Business and the Business Environment

This report discusses the impact of the business environment on organisations, focusing on the growth of the international business environment. It provides an overview of different types of organisations, including public, private, and voluntary, and explains the functions of each. The report also analyzes the interrelation between different business functions and discusses the advantages and disadvantages. Additionally, it identifies the positive and negative impacts of the macro environment on business operations, conducting an internal and external analysis of the chosen organisations.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1) Overview of different types of organisations and the growth of the international business
environment.................................................................................................................................1
2) Explanation of each of the chosen organisations....................................................................2
3) Different business functions of organisations and interrelate and analyse the advantages and
disadvantages..............................................................................................................................4
PART 2............................................................................................................................................6
1) Identify the positive and negative impacts the macro environment has upon business
operations....................................................................................................................................6
2) Conduct an internal and external analysis of the organisations in order to identify strengths
and weaknesses...........................................................................................................................7
3) Explain how the strengths and weaknesses identified interrelate with external macro factors
.....................................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is explained as factors and forces which impact on ability of
company to develop as well as maintain customer relationship in successful manner. It is sum of
all external and internal factors like consumer needs, wants, management, owners, staff
members, market trends etc. These all factors impact on functions of an organisation and how an
organisation work indirectly or directly (Aithal, 2017). This report is based on the Marks &
Spencer and it is a multinational retail organisation. It is specialised in selling the home products,
food items and high quality of clothing. In this report is going to discuss about various kinds as
well as purpose of different organisations. Relationship among the various organisational
functions and how the link to the organisational structure will be discuss here. There will be
SWOT analysis conducted to determine internal environment of company.
PART 1
1) Overview of different types of organisations and the growth of the international business
environment
Business environment means collection of people, entities and some of the other factors
which may not under control of company and develop negative as well as positive impact on
performance level, growth and profitability. Under this, there are different kinds of organisations
like public, private and voluntary. NHS is considered as public organisation, Marks & Spencer is
considered as private company and Oxfam is voluntary. These all organisations conduct its
business operations at international level.
Public organisations- The public sector organisations are mainly owned as well as
operated through government and also exist to give effective services for citizens. The public
organisations mainly consists healthcare, education etc. NHS is a public organisation and it
affiliated the health and social care in the Northern Ireland. It is publicly national healthcare
system and also provides the better healthcare services in all over the world. This company was
founded in year 1948. This supports delivery of the high- quality patient care by role in training
and development educating health workforce. At international level, NHS promote the healthcare
market and develop strong links with the international business, government and healthcare
providers (Avramenko, 2012).
Examples of some other public organisations are: BBC and Bank of England.

Private organisations- It refers to any person, corporation, associations which are not
publicly body and operated for earning the profit. Marks & Spencer is a multinational retail firm
that deals in providing the clothings, food items and home products. It was founded in year 1884
through Michael Marks & Thomas Spencer. This company conduct its business operations at
international level. It is leading retail groups with combined focus on food and clothings. Marks
& Spencer has 1463 stores across 47 countries. It has high growth rate in the international market
(About M&S, 2019).
Examples of Private organisations- ASDA, Sainsbury and Waitrose.
Voluntary organisations- It is group of people which enter into an agreement as
volunteers. They work for welfare of the society. Oxfam is a voluntary organisation and it is
independent charitable company that focusing on alleviation of the global poverty. It is non-
profit group with extensive operations (Berg and Kilambi, Siebel Systems Inc, 2014). It was
founded in year 1942 in Kenya. This organisation is global movement of the people which are
fighting an inequality to remove poverty. It campaigning the programs at foreign countries and it
has strong brand image at global level.
Examples of other Voluntary organisations- Save the Children and Wellcome Trust.
2) Explanation of each of the chosen organisations
There are different organisations within market and their main aim is to attaining the
specific aim and objectives with in given period of time. Different kind of organisations are
given below:
Public organisations- NHS is public organisation and it provides the healthcare services
in United Kingdom. This promote the healthcare sector to the overseas markets and also develop
strong connection with the international government, health care providers and business. Its aim
is to provide better support and improve care for the patients.
Services and Products- NHS provide the Healthcare services to people such as Nursing
Care, Medical Social Services etc.
Size- The size of NHS is large and in this organisation there are almost 1.4 million
employees are working.
Scope- Its scope can be identifies from services which are offered. NHS has different
functions for an instance dental care, optical care and basic medical facilities.

