Business and the Business Environment

This document provides an overview of the different types and purposes of organizations, the size and scope of different types of organizations, the relationship between organizational functions and objectives, and the positive and negative impacts of the macro environment on business operations. It also includes a case study of Cyclacel Pharmaceutical Inc., National Health Services, and BTS Group Holdings Public Company Limited.

Business and the
Business environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Different types and purpose of organisation .........................................................................1
P2 Explain the size and scope of different type of organisation ................................................2
P3 Explain the relationship between different type of organisational functions and the way
they link to the organisational objectives and structure .............................................................3
P4 Positive and negative impacts the macro environment has upon business operation ...........4
P5 Internal and External analysis of the specific organisation in order to identify the strengths
and weaknesses...........................................................................................................................7
P6 Explain how strengths and weaknesses interrelate with external macro factors ..................9
Conclusion ....................................................................................................................................11
References .....................................................................................................................................12

INTRODUCTION
Business and the business environment consist of such factors which helps the
organisation understand about how the business environment impact the changes that took place
in an organisation. The business and the business environment including all the internal and the
external factors which affect the functioning of the company including employees, customers,
supply management and regulations of the business. The discussion includes three different type
of organisation including private, public and voluntary organisation which has a different size,
scope and effective areas, the relationship between different organisational functions and their
link to objectives and goals. The report also includes positive and negative impact of macro
environment. The internal and external analysis of the specific organisation in order to identify
the strengths and weaknesses (Fang and et. al., 2018).
At last, the explanation on how the strengths and weaknesses interrelate with the external
macro factors. United Kingdom based private organisation is Cyclacel Pharmaceutical Inc.
which is biotechnology firm of United Kingdom from Scotland specialised in cancer drugs and
treatments. In 1996, the Cyclacel was founded by David Lane and Merlin Ventures. United
Kingdom based public organisation is National health services which was founded in 1948 and it
is known to be a publicly-funded healthcare systems of the country. United Kingdom based
Voluntary organisation is BTS Group Holdings Public company limited.
P1 Different types and purpose of organisation
Private organisation: It is a type of business organisation that helps in partnership, corporation,
agency and person which is only made for maximising the profit because it is founder owned
company. The private organisation includes all such businesses that are only made for profit
maximisation rather than operated by the government. It is known to be a limited liability
company and useful in establishing, maintaining and operated in a foreign trade zone. In relation
with the Cyclacel pharmaceutical company is a firm based on Scotland. The only purpose of this
organisation is to give the best medicine facilities and achieve success in terms of maximising
the profit more than anything (Liébana-Cabanis and et. al., 2018).
Public organisation: It is a special part of the government sector. The public organisations are
completely non-profit based and the only purpose of such organisation is to attain maximum
benefits to the people. These are such type of enterprises or agencies which is useful in
delivering the goods, services, public programs and operate with a partial degree of government.
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However in most of the cases, the government is seems out to be a major shareholders and these
enterprises follow the acts and regulations that govern the core government. In relation with the
National Health Services is one of the publicly funded healthcare systems of the United
Kingdom. The company was founded in 1948 and it is funded out of the general taxation.
Voluntary organisation: It seems out to be a generic term which refers to a specific type of
organisation and it is referred to a non-profit organisation. NGOs are a great example of the
voluntary organisation. Voluntary organisation emphasizes the fact that citizens remains freely
from these organisation and so, they are autonomous, independent of both the government and
the market. It is a third type of organisation which does not examine on the basis of private
organisation in terms of maximising the profit and there is no impact of the government in such
type of voluntary organisation. In relation with the BTS PLC is one of the public company that
headquartered in Bangkok but a large size of the company remain in UK.
Legal structures: A legal structure of a business organisation or a business form, the choices
includes partnerships, sole proprietorships, corporations, non-profit and co-operatives. The legal
structure of an organisation is very important because helps the run in any type of business
organisation including private, public and voluntary.
Sole proprietorships: It is a legal structure which is owned and operated by the single owner. A
sole proprietorship is a good option to have a complete control of the business. They are liable
for the business liabilities, debt and losses. It can be also suggested that if business will go in
debt then personal assets will be completely in a risk.
Partnerships: It is a legal structure which helps the organisation to act according to the
partnership in which two or more than owners have been involved.
Corporation: A corporation are completely separate from the owner. The corporation has a
strongest protection from the personal liability. It is a good option to expand business and
shareholders. The corporations require extensive record keeping and reporting.
Limited liability company: It includes liability protection without any double taxation.
P2 Explain the size and scope of different type of organisation
Private organisation Public organisation Voluntary organisation
Size In relation with the
Cyclacel, the size of
Generally, the size of
the public organisation
The size of the
voluntary organisation
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the organisation is
systematically
determine on the basis
of number of
employees. The size of
private organisation is
broader.
is quiet large. in 5.4% of the
country's gross
domestic product.
