Business and the Business Environment

This document discusses the relationship between different organizational functions and how they link to organizational objectives and structure. It also explores the impact of the macro environment on business operations. Additionally, it provides insights into the size and scope of different types of organizations.

Unit 1: Business and
the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK 1.......................................................................................................................................................4
Types or organizations.................................................................................................................................4
Size and Scope.............................................................................................................................................4
Voluntary Structure.....................................................................................................................................5
P2 Explain the size and scope of a range of different types of organisations...........................................6
TASK 2..........................................................................................................................................................8
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure....................................................................................................8
TASK 3.....................................................................................................................................................11
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples.............................................................................................................11
TASK 4.....................................................................................................................................................14
Explain how strengths and weaknesses interrelate with external macro factors..................................14
CONCLUSION.........................................................................................................................................16
REFERENCES..........................................................................................................................................16

INTRODUCTION
Business environment encompasses all the climate or set of conditions such as economic,
political or social in which business activate its operation in order to gain desirable outcomes.
Respective factors also responsible for creating opportunities and threats for business and
individual that are collaborate for achieving organisational goals and objectives. Together with
external factors there are internal factors that directly impact on business works and activities
such as culture, working environment and organisational structure that collaboratively working
for achieving optimum outcomes (Zhu and et.al., 2019). It is major accountability of
organization to observe or evaluate respective factors and build strategies and tactics to mould
as per organisational requirement to achieve desirable goals and objectives. To operate in
business environment in successful manner it is very important to understand or acknowledge
about the various factors on which organization directly depends such as nature of business, size
of operations or many other attributes. Respective report is based on the Aldi which is one of
common brand family owned discount super market chain by owing 10,000 stores in 20 nations.
Respective report is based on the significance of accessing the business environment by using
various kinds of tools and techniques. In that series firstly it includes different size, types and
scope of business that exist in surround of environment. Further it includes the interrelationship
of various organization function and their relationship with organisational structure in order to
gain desirable outcomes. It also elaborate the contemporary examples which demonstrate about
the both positive and negative effects of macro factor on business operations. Finally it includes
internal strength and weakness of specified business and their close relationship with external
macro factor. Business not operate in vacuum but there are several factors that affect on their
works and activities need to monitor or evaluate in order to gain desirable outcomes. There are
different kinds of organization that vary from one another in terms of their size, scope and
objectives.

TASK 1
Types or organizations
Private organization:
Respective kind of business type existed into market to earn profitability by serving
needs and wants of consumers in potential manner. in respective project the private organization
is Aldi that is leading organization in retail sector.
Public organization:
Public organization that work for earning profitability by working in welfare of people in
order to remain competitive in marketplace (Zhao, 2019). In public sector organization that
taken into consideration is NHS.
Non governmental organization:
NGOs work not for earning profitability but for welfare of people and society for
development of economy in potential manner.
Size and Scope
Medium Organization
Purpose: The sole purpose of respective organization is to provide one of best products and
services to the end users in that regards they conduct continuous research and development
potentially.
Products and services: The products of respective organization includes the variety of products
such as edible products, appliances and all household products.
Large Organization
Partnership: In respective kind of legal structure involved two or more individuals that work in
self interest for earning profitability for gaining competitive advantage.

Private limited companies: Respective kind of organization build their own legal structure to
manage organization works and activities potentially. In context of Aldi they follow private
limited company organization structure.
Purpose: the major goal of respective organization is to provide one of best health care services
in effective manner. by providing services in affordable range they work in welfare of society.
Products and services: NHS (National health services) provides aids and caring to consumers to
make them healthy and fit.
Stakeholders: The major stakeholders of respective organization is doctors, nurses, government,
suppliers and many more.
Non governmental organization:
Purpose: The main purpose of respective organization to eradicate poverty from the country by
raising standard of people in potential manner.
Stakeholders: Key stakeholders of respective organization is employees, people, government
and many more.
Services: they by providing adequate services to their people so that they can contribute in
organisational development (Tham and Huang, 2019).
Voluntary Structure
Private Organization
For private organization there are different kinds of legal structure that are as follows:
Sole traders: Respective structure is one of most simplest form in which individual owned
organisational whole activities and manage risk.
Legal structure:
Central level: In respective legal structure all the functions and roles obliged at national level and
NHS also come under it.

