Business Environment Report: Comparing Public and Private Businesses

This report provides a comprehensive analysis of the business environment, focusing on two contrasting businesses: Mark and Spencer (a private sector company) and the National Health Service (NHS, a public sector organization). The report begins with an introduction to the business environme...Read More

BUSINESESS
ENVRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P.1 Describe type purpose and ownership of two contrasting business......................................3
P.2 Different stakeholders who influence the purpose of two contrasting businesses................4
TASK 2............................................................................................................................................5
P.3 Describe how two businesses are organised.........................................................................5
P.4 Explain how style of organisation helps to fulfil their purpose............................................6
TASK 3............................................................................................................................................6
P.5Influence of two contrasting economic environments on business activities........................6
P.6 Impact of political social and legal factors n business .........................................................7
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................8

INTRODUCTION
Business environment is the surroundings in which any enterprise operates. There are
different concern which are carried out with distinct motives. In the following report study of
one private and one public sector company is done that how they operate and what is the core
difference between both of them (Wild, Wild and Han, 2014). Their functions are discuses in
detail along with the structure of each so that it could be understood that how they perform the
different functions.
TASK 1
P.1 Describe type purpose and ownership of two contrasting business
There are various different business set up which operates with different motives and
goals. Business can be broadly classified into public private and government organisations. Each
operate with there different objectives of earning profit, providing services and helping people
who need. In order to understand the difference two companies are selected which fall under two
distinct categories.
Mark and Spencer
It is a global brand which is dealing in fashion industry. It has stores all around the world which
are providing the customers with the latest trend fashion clothes and earning good profit. It is a
public limited company. As the name suggest the shares can be sold to public and against which
the liability remains limited (Colfax, Rivera and Perez, 2010). Having limited liability is an
advantage to the different shareholders as they are safe at the time when the company is declared
to be bankrupt or insolvent. Shareholders will be responsible only to the level to which they have
invested in the shares and for the rest amount which is the of making the company bankrupt they
are not responsible. The main objective of the cited company is to provide service to the
customer and supply the demanded product on the right time at right place. The motive behind
providing the different product and service is to cover the running cost of the company and
maximisation of the profit. Initially when the company was started the motive was to sell the
good which were made by British as they were of high quality. It is a private owned company in
which different stakeholders invest and becomes the part of its management team (Klapper and
Parker, 2010). They buy the shares of the company and enjoy the dividend against it which
varies from person to person depending upon number of shares they have.

National health service
It is a part of non profit organisation business and was set up in 1948. It is public organisation
which was set by the working class government. The main source of income for this business is
through taxation. There main aim is to provide services to the general public for their welfare.
NHS provide good quality facilities to the public sop that the overall level of health care can be
developed. Employees in the sited sector are medical practitioner, health care provider who give
their services for free as they are not paid for the work done by them. They volunteer do the
work with their own will. Therefore the amount raised through taxations is used to pay the
running expenses like rent, medicine equipments etc (Becker, 2017).
P.2 Different stakeholders who influence the purpose of two contrasting businesses
Stakeholders are those which have interest in the concern business and get affected and
can affect the operations of the businesses. They can be internal or external to business. Inside
stakeholder for both the business are those who are present within the boundaries of the
organisation and external which are there present outside the organisation (Chavis, Klapper and
Love, 2011). Different stakeholder has distinct objective with the business as their motive behind
investment is not same. Key stakeholders for the given two companies are as follows:
 Customers – They are the part of external stakeholders and effect the business to a great
effect. For Mark and Spenser consumers are of vital importance as they are the main
source of income and all the goods and services are produced for them only. On the other
hand for national health service the customers are the patients. Services are provided to
them so that their health can be improved in order to develop the health standards.
 Employees – It consist of the people working in the organisation. For M&S employees
want that they are provided with equality in the business. Their aim is to get maximum
satisfaction from their work place in terms of wages and salaries on the other hand the
employees of national health service employees works with an objective of giving the
best quality service to the customers with the provided resources. Clients are treated with
friendly environment so that they are motivated to use the services of this sector. They do
not expect much in return but client satisfaction (Aterido Hallward and Pagés, 2011).
 Suppliers – For M&S the suppliers duty is to provide the company with the required
products and raw material on time. They have major effect on the business of M&S as if
they discontinue their supply than it will have adverse effect on its functions as than

company will require time find the new suppliers for their business. Suppliers are the
main source of income for NHS and therefore they play an important role as if they
discontinue to give their supply the operations will be affected very much.
TASK 2
P.3 Describe how two businesses are organised
Both the companies may have different objective or policies but the manner in which
they are organised are almost same. Structure and functional areas for all the business are same
as activities of the business do not vary much. Different areas of the business are as follows:
Finance – The finance sector basically deals with anything to do with money. As M&S is a huge
company, it is very important that the financial body is ran well and correctly (Laumer, Eckhardt
and Weitzel, 2010). Within M&S the financial sector takes care of the company accounts, wages,
stock evaluation, VAT returns etc. In NHS Finance professionals have a huge role to play in
governance, accountability, annual reports and keeping accounts that inform public sector
funding decisions in the future.
Sales and marketing – It is the function of advertising of products, packaging and
the selling of products. The marketing side of the organisation would be
displaying their product in many of different ways, such as on
television, posters etc. For NHS this function is performed with a different objective. As it is non
profit organisation marketing is done in order to carry out research to create compelling
engagement, assess the care received by the patients and also the changes that has taken place in
the outside environment can be noticed and implemented in own business which helps in
development (Commander and Svejnar, 2011).
Human resource – One of the most important function for both the cited companies is to
manage its employees. Wise organisations look after their staff on the basis that if they are well
trained and committed to the aims of the business, the organisation is more likely to be
successful. HR is responsible for recruiting new employees and ensuring that each vacancy is
filled by the best person for the job.
Production – It is an important function which is performed effectively in both the business.
M&S has to do enough production so that the demand of the customers can be fulfilled and for
NHS this function is performed to give the clients best services on right time.

