Analysis of Business Environment in Various UK Organizations: A Report

This report provides a comprehensive analysis of the business environment in the United Kingdom, focusing on three distinct types of organizations: the National Health Service (NHS), a public sector entity; the British Red Cross, a voluntary sector organization; and John Lewis, a private sector company. The report begins with an introduction to the concept of the business environment, encompassing internal and external factors that influence business operations. It then delves into the different types and purposes of organizations, including public, private, and voluntary sectors, along with their legal structures. The report further explores the size and scope of these organizations, providing an overview of the NHS, British Red Cross, and John Lewis. It also examines the relationship between organizational functions and their link to organizational objectives and structure. The analysis extends to the macro environment, assessing its positive and negative impacts on the chosen organizations. SWOT and PESTEL analyses are employed to evaluate the internal and external factors affecting the selected organizations, and the interrelation of strengths, weaknesses, and macro factors. The report concludes with a summary of the key findings and insights derived from the analysis, offering a valuable understanding of the UK business environment and its implications for various organizational types.

Understanding the
Business Environment in
Various Organisations

Table of Contents
INTRODUCTION...........................................................................................................................1
Part 1................................................................................................................................................1
LO 1.................................................................................................................................................1
P1) Different types and purposes of organisations; public, private and voluntary sectors and
legal structures........................................................................................................................1
P2) The size and scope of a range of different types of organisations...................................3
LO 2.................................................................................................................................................6
P3) Relationship between different organisational functions and link to organisational
objectives and structure..........................................................................................................6
Part 2................................................................................................................................................8
LO 3.................................................................................................................................................8
P4) Positive and negative impacts the macro environment....................................................9
LO 4...............................................................................................................................................13
P5) Internal and external analysis of specific organisations................................................13
P6) Strengths and weaknesses interrelate with external macro factors................................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Business environment is a very vast concept that comprises of analysis and evaluation of
all the internal and external factors of a firm that have a direct or indirect impact on its business
operations and decision making (Amato, 2021). Current project is based on the analysis of
business environment of UK thus, 3 different type of organisation from business environment of
UK has been selected which comprises of The National Health Service (NHS) which is a UK
government organisation, second firm is The British Red Cross that is a well know UK registered
charity organisation and the last one is John Lewis which a private company operating as a high-
end department stores. Further, this report consists of discussion about the different types of
organisation together with their size and legal structure. Beside this, analysis of relationship
between organisational structure and function is also made. Along with this use of SWOT and
PESTEL analysis is also comprises in current study to evaluate the positive and negative impact
of the business environment on the firm’s operations.
Part 1
LO 1
P1) Different types and purposes of organisations; public, private and voluntary sectors and legal
structures
A business can be defined as an organisation or group of people or other enterprising entity
which are tend to be engaged in any commercial, industrial or professional form of activities.
Thus, business basically comprises of an organised efforts and coordinated activities to produce
and sell some specific goods and services. The different types and purpose of organisations
present within the business environment of UK are provided as discussed as below:
Public sector
These are the organisation which are basically owned and controlled by the authorities of
the government. Beside this, the main purpose of public sector organisation is to provide and
facilitate all the forms of public facility to the society and citizen of a nation which consists of
services of police, army, education, hospitals, public transportation and others basic services of
citizens.
Legal structure- The legal structure of public sector organisations are directly associated
and accountable to the government of nation and has to perform and work according the rules
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and policies set out by the government. Thus, the legal structure and operation of the public
sector firms is decided and completely finalised by the government or some other supreme
authority of the nations (Barlatier, Giannopoulou and Gryszkiewicz, 2021). Further, the public
sector has been categorised into three more types based on their legal structure and control which
is described and discussed as below:
 Central government- These are the firms which comes under the direct control and
jurisdiction of the supreme and central authority of the nation and all the activities and
function of these organisation are directly controlled and monitored by the central
government. Beside this, the funding and management of operations and business
purpose of these firms are also under the supervision of the central government.
 State government- These are the organisation that comes under the control of the state
government and their business activities and operations are being managed by the
government of some specific state in which the its major business operations and
headquarter is located and situated. Thus, the major business operation of a state owned
public company is limited to that specific state which have authority and power of
supervision along with meeting the financial needs and other resources (Best and et. al.,
2021).
 Local government- These are the companies which are nit under the supervision of
central or state government but their operations are control and managed by some local
authorities. Within UK, the local government public sector company is being operated
and managed by the Municipal corporation along with the supports of other local bodies.
Private Sector
These are the companies which are managed and owned by some private individual or
group of people. The main purpose and aim of the private company is to have maximisation of
profit by the way of satisfying and meeting the needs of customers.
Legal structure- Various legal laws and acts are applicable to the private sector
companies which states provisions for their incorporation and management of operations, within
in UK, companies act 2006 and partnership act 1890 are two major laws which defines the legal
structure of public sector companies. On the basis of legal composition and structure the,
organisation in private sector are further classified into these three types which are disused as
below:
2

