Business Environment Analysis: Organisation Types and Impact

This report provides a comprehensive analysis of the business environment, examining various organization types including private (General Motors), public (Crown Prosecution Service), and voluntary (Oxfam) organizations. It explores the purpose, legal structure, and stakeholders associated with each type. The report further delves into the positive and negative impacts of the macro environment on business operations, considering political, economic, social, and technological factors. It also analyzes the interrelationship between organizational functions, such as human resources, finance, research and development, production, and marketing, using General Motors as a case study. Additionally, the report assesses the internal and external environments of organizations, highlighting their strengths and weaknesses, and discusses the interrelation of these factors with macro environment elements.

Business and the Business
Environment
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Table of Contents
Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Different types and Purpose of organisation.....................................................................4
P2 Size and Scope of different types of organisation.............................................................6
TASK 2............................................................................................................................................8
P3 Relationship Between Organisational functions...............................................................8
TASK 3............................................................................................................................................9
P4 Positive and Negative Impact of macro environment on business operations..................9
TASK 4..........................................................................................................................................11
P5 Internal and external analysis of organisation and their strength and weaknesses.........11
P6 Interrelation of strength and weakness of macro environment elements on a company.12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
Business environment refers to all the internal and external factors which influences
functioning of any organisation. Social, legal, environmental, political, technological and
economic all these factors affects working of an organisation in a positive as well as negative
way (Anıl, A. R. and Ficici, 2017). By examining these factors organisation increases its
profitability and also maintains sustainability at marketplace. In this report, we have taken three
organisation on the basis of different types that is for public sector Crown Prosecution Services
is taken, General Motors is chosen as a private sector organisation, lastly for voluntary
organisation Oxfam is taken. This report includes information about three different
organisations. Along with this, it will cover impact of macro environment on an organisation and
analysis of external and internal environment with their weakness and strength. At last, it will be
discussing about how strength and weaknesses are interconnected with all external factors
TASK 1
P1 Different types and Purpose of organisation
There are various kind of companies which performs operational activities in economy. These
types of companies are named as private, public and voluntary. All three of them are defined as
below along with their purpose, legal structure and their stakeholders:
Private Organisation – Private companies are started for the main motive of earning profit
through various medium like indulging into partnership, an association or any agency. In order to
initiate a private organisation, it is required by the company to follow an feasible organisational
structure. After finalising it, it can move forward to setup its aim whose main objective is to
develop loyal customers for the company. For example: General Motors is an auto mobile
multinational company which is headquartered in Detroit, America. The company is mainly
dealing in designing, manufacturing and marketing and finally distributes its vehicles as well as
its parts across the world. Along with this, it also offers financial services to the customers
(Burayidi, 2013).
 .Purpose: The main purpose of this company is to recruit best talented working staff and
selecting them, it focuses on providing appropriate guidance to them so that
organisational goals can be achieved effectively. It also aims to satisfy customers at
highest level by providing consumers services with best quality.
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 Legal Structure: There are different kinds of legal structure which are followed by
private companies. Some main of them are defined as below:
(a) Sole Proprietorship- Under this, whole company is managed and tackled by single
individuals or person only who is basically named as sole proprietor.
(b) Partnership- It is the kind of written contract between two or more individual that will
be working together under the name of one common business entity whose profit and loss
will be shared by them according to their investment ratio (Charfeddine, 2016).
(c) Company: It is kind of company that includes many people who does not issue shares to
common public with the medium of IPO(Initial Public Offer). The main objective of this
company is earning high range of profits.
 Stakeholders – Stakeholders are considered as the person or individual who is related to
business. They can be anyone such as shareholders, top management team of company,
employees or the customers.
Public Organisation - Public organisation are mainly operated and managed by the government.
Companies comes under this type of organisation do not engage in business of private business
and also does not allow them to services their own segmented resident people. The Crown
Prosecution Service is a public prosecuting organisation which based in the London, United
Kingdom. The company was incorporated in the year of 1986 and mainly handles criminal
related prosecution in Wales and England. Purpose – Crown prosecution aims to defend various kinds of criminal cases which are
tackled by police of Wales and England. The company also provides advices to police
other criminal agencies about legal norms related to criminals.