P.4 Explain how style of organisation helps to fulfil their purpose
The aims of organisations depend on the type of business they are. Objective of M&S
will be quite different from those of NHS. A business needs to have a clear sense of direction,
which must be clearly communicated to all stakeholders. This is the aim of the business which
can then be broken down into smaller aims and objectives.
As Mark and Spencer is a profit-based business, it maximises their sales and profit,
expanding to maintain its competitiveness in addition to outshining competitor (Teece, 2010). It
also focuses on providing shareholders with progressive returns on their investment improving
profitability through investment in efficient stores and distribution depots, in productivity
improvements and in new technology, developing the talents of its people through sound
management and training practices, while rewarding them fairly with equal opportunities for all.
For NHS their profit is maximum customer satisfaction. For this all the resources are made
available and also the quality of good standards is also maintained (Halbert and Ingulli, 2011).
TASK 3
P.5Influence of two contrasting economic environments on business activities
Within the selected organisation, M&S, there are 2 important economic environments
that have an influence on business activities. Both economic environments will have a different
way on affecting the company.
Economic environment- The system surroundings are growth and recession.
Economic growth occurs when more goods are being produced and consumed, and incomes are
rising. A growth company tends to have very profitable reinvestment opportunities for its own
retained earnings. Economic growth will affect the cited company as it would increase their
profits due to more people wanting more products and wanting to spend their money.
Legal environment- The economy is different worldwide and fluctuates constantly, which
makes this factor so complex for large multi-nationals like M&S to tackle. To maintain
maximum profitability overall, company needs to raise its prices in accordance with inflation
rates. If however prices are raised higher than the rate of inflation, customers may be urged to go
somewhere else or spend less, and if the prices aren't raised high enough, they may not
compensate with the rate of inflation and decrease the products profit margin (Aula, 2010). As

there are people on different budgets the cited company tries to accommodate for everyone,
which is why over recent years they have introduced many different price-based ranges.
P.6 Impact of political social and legal factors n business
Political factors – The Government may change the tax rates for textile industry by doing up or
down this will be to try help boost the economy, an example of this is VAT this means all non
food and adult clothing range will need different prices on the shelf edge labels this then means
staff will then have to go change the shelf edge labels. Although this then will change the
profitability and finance department of the company as they will then need to change the profit
sheets that report back to the business. In health and safety government interfere to reduce or
eliminating unhealthy conditions by promoting activities that support individual and community.
Health efforts are taken to improve the wellness of a large number of people (Oh, 2010).
Legal factor – Health and safety standards are the most important, and for all the new workers
will have a full day having an induction before that are allowed to start their job, they are also
shown around their work place and they are also shown the areas that they won’t be allowed to
go due the dangerous machinery and these are applicable on both the business organisations
(Porter and Rivkin, 2012).
Social factors - Consumers increasingly consider the social impact of the money they spend
therefore it brings pressure on M&S to maintain the product quality. Some will pay more to
support retailers who assert sustainable practices, for instance, by buying products made with
recycled material (De, 2011). Others avoid companies notorious for irresponsible or unethical
practices, such as outsourcing manufacturing to exploitative sweatshops in under-developed
countries. For NHS the social factors which may influence the operations are change movement
of people from one place to another or change in the perception of the customers (Harrison,
2011).
CONCLUSION
From the above report it can be concluded that different type of business organisation
operates with distinct motives. M&S prime objective is to achieve maximum profit so that it can
be developed. The liability of the shareholders is limited to their share in the company which is
different in the NHS. It operates with different objective of providing services to the people who

need them. Environmental factors have influence on both the companies but in a different
manner.

REFRENCES
Books and journals
Wild, J., Wild, K.L and Han, J.C., 2014. International business. Pearson Education Limited.
Colfax, R.S., Rivera, J.J and Perez, K.T., 2010. Applying emotional intelligence (EQ-I) in the
workplace: Vital to global business success. Journal of International Business Research,
9, p.89.
Klapper, L and Parker, S., 2010. Gender and the business environment for new firm creation.
World Bank Research Observer.26(2).pp.237-257.
Becker, K., 2017. Editorial. Journal of Transnational Management, 22(1), pp.1-3.
Chavis, L.W., Klapper, L.F and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3).pp.486-507.
Aterido, R., Hallward-Driemeier, M and Pagés, C., 2011. Big constraints to small firms’ growth?
Business environment and employment growth across firms. Economic Development
and Cultural Change. 59(3). pp.609-647.
Laumer, S., Eckhardt, A and Weitzel, T., 2010. Electronic human resources management in an e-
business environment. Journal of Electronic Commerce Research.11(4). p.240.
Commander, S and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics.93(1). pp.309-337.
Halbert, T and Ingulli, E., 2011. Law and ethics in the business environment. Cengage Learning.
Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy &
Leadership.38(6).pp.43-49.
Oh, S., 2010. New role-based access control in ubiquitous e-business environment. Journal of
Intelligent Manufacturing, 21(5), pp.607-612.
Porter, M.E and Rivkin, J.W., 2012. The looming challenge to US competitiveness. Harvard
Business Review. 90(3). pp.54-61.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Harrison, R., 2011. Learning and development. Development and Learning in Organizations: An
International Journal. 26(1).
Teece, D.J., 2010. Business models, business strategy and innovation. Long range plannin. 43(2).
pp.172-194.
Online
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[Assessed on- 5th May 2017]