the company's strength and weakness, the company target high
class people and it is the strength and weakness of the company. They make high quality product
and the prioce of these products are also high, it is strength in the context of quality but weakness
in the context of prices.
Porter's five force Analysis

It is an analysis tool that I used by the companies to determine the competition in the
market to find out the product value and their customer in the market. The UK supermarket is
very competitive and profitable for the product and the customers. There is a war between the
same product and services in the same market. In the UK market there are many same
companies which provide same product and services to their customers. M&S is a major British
multinational retailer company and in the UK market there are many other retailer companies
which are crate competition for M&S. UK supermarket is a good market to find out competition
and its competitors. M&s face many barriers and competition in this market. The five force of
Porter which help in the company to find their customers and competition in the market (Sena
Ferreira and et. al., 2012).
Threat of substitutes- In this force the customers are refers to the substitutes products
because in their the customers give preference to their need and money. 9If they find another
product and service at that cost then they did not loyal towards the past products. In UK market
if consumer get better services in cheap cost rather then M&S then they did not show their
loyalty towards it. In this the threat of substitute product and services is high.
Threat of new entry- In this force market is existing but the product is new so risk is high
for the new products and services because the product is new and no one is aware from it. In UK
market if the retailing company provide any new service in the market then it not sure that the
consumer will adept easily. Chance of failure is high in it.
Bargaining power of Buyer- In this there are more substitute products in the market so
there are various choice for the customers. The have a demand for a high quality product in low
price so the bargaining power of the consumer is high in this force. They can easily switch from
the product because of substitute. In M&S if it launch its new services then customer will not
adept them easily because they are sensitive for their price (Prajogo, 2016).
Bargaining power of supplier -Under this force the bargaining power of the supplier is
high because they want to sell the raw material on high price while the quality of the raw
material is low. This affect the companies or firms profit because they pay more for that
material. In UK supermarket if the suppliers will doing like that the company will go in the loss.
Rivalry among existing competitors- In this force there are mainly competitor in the
market and create barriers to the others. Customers are not also loyal towards the produce and
services cause of competitors. They can get and purchase services from others. In UK market

there are many relating companies which are the competitor for the M&S and many substitute
products which can replace M&S products.
CONCLUSION
In this report, different types of organisations are define and the difference between
profit, non profit and non governmental organisations are also define. M&S business purpose
and supply of goods and services are also explain. There arr focused on the size and scope of
micro, small , medium and large companies and their market share, profit, growth and
sustainability is also explained. The organisation structure and suctions related to overall
organisations and objectives are describe in the report. The pestle analysis, swot or potter's
analysis is also do for the UK supermarket and it is describe that how it influence the market.

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Macro Environment. 2018. [Online]. Available through:
<https://www.investopedia.com/terms/m/macro-environment.asp>.