Vision and mission- Vision of NHS is to provide better health, care and value. Mission is
to give care services which people want to use.
Objectives- The main objective of NHS is to improve living of people. This organisation
is committed to give fair, sustainable effective use of the finite sources (Chi, 2015).
The purpose of NHS is to provide the better healthcare services and safe environment to
people so that they can recover quickly.
Legal structure- The legal structure of public organisations are given below:
Central Government: These are controlled as well as owned through central government.
State Government: Under this, organisations ate controlled through state government.
Local Authorities: In this, firms are controlled through the local government.
Stakeholders- These are the people which take interest in activities and operations of
business. The stakeholders of NHS are NHS Confederation, Clinical Commissions, Local
Government Associations, Association of Directors of Adult Social Services.
(SOURCE: Full details: New NHS England and Improvement structure)
Illustration 1: Organisational Structure of NHS

Private organisations- Marks & Spencer is multinational retail company that specialises in
selling the food items, quality clothing and home products (Craig and Campbell, 2012). This
company was established in year 1884 by Michael Marks and Thomas Spencer in Leeds.
Products and services- Marks & Spencer deals in food items, clothing and home
products.
Size- As Marks & Spencer is a large size organisation and in this organisation there are
large number of staff members working. It conduct its business operation at international level.
The stores of this company on around 1463 locations and almost 80, 787 staff members are
working.
Scope- It provides the wide range of the services and products to consumers at
international level. Company has the strong customer base and the quality of its products is high.
Vision and mission- Vision is “To making business successful at global level by
satisfying customers needs.” The mission of Marks & Spencer is to make the aspirational quality
that is accessible to each person by providing high quality goods.
Objectives- Its objective is to develop sustainable business by profitable growth and
assure to satisfy the needs and wants of people on the basis of their requirements.
The purpose of Marks & Spencer is to satisfy the customers needs and develop friendly
environment at stores.
Legal structure- Private company legal structure given below:
Sole- trader- It is single person business that found in trades where the small amount of
the finance is needed to set up the business. Sole trader faces the unlimited liability.
Partnership- It is an association of people which mainly consist the partners among 2 and
20. In this, each person is responsible for debts of partnership and share the profit or loss on
equal basis.
Public limited Company- These are small in size and owned through shareholders. In this
company, each shareholder should be part of business and do not sold the shares to members of
general public (Hillary, 2017).
Stakeholders- The stakeholders of Marks & Spencer are management, staff, shareholders
and owners.

Illustration 2: Organisational Structure of Marks & Spencer
(Source: Organisational Structure of Marks & Spencer, 2019)
Voluntary organisations- Oxfam is a voluntary firm and it was founded in year 1942. This is
non- profit company with extensive operations collection (Ifinedo, Pyke and Anwar, 2018). This
company provide its services in many areas of country.
Services and Products- Oxfam works on the fair trade, livelihoods, gender equality,
justice, natural disasters etc.
Size- This is group of the 14 forms those are working more than 3000 parters in around
100 countries to search solutions related to poverty and injustice.
Scope- The activities conducted through Oxfam organisation is to minimize poverty and
also save people life from disaster. It works on providing the people better lifestyle.
Vision and mission- Vision of Oxfam is to remove poverty. Its mission is to tackle
poverty causes and also develop lasting solutions.
Objectives- The objective of Oxfam company is to assess the people directly when the
local capacity is inappropriate. It works on providing the better life to people.
The purpose of Oxfam
Stakeholders- The stakeholders of this company are Trade Union, Trustees and donors,
Volunteers.

