Comprehensive Analysis of Business Environment for ABC Consultants

This report provides a comprehensive analysis of the business environment for ABC Consultants. It begins with an introduction to the concept of the business environment, defining both business and environment, and highlighting the internal and external factors that influence an organization's operations. Task 1 delves into the purpose and types of organizations (public, private, and voluntary), their size and scope, and the interrelationships of different organizational functions, using an organizational chart to illustrate these connections. It also critically analyzes the complexities of various business structures, including functional, divisional, and matrix structures. Task 2 focuses on identifying the macro environment factors (PESTLE analysis) impacting ABC Consultants, followed by a SWOT analysis to assess the company's strengths, weaknesses, opportunities, and threats. The report concludes with a summary of findings related to the internal and external analysis, providing insights into the company's position within its operating environment. The report references various academic sources to support its analysis and conclusions.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ..........................................................................................................................................4
1.1 Purpose and types of organisations.......................................................................................4
1.2 Size and scope of different organisations..............................................................................5
1.3 Interrelationships of different organisational functions........................................................6
1.4 Critical analysis of the complexities of various business structures.....................................8
TASK 2 ..........................................................................................................................................8
2.1 Identification of macro environment which impacts organisation........................................8
2.2 SWOT analysis....................................................................................................................10
2.3 Findings related to internal and external analysis...............................................................11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Business environment is made up of two words i.e. business and environment. Business
can be defined as the individual's activities like extraction or purchase, production and sales of
goods and services which is being performed in order to generate money . Environment can be
defined as the overall surroundings of the business. Business environment is termed as the
arrangement of conditions political, institutional, legal, economical and social which is not
controllable and can affect the working of an organisation (Zott, Amit and Massa, 2011). This
report is based on the topic of business environment, on the case of ABC consultants. In this
report analysis of business environment in which organisation makes operations will be done and
organisation's function will also be analysed. There are two components of business
environment, which are internal and external environment. Internal environment includes money,
management, material, machinery and man. While, external environment includes political,
socio-cultural, geophysical, demo-graphical, legal and government factors.
TASK 1
1.1 Purpose and types of organisations
As the business consultant of ABC consultants, various types of organisation and their
purpose have been analysed. Several types of organisations are there and generally all
organisations are classified into three types: public, private and voluntary organisations. Purpose
of all these organisations are not same. Public sector organisations are run and owned by
government and works for people (Kolk and Van Tulder, 2010). Tax is being paid by the people
and this money is used as finance for many public sectors. The main purpose of such
organisations is to give essential services and to make effective use of the resources for the
wellness and benefit of the society and community.
Private sector organisations are run and owned by the private individuals. Examples of
such businesses are limited companies, sole traders and partnerships. They can also be said its
legal structures. Limited companies generally have 2 to 50 employees who operates in order to
generate profit. Sole traders business is operated by single or sole person. He/she is responsible
for the all the profits and loss that occurs in business. Partnership business is run and owned by 2
to 20 members and it is registered beneath partnership act 1890. Division of the revenue and
profit is done on the basis of capital amount which is invested by partners. Main purpose private

sector is to develop their business, maximize sales, increase market share and make profits
(Hamilton and Webster, 2015).
Voluntary sectors are not operated by an individual person. However, few persons will be
there who takes responsibility in order to ensure that targets and budgets are being set and they
do whatever they are entitled for. In many cases, these organisations try to give help to specific
types of persons like Oxfam, blinds etc. In order to make survival in the market they don't spend
more than their donations, funds and grants which they have received. They can act like social
welfare settings, community groups, charities etc. Their main aim and purpose is to provide help
to the one who is in need. These all types of organisation which are discussed operates in
different kinds of business environment in order to make growth and success. They also operates
in order to provide services to the people.
1.2 Size and scope of different organisations
Public sector organisations include national, local, sub national government and various
regulatory bodies. Private sector organisations include companies, franchises etc. and voluntary
organisations consist of charities, community groups etc. All these organisations have different
types of nature. Every organisation which is operating in a business environment is not there to
make profit only, there are several non profit settings who works in order to provide services to
the different customers (Wheelen and Hunger, 2011). Private sector is that segment of economy
which is not directly operated and controlled by government agencies. They run to make profit
by providing goods and services to the desired customer. They operate in different forms like
sole proprietor, partnership etc. whose sole purpose is to generate revenues. Voluntary
organisations are there to support people who needs help in their day to day working.
Main functions of these sectors is to provide different services to their customers
according to their requirements and to generate profit and revenues by providing desired services
and goods. Scope and size of the different sectors can be defined in three areas, which are local,
national and international.
 Local: These are those businesses which are owned locally and gives services in various
local areas. Local businesses can be like independent shops which is being operated by
the several local individuals or residents.
 National: Business that operates nationally or which are expanded in whole nation comes
in this category. They work on continuous basis and provides services to their users.