Legal Structure : Legal structure of public organisation are mainly of three types that is state ,
local and national (Hacioglu, Dincer and Celik, 2012). All three of them are stated as below:
(A) Local organisation: In this, controlling and administrating power of public
organisation are provided to local Government.
(B) State organisation: Under this, company is managed, controlled and owned by state
government.
(C) Central organisation: In this, public organisation are handled, controlled and
managed by central government.
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 Stakeholders - Stakeholders of public organisation are highly influenced by the policies
and actions of organisations. This includes financial institutions, government employees
that are owned by government and shareholders.
Voluntary Organisation –
 Purpose: Oxfam is an NGO which works for reduction of poverty. The main aid of this
company is minimise poverty by identifying feasible solutions for its. Vision of this
company emphasis on creating such a world where poverty does not exists.
 Legal Structure : The specific legal structure of voluntary kind of organisation are
defined as below:
(a)Unincorporated Association: This kind of company is created with the mutual agreement of
group of people who combines together for non profit motive (Hussin and et. al., 2017). It can
said that partners or member of this company are the only reason for their disputes or
obligations.
(b)Trust: It is considered as the agreement between total of three parties under which
trustees owe rights to manage property in order to provide benefits to beneficiary.
(c)Limited Organisation: Under this, voluntary companies are limited in the number of
individual or members in organisation.
 Stakeholders : Stakeholders are considered as the individuals who shows interest in the
voluntary company or is affected by its functions. It includes donors, founders,
employees, beneficiaries and boards.
P2 Size and Scope of different types of organisation
There are various of kind of business organisation which conducts business activities in an
economy. Types of business organisation are termed as private, public and voluntary companies.
It can be said that their size, scope, product or services varies from each other. In this regard,
Size and Scope of company are defined as below:
Type of company Name of company Size Scope
Private Organisation General Motors General Motors is
having around 207000
employees who works
across all six
GM is mainly hiring
only experienced and
skilled employees
who could deliver
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continents. In these
employees
approximately 67000
employees are
salaried and the
remaining 140000 are
paid on hourly basis.
The company is
offering its products
or services across the
world. It owns loyal
customers from 120
countries.
best quality services
to customers in
effective manner
(Otoo and Drechsel,
2018). Employees of
this company are
speaking around 50
languages in different
time zones. The
company owns vast
scope of business
expansion in those
countries where they
not entered yet.
Public organisation Crown Prosecution
Service
Crown Prosecution
services is operating
its business activities
in Wales and England.
Organisational
structure of this
company consists of
around 14 regional
teams which come
under criminal
prosecution. All of
these 4 teams are
leaded with the chief
Crown prosecutor
who manages the
team in effective
manner. The company
The company owns
capability of
converting its work
into digitalisation for
making their business
operations faster. It
will also raise speed
of flow of information
outside as well as
inside Crown
Prosecution service.
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is having total number
of staff of 6000
employees.
Voluntary
Organisation
Oxfam Oxfam is operating its
business activities in
approximately 14
countries where they
collaboratively work
in order to minimise
negative impact of
social issues for
which company is
working very hard
(Vasilcovschi and
Georgescu, 2012).
Oxfam could expand
its business by
offering its services
related to reduction of
poverty in all the
remaining or leftover
countries
TASK 2
P3 Relationship Between Organisational functions.
In every organisation each and every department plays their own role and they are
interrelated with each other for achieving the organisational goals and objectives. It includes
marketing department, human resource department, and sales department and so on. In context to
General Motors, all of the organisational functions of this company are interrelated to each other.
Where employees of all department of General Motors has their common purpose for achieving
organisational goal and which ultimately connects or links them in different ways.