The purpose of Oxfam is to remove poverty and improve people living standard.
(Source: Organisational Structure of Oxfam, 2019)
3) Different business functions of organisations and interrelate and analyse the advantages and
disadvantages
In Marks & Spencer company, there are large number of departments working and their
main goal is to attain the specific objectives. The interrelation among different business functions
of Marks and Spencer company given below:
HR and Marketing function- The objective of HR department is to hire and select best
candidates who can work able to perform the job roles within the company to attain their aim and
goals. Under this, management of company makes decisions and they take the suggestions from
employees because it uses flat organisational structure It helps in develop positive impact on the
decision making of business. The organization's vacant posts and details about the products and
services must be posted by the marketing department. In addition to this, the marketing
department of Marks and Spencer is responsible for conduct the market research for analysis of
needs and demands in this, marketing department of this company gives proper specifications or
qualifications about the candidate to HR department so that they can recruit that candidate on the
basis of their capabilities (Janita and Miranda, 2013). This teamwork and collaboration allows
Marks and Spencer to hire the new workers with all the necessary skills. The aim for Marks and
Illustration 3: Organisational Structure of Oxfam

Spencer company is to enhance productivity. If HR and marketing department work together
then this will have a positive impact on the company's success.
Finance and Marketing function- Marks and Spencer's marketing department is
committed to the development of successful methodologies and conducting the market research.
The purpose of Marks and Spencer is to build a solid system of promotion that will assess in
expand the organization's offers effectively. The Finance Department of Marks and Spencer
provides assets and also maintain the financial plans to promote arrangements. When this
company's marketing department requires to sort out display activities and advertisements so for
this fund division requires to provide to sufficient funds to marketing department. An
interrelation between the department of marketing and finance impact on the structure of the
organization. As Marks and Spencer's goal is to make the consumers loyal by providing high
quality services (Palepu and Healy, 2013).
Organisational structure- It explains how the activities like supervision, allocation and
coordination are directed towards attaining organisational aim. It impacts on organisational
action and give foundation on which the company operating the process. Under this, Marks &
Spencer follows the flat organisational structure and in this structure, there has limited
manageable level among front- line staff and administrative level. The main aim of follow this
structure is to encourage the staff members in process of decision making (Palo and Tähtinen,
2013). Basically, this structure reduce bureaucrat and also make the staff members more skilled
through authorizing them in order to make effective decisions.
The different functions of the Marks & Spencer organisation are marketing, human
resource, operations, finance etc. They are all working for attain common outcomes and follow
organisational structure effectively.

(Source: Organisational Structure of Marks & Spencer)
PART 2
1) Identify the positive and negative impacts the macro environment has upon business
operations
Macro environment is condition that exist in an economy as whole rather than in specific
sector. These factors are uncontrollable which impact on decision-making of an organisation and
performance level. Marks & Spencer conducts PESTLE analysis to examine macro
environmental factors to identify weaknesses and strengths:
Political factors- It consists political stability, government stability etc. In this, government sets
some regulations for organisations to abide through Health & Safety Standards like risk
assessment, risk control and hazard identification. There is a need to company to consist these
regulations while conducting business operation's. Marks & Spencer company has been favoured
by free trade agreements and led to reduce sourcing cost (Shenkar, Luo and Chi, 2014).
Positive impact- The government stability develops positive impact on business.
Negative impact- High cost structure and government instability develop negative impact
the on business functions.
Illustration 4: Organisational Structure of Marks & Spencer

Economical factors- This factor include savings rate, foreign exchange rate, economic cycle,
inflation rate which identify aggregate demand and investment in economy. Marks & Spencer
company is impacted through discounted pricing of the competitors. The main focus of this
company is to provide high quality goods for attract more consumers (Schaltegger, Lüdeke-
Freund and Hansen, 2012).
Positive impact- To provide the goods at discounting cost helps in enhance customer
base.
Negative impact- High interest rate and change in currency negatively impact on
business.
Social factors- This factor is related to the customers preferences, income level, interest and
some other factors. There is a need to Marks & Spencer to develop goods on the basis of needs
and demands of consumers. Change in needs and wants of consumers rapidly impact on business
in negative manner. Shared attitudes and beliefs of people plays a necessary role in how Marks
And Spencer will understand consumers at market place.
Positive impact- To understand preferences and requirement of consumers and satisfying
them helps in develop the positive impact.
Negative impact- Rapid change in preferences of consumers negatively impact on
business.
Technological factors- Marks & Spencer company has strong online and social media
presence to place the capitalise on it avenue. In this present time, consumers are technologically
focused and they prefer the mobile commerce. There is a need to company to develop its
presence in digital medium to tale benefit of shift.
Positive impact- Up gradation and adoption of advanced technology helps in improve
communication with consumers and provide them better purchasing services (Tynan, McKechnie
and Hartley, 2014).
Negative impact- Leakage of personal and financial data negatively impact on business.
Legal factors- Under this, government developed many legislation and laws for an organisation
such as Data Protection Act, Health and Safety Act etc. There is a need to firm to follow all
legislation effectively when performing business functions. Decision to exit from EU with the
other retailer of UK face some legal actions and legal plan requires to put in place.

