Analysing Business Environment: Types, Size, Scope, Functions & Links

This report provides an analysis of the business environment, focusing on different types of organizations including public, private, and voluntary sectors. It discusses the purpose and legal structures of these organizations, with specific examples such as Marks and Spencer, British Broadcasting Corporation, and British Heart Foundation. The report also examines the size and scope of these organizations, their vision, mission, and values. Furthermore, it explains various organizational functions such as finance, marketing, human resources, and operations, and how these functions link to organizational objectives and structure, using Marks and Spencer as a case study to illustrate the interdependencies between different departments and their contributions to achieving overall organizational goals.

Business and Business
Environment
1

Table of Contents
PART 1............................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Explain different types and purpose of organisation public, private and voluntary along
with legal structure.................................................................................................................3
P2 Explain the size and scope of a range of different organisations......................................6
P3 Explain different organisational functions and how they link to organisational objective
and structure...........................................................................................................................7
PART 2............................................................................................................................................9
CONCLUSION................................................................................................................................9
References......................................................................................................................................10
Books and Journals...............................................................................................................10
2

PART 1
INTRODUCTION
Business environment refers to the sum total of all the internal and external factors in
which the organization operates. These internal and external factors in the environment influence
and impact the functioning of the business. Business environment constitutes of several types of
factors such as customers, competitor’s government, social, cultural, technological, political and
legal conditions. In this report, the different types of organization are discussed along with the
purpose and legal structure that these company follow. This report discusses the size and scope
of the above stated different types of organizations existing in the environment. Further Marks
and Spencer is considered which is a United Kingdom based fashion retail company. The
external environment in which the company operates is discussed along with the different types
of organizational department that are there in the company. Further it also covers the strength
and weakness of the company and how the external factor impacts the functioning of the
business.
MAIN BODY
P1 Explain different types and purpose of organisation public, private and voluntary along with
legal structure
When an individual or a group of individuals form a business entity to achieve specific
objective to earn money or for social work than it is called an organisation or a company.
Private Sectors
Private organisations are those companies which are having basic aim to earn maximum
profit by offering their products and service their targeted customer’s public (McTigue, Monios
and Rye, 2020). Marks and Spencer is a private organisation which is clothing and retailing
company and it is founded in the year 1884 by Michael Marks and Thomas Spencer. It is
headquartered in London, UK. It is having 78,000 employees currently and has 995 stores in UK
from which 615 stores are selling food products.
Purpose of Private Sectors
The main purpose of private organisation is to maximize their profit and gain competitive
advantage and earn a good brand reputation in market. On the other hand, they also focus to
3

contribute well to economic development by providing huge amount of job to unemployed
people. They also focus on their business expansion.
Legal structure of Private Sectors Sole-proprietorship: - It is a type of business which is owned, controlled and managed
by single individual. Here, whole profit and losses are shared among a single individual
who is owner of this business. The decision making process is also taken by single
individual. Partnerships: - Partnership is a type of private organisation where two or more
individual come together to work together and handle a single purpose organisation to
achieve maximum profit. Here, a partnership agreement is signed by all partners and
they divide their roles and responsibilities to manage business. Marks and Spencer is a
partnership form of business which is developed by the partnership of two people by
Michael Marks and Thomas Spencer. Corporations: - It is type of private organisation where there are huge amount of
employees and stakeholders are attracted to the company who invest in the company. a
board of directors were appointed by all stakeholders who are responsible to manage the
business by taking major decision for the company’s profit. .
Public sectors
Public sector is those companies which are having full control of government and they
are unable to make any decision without consulting to the government (Atchison and et. al.,
2020). The organisation which provide public transport services, government educational
institutes, military, health care and many others are the examples of public companies. British
Broadcasting Corporation is public company.
Purpose of Public Sector
Their main purpose is to fulfil the needs and wants of general public and develops the
infrastructure of the economy. These types of companies basically represent their nation. Hence,
they make sure that they will work properly and make their country attractive and provide
benefit to economy my developing their GDP. They do not work to earn money but they work to
solve social issues.
Legal Structure
4

