Business and Business Environment: Asda Case Study Analysis Report

This report provides a comprehensive analysis of the business environment, focusing on different types of organizations (public, private, and non-profit) and their respective purposes, structures, and scopes, using Asda as a case study. It examines the relationships between various organizational functions and how they contribute to business objectives. The report further investigates the positive and negative impacts of the macro environment on business operations, supported by specific examples. Internal and external analyses of Asda are conducted to identify strengths, weaknesses, and the interrelation of these factors with external environmental influences. The report concludes with a synthesis of these findings, providing a holistic understanding of the business environment's impact on organizational success.

BUSINESS AND THE
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1. Different types and purposes of organisations.................................................................1
P2. Size ans scope of organisation.........................................................................................4
TASK2.............................................................................................................................................6
P3. Relationship Between Different Organisational Functions within company..................6
TASK3.............................................................................................................................................9
P4 The positive and negative impacts the macro environment has upon business operations,
support by specific example...................................................................................................9
TASK 4..........................................................................................................................................11
P5. Internal and external analyse of specific organisation to identifies the strength and
weaknesses...........................................................................................................................11
P6 Strengths and weakness interrelation with the external macro factors.........................13
CONCLUSION..............................................................................................................................16
REFRENCES.................................................................................................................................17

INTRODUCTION
Understanding the atmosphere within which business directs is very essential for running
a business unit successfully at any place. Environmental factors influence every aspect of
business. Business environment is the combination of internal and external factors that influence
organisations operations. Organisation undertaken here is Asda which belongs to retail industry
and deals in groceries, merchandise and financial services (Business Environment, 2018). This
report explains different types and purposes of organisations and their size and scope. Further it
determines the relationship between different organisational functions and how they are linked
with objectives of business. It also identify the impact of micro and macro environment on
business. This also elucidated the internal and external analysis of organisation to identify
strength and weakness. And later part of the report depicts the the inter relationship between
strength and weakness with external factors of environment.
TASK1
P1. Different types and purposes of organisations.
An organisation is a formal construction of relationships, duties and authorities through
which specific objectives are accomplished. All organisations have management structure that
determines relationships between different actions and members. It allows individuals to
specialise and increase efficiency (Andersson Forsgren and Holm, 2015). There are various types
of organisations which have different purpose, structure, and scope. It can be private, public or
non profit organisation and they are explained below :-
Public organisation : Public sector organisations are those which are owned and
operated by the government and exist to provide services to the nation. Funding of these
organisations are usually through taxation, fees , financial transfers, etc. The main aim of these
organisation is to maximise wealth and it includes services like providing education, health
facilities, etc. For instance, The child support agency which is a UK based public organisation
company and aim of this organisation is maintenance of child and helps in transferring money
from non resident parent to the person who needs it.
Aims and purposes of public organisations
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There are various purposes for which public organisations operate in a country and they
are :- Transformation of the economy : It is the continuous process which helps people to
grow from lower level to higher level which increases the productivity which contribute
to the growth of economy. It transforms the economy such that it moves towards
socialism. Accomplishment of planned resource allocation : It modifies the programme and
policymakers to achieve better resource allocation (Barsness, 2014). They will desire to
achieve these objectives by supporting the development of small scale and cottage
industries.
 Generates employment opportunities : this sector through various polices and plans
generates employment for rural sector which will contribute to the GDP.
Legal structure of public organisation Central government:- It refers to a legislative body which have an authority to mange
and formulate regulations for the the whole nation. It overlook the operations like
commerce, finance, national defence, foreign affairs. State Government: The role of state government is to formulate rule or regulations in
order to promote the state economy and to control over operations performed within state.
It is also held responsible for the controlling the operations performed by local
government.
Local Government:- It refers to the authority which have is liable for controlling the operations
that are being performed within the particular geographical area (Cairncross 2014). Local
government has to perform their operations over the regulations formulated by state government.