Positive impact- Follow all legislations and regulations develops positive impact on
business.
Negative impact- It is concerned with Advertisement Act and on the basis of this,
company can make only those advertisements which can divert the consumer from reality to the
imagination. Marks & Spencer does not make any attractive advertisement.
Environmental factors- These factors consists all those which influence the surrounded
environment. These are related to impact of surrounding environment and influence ecological
aspects. There is a need to Marks & Spencer to follow environmental laws when conducting the
business in other country (Vitale, 2012).
Positive impact- Following the environmental acts helps in conducting business globally.
Negative impact- When conducting the business at global level, if firm does not follow
all environmental regulations then it negatively impact the business.
2) Conduct an internal and external analysis of the organisations in order to identify strengths
and weaknesses
SWOT analysis is undertaken through an organisation to determine internal strengths and
weaknesses and the external opportunities and threats. The main reason of an organisation to
conduct the SWOT analysis is to identify the internal factors which impact on the organisational
growth and decision-making. There are two different organisations which conduct SWOT
analysis for determine internal factors.
SWOT Analysis of Marks & Spencer
Strengths
 This company has a strong brand image
and customer base in United Kingdom
and at global level.
 Marks & Spencer company makes
innovation in its business with
creativity and also encourages the
people to think out of box.
Weaknesses
 There is an inability to penetrate in
foreign markets.
 Company has the poor scalability of
supply chain.
Opportunities
 It can make its online presence to
Threats
 The main threat is changing trend in

bolster the position of market at
internal level (Wetherly, 2014).
 Marks & Spencer form can reshaping
clothing segment.
clothing space.
 Competition is high in retail sector as
there are many different competitors
such as Tommy Hilfiger, Uniqlo, Gap
and Zara.
SWOT Analysis of NHS
Strengths
 NHS has the high skilled and
experienced clinical staff.
 Organisation has strong ethos of
sharing, commitment and openness to
enhance confidence of patient.
Weaknesses
 In this healthcare organisations, staff
are not clear about their role in patient
relationship.
 The nurses are not available to met thee
patients enough.
Opportunities
 Use the patients to contribute to the
practice delivery.
 There is a need to NHS to active the
volunteer committee that willing to
organise events properly.
Threats
 In NHS, there is high staff turnover.
 Reputation of NHS is impacted through
contractors work (Wheelen and et. al.,
2017).
3) Explain how the strengths and weaknesses identified interrelate with external macro factors
The process of decision-making of Marks & Spencer and other firms is affected through
micro and macro factors which affect on working of company in a positive and negative manner.
The SWOT and PESTLE analysis has been conducted above with proper explanation.
Interrelation among strengths and weaknesses with macro environmental factor are given below:
Political Factors: This factor is relate with government rules, regulation, policies in order to
accomplish their desired goal or objective.
Strength: Marks and Spencer makes an effort to follows and adheres to all policies and
rules which is imposed by government that benefit them by acquiring sustainable profitability
within UK market.

