Edexcel BTEC Unit 1 Business Environment Report - Luton College

This report analyzes the business environment, focusing on Primark and ASDA. It begins with an introduction defining business and its importance. Task 1 describes different types of businesses (private, public, and others) and their stakeholders (owners, customers, suppliers, and employees). Task 2 examines organizational structures, contrasting matrix, product, and functional structures, and explaining how these structures help businesses like Primark and ASDA fulfill their purposes. Task 3 explores the influence of contrasting economic environments and challenges faced in these environments on business activities. Task 4 discusses the impact of political, social, and legal factors on business activities. The report concludes with a summary of key findings and references.

Businesses
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Description about the types of business ................................................................................1
P2 Description about the different stakeholders.........................................................................2
TASK 2............................................................................................................................................2
P3 Describe how two businesses are organised in terms of their structures and functioning.....2
P4 Explain how the style of organisation of your chosen businesses helps them to fulfil their
purposes. ....................................................................................................................................3
TASK 3............................................................................................................................................3
P5 Influence Of Two Contrasting Economic Environments.......................................................3
M2 Challenges Faced In Two Economic Environments.............................................................4
TASK 4............................................................................................................................................4
P6 Political, Social And Legal Factors Impact On Business Activities......................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In this modern world of technology there is always a question arises of livelihood,
survival and assistance and for that purpose one needs to do different activities. One of the main
ways of earning or to exchange certain things is business. Business is an activity performed by
an individual or by an organization to commercialize certain goods or services of to achieve a
definite purpose. The focus point of this report is to explain the various aspects of businesses and
their environment (Aguilar, 2017). Workplace and the conditions of business bears a lot of
importance in a business organization as it helps their employees to do their work assigned to
them peacefully and in safe premise. Now a day’s approximately every organization wants to set
up a healthy business environment in their office to protect their interests and helps in to increase
their moral for efficient working.
TASK 1
P1 Description
Private company-This type of organisation are owned and run by the private individuals. This
can be operated by two ways that is either in the form of sole proprietor or with partnership.
Hilton is a private organisation which aim is to deliver effective quality of services and earn
maximum profitability and market share. This types of organisation rules and regulation can be
govern by the manger of company who is liable to develop working practices, policies and
norms of business (Davis and Blomstrom, 2016). It can be said that private organisation's aim is
only to earn the highest profitability in the competitive market and deliver effective customer
satisfaction. For this purpose the develop effective marketing strategy and tactics so as more
customers can attract towards business organisation.
A) Public company- This types of organisation issues securities through an initial public
offering and trade them in at least one stock exchange. Main objective of this type of
organisation is to maximise shareholder's wealth by generating high profit and enhancing
organisational growth. Primark is the example of Public company which have major
objective is to earn the maximum profitability by delivering effective product and
services. Further it want to develop such brand image in the market so as it can acquire
large numbers of customers.
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 Other organization: Other than above mentioned entities there are several other firms also
which are made to achieve their definite goals and have their different kinds of objectives
such as voluntary organization, government entities, charitable trusts, co-operative firms
etc. Charity is a non profit organisation which have main function for the welfare of the
company. Its main objective to deliver the help of the society (Kennerley and Neely,
2013).
B) Voluntary organisation- Such kind of organisation have ownership is with the voluntary
people. Voluntary group is a group of people who decides to work together to bring out
task and decides there part of responsibility and obligations mutually and therefore, legal
form is being an issue when the rules and regulations are written
P2 Description about the different stakeholders
Owners: These are the investors of the company and provide huge capital to run operations
of the business. Management of the corporation provides details of financial performance of the
business at the end of each year. They report and present financial statements of the entity in the
annual meetings. All the other needs will be fulfilled by the managers of Primark. They make
effective dividend policy for the shareholders. Statutory and compulsory meetings are also an
effective way for providing valuable information to the shareholders of the company.
Customers: Pricing policy of the business is prepared by Primark to provide important
information regarding products and services to their consumers. They set the quality standards to
provide equal and best quality goods and services to buyers of the company (Buchholz, 2016).
Suppliers: These are the individuals or business unit which provide raw material to
Primark. They also require payment on time and other important financial information of the
company to become more secure regarding regular supply. Company has an effective payment
system and sets the time limit for the payment to suppliers to fulfil their objectives.
Employees: Workforce of the business needs sufficient wages and salaries on time and
also expects some increments. To fulfil this kind of requirements of the employees, company can
make special policy for employees in which rules and regulations regarding workers are cleared.