Example of such business is franchise, which a particular organisation has opened in
other state or area (Zott and Amit, 2010).
 International: In such kind of business, transactions take place beyond the border of
nation.
Nature, functions, size and scope of the business are interrelated with the objectives and
goals of business. A particular business carry out functions according to their set mission, vision,
goals and targets. If the nature, scope and size of the business will not be coordination with the
organisation's target, then they will not be able to manage their functioning effective, that will
impact their success and growth.
Stakeholders can be termed as the organisation, person, group or a system which affects
the actions of an organisation. They may have indirect or direct interest in a particular business,
and may have daily or occasionally contact with the business. They can be said as the
shareholders, who will be interested in their capital growth and dividend of their shares.
1.3 Interrelationships of different organisational functions
There are various business functions that are being carried out ABC consultants in their
organisation. Various functions can be termed like finance, HR, sales, production and marketing.
All these functions are directly linked with goals and objectives of the company and its structure,
as they are helpful in maintaining goodwill of the company. Relationship of the organisational
functions can be explained with the help organisation chart (Bryman and Bell, 2015).
Organisational chart can be defined as the diagram which shows overall organisation's structure
and the relationship among different departs of the company. Organisational chart of ABC
consultants can be defined as:

(Source: Organisational chart, 2017)
There are four major departments of ABC consultants which are marketing, sales and
support, product development and operations. These all departments are interlinked with each
other, which can be described as follows: Marketing: In the marketing department of ABC company different functions are
performed like marketing of the product, development of communications, lead
generation and event management. All these marketing functions are interrelated with
sales department as they helps to generate leads and leads are matured by sales
department (Kolk and Van Tulder, 2010). Sales and Support: In the sales and support department of the company, different
functions like inside and outside sales, strategic sales and sales support functions are
being performed. These functions help in the generation of profit. Sale department is
interrelated with the product development department. As sales managers helps to
analyse the needs and requirements of the customer and convey such needs to the product
development department who develop products accordingly.
Illustration 1: organisational chart, 2017

 Product development: Another department of ABC consultant is the product
development department. In which management of various products, software
engineering functions and quality assurance is carried out. This department is interlinked
with the operations department as the product management also helps the administration
department in order to maintain records (Wild, Wild and Han, 2014).
 Operations: Operations department of the company consist of administration, finance, IT
and HR department. This department is interlinked with all the other departments of the
company as it plays a major role. Administration function of this department is helpful in
managing sales, marketing and development functions. Finance department of the
company supports in gathering funds which are required for the process of production. IT
department helps to manage and implement different new technologies and HR is
responsible for the management of employees in an organisation.
There are various advantages and disadvantages of organisational structure. It is helpful
to have proper management in ABC consultant and maintains proper coordination among all the
departments of the company. With the help of effective organisational structure, there will be
increase in the sales activities which will eventually leads in generating high profit. But
sometimes there are some negative things which occur due to organisational structure. If there
will improper structure then it may affect on the growth of the company. If the marketing
activities will be in improper way then it will affect badly on sales of the products, and decrease
inn sales will have direct impact on company's profitability (Zott, Amit and Massa, 2011).
1.4 Critical analysis of the complexities of various business structures
According to Wild, Wild and Han (2014). several types of organisational structures are
there that exists in different organisations so as to make effective operations and workings. These
organisational structures are interrelated with various functions of ABC consultants. They also
have several difficulties and complexities which affects the working of the organisation.
Different types of organisational structure can be defined as follows: Functional structure: There are many businesses which operates in the functional
structure. This type of structure is divided on the basis of different functions related to
different departments of the organisation. As per Gecevska and et.al. (2010) report of the
various functions are being given to manager who then reports to the high authorities.

Complexity arise sometimes in this type of structure where there is lack of
interrelationship between different functions. Divisional structure: Functions are divided into different branches in this type of
organisation structure. ABC consultants works in such type organisational structure as
there are various divisions in the organisation like marketing, sales, product development
and operations . Matrix structure: Great flexibility to the various functions can be provided with the help
of matrix structure. Every employee of the company works in the different department
which are based on functions like marketing and finance. With the help of such structures
organisation objectives can be achieved by the persons.
 Organisational charts: Teece (2010) says that this type of structure is helpful in viewing
the overall structure of the company, as it shows control and authority lines which are at
the different management levels and departments. If there will be well organised structure
then proper decisions can be made easily.
TASK 2
2.1 Identification of macro environment which impacts organisation
Macro environment is defined as the condition in an economy or in external business
environment which affects the operations of the business. These factors are external and
uncontrollable, which effects the organisation's decision making. Performance and strategies of
the business also gets affected by macro environment. ABC consultants have positive and
negative effect of macro environment on its working. There are various factors of macro
environment which can be said as PESTLE. Political factors: These factors defines the stability of political environment and the
behaviour of political parties and movements. Such factors get generated by the
government's influence on tax policies and its involvement in the business agreements.
They also add difficulties in the form of risk to the organisation, by which there can be
loss (Wheelen and Hunger, 2011). Economic factors: These factors includes the large economy and level of employment
and unemployment, cost of raw material like energy, steel and petrol, economic growth