 Sole proprietorship- Under this form of legal structure, a private company is wholly
controlled and operated by a single individual in an independent private manner who is
having all the liability and responsibility of managing a firm. further, in UK the Sole
proprietor needs to get registered for a self-assessment along with filing the tax return of
the business operations every year as per the legal laws and provisions of the UK.
 Partnership- This form of private organisation basically consists of a group of two or
more individuals who are working in an association or agreement to achieve some
common goals. As per the provisions of the Partnership act, 1890 all the role and
responsibilities of the partners needs to be properly stated and written within the
partnership deed (The Partnership Act 1890 - General Partnerships, 2019).
 Private limited companies- These are mainly joint stock company where each of the
shareholder have a limited liability and are also tend to bound with the rules written
MOA and AOA as per the provision of company’s act, 2006 (What is the Companies Act
2006?, 2019).
Voluntary sector
These are the companies which are operating with the purpose of benefiting society and
aim at brining equality in the community by the way of supporting and enriching the vulnerable
group of the society. Thus, companies in voluntary sector mainly operates without having the
aim of earning profit and their main purpose is to support society to create a better world.
Legal structure- The voluntary sector has divided into below stated types based on its
legal structure (Legal Structures for Voluntary and Community Groups, 2019):
 Trusts- It is mainly a group of people who comes together as a trust with the purpose of
doing charity for wellbeing of society, the members of the trust are ruled and managed by
the trust deed and have to follow regulation provided in trustee act, 2021.
 Charitable company limited by guarantee- It comprises of a group of people who raises
funds in form of donations and charity to help the vulnerable group of the society and its
members are bound by the AOA and MOA of the company (Hamilton and Webster,
2018).
P2) The size and scope of a range of different types of organisations
On the basis of size, organisation are divided into three main categories which are provided
as below:
3