Interrelationship between different functions of General Motors is defined as below:
Human Resource and Finance Department: Human resource department and finance
department of General Motors are inter connected with each other. This is because, main role of
the HR department is to provide well trained, qualified and experienced employees to the
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company. For this, they requires adequate amount of funds in order to conduct an effective
recruitment programs. This fund is released to HR department by taking approval of finance
department. This reflects relationship of the finance and HR department of General Motors.
Research and Development and Production Department: R & D department of General
Motors mainly conducts an Market analysis in order to evaluating customers behaviour, their
expectation from company and their actual requirements (Toedt, 2014). This function also aware
company about latest technology and modification required in the product range of General
Motors. On the basis of this market evaluation, production department manufactures improved
products for the customers which can satisfy their needs and requirement in more effective
manner.
Marketing department and human resource department: Marketing of General Motors
plays an essential role in its business growth and success. It can be said that marketing
department requires huge number of qualified and experienced workforce which can promote
products or services of the company among customers in effective manner. In order to perform
their work in more effective manner, marketing head provides list of number of required
employees to HR department. After that, human resource department usage their best effective
recruitment method for fulfilling requirement of marketing department. This represents
interconnectedness among human resource and marketing department of General Motors.
TASK 3
P4 Positive and Negative Impact of macro environment on business operations.
Top management team of General Motors is having both the micro as well as macro
factors while they are executing their business activities. There are innumerable factors affecting
the functioning and effectiveness of company. The positive and negative impact of macro
factors for General Motors are defined as below:
Political Factors: Political factor includes rules, regulations, policies, legal norms, laws which
are formulated by government. This factor shows influence of government over the operational
activity of the company.
 Positive: With reference to General Motors, the company is mainly belonging to
USA whose political conditions are stable. The country is continuous growing and
raising the number of opportunity for General Motors effectively. It has been
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analysed that this company is performing its business activities by following each
and every norm or law like embargo, trade regulations, custom duties and quotes
made by the government of operating country.
 Negative: US’s Government is supporting usage of public transportation at
highest level which becomes a major threat for General Motors. In order to
overcome this situation, it is required by the top management team to formulate
and an action plan which can reduce impact of this situation in effective manner
(Hacioglu, Dincer and Celik, 2012).
Economic Factors: These factors are mainly impacting upon economical situation of the
country. It is consist of many factors such as interest rate, inflation rate, foreign exchange rate
and many others.
Positive: Stable economic status of US states that disposable income of its citizen is high.
Therefore, it creates best and feasible market for General Motors where they can easily influence
customers to buy their products (Warkentin, M., Sugumaran and Sainsbury, 2012).
 Negative: Even though, US is having stable economic status but its prices of
different commodity fluctuates with the changing time. For example: changes in
prices of steel and fuel might affect operational activities of the company. For
overcoming this situation, it is essential for the company in reserving steel and
fuel in sufficient quantity so that tough situation could be managed in effective
manner.
Social Factors: It involves various trends in demographic or society like age, population,
gender, income level, occupation etc.
 Positive: General Motors is offering high quality of vehicles to its customers and
also ensures to them that the company will always provide effective post delivery
services to customers in order to enhance their satisfaction level.
 Negative: It can be said that quick change in customers taste and preference
might result in decreasing sales on General Motors. In order to handle this
situation, General Motors should focus on communicating to its customers t
regular basis for reminding them importance of General Motors product in their
life.
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Technological Factors: Up gradation or advancement in technology due to the changing
business environment comes under technological factors. In context to General Motors, it
includes digitalisation process, innovation, complete automation in vehicles etc.
 Positive: By using advance technology like usage of robots in operational
activities of company will help General Motors in improving perfection level in
its manufacturing and designing work. With the help of technology, the company
could deliver high end product to customers with minimal rejection or wastage.
 Negative: High level of dependency to advance technology enhances costing of
the company. Along with this, it might demotivate employees too which will
reduce their productivity of work. It will also create difficulty for employees to
understand typical processes in which company is already engaged (Vasilcovschi
and Georgescu, 2012). It can be said that, this situation could be overcome by
providing effective training to employees at regular basis so that they could
update them self according to the changing technology.