rate, exchange and inflation rate. Competition nature which is faced by company is
influenced by economic factors (PESTLE - Macro Environmental Analysis. 2015). Socio-cultural factors: It presents the social culture of the different societies in which
company makes operations. It includes lifestyles, population growth rate, education level,
living conditions and demographics. With the help of such factors business will be able to
analyse working in the different areas. Technological factors: In these factors, change in the information and technology,
development rate and new inventions, modifications in e-commerce strategies and
internet. With the help of technological factors, company will be able to focus on the new
developments of the technology which can be adopted by the business in order to reduce
production cost. Safe and secure environment can also be created by business with the
help of these factors. Environmental factors: It includes waste disposal, process of recycling and the amount
of natural resources which will be helpful in the process of production. Environment
factors are there to help business operate effectively in the external environment.
 Legal factors: These factors includes trade restrictions, employment laws, regulations,
monopolies and consumer protection. Legal factors affect the working of business in
regards with rules, policies and regulations which is made by the company so as to
operate effectively in the business environment (Vitale, Giglierano and Pfoertsch, 2010).
Positive impact
 It makes involvement of different functional skills and expertise.
 Impact of threats can be reduced with the help of PESTLE.
 Development of strategic thinking is done with the help of these factors.
 Company will also be able to analyse competitors and new opportunities.
Negative Impacts
 Regular analysis of this process should be done so as to have effective results, in which
many organisation lacks.
 Sources of external data are time consuming and costly.
2.2 SWOT analysis
SWOT analysis will be helpful in analysing and identifying internal weaknesses and
strengths, opportunities and threats of ABC consultants. Opportunities and threats of an

organisation will be analysed with the help of external macro factors which has been discussed
above. So it can be said that SWOT analysis is interlinked with the macro factor. While making
analysis of the SWOT, organisation should be realistic regarding its good an bad points (Trkman,
2010). Strengths: Strength factor in organisation tells about the advantages which a company is
having. It also helps in analysing USP, low cost and unique resources which company is
making use of, what are the strengths which customers see in a company, an the factors
which helps in generating sales. Weaknesses: In this area company makes analysis of the things which they are lacking
in. Things which needs to get improved, things which should be avoided and the factors
that reduce sale are analysed in this area. Opportunities: Opportunities which needs to be carried out, interesting trends,
technology change, change in social pattern and government policies, lifestyle and
population profile is analysed in this factor.
 Threats: Analyse of threats is very important as it hinders company to make appropriate
growth and success. Various obstacles which are faced by company, analysis of
competitors, changing specifications and quality standards, changing technology which
give threat to the company's position, problems regarding cash flow and bad debt, or any
other weakness which threats business is analysed in this factor (Kolk and Van Tulder,
2010).
External macro factors are related with the strengths and weakness of an organisation.
External factors includes the environment in which business is operating, it also includes
ecosystem, competitors and market. By analysing company's strengths, competitive advantage
can be made by company and it will also help in analysing different opportunities. In the
ecosystem, political, social, technological environment is there in which company makes its
operations. Different opportunities can be analysed with the help of ecosystem.
2.3 Findings related to internal and external analysis
Analysis of internal and external environment will be very helpful in order to analyse the
external environment in which business is operating as well as different strengths and weakness
which are available for the company so as to work effectively (Klapper, Lewin and Delgado,
2011). The company's market can be defined as the area in which all the customers of the

company is using their products and services. With the help of the PESTLE analysis, external
environment which includes market, competitors will be analysed. SWOT analysis which is
called as micro or internal analysis will e helpful for the company to determine its opportunities
and threats. Opportunities will be helpful in finding out market change, new innovative ideas and
development of technologies which may be helpful for the growth of the company. Threats are
the external factors which are uncontrollable and are present in the supply chain, which can be
determined by the micro environment.
Different government policies and regulations that affect the business activities and helps
to monitor and control operations of business can be analysed with the help of macro factors.
Managers who are responsible to make strategies should be aware of laws and statutory issues so
as to make effective policies and strategies. Analysis of socio-cultural factors should also be
there in order to analyse implementation of different business policies. New technologies can
also be adopted with the help of technological factors (Klapper and Parker, 2010).
SWOT analysis helps in the determination of strengths, weaknesses, opportunities and
threats of the business, so that organisation can make effective decisions. With the help of
strengths business will be able to achieve objectives and goals which will assist in their growth.
They can also have win over their competitors and can attract large number of customers.
Weakness are analysed so that company can make various changes in terms an policies which
are giving negative effect on the sale or products and services. With the help of opportunities, an
organisation will be able to have new things by which goodwill can be maintained. By analysing
threats that are present in the external environment of the business, company will be able to
make various tactics and strategies in order to overcome threats which are affecting productivity
and revenues of an organisation (Craig and Campbell, 2012).
CONCLUSION
From the above mentioned report, it can be concluded that business environment analysis
is essential so as to have effective and efficient working in an organisation. The ABC consultant
makes use of different tactics and strategies in order to analyse environment of the business.
With the help of macro and micro factors, company will be able to make necessary growth and
success by analysing strengths, opportunities, technological changes etc. It is also analysed that
different functions of the company affects the organisational chart, and helps to make
coordination among various departments of the company which supports in achieving targets and

objectives of the company. This report will be helpful to analyse size and scope of an
organisation which is operating in a business environment.
REFERENCES
Books and Journals