They also require managing and motivating their employees for doing smart work.
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TASK 2
P3 Describe how two businesses are organised
Matrix –
The matrix structure is usually found in organisations that can deal with the special one
off type of projects, also these companies can also work on several projects all at the same time.
Although while all of these projects are ongoing, they have and expert team seeing it through
making sure it goes well.
Product
A product structure is the way an organisation represents the parts of a product and the
way they fit together and interact, also the organized levels in the detail based on the type of
structure. Also, this type of structure that is also used to manage the changes, testing and the
problem resolution for the complex products with numerous parts and functions (Ward and Sum,
2015).
Functional
The functional structure is more of an organisational structure where the employees are
all grouped hierarchically and then these are managed through the clear lines of authority and
then only report to the only person in charge.
The purpose of a structure
Divisions of work
The divisions of work are where a company has different types of works and these are
the manager, a few deputy managers and then the workers. Having these divisions at work
means that the employees know, who to talk to if they need help.
Lines of control
This is important that they have deputy manager just in case the manager is in a meeting,
and the workers need help the deputy mangers are second in line to be in charge if help if needed
or if there is a problem. This also means that each layer in the structure for Primark has a certain
amount of control (Kaufmann and Schankerman, 2017).
The functional areas of ASDA
The finance department will manage the payrolls, invoices, P&L also balance sheets and
the business's performance, the finance department will also report how well the business is
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doing to the rest of the company departments. This will happen each day if there is any major
area of concern, plus there will also be a monthly late lunch meeting for everyone in the ASDA
house this then will be videoed and sent out to all the stores.
Also, the Human Resources department will work with all the different departments and
will offer the training that will be needed, and will also help when recruiting the key people for
the different areas. Also, an example of this is the buyer may also leave a produce and then they
will need to recruit someone who has an experience and knowledge about buying products
(Child and Möllering, 2017).
P4 Explain how their style of organisation helps them to fulfil their purposes.
Primark is a public limited company it is formerly known as a PLC, they have a lot of
stores across the UK, plus they sell a wide range of products, and this variety from food, toys,
electronics, drinks, clothes, toiletries.
The organisational structure Primark has is a matrix style and this means, that there will
be fewer people at the top of the company managing the people below. Plus this also will allow
the managing directors, at the top of this chart to make the big decisions about which way the
business should take next. These decisions are important and should be made by the top
executives with the right experience and intelligence in this type of experience (Yew Wong. and
Aspinwall, 2014).
The sales director is responsible for making sure that all the right products are bought for
the store, although he doesn’t have change to check every individual one he knows they must
ensure that the right people are buying these products. Also, by having this type of
organisational structure it also allows each team to run in their own areas and research about
them properly to help them find out about the new trends across the world and also try to be one
of the first to market or offer out the best deals.
TASK 3
P5) Describe the influence of two contrasting economic environments on business activities
within a selected organisation
Environmental factors as internal and external environmental factorsimpact on business
operations and effectiveness of Primark. Where, internal environmental factors include
management of product services, funds, employees' performance, environment of entity etc.
which are manageable. While, external environmental factors remain uncontrollable including
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political, social, technological, legal which are monitored by preparing and implementing
strategies. Therefore, mismanagement in these factors affect decisions regarding business
operations. In this regard, internal and external environmental factors' impact on decision-
making regarding business operations of Primark can be understood as follows briefly:
Internal environmental factors impact on decision-making process: It includes
factors which are controllable as men, machine, mission, management etc. Through analysing
these factors, several ideas are generated related to proper management of business operations,
using machinery equipment, adequacy of resources and funds etc. Therefore, these are helpful
for managing tools which remains controllable as contribution of workers for goal
accomplishment. In this regard, different tools are analysed for performance management and
enhancing working efficiencies of employees effectively (Montazemi, 2017). Moreover, internal
factors of business environment impact on operations and profitability effectively. In addition to
this, it is considered that if there is lack of any factor in the entity then all business operations get
affected. However, various strategies implemented that influence productivity and profitability
of organisation. Thus, various ideas are generated for improving services and allocation of
resources and funds efficiently. Including this, occurred changes in internal environmental
factors are controllable which plays as key role on overall business operations for further
implementations (Schiffer and Weder, 2016). Therefore, entity's strength and weakness are
obtained in which positive aspects can be maintained as well weaknesses can be reduced
efficiently for further operations. Besides this, internal environmental factors affect atmosphere
of enterprise as well tools for production and distribution of cloths provided by Primark. Overall,
it is determined that internal environmental factors that can monitor over and also remains
helpful for entity's development as of productivity and profit earning capabilities.