TASK 4
P5 Internal and external analysis of organisation and their strength and weaknesses
SWOT analysis is considered as an effective method which helps in evaluating micro
environment of business organisation that is internal area of company. It included four
main factors that is strength, weaknesses, opportunities and threats. In context to general
motors, its SWOT analysis is defined as below:
Strengths Weaknesses
 General Motors is vast portfolio, which
includes all of its products or services
with the support of subsidiaries. This
support also helps them in managing
their operational activities at different
geographical locations.
 The company is highly emphasising on
the advance technology for the
delivering innovative services or
 Brand image of General Motors has
been affect adversely due to several
defaults which were identified in parts
of the automobiles delivered by this
company. This has reduced sales of
General Motors and affected its
profitability a lot.
 The company has faced some issues
related to underfunding in past which
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products to customers.
 Furthermore, General Motors is using
eco friendly activities in its operational
functions in order to develop its
positive brand image among customers.
have impacted negatively on its
financial position.
 General Motors is highly dependent on
United States in terms of generating
profits from that specific zone.
Opportunities Threats
 General Motors is expanding it
business at global level in same
industry that is auto mobile. This
enhances number of opportunity for it
which also results in increase of
profitability ratio.
 With the changing time, demand of
fuel as well as electrical are raising at
highest which brings opportunity for
General Motor as its demand at market
place also raises.
 Increasing number of rival companies
raises number of threat for this
company like reduction of margins,
market share and many others.
 Changes in governmental laws creates
difficulty for General Motors as it’s not
easy for company to fulfil legal
required of every country where they
are working ((Hacioglu, Dincer and
Celik, 2012). And if these requirements
are not fulfilled and it will survey
impact upon their sustainability.
P6 Interrelation of strength and weakness of macro environment elements on a company
Macro factors are also considered as the external factors such as social, political, technological
and economical factors which influence operational activities of company in both the positive
and negative manner. With reference to General Motors, it can be said that this company requires
analysing macro factors and then interrelating it with the strengths and weakness of company
which could help in improving weak areas:
Political
Strength- The main influence of this factor is to develop positive and strong relationship
with legal departments and governmental bodies so that legal work of the company can be done
quickly. It also helps company in building up its brand name in the operating country.
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Weakness- Political factor also impacts negatively on the decision making process,
formulation of policies, processes etc of General Motors as they cannot take major decisions at
their own level.
Economical
Strength- Economical factors is related to price of the product, growth and interest of rate
of company. With the reference to General Motors, the company holds strongest position in
taking decisions related to economical terms.
Weakness- Enhancement in inflation rate influences management work and working
process of the company (Hacioglu, Dincer and Celik, 2012). It can be said that if percentage of
inflation rate is up then there are high chances of Job loss in General Motors.
Social
Strength- This factors owns major role in decision making of General as it is completely
related to customers, their taste and preferences, culture, values related to their country etc.
Therefore, it can be said that social factor owns capability of developing society as well as
country.
Weakness- In context to General Motors, this factor can drop down actual vision, morale
and values of the business organisation. Along with this, changing demand and preference of
customers can impact negatively on production department of the General Motors.
Technological
Strength- With reference to General Motors, acquiring advance or latest technology is
helpful in attracting buying behaviour of customer for its product and services. It can be said that
regular updating of helps company in the engaging mind of customers toward buying latest
product of General Motors.
Weakness- It can be said that regular based up gradation in technology raises prices of
products or services of General Motors. This might influence purchasing decision of customers
as their budget for the specific product has crossed its standard cost.
CONCLUSION
As per the above mentioned report, it has been concluded that companies are mainly of three
types that is private, voluntary and public. These companies can be differentiated with their
different size, scope, legal structure and purposes. It can be said that it is totally depending upon
individual that which kind of company is best suitable for them and where they can sustain
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longer and deliver best of their efforts to organisation so that their desire goal could be achieved
in quick manner. Along with this both the SWOT as well as PESTLE analysis had been
evaluated in order to identify emerging opportunities at marketplace and within the company.
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