Private organisations : Private sector organisations are those which are owned and
operated by individuals or group of people. The primary aim of these organisations is to earn
profit. Funding of these organisations are done through personal savings, bank loans, etc. For
instance, Asda is a private organisation of UK which is a retail industry and deals in products
like groceries and financial services (Becerra-Fernandez and Sabherwal, 2014). Primary aim of
these is to provide products and services for customers to earn profit.
Aims and purpose of private organisations
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 Revenue generation : The main objective and purpose of theses organisation is to
maximise revenue and attainment of financial objectives effectively and efficiently. Long term planning : It eliminates the needs to focus on short term plans and focuses on
long term plans for accomplishing desired results.
 Freedom and flexibility : As these are organisations are not bound and controlled by
government so they are more flexible in their structure and have more freedom of power.
Legal structure of private organisation Sole trader:- Its a organisation which runs by the single person. To set up sole
organisation people are required small amount of finance. Sole traders are going to bear
the risk and they only enjoy the profits. Partnership:- Its a association between the 2 or less then 20 partners. Each partner is
responsible for the debt so, partners have to be chosen carefully.
Private limited company:- Its a joint stock company where the business have separate legal
entity. Each shareholders are the part of the business. Non profit organisations : These
organisations are independent from government and distinct from private sector. Primary
purpose of these organisations is to provide social welfare to the societies rather then profit
earning. They are owned and operated by individuals or groups under the governance of
government. Workers of these organisations can be paid or unpaid whose primary motive is to
serve society. For instance, ACT is a registered charity in UK which works to promote the best
possible support care for children and their families. It has helpline number and a database of
useful organisations which comprises of professionals like publications, research, etc.
Legal structure of voluntary organisation Trust:- The organisation is run by trustees and by the particular name. They don't require
any members, they run the organisation according to the trust deed. The risk is personal
liability. Unincorporated Association:- It's refers to the organisation formed with an agreement
between the number of people for a reason rather than making the profits. This
organisation is run by trustee as well the members of the corporation. It's not a separate
legal body from the individual trustees.
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 Company limited by guarantee ('CLG'):- Its an alternative type of company which is
not formed to provide to profits to its shareholder. In this directors are their and they have
proper separate legal entity.
Aims and purposes of non profit organisations Helpful in providing education : They provide education to the people about the policies
and programs of government regarding their welfare, various rights and obligations. Encourages participations : It further Positive encourages people and society to take part
in various activities of the state through politics and government.
 Act as helpful force : They act as a stabilising force for promoting national integration
and concentrates on non political issues.
P2. Size ans scope of organisation.
Different organisations have various sizes and scopes which depends on the purposes and
aims of the bushiness. There are various organisations whose size and scope are discussed
further :-
Public organisation
The main aim of these type of organisations is to provide services to the people and
nation. So there size and structure can be understood by taking example of organisation that is
the child support agency which is also known as child maintenance service and operates in UK
which aims to provide financial support towards child's everyday living costs when separated
from their parents. It was a deliver arm for department of work and pension in UK.
 Mission : Its mission is to provide maintenance for upbringing the child.
 Vision : It asses the appropriate amount of child maintenance in any given case.
 Objectives : To provide child maintenances services and transfer of money from non
resident to those in need.
 Size : It is spread in entire UK. Citizens of UK can apply to this agency through their
helpline numbers on child maintenance numbers on their official website. It is a large
organisation.
 Scope : It has limited scope as people living outside UK can not apply to this.
 Products and services : Provides benefits of birth, death, marriages and care, child care
and parenting, taking care of disabled people,etc.
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 Legal structure : It has a three tier legal structure which are local, state and national.
Local are issues are handled by municipal corporations and decisions are taken by local
bodies (Chang, 2016). State issues are handled by state authorities which follows the
rules and regulations set by government. Central system is responsible for making
policies and programs for entire nation.
 Stakeholders: These organisation draw their resources from public or government in
form of receipts, taxes, truthful reports, legalities, etc. they are very important for the
organisation for running government undertakings in smooth and efficient way.
Private organisations
The individual or group of people formed an organisation for purpose of earning profit is
a private company. For instance, size, scope and structure of Asda will be discussed for thorough
understanding :-
 Mission : Their mission is to become Britain's best value retailer exceeding customer
needs everyday.