External environmental factors: Due to changes in these factors which are beyond
control are requireed to be implemented for managing them and creating balances. However, by
implementing strategies for fulfilling different people's requirements, adopting technological
changes, getting adjusted according to situations occurred would be effective to manage business
operations. Thus, implementing strategies for controlling over external environmental factors are
needed to be implemented for organisation’s effectiveness and profitability (Keiningham and
Evans, 2013). In addition to this, conducting market research related to different country's people
choices as are required for further operations and better-quality services. However, for managing
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changes in technological factors, it is required to adopt innovative techniques and latest
technologies for better quality services. Along with this, preparing strategies in accordance to
social and cultural factors, it is essential to consider different nations' social system and choices
for business operations and effectiveness in them. In this regard, by implementing strategies for
managing economic fluctuations, it is needed to create innovative ideas and implementing plans
more efficiently. Thus, it is considered that changes in macro environmental factors impact on
decision making and business operations of Primark as well its competitiveness. In addition to
this, changes in government policies including tax rates, interest rates, foreign trade and others
impact on decision making and effectiveness of organisation (Highsmith and Cockburn, 2016).
As increase in tax rate affects financial position of entity negatively while decrease in this rate,
develops its monetary position. Therefore, changes in these factors and different tools get
affected on business operations of Primark. It is linked with productivity and profitability of
entity efficiently.
TASK 4
P6 Political, Social And Legal Factors Impact On Business Activities
 Political factors:- Primark and UK business organisations should focus on political
factors like; the level of bureaucracy affairs, tariffs between UK and other countries etc.
By balancing on these factors, there is possibility for stability and growth of organisation
politically.
Economic factors:- This case's situation will create high impact on UK business organisation
economically. Effect of stock market's flexibilities, World bank and WTO will also be effected
for organisation's growth. So, Primark should try to balance its business in economic way on
behalf of these factors (Batra and Stone, 2017). Social factors:- It will effect on Primark's business and UK business organisation at
large scale in terms of social environment of business. Social factors of environment for
business will be as; increasing popularity of immigration and transferring practices and
also greater concern for minorities in societies. Technological factors:- Due to situation, technological factors will effect on UK
business organisations as in continuous emergence of new communication technologies.
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There would be innovative techniques occurs and level of global technological
infrastructure will also be effected. So, Primark and UK organisations will have to focus
on these factors for expansion of business.
 Ecological factors:- These factors are related to increasing levels of air and pollution and
impact of global warming tendencies (Tapscott and Caston, 2017). These factors plays
great role to impact on UK business organisations during the case. Ecology of business
will effect globally.
 Legal factors:- Global data protection laws will effect due to case's circumstances. Thus,
organisation should increase its level of legal globalisation and accept changes in cross
country employment and health and safety laws.
CONCLUSION
In this report, it is concluded that changes in environmental factors affect organisation's
effectiveness and business operations. In this regard, different sector organisations' purposes,
size, vision and mission are described. However, various organisational functions and their link
with organisational structure of Iceland is presented that is essential for creating coordination
among them and improving organisation's performance. Moreover, internal and external
environmental factors including SWOT and PESTLE are understood that affect decision-making
regarding further business operations and profitability of entity. In addition to this,
interrelationship between internal and external environmental factors is described that impacts
on business operations and different business activities. Therefore, significance of strategic
planning for getting adjusted towards occurred changes are understood through this report.
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REFERENCES
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Buchholz, R. A., 2016. Business environment and public policy: implications for management
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an empirical study of Singapore manufacturers. Journal of operations management.
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Kaufmann, D and Schankerman, M. A., 2017. Measuring governance, corruption, and state
capture: How firms and bureaucrats shape the business environment in transition
economies.
Child, J. and Möllering, G., 2017. Contextual confidence and active trust development in the
Chinese business environment. Organization Science. 14(1). pp.69-80.
Yew Wong, K. and Aspinwall, E., 2014. Characterizing knowledge management in the small
business environment. Journal of Knowledge management. 8(3). pp.44-61.
Montazemi, A. R., 2017. Factors affecting information satisfaction in the context of the small
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