Weakness: If they fails to comply with the government regulation and procedures then it
directly impact over their reputation and productivity (Berg and Kilambi, Siebel Systems Inc,
2014).
Economical Factors- Under this aspect, it involves inflation or deflation rate, interest rate,
economic growth, exchange rate and many more which influence company's brand image.
Strength: In regard of Mark and Spencer, they takes an initiative to impose best strategic
decision i.e. lowering the price of the product during the recession period. Due to such action,
firm was able to take advantage of available opportunity in exploring into new markets.
Weakness: In this, if Mark and Spencer does not take corrective action during complex
economic situation, it may impact them by deceasing their productivity and profit margin ratio
among competitors.
Social Factors- This phase is relate with population income, customer taste and preference,
demographic and many more which impact organisation decision making process. (Weiss, 2014).
Strength: In relation to Mark and Spencer, it makes an attempt to identify the demand
and need of customer and based on that company introduce several trendy and fashionable
clothes for all age group. Due to which, it assist them to enhance their consumer base and also its
brand value among competing industry.
Weakness: At the same time, if Mark and Spencer denies the fact of providing improved
level of satisfaction, that may incur several difficulties like, decrease in productivity ratio, reduce
company's brand image and so on.
Technological Factors- This determinant comprises advanced and innovative technologies and
techniques in order to place the brand in better position. It is also necessary for company to
consider these factors. There is a need to an organisation to properly evaluate the competition
while exploring new markets so that they can gain market share and turn potential customers into
the company's real customers. Therefore, it will be possible to simplify the company's operating
model. It will help company to provide goods to company and gain competitive benefit.
Strength: IN case of Mark and Spencer, it make use of all available opportunities in
adopting modern and innovative technologies within its business function such as developing
own websites and application. With the help of this, it enable them to gain competitive advantage
among competitors in an improved style.

Weakness: If Mark and Spencer resist to acquire advancement and novel ideas into its
functional unit that will impact negatively over their proficiency and sustainability aspect within
existing marketplace.
CONCLUSION
It has been concluded from above mention report that business environment consists
internal and external factors which impact on organisational performance and growth rate. The
three different organisations such as public, private and voluntary has been discussed here. There
has been detailed explanation about the different companies with their background, vision,
mission, stakeholders etc. PESTLE analysis has been conducted to determine the external factors
which impact on the organisational productivity and decision- making. There has been studied
about the SWOT analysis because it helps in analyse internal factors affecting decision-making
and business operations.

REFERENCES
Books & Journals
Aithal, P. S., 2017. Impact of Domestic, Foreign, and Global Environments on International
Business Decisions of Multinational Firms: A Systematic Study. International Journal
of Management, Technology, and Social Sciences (IJMTS). 2(2). pp.93-104.
Avramenko, A., 2012. Enhancing students' employability through business
simulation. Education+ Training. 54(5). Pp,355-367.
Berg, E. and Kilambi, K., Siebel Systems Inc, 2014. Method and apparatus to facilitate
development of a customer-specific business process model. U.S. Patent 8,639,542.
Chi, T., 2015. Business contingency, strategy formation, and firm performance: An empirical
study of Chinese apparel SMEs. Administrative Sciences. 5(2). pp.27-45.
Craig, T. and Campbell, D., 2012. Organisations and the business environment. Routledge.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Ifinedo, P., Pyke, J. and Anwar, A., 2018. Business undergraduates’ perceived use outcomes of
Moodle in a blended learning environment: The roles of usability factors and external
support. Telematics and Informatics. 35(1). pp.93-102.
Janita, M. S. and Miranda, F. J., 2013. The antecedents of client loyalty in business-to-business
(B2B) electronic marketplaces. Industrial Marketing Management. 42(5). Pp,814-823.
Palepu, K. G. and Healy, P. M., 2013. Business analysis and valuation: Using financial
statements, text and cases.
Palo, T. and Tähtinen, J., 2013. Networked business model development for emerging
technology-based services. Industrial Marketing Management. 42(5). pp.773-782.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2012. Business cases for sustainability:
the role of business model innovation for corporate sustainability. International Journal
of Innovation and Sustainable Development. 6(2). Pp,95-119.
Tynan, C., McKechnie, S. and Hartley, S., 2014. Interpreting value in the customer service
experience using customer-dominant logic. Journal of Marketing Management. 30(9-
10), pp.1058-1081.
Vitale, R. P., 2012. Business to business marketing. Pearson Education India.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
Wheelen, T. L. and et. al., 2017. Strategic management and business policy. Pearson.
Weiss, J. W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Online
About M&S. 2019. [Online]. Available through: <https://global.marksandspencer.com/about-
ms/>.
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.

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