State Level: In Respective kind of legal structure consist of handling business activities up to
state vise by coordinating with national level (Zarour and Benmerzoug, 2019).
Regional level: In respective level consist of handling all aspect of business of regional level to
deal with in effective manner.
Legal structure:
Trust voluntary structure: organization follow respective organisational structure are oftenly
non profitable one that pursue their business activities for welfare of people by taking funds from
trustees.
Charity voluntary structure: Charitable organisations majorly accumulate funds from charity
and work for development of society in positive manner. In context of Oxfam they come under
it.
Key stakeholders: Stakeholders for an organization plays very much important role as they
contributes money, time and their skills in organisational development (Zhu and et.al., 2019). It
is important to work in interest of stakeholders, the important stakeholders of respective
organization is employees, consumers, suppliers, distributors and competitors.
P2 Explain the size and scope of a range of different types of organisations.
For an organization it is very potential to determine the size and scope of organization to
build strategies and tactics accordingly (Ruohomaa and Salminen, 2019). Here are the different
organisations with their size and scope that share relationship with objectives and products
offered by them.
Size and scope of Aldi: IN context of Aldi they have approximately 32000 employees in UK
marketplace with 10000 stores in 20 nation that includes Swizerland, Australia and many more.
They aimed to provide employment opportunities to more than the 500 people and bring new
stores. In context of Aldi their objective is to reach at large no. of consumers in order to serve
their demand potentially. In that regards they by aligning the organisational objectives with their
operating size and scope to prosper in the marketplace in potential manner.
Size and scope of NHS:

In context of NHS they are largest public sector organization that serving approximately
54 million people and employing approximately 1.1 billion individuals. They serve 1 million
patients within the 36 hours by using their skills and capabilities. In context of NHS they are
determined to enhance their level of services in that regards they determined to provide
technically advance tools to remain always competitive in marketplace. For that they largely
conduct research to promote their products by different means to remain competitive in
marketplace.
Size and scope of Oxfam: IN context of Oxfam with them 20 charitable firms working to
eliminate poverty at maximum level (Nisa and Saini, 2019). They determined best facilities to
people so that they enhance their living standard. The main objective of Oxfam is to eliminate
poverty from the nation, in that regards they provide one of best services to end users by
considering their welfare in potential manner so that serve them in best manner.
So it is important for an organization to align organisational goals and objectives with the
objectives and products offered by them. as respective activities directly contribute in enhancing
consumers experience level.
Micro enterprises Small enterprise Medium enterprise
A micro corporation is the only
which has less than ten
personnel and the turnover is up
to €2 million or a complete of
balance sheet is as much as €2
million
A small enterprise is the only
wherein now not extra than 50
personnel are operating and has
a turnover of €10 million or a
total of stability sheet is as much
as €10 million.
A medium company is the one
wherein much less than 250
worker are operating and general
of stability sheet is up to €forty
three million or the turnover is as
much as €50 million .