 Micro- These are basically the small sized organisation that have the limited operations
and also have the limited requirements of the amount of resources.
 SME- These are small to medium sized organisation with 20 to 250 employees which are
bigger than micro but smaller than global company. They have limited financial
requirement and mainly operate at local and domestic level.
 Global- These the big multinational organisation which have their business operations in
more than one country of world. The ultimate purpose of global company is to focus on
maximization of profit and expansion through large amount of finance and resources
(Hasse, 2021).
Overview of the chosen company
The National Health Service (NHS) – It is a UK government organisation which act as
umbrella team for providing publicly funded healthcare and medical supports system within the
various parts of UK. The main headquarter of NHS is situated at London, United Kingdom along
with three main systems consists of NHS England, NHS Scotland and NHS Wales. Each of the
NHS is providing a comprehensive range of health services along with free use for people who
are ordinarily resident in the United Kingdom.
The British Red Cross – It is a well-known UK registered charity that is working fir creation
of worldwide neutral and impartial humanitarian network. This society was formed in 1870 and
main headquarter is located at London, United Kingdom which is committed for helping the
people who are facing discrimination based on some ethnic origin, nationality or political belief
and religion (Kasemsap, 2018).
John Lewis –It is a private company and well-known brand of high-end department stores
that is operating throughout Great Britain and having its main headquarter situated at London,
England, UK. It was created in 1929 and providing various products to its customers which
consists of Home and Design, Electricals and Technology, Gifts and Celebrations, Fashion and
Beauty and Baby and Child.
Basis John Lewis
(private sector)
The National Health
Service (NHS)
(public sector)
The British Red
Cross
(voluntary sector)
Scope The scope of John Lewis
consists of becoming one
The scope of NHS
consists of providing best
The British red cross
is working to provide
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the largest retailer of the
of the UK through
providing best quality
product to its customers.
possible health care
facility and all medical
support for the British
Citizen at free of cost.
the needed people
with equipment,
space and resources
to support those who
are affected by an
emergency or any
form of
discrimination
through helping them
to recover (UK
British Red Cross,
2021).
Business
objective
Maximisation of profit
trough attracting more
and more customers for
its organisation (Khatun
and Miah, 2019).
Provide best quality
medical care and support
for citizen
Creating a better
world and society
through helping out
people in emergency
and other
consequences.
Stakeholders Stakeholders of John
Lewis consist of its
employees, owners,
board of directors,
customers etc.
Stakeholders NHS
include government
authorities from where it
gets the needed finance
and other required
resources along with the
doctors, nurses and
patients.
Stakeholders of
British Red cross
comprises of all the
trustee and members
who are making
donations along with
the volunteers who
are working to create
equality in the
society.
Size It is a large size
organisation with near
around 38,100 employees
It is a global organisation
with more than 1.1
million full-time
The British Red
Cross is also a large
organisation which
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working across the UK. employees working in
working in general
practice and other clinical
roles (The NHS workforce
in numbers, 2021).
employs nearly 4,000
people.
LO 2
P3) Relationship between different organisational functions and link to organisational objectives
and structure
The John Lewis is a one of the leading retail stores of UK that provide a variety of predicts
and services to its customers comprises of Home and Design, Electricals and Technology, Gifts
and Celebrations, Fashion and Beauty and Baby and Child. The main Business functions of John
Lewis are discussed as below:
Marketing- It is essentially required to promote and advertise about the products and
services provided by the John Lewis in order to attract and cater larger number of customers.
Finance- It comprises of timely preparation of budgets and other financial reports in order
to keep a check on cost and expenses of John Lewis so that better control can be taken on flow of
money and other resources.
Logistic- This department of John Lewis is responsible to manage the supply of products to
ensure timely availability and delivery of products at its various retail store as per the need and
demands of the customers (Kopnina and Blewitt, 2018).
Relationship between different organisational functions
To ensure smooth flow of business operations it is necessary to have proper relationship and
interconnection among various functions which have both advantages and disadvantages that are
discussed as below:
Marketing and Finance- A relationship and interaction between marketing and finance
allows a better control on marketing expenditure through preparation of proper marketing
budgets and schedules. Further, effective marketing also supports higher funds with for finance
function through attracting and catering larger number of customers.
6

Logistic and Marketing- An interrelation between logistics and marketing department
ensures a better coordination between the supply and demand of the product to reduce the
chances of wastage of resources and products. Marketing functions helps in determine the latest
trend and demand of the customers which directs and supports logistic function to have more
delivery of that particular product (Masłoń-Oracz, Wahome and Njiraini, 2021).
Thus, on the basis of above discussion an analysis can be made that interrelation of business
function is beneficial for John Lewis as it supports higher productivity and better management of
funds through meeting the needs and expectations of the customers. But sometime this,
interrelationship between function also leads to delays and chances of conflicts due to lack of
proper coordination which leads difficulty in achievement of organisational goals.
Functional organisational structure of John Lewis
Figure 1: Function based organisational structure of John Lewis , 2021.
The John Lewis company is having the functional organisational structure which plays a
vital role in achieving its objectives of higher productivity and success as it brings more clarity
and transparency in business operations. Functional structure helps in leading improved
communication and enhanced the coordination level through proper bifurcation of role and
responsibility of each staff working within a particular function based on skills and knowledge
level. Thus, adoption of functional structure reduces the chances of chaos and confusion at the
workplace of John Lewis which helps in effectively meeting the set objective of higher
productivity and success through improved performance and efficiency of staff.
7

Part 2
LO 3
8

P4) Positive and negative impacts the macro environment
NHS is a well-known public owned health care organisation of the UK that is operating
and working for leading medical support and providing health care facilities to citizens of UK
through various health care systems (Nikitina and Lapiņa, 2019). On the other hand, John Lewis
9