Scope The major scope of
private organisation is
to maximise the profit.
The major scope of the
public organisation is
to help the human
beings to diligently
work.
The major scope of the
voluntary organisation
is to increase the
variety of groups and
they are not
necessarily registered
with the charities.
P3 Explain the relationship between different type of organisational functions and the way
they link to the organisational objectives and structure
An organisational functions or some sort of business function is seems out to be a core
process or the set of various activities that carried out within a department or various areas of a
company. Some sort of common functions included in the organisational and business functions
are human resources, marketing, information technology, customer services, finance and many
others.
Front office functions: The front end or the front office organisation are those which are
directly linked and connected with the consumers. Customer services, marketing and sales are
resulted and included in the front office functions. The department research and developing
solutions helps in promoting the target prospects and provide consumer services to drive the
relationships. Front office functions are known to be a revenue generating activities in a
business. The leaders of the company significantly allocated the budgets to these departments.
Back office functions: These are those functions that support the front office functions. It sector,
HR and finance and warehousing are all included in this category. These are the functions which
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are quiet important for the success of an organisation but they tend to receive less public
recognition. Managers of the back office department defend the value of their teams and it
provide internally to secure equitable compensation and the funding is quiet adequate.
The relationship between front office and the back office, states that the staff members of
the front office are the folks in contact with the consumers or clients, or while the back office
staff are the people behind the scenes working in the supportive roles and in the administration.
The different type of organisation functions are all interlinked with each other on the basis of
core process or some set of activities that carried out within areas of the company and the
department of a company. Some of the common functions other than back office and front office
are the relationship between stakeholders. The results of this study, in general, are the support of
both the positive role of trust and the social capital which is useful in achieving the desirable
outcomes of the organisation.
P4 Positive and negative impacts the macro environment has upon business operation
Macro environment are the conditions that exists in the economy as a whole, rather than in
a particular region or a sector. In general, the macro environment includes GDP (Gross Domestic
Product), employment, spending, inflation, monetary and the fiscal policy. The general business
cycle is closely related with the macro environment factor that opposed to the performance of
business sector of an individual. The macro-environment refers to the conditions of
macroeconomic in which a sector or a company operates to the best of ability by influencing the
performance. Macroeconomic deals with the aggregate performance, price level and spending in
an economy as compared to markets and various individual industries.
The amount of the macro environment's influence depends on how much of a company's
business is dependent on the health of the overall economy. Cyclical industries are heavily
influenced by the macro environment, while basic staple industries are less influenced. Industries
that are highly dependent on credit to finance purchases and business investments are strongly
influenced by changes in interest rates and global financial markets.
The macro-environment can also directly affect consumers’ ability and willingness to
spend. Luxury goods industries and big-ticket consumer goods can be highly impacted by
fluctuations in consumer spending. Consumers’ reactions to the broad macro-environment are
closely monitored by businesses and economists as a gauge for an economy’s health.
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Factors of the macro environment includes one of the important part of the strategic
management. The business organisation conducts a PESTEL analysis to identify some sort of
macro-economic factors which has a major effect in present scenario and can be in future. Some
major key infusing the macro environment are listed below.
Gross Domestic product: The country’s total output and production of goods and services
are all included in the gross domestic product. The GDP growth has been figuring in the report
analysis of Bureau economic analysis that initiate in the quarterly report which also provide a
broad overview of the good and services output across all the sectors. The influence of GDP is
corporate only in the corporate profits of an economy and it is known to be an another measure
of the economy’s productivity.
Inflation is the another factor which suggest that it includes ample number of economists,
investors, financers and consumers. The US dollar purchasing power has been affected and also
closely watched by the federal reserve. The annual inflation targeted almost federal reserve of
2%. However it can be also suggest that inflation is higher than the 2% and it significantly
diminishing the dollar purchasing power and that rises inflation and less valuability of each
dollar.
Employment is an important factor because it simply sustain the availability of workers to
work day and night with the best of ability. Employment are also known to be a major outreach
to implement a decision making process to the best of ability. The ample number of employment
levels that are measured by the bureau labour statistics suggest the unemployment report on daily
basis. Through credit measure and monetary policy, the federal reserve has been seeking to pay
business rolls of the employment level. It gives a great result in the growth of businesses on the
basis of improving the capital spending and the growth in business and resulted the growth of
employment.
The consumer spending is one of the major issue that makes up of 2/3 percent of the gross
dometic product to be important part under the factors of macro environment that impact the
business. The decline process or the probability of the slow growth shows a complete regime and
disputes of the consumer spending which also gives a result of declining in the aggregate
demand and the economists considered as one of the cause of downturn macroeconomic and
recessions.