 Vision : Their vision is to make products and services which are affordable to everyone
and everyday.
 Objectives : To provide services related to finance, sell groceries and general
merchandise to the customers and earn profit.
 Size : It is covering locations of UK and also established the business outside UK and is
spread all over the world. It is a large organisation.
 Scope : Wider scope as it confined to multiple countries and also employees huge pool of
candidates.
 Legal structure : It is private company of subsidiary type which is owned and controlled
by parent company that is Walmart.
 Products and services : Apart from products they offered, they offer various services
like ATM machines at every Asda store, free parking for customers, discount cards, etc.
 Stakeholder : In private organisations, stakeholders are employees, customers, suppliers,
creditors, etc. They draw resources from various financial institutions like commercial
banks, mutual funds, etc. They are important for generating profit in the organisation.
Non profit organisation
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The main aim of theses organisations is to provide services of public and societal welfare.
For instance, Cancer research UK is an organisation which helps people in diagnosing and in
treatment of cancer.
 Mission : To support research on all types of cancer to all age groups.
 Vision : To bring forward the day when all cancer will be cured.
 Objectives : Main motive is to reduce the number of death from cancer.
 Size : It is a UK based company which operates in UK only by employing approx 4000
people and do research about cancer to reduce death. It is a large organisation.
 Scope : It has a limited scope as it is confined to UK only and is a charitable organisation
which depends on donations.
 Stakeholders : In these organisations, stakeholders are members of the organisations,
investors, local authorities, board members and trustees, etc. These organisations draw
resources from charity, donations, cause related events, etc. They are helpful for
providing social welfare in the society.
 Legal structure : Different organisation have different legal structure and in this it
depends on associations, trust, company limited by guarantee, industrial and provident
society, etc.
 Products and services : Developing new test, surgery, radiotherapy techniques,etc.
Organise campaigns for funding of cancer, etc.
TASK2
P3. Relationship Between Different Organisational Functions within company.
The different organisational functions of a company relate with each other in different
ways. Here, the link between different organisational functions of Asda will be discussed. In
order to produce and sell their product in the market an organisation must undergo the key
organisational functions (Charter, 2017). These functions are Marketing, Finance, Production,
Sales and Human Resources Department. Each of these functions must work together in order to
achieve the aims of the company. There must be proper coordination between all these functions
performed. The relationship between them is discussed below:
 Marketing Department: The marketing Department of ASDA works in order to satisfy
the needs of the customers and producing those goods which meets the requirement of the
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customers. It can be done by meeting the changing needs of the customers (Cook, 2017).
Also, the marketing department is responsible for helping the organisation in acquiring
and keeping profitable customers. It is related to the Finance Department because for
advertising and publicity of the product, company will need strong finance base which is
complete by Finance Department.
 Finance Department: This Department of the company deals in keeping track of money
generated from the sales, send invoices, preparing of budgets, appropriation of accounts,
and paying salary to the staff. There is a direct relation between Finance Department and
the Human Resource Department because the salaries paid to the employees are decided
by the HR Department as the salary is paid according to the skills and knowledge of the
employee of which the HR Department does have perfect knowledge. It is also related
with the Marketing Department as it budget for the Advertising is approved by the
Finance Department. This department also checks the return that will come on investing
money on the advertising.
 Production Department: This department is directly involved in manufacturing of good
. It is interlinked with the sales department because that department defines what quantity
of a product or service is to be produced for sales. Sales Department makes an estimate of
the future sales and give an idea to the Production Department and on that behalf
production is done by the Production Department (Crane and Matten, 2016). When the
Production is done on as per the requirement and stocks are maintained properly, the
demand in the market can be met easily. Maintaining stocks will help in generating
finance for the company as Sales will be increase and Sales create revenue for the
company.
 Sales Department: The main function of the Sales Department of Asda is to do the
market research and achieving the targeted sales by applying different strategies. Sales
Department comes in direct contact with the customer and can know about product's
qualities and chances of improvements. It is directly linked to the Production Department
as it can provide the needful changes to be made in the product in order to make the
product that fits consumer's requirements.