is a private company and well known retailer of UK offering a range of products to its customers
through various stores across the different location of UK. An analysis about the positive and
negative impact of the various factors of the macro environment on the business operation has
been provided below in context with NHS and John Lewis company with the help of PESTEL
analysis that is provided as below:
PESTEL analysis
The main aspects and factors of macro environment provided by the PESTEL analysis
are discussed below in context of NHS and John Lewis company:
Political factors
 Positive impact- The political environment of UK is mainly stable that bring positive
impact on business operation of NHS and John Lewis as they do not need to make
major modification in their business strategy.
 Negative impact- It had been analysed that a rapid change in the taxation policy and
trade polices is being seen within UK that is creating a negative impact on the
business operations of John Lewis as it tends to make rapid changes in its tax
structure and other accounting that enhances its c cost of operations (Rivera, Yunusa-
Kaltungo and Labib, 2021). Beside this, change in trade policy that is mainly seen
after the Brexit is leading negative impact on the business operation of both NHS
10

and John Lewis as they are facing difficult in supply and proper delivery of required
material and resources that is affecting business operations and creating delays in
work.
Economic factors- The economic environment consists of inflation, deflation, recession,
bank rate, purchasing power of customers, level of demand, disposable income and other factors
that are related growth of GDP and economy of a nation.
 Positive impact - Mostly, UK is having a stable economy but the recent Brexit and
global pandemic of Covid-19 has adversely affected the economy of UK and a little
slow down and recession is seen. Recession and slow down of economy offers
cheap labour for John Lewis and NHS that have positive impact on its business
operation.
 Negative impact- This recession and situation of covid-19 has created a negative
impact in the business operation of NHS as it has to face many financial troubles
along with insufficient amount of resources to provide quality care for the patients.
Decrease in the purchasing power of the customers due to the recession and strict
lack down has also negatively affected the business operations of the John Lewis as
many of its store are closed down thus, its productivity has got reduced (Sharma and
Biros, 2021).
Social factors- This section of external environment is derived by the belief, cultural and
mind set of the society. It has been analysed that the society of UK is highly active on online
platforms and social media along with open minded belief and culture.
 Positive impact- Active society on social media and other online channels has lead a
positive impact in the business operations of John Lewis as it makes easier for this
firm to promote and advertise its products. Along with this, during the time of
lockdown and shut down use of online services is made by John Lewis which
supported smooth flow of its operations. Social factors have also lead positive impact
on NHS as it become easier to get online registration of patients along with ensuring
better alertness in patient and citizens about the Ciovid-19 which supported better
business operation during the situation of this global pandemic.
11

Technological- High level of technology improvement is seen in the business environment
of UK that is leading positive impact on business operations of both John Lewis and NHS. Use
of latest technology and digital platforms helps in making effective communication and
interaction with customers in order to have higher productivity and improved customer base that
lead better business operations.
 Positive impact- Beside this, automation of billing and secure online payments
options has also lead to positive impact of technology on the business operations of
both NHS and John Lewis. Technology has also provided more efficient medical
equipment for NHS that support improved business operation and better health care
services (Shu, Jain and Liang, 2019).
 Negative impact- rapid changes in technology leads to higher cost of operation for
John Lewis and NHS as they need to make higher financial expenditure for adoption
of new technology.
Environmental factors- It comprises of the step taken by the government and business
organisation for protection of environment. Now the customers and citizens of UK are becoming
more conservative towards environment that is leading a positive impact on business operation
of NHS and John Lewis.
 Positive impact- All efforts are made by John Lewis and NHS to reduce carbon
emission and other wastage to protect environment and also ensure healthier business
12

operations. Making sue of renewable energy and eco-friendly packing are some of
the positive impact of environmental factors on business operations.
 Negative impact- adoption of eco-friendly measures are sometime costlier thus,
enhance the cost of operation for both NHS and John Lewis.
Legal Factor- This section of micro environment is related with the legal laws and act as
many health and safety act and employment regulation laws are implemented within UK for
protection of employees.
 Positive impact- Legal factors are leading a positive impact on the business
operations of NHS as it is providing much more positive and safe working
environment to its employees that has improved efficiency level of overall business
operations.
 Negative impact- Food security act and other strict laws are leading a negative
impact on business operations of John Lewis as sometime it has to faced legal
consequences that affects and hampers its business operations (Singh and Malla,
2021).
LO 4
P5) Internal and external analysis of specific organisations
The SWOT analysis for NHS and John Lewis is provided as below:
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SWOT analysis of NHS
Strengths Weakness
 High Loyal, engaged and committed
workforce
 Expertise across range of health acre
services and acknowledge clinical
strength
 Strong research and development and
associated university hospital status.
 Issues in recruiting and retaining the
staff is creating issue of high vacancy
for nursing
 Underlying fiscal deficit and lack of
finance for further development
(Amato, 2021).
Opportunities Threat
 Development of integrated and well-
coordinated pathways with the local
health community are supporting better
growth and development
 Adopting transformation plan and
wider systems of sustainability is also
creating opportunity.
 Focus on creating core strength in field
 Uncertainty of national economy is the
biggest threat faced by NHS that is
affecting its future funding models and
development.
 Non delivery of CCG planned
reduction at the time of emergency
activity.
14