TASK 2
P3 Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
To pursue business works and activities required to pursue functions and build close
relationship in one another for gaining the desirable outcomes. There are different functions of
an organization which are marketing, HR, finance, IT, R&D, Production etc. All these are main
departments that help an organization in achievement of its goals and objectives easily. In
context of Aldi there are various functional departments in the organization that share roles and
responsibilities to one another to work in effective manner that are as follows:
Human resource department with marketing: Human resource and marketing departments is
very important for an organization to pursue business objective and goals in positive manner
(Kolychev and Shebotinov, 2019). it has been analyze that both departments has close
relationship as HR department by taking help to collect information regarding skills and
capabilities required to pursue specified work and activities and accordingly HR department
select one of best candidate with in the organization in order to remain competitive in
marketplace. On other hand marketing department by providing important information such as
requirement of potential candidates in their department and issues faces by them should be
resolved with help of HR department. In context of Aldi they by organizing various kinds of
events that helps in build positive relationship with other department able to gain desirable
outcomes.
Interrelationship among advertising and income branch: The marketing branch of the
employer adopts various strategies that create awareness among the customers and then sales
department with various efforts such as constructing family members with them attempts to
growth the income of Aldi. With this their purpose of improving the profitability can correctly be
accomplished. Also sales branch gives findings of the market and affords to the advertising
branch which permits them to takes important steps to improve the products.
Finance with marketing department: Respective departments plays very crucial role in
managing and coordinating organisational works and activities in most effective manner. In
context of Aldi finance department collect information from the marketing department in regards

of best source of raising fund, best investment proposals and many more aspect (Jimenez-
Castillo and Hoy, 2019). In that regards marketing department provides relevant information to
them in order to gain desirable outcomes. On other hand marketing department conduct research
and development by acknowledging financial position of organization so that they accordingly
spend money on various activities by setting prioritize for them. in context of Aldi they by using
smooth communication strategy able to share the knowledge and information in respective
departments to remain always competitive in marketplace.
Advantages and disadvantages interrelationship of organisational functions:
There are no. of advantages of interrelationship of various functions that are as follows:
Specialisation: The most important and obvious advantage that incurred by interrelationship in
various functions that by grouping of employees ensures development of departmental
competence. Respective majorly used for large organization such as Aldi as they have various
functional departments in organization. By it they get specialization in their work and can be able
to give one of their of their best efforts in organisational development and enhancement in
potential manner.
Operational speed: The another advantage that it proved beneficial in operational speed of
works and activities by brining major improvements in delivering best of products to the end
users. in context of Aldi they by building strong relationship within employees can be able to
gain desirable outcomes from them.
Here are the disadvantages that hinders self interest of organization that are as follows:
Weakening of common bonds: To have the common organisational purpose helps to amend the
morale of employees and their performance in potential manner (Harmon, 2019). while each and
every group is specialized in their own work get isolated and common bond that proved
beneficial in achieving desirable goals and objectives is inevitable weaker and impact on their
performance. In context of Aldi they by building various strategies and tactics always put one of
their best efforts to improve their level of performance.
Lack of coordination: In the functional organization, each and every group tasks required no
input form their other functional groups, due to communication dominance in market insolated

programs suffer from underperformance in adverse manner. In that regards it is very important to
collaborate their working in right direction.
Way functions of organization link with objectives and structure:
It has been analyze that organisational functions directed towards the achieving
organisational goals and objectives. Respective department works in isolation but for achieving
the sole objective that is organisational success for that they allocate resources with
responsibilities to one another so that each and every individual can give one of their best efforts
in organisational development and enhancement (Guo and et.al., 2019). Further to share roles
and responsibilities required a well defined organisational structure that needed to followed by
every individual. In context of Aldi they use hierarchical organisational structure in which every
entity except one, is the subordinate to the another single entity. In that regards various
departments in the organization in systematic manner by following hierarchical chain interact
and share roles to one another as per their skills.