 Human Resource Department: This Department works on the acquisition and
termination of employees, payroll, explaining and handling benefits, employees training
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and taking care of the interest of the employees (Dawson and et. al., 2015) . It is linked
with the Finance Department as the salary of the employees is decided by the HR
Department but their pay-off is done by the Finance Department. Also where there is a
need of an employee whether in the Finance, Marketing, HR, Production or any other
Department, the recruitment is done only by the this department. In this way, it is linked
with all other Departments of Asda Company. Through the training sessions,it helps in
developing the accuracy of any department.
Illustration 1: Organisation charts
(Source : Organisation chart, 2018)
TASK3
P4 The positive and negative impacts the macro environment has upon business operations,
support by specific example.
Asda is a supermarket retailers in British. Their other businesses is providing financial
services to customer. They also run the property development subsidiary. So, for them it is
essential to analyse the external market. To analyse the external growth opportunities and threats
can don through PESTLE analysis. These factors can effect the industry positively as well
negatively. New trends and forces are reshaping in retail industry specially the economic and
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technology factors have intensive effect in the growth of the company. This will help them in
framing the strategic planning. Here the PESTLE analysis of Asda supermarket are:
Political Factor
Government factor and regulation are the political factor which effects the revenue and
profitability of retail industry. It is necessary to find out in advance the upcoming legislation
activities which affects the business so that it can be applied within the business on time. These
risk can lead to major profit or major loss. These factors have the power to change the result in
the business. Companies have to be prepared to deal with the local and international outcomes.
Government polices effect the consumer buying habit. Positive:- If there is a political stability in the country then business will run smoothly
and higher revenues can be generated. If government is stable then polices remain same
so it become very easy for them run business and Asda will not be required to change
organisation policies.
 Negative:- If there is any issue in politics then the operations can't run smoothly which is
a hindrance to the business. Instability in the government then supply chain and sales of
Asda also get effected.

Economic Factor
This factor includes various attributes like inflation rate Interest rates, government laws,
tax rates, wages etc. that have an huge impact over the operations performed by Asda. As, they
perform their operations in several different countries. Positive:- If economy grows that means the people are going to spend more money on
shopping. At this time, Asda will able to maintain the impressive sales and generate huge
profit.
 Negative:- If the taxes and interest rate increased, these factor will effect the business
operation. Asda consumer are not going to buy the products if tax are increased. Changes
in labour cost effect the operations of the business.
Social Factor
The social trends and preferences of customer majorly impact the industry and the
profitability. As the society is continuously changing. Some companies only analyse the
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population and age structure but in new scenario, to understand the customers properly,
companies are required to analyse the customer attitude and lifestyle. Positive:- Asda deals in different food products and which are according to the customer
requirement and need. This will help positively to them to increase the sale of the
company.
 Negative:- These factor also impact the operations of a business. As company always
maintain inventory in starting season and if in middle trends changed or consumer
preference changed this will definitely effect the sale of the company.
Technology Factor
These factors are required to be evaluated every alternative time. Upgrading and
introduction in technology are keep on changing. Technology factor plays a crucial part in
improving operations and the functions of the business. Promoting their products through digital
media companies are able to increase their sale. Positive:- As large scale companies offers the customer to get shipped their products at
home as well stores near to them. This will help them to increase the sale. As company is
using the technology for ordering the product.
 Negative:- Due to advance technology, Asda is not been able to focus on operational
activities. And this factor also decline the labour cost.

Legal Factor
The regulatory system and the laws determinants effect the business. Laws are not set on
stones, these are keep on changing and changes are occur according to the government. These
factors are associated with ethics and values of the company. Asda retailer have to follow the
regulation appropriately for the smooth running of business. Positive:- If companies follows the rules and regulation then it can generate huge
revenue. companies just have to treat their employee equally.
 Negative:- Rights which are made for employees have to be fulfil otherwise huge
penalties are implied on company.
Environment Factor
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