of high quality care and medical
support through regular training and
education programmes (Barlatier,
Giannopoulou and Gryszkiewicz,
2021).
 Effective use of online channels and
digital platforms to make aware and
educate large number of patients for
having improved health care and
medical support.
 Threats created by Brexit and Covid-19
in form of slow delivery of resources.
SWOT analysis of John Lewis
Strengths Weakness
 Wide range of products and fashion
brands are delivered along with product
of their own brand (John Lewis SWOT
Analysis, Competitors, STP & USP.
2020).
 Price of items are higher as compared
to other competitors (Best and et. al.,
2021).
15

 Having a strength of more than 35000
skilled employees across the UK to
deliver best quality services.
Opportunities Threat
 Expansion of network through making
use of online services and digital
platforms.
 Having opportunity to enter new
segment like pharmacy, etc. as digital
store during the time of covid-19
pandemic (Hamilton and Webster,
2018).
 Adoption of new and latest technology
can be made to have higher efficiency
in operations and reduction on
operating cost.
 Intense competition and threat of
lockdown is increasingly seen in the
retail industry of UK.
 Competition law and other legal
provisions are creating more legal
consequences and risk in form of
leading merger of the many
convenience stores (Hasse, 2021).
16

P6) Strengths and weaknesses interrelate with external macro factors
A better understanding about the prevailing threat and opportunity is facilitated by the
external macro factors which supports more effective formulation of strategy through proper
interrelations and connection with the strengths and weakness of the firm (Kasemsap, 2018). An
analysis of the Strengths and weaknesses interrelate with external macro factors has been
provided below in following points in context of NHS and John Lewis:
 It has been analysed that the current situation of Covid-19 that is present within the
external environment of John Lewis has been properly analysed by the managers and to
set a proper coordination between this external threat and internal strength, it has been
decided to come up with digital and online form of services. Thus, an analysis can be
made that interrelation of the strengths and weakness with the external situation and
macro factors leads to effective decision and strategy formulation to support improved
performance and higher success of the firm.
 Apart from this, the legal external factor has revealed that many strict laws are made for
protection of customer’s interest and saving them from false advertising. Thus, it has
become vital for John Lewis to take effective action on these legal laws to remain
safeguard from any kind of claims and suits that can be filed against regarding
17

misleading advertisement (Khatun and Miah, 2019). Thus, it can be evaluated that
interrelation among strengths and weaknesses with external macro factors is beneficial
for John Lewis through making it able to grab the existing opportunity and also lead to
elimination of threat through effective decision making on the basis of its own internal
strength and existing situation.
 Beside this, it has been analysed that issue of proper interaction with patient who are
living in local and rural areas has become difficult due to outbreak of covid-19 thus,
NHS is adopting transformation plan and wider systems of sustainability is also creating
opportunity which reflects the benefits of interconnection of strengths with the eternal
macro environment (Kopnina and Blewitt, 2018).
 Beside this, based on the current situation in the external macro environment, The NHS
has also adopted integrated and well-coordinated pathways with the local health
community for are supporting improved health and medical facility and system to all
people residing in the local areas. Thus, Strengths and weaknesses interrelate with
external macro factors as it supports NHS to grab the existing opportunity and also lead
to elimination of threat through effective decision making on the basis of its own internal
strength and existing situation.
CONCLUSION
18

On the basis of current project, a conclusion can be made that various form of compressing
private, public and voluntary organisation are present within the business environment of a
nation. Further, it has been also summarized that the internal factors of the business environment
consist of the elements that exits within or inside a firm like the owners, employees,
shareholders, board of directors, company policy, etc. On the other hand, it has been also
summarised that the external environment consists of the elements that are situated outside the
business organisation but have significant impact on its operation such as social factor,
economic, technological and political factor and many more.
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Books and journal
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