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Monetary policy is one of the policy which indicates as one of the major and the most
important factor of the macro environment that impact the business organisation. These are such
type of policies which are typically centered around the access to credit and the rate of interest.
The federal interest rate is systematically shows as one of the major monetary tools. The
tightening of the monetary policy indicates the rising of rate, and making of the borrowings more
difficult to be taken.
Fiscal policy refers to the policy given by the government on the basis of taxes, spending
and borrowing. The tax rates which are quiet higher an easily able to reduce the business
incentives to work upon, investments and savings. The government’s size refers to the annual
deficit and the debt in total that can easily able to influence the demand expectation regarding the
tax rates in future, increasing inflation and overall stability of macroeconomic. The drives of
government stability helps in borrowing and taxation. It is also known to as one of the widely
used policy tool that helps in stimulation activity during the procedure of slow timings, the
spending of consumers and the investment of businesses at the time of recessions (Abusweilem
and Abualoush, 2019).
Advantages of the macro environment on the business organisation
Clear vision: One of the most sort of advantage of the macro environment state that it
gives the proper clarity and a systematic vision in the organisation, so the there is a proper
growth of businesses and they work to the best of ability. Having a clear vision gives a proper
decision making process with the plan and procedures.
A simultaneous growth: The business organisation can have various fundamental
possibility of the fluctuation is a business asset but have a fundamental growth in which the
business can maximise a huge number of profit.
Identification of threat: One of the major reason of macro environment factor must
happen in the business organisation to identify and properly signify the upcoming threats and
procedures. It also helps in various strategies to be developed on an early warming system so that
preventing of the threats is easily possible.
The market place review: From understanding and knowing about the macro
environment factors helps the organisation so that they should be aware about the happenings of
market place. If the company has been by chance fails in adjusting the strategies, then by
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knowing the market happenings and review, the marketers of business organisation can easily
make a good and valid strategy rapidly.
Disadvantages of the macro environment on the business organisation
1. Lack of Forewarning of Unforeseen Events
Environmental analysis does not predict the future. It does not eliminate uncertainty for the
organization also. Business enterprises sometimes face events, which are unexpected during
analysis. Environmental analysis, however, should aim at minimizing the frequency and extent
of surprises that may attack a business organization.
2. No Assurance as to Organization Effectiveness
Environmental analysis does not ensure organizational effectiveness. It acts only as inputs in
strategy development and testing. Sometimes, managers place uncritical faith in the data without
thinking about the data’s verifiability or accuracy. If this is the case, it may lead to misleading
outcome.
3. Not fully Reliable
Normally, people place too much reliance on the information collected through environmental
scanning. But in practice, it is not so. When there is overloading of information, one is likely to
get confused.
4. Absence of Strategic Approach
Success of any organization lies in adventure and strategic risk-taking. Environmental analysis
often makes an individual too cautious in his approach and he is likely to be left behind the
events. So this analysis should be strategically done (Wei, Thurasamy and Popa, 2018).
P5 Internal and External analysis of the specific organisation in order to identify the
strengths and weaknesses
The specific chosen organisation is National health services which is a publicly funded
company of the United Kingdom and it was founded in 1948 which have been funded out of the
general taxation. In United Kingdom itself, NHS has three branches including in the Scotland,
Wales and Northern Ireland. The internal and external analysis can be possible on the basis of
PESTEL and SWOT. PESTEL analysis can be useful in understanding of the macro environment
factor that impact the organisation and SWOT analysis is useful in understanding the internal
strengths, weaknesses, opportunities and threats of the organisation which helps in understanding
the plan and procedure so that the organisation will attain maximum profits and benefits.
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PESTEL analysis of National health services.
Political factor: It refers to such type of factors in which there is a government
interventions. The political factors can be possible on the basis of ample number of politicians
intervention in the organisation NHS which negatively impact the company on the basis of
decision-making process and further plan and procedures (Ungerer and Mienie, 2018).
Economic factor: These are those factors which includes the essential components which
has a impact on the organisation. Inflation rate, cost effectiveness, demand and supply are all
included in the economic factors of the organisation. In relation with the National Health
Services, sometimes in fluctuations in inflation rate can simply impact the organisation.
Social factor: These are those factors that has a impact of social causes that took place in
the society. Such components which have been included in the social factors are gender, caste
and many others. Sometimes the policies that are made earlier gives a huge impact on the
organisation National Health services. Suppose taking an example, the impact of poor people and
gender differences has a great components of social factor in the organisation.
Technological factor: These are those factors which includes all the technological
advancement which has a greater impact in the organisation. In relation with the National healths
services, the technological factors includes all the advance technologies to increase the profit of
medicines in the organisation, so that the company will attain maximum benefits.