Complexity of different structures:
There are no. of structure such as functional, matrix, BSUs that works to serve the differ
purpose and have their own complexity such as functional structure is a lack of inter
departmental communication that hinders self interest of organization (Gray, 2019). The another
one is divisional that only focus on divisions, employees working in same kind of function that
create inability to communicate in between divisions. So it can be stated that different structures
have differ kind of complexities.
In that regards it is very much potential for organization to acknowledge complexities of
various structures at national, international and at global level and accordingly mould it to gain
the desirable outcomes. With the help of through research and development organization can
make it possible to find out one of best organisational structure for them and work according to
it.
TASK 3
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
For an organization it is very much potential for an organization to evaluate external
business environment in order to collect important kind of insights and results. In external
business environment of organization consist of political, social, technological factors that
directly influence on business works and activities. Here are the PESTEL analysis of Aldi that
are as follows:
Political factor: In political factors consist of the government interventions, political regimes
and entry and exit restriction and many more that directly influence on decision making of
organization (Clifton, 2019). In context of Aldi due to free entry and exit organization gain the
lots of their competitors in the market place. In that regards it is very important to analyze
positive and negative aspects of it:
 Positive Aspect: the positive side of respective factor of external environment consist
that organization by gaining fierce competition can be able to build strong strategies and
tactics that helps to remain always competitive in marketplace.

 Negative aspect: on other hand due to easy entry and exit it provides lots of choice in
front of consumers that enhance bargaining power of consumers.
Economic factor: In economic factors consist of the taxation, interest rates and any kind of
economic change within the economy that directly affects business works and activities (Black,
2019). In context of Aldi due to advent of Brexit respective organization need to build strategies
to remain competitive in marketplace.
 Positive Aspect: The positive aspect of respective attribute that organization can be able
to expand their business other at large scale.
 Negative aspect: Due to advent of Brexit consumers not able to purchase products as it
reduce their disposable income that directly affects selling of respective organization.
Social factor: In social factors consist of change in taste and preferences of consumers in order
to provide one of best products and services to the end users. In context of Aldi they need to
conduct continuous research and development to provide one of best experience to their
consumers.
 Positive Aspect: It has been evaluated that due to exceeding expectations of consumers
proved beneficial for organization to remain always competitive in market place.
 Negative aspect: due to rapid change in taste and preferences of consumers organization
have to spend lots of money and time.
Technological factor: Technological factor refers to the provide products and services to
consumers by using techno advance (Biech, 2019). It is observed that today consumers are very
much demanding in that regards to enhance consumers experience required to pay attention on
respective side.
 Positive Aspect: Technological advancement proved very much beneficial for
organization in enhancing consumer base.
 Negative aspect: on other hand it takes too much time to bring under usage and consume
lot of time.
Environmental factor: In environmental factors consist of put one of best efforts in pursue of
saving the environment as consumers are very much conscious about eco friendly products and

services. in context of Aldi they invest in environment friendly packaging of their products in
order to attract large no. of consumers.
 Positive Aspect: By using environmental protection practices organization can be able to
build distinctive image in the marketplace.
 Negative aspect: on other hand it takes too much cost and time to bring into practice.
Legal factors: In legal factors consist of the various kinds of legal regulations, regimes that
helps to regulate organisational works and activities. (Aksenova and et.al., 2019) In context of
Aldi they follow various kinds of HR practices in order to gain desirable outcomes.
 Positive Aspect: By using such kind of practices organization can be able to
systematically can regulate behavior of their employees.
 Negative aspect: On other hand organization face lots of difficulty in regulating all
regulations simultaneously.
Internal Analysis
It states micro environmental analysis of a business which is conducted in order to assess
its resources, competencies and competitive advantages. Conducting intrinsic analysis often
incorporates measures that offer important data regarding organization’s capabilities,
weaknesses, growth options and threats. To determine the internal business environment, the
management of Aldi can organize SWOT analysis which is a strategic tool to evaluate strengths
risk and weaknesses of the firm in appropriate manner (Cross and Miller, 2020). The description
of this tool in term of respective firm is as under:
Strengths Weaknesses
 The respective offer wide range of
quality products at affordable prices to
its target audiences.
 The firm has global presence with the
help of its approx 10,000 stores in more
than 15 nations.
 There are more than 1000,000
 The firm is small in size in comparison
to other retail grocery firm there is low
margins.
 There is poor employee satisfaction
cause of paid lesser than most other
jobs of similar types.
 There are gaps in the product range that