Environmental factor: It refers to such factors which has a huge impact of the natural
calamities and resources. Sometimes the pollution of the society and the waste material has
largely impacted the organisation because it is one of the most direct involved and impact in the
health factor.
legal factor: There are those factors which include all the government laws. Rules and
regulations of the organisation which impact the organisation. In relation with the National
Health Services, the earlier made laws and regulations given by the government including every
human must have all the receive medicines on reasonable rates, there must be a reduction in
poverty and many others.
SWOT (Strengths, Weaknesses, Opportunities, Threats) of National Health services.
Strengths of the National Health Services
 Reputation of the organisation.
 Technological aspects are really good and gives a major potential
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 Cost effectiveness gives a major positive impact in the organisation
Weaknesses of the National Health Services
 There are very less and limited service lines
 There are quiet difficult marketing deficiencies Staff problem is a huge issue of this organisation because the salary of the employees are
very low
Opportunities of the National Health Services
 The new technological advancement abilities that helps the organisation in increasing and
maximising the profits
 There is no dominant competition due to which National Health Services can be able to
increase maximum profit (Abdelaziz, Alaya and Dey, 2018). There are new market available so that the organisation have to broader their services
Threats of the National Health Services
 There are so many public as well as voluntary organisation including other public
organisation of pharmaceutical company which increases the competition of the National
Health Services
 Insurance plan changes
 The demographic changes are quiet adverse economic slowdown
The above internal analysis of the National health services helps the organisation in
gaining maximum profit and work to the best of ability.
P6 Explain how strengths and weaknesses interrelate with external macro factors
The strength and weaknesses of the organisation are directly linked with the macro factor
because in some of the cases National health services can be affected by the factors which are
external. Organisation or the company many not be able to identify the external factors that
affect the decision making process and related plan and procedures indirectly and directly.
The macro factors are simply identify on the basis of external macro factors analysis. The
strengths and opportunities of the organisation helps the company to understand the major
factors and effectiveness of the organisation (Nadeem and et. al., 2018).
The effective analysis of the two different kind of factors achieved the business
organisation. It can be also suggested that strengths and weaknesses are completely related with
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the external macro factors in the organisation. The factors that are related with the macro
environment or external factors can eventually affect the organisation on the basis of outside
boundaries and it can be possible on the basis of the positive and negative segments. The factors
which are external based are completely analysed in an organisation on the basis of PESTEL
analysis including the political, economical, social, technological, environmental and legal
factors (De Souza, De Mello and Marx, 2019).
The political factors can simply affect the organisation in a political way including the
pressure of government in the organisation by which it rapidly increases the weaknesses of the
businesses. The social factors are have a weakness in the businesses in terms of CSR
responsibility of the organisation which is quiet liable in understanding of the social activities. It
is a duty of every business and organisation to increase the social responsibility and in the
financial terms in can be weaknesses as well. The PESTEL analysis helps the organisation
National Health Services to have a suitable alternative way in order to overcome with the various
hurdles. The external factors including number of market changes, the policies of the
government, legal rules and the regulations.
External Factors Strengths Weaknesses
Political factors The major strength of the
political factor in relation the
National Health Services is the
government sponsorship and
opportunities.
The weaknesses of the
political factors including
those politicians who
sponsored in the National
health services are also force
their ideas in the decision
making process.
Economic factors National health services have a
direct impact of economic
growth and sustainability.
Rate of change in inflation is a
huge economic factor which is
weakness of NHS as well.
Social factors Government policies and
regulations that are made
earlier for the development of
the society is the important
Lot of cost and time consume
because there is no profit.
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aspect in the social factor.
Technological factors NHS uses advance
technologies due to which
medicines are made
significantly and properly.
The use of advance
technologies increase lot of
cost and impact of NHS
because it is a non profit
organisation.
Environmental factors Environmental updates can be
earlier heard by the
organisation NHS from which
implementation of the plans
and procedures are quiet easy.
Lot of waste and pollution
gives a negative impact in the
organisation.
Legal factors Rules and the regulations gives
a major impact towards the
plan and procedures of the
organisation. It runs more
effectively and significantly.
Sometimes the rules and
regulations of the government
is a huge pressure in the
organisation.
Conclusion
The above discussion concludes that there are three different type of business
organisation including public, private and voluntary. The above discussion has been chosen three
different type of organisation as well. For public-NHS organisation, for private-Cyclacel
organisation and for the voluntary-BTS Group Holdings Public company limited and these three
have its different size and scope. Positive and the negative impact of the macro environment
have been listed above. The PESTEL analysis and the SWOT analysis have been listed above
which are useful in analysing the decision-making process of the organisation. Also, the repost
includes interrelation between the external factors with strengths and weaknesses of the
organisation NHS.
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