individual are employed by this firm
cross wise the globe (Barsness and et.
al., 2018).
sold by the firm. This lack of choice
can give a new competitor a foothold in
the marketplace.
Opportunities Threats
 By expanding its business in different
nation like Africa and Asia that are
growing economies which can be
beneficial for the company to gain
development option.
 BY repositioning itself by offering
better quality for middle-upper class
and upper class people rather than a
cheap products company.
 Customer’s needs and preferences are
change rapidly so offering products as
per their needs the form can make
maximization in its sales and increasing
customer base.
 There are number of competitors like
ASDA, Tesco, Lidl, Walmart, Amazon
many others which create high
competition for the business of
respective firm in term of offering
several substitute products.
 Changes in government laws and
regulations are another threat that
highly affects the business of Aldi as it
operates in different nations.
 Shortage of skilled labor in marketplace
can devise it difficult for the company
to get attention talent with effective and
right skills set.
By determining capability and weakness of the respective firm, the administration able to
frame plan of action in efficacious manner in reference to organize business in proper way and
sustain it till long term (Pînzaru, Zbuchea and Vitelar, 2018).
TASK 4
Explain how strengths and weaknesses interrelate with external macro
factors
External factors refer to the outside factors which have impact on the business functions
and operations of an organization. So, it is necessary for the management of company to conduct
in-depth evaluation and analysis of external factors impacting the business so that management
can run a company in most efficient way.

It can be analyzed through various methods which includes SWOT analysis, PESTEL and few
others (Guo and et. al., 2018). SWOT analysis:
Strength –Political environment in United Kingdom is stable due to which respective
organizations can operate its business in efficient manner. Organization feels at ease to define
long term plans easily. Keeping in view of economic environment of the country ALDI
manufacture and serve the customers which helps the company large customer base, higher
profitability and growing business share (Aksenova and et.al., 2019). Keeping social factors in
mind helps company identifying needs of customers according to their demographics and design
the organization policy and product in line with them to get the maximum benefits. Technology
helps the organization to align its products and processes to get the maximum benefits. In current
era individuals are more focused on quality, safety and hygiene factor of goods and services. So
it is crucial to make sure about the quality of products in effective manner. The firm effectively
follows all the laws like equality act in term of offering equal pay and growth option. It also
follows consumer protection act and protect their personal data.
Weakness –Due to fluctuation in political factors cost of import and export fluctuates
which makes it difficult for management for taking decision.In situation of higher inflation
company may face challenges to achieve above mentioned benefits. Customer habits and
preferences changes rapidly due to which it’s difficult to define long term policy. Frequent
changes in habits and preferences at times make the products and services obsolete, resulting into
losses for the organization. Frequent changes in the technology makes it difficult for company to
define the policy based on the existing technology in place. Currently, the business of Aldi is
affected by COVID19that highly affect the business of the firm in negative manner. But it is not
potential for respective firm to accept each and every laws and regulation that is looks like as
limitation (Black, 2019). Change laws are a main drawback that highly affects the business of the
firm.
CONCLUSION
From the above report it has been concluded that for an organization it is very important
to analyze or evaluate the business environment as whole business activities rely on it. For
accessing it required to use various kinds of tools and techniques such as PESTEL and SWOT in

order to gain important kinds of outputs to reach at valid conclusion. It is evaluated that to
operate business functions organization also access the size, scope and nature of business and
build strong relationship with various departments in organization to gain desirable outcomes.
Whether an organization operate at national or international level need to evaluate their
surroundings such as political, social, economic and many more factors for gaining potential
outcomes. It is not limited up to external factors but internal factors also plays important role
such as culture, hierarchical chain and many more. Hence, it can be concluded that business
environment plays very much crucial role in organisational success and potentiality.
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