 Federal or National: - There type of organisation have direct control of national
government and these type of companies are basically responsible to develop the
infrastructure of a nation. Defence, law enforcements, infrastructures (national highways,
tunnels, bridges etc.), health care and public education are the institutions fall under this
category. British Broadcasting Corporation is a type of federal company which is
responsible to develop awareness of their nation’s people by showing them national news
that what is happening in their country. Regional or State: - These type of organisations have full control of state government
and they basically work to fulfil the demands and needs and wants of a particular region
of customers (Savona and et. al., 2021). Local or Municipal:- These type of organisation have the control of local government
and these organisations makes sure that they will provide employment and health care
facilities to local people so that they will fulfil their basic needs by them self.
Voluntary sectors
Voluntary companies are those companies who work for non-profit aim and their
especially work to solve the problems of their society like removing poverty, providing medical
benefits to those people who could not afford it and many others.
Purpose of Voluntary sectors
The main purpose of these types of organisations is to mitigate the social issues from the
society and make the earth happy place to live life (Coyle, 2021). They mainly aim to provide
positivity in society and environment by protecting their interest.
Legal structure of voluntary sectors
 Trusts: - Charitable trusts are established for the purpose of philanthropic activities and
social well-being. It is a fiduciary relationship between the two parties in which one
(trustor) gives another person (trustee) a right to hold and manage the given assets over a
period of time for charitable activities.
 Unincorporated organisation: - Here, organisation is formed by a group of people who
work together to solve a common societal issue without making profit for their
organisation. British Heart Foundation is a perfect example of unincorporated
organisation, where a group of medical professionals have come together to address
cardiovascular disease.
5

P2 Explain the size and scope of a range of different organisations.
Mark and Spencer: - Marks and Spencer is the retailing and clothing company which focuses
upon making maximum profit by selling quality products to their targeted customers (Kellard
and et. al., 2021). They are having 78,000 employees and they are having overall 995 stores only
in UK from which 615 stores are selling food products. Hence, this is clear that they are having
good scope in retailing sector and they plan to expend their market with same kind of products
and services which is helping them to develop in UK. Their customers are satisfied with their
products and having loyalty for them because of their quality. Hence, they are also having a
strong customer base.
Vision- The vision of the company is to provide a standard on which the company can compete
with other players in the retail clothing industry. Their vision is to care about the environment
and community in which they conduct their operations (Marks & Spencer Mission Statement
Analysis, 2022).
Mission- Their mission is to make the people aware about the importance of using quality
products in their day to day life. They thrive to provide the best services and products in the
market so that the lives of people can become better across the globe.
Values- Marks & Spencer is built on some core values such as service, innovation and trust
through which they establish an effective culture for the employees as well as the customers.
British Broadcasting Corporation: - BBC is headquartered in Westminster, London and it is
founded in the year 1922. They are having more than 35,000 employees from which more than
16000 work for public sector broadcasting and rest of the employees are part time workers. BBC
is considered as one of the oldest and widely known broadcaster in the world. They are showing
news on TV, radios and also available online by its mobile application. They are serving their
news in more than 25 languages and their customers are having major trust on the reliability and
trustworthy of their news. They are having good scope to expand their business and targeting
other countries to provide international use and make them aware about their surroundings.
Vision- The vision of BBC is to be more creative and deliver the best quality of content across
the world. They currently dominate the UK market but they are looking to get a good grab on the
other markets across the world as well.
6

Mission- The company is looking to act in public interest, they want to serve the audience
without any partiality. Further the mission is to maintain the quality and distinctive output which
will educate, inform and entertain the customers.
Values- Trust is a great foundation on which BBC has established their operations, they
celebrate each caste, colour and grid. They treat their audience at priority and they think of them
as heart of everything that they do in the business.
British Heart Foundation: - British heart foundation is a charitable organisation which was
founded in 1961 by a group of doctors with the main aim to provide the treatment for those
people who are facing with the disease called Cardiovascular disease (Renshaw and et. al.,
2018). They specially focus on those patients who are having major diseases related to heart and
having no proper financial ability for their treatment. Hence, this organisation helps them to
provide them best treatment to live their life happily. There are total 935 medical professionals
who are connected with this organisation and help people to get proper treatment for their heart
diseases.
Vision- The vision of British Heart Foundation is to save the lives of people who die because of
several heart diseases. The company is looking to achieve these results through their effective
research and quality care process.
Mission- The mission of the organisation is to end heart and circulatory diseases so that no
people die of undetected heart diseases. The company is looking to achieve this mission through
their effective implementation of strategies in equipment’s and research.
Values- The values that are expressed in the organisation are compassion towards the people and
heroic qualities to save lives of people.
P3 Explain different organisational functions and how they link to organisational objective and
structure
Organizational function refers to the different types of department that works in the organization
in order to make the functioning smooth. The department in the organizational divided according
to the functions that they perform and the ability of individuals. Every organization has different
departments so that they can manage the several types of operational activities that are
conducted. In context of Marks and Spencer they have majorly 4 departments, the four
departments are finance, marketing, human resource and operations (Cepel and et. al., 2019). All
these functions work together in order to make the objective of the organization attainable. The
7

objectives of each department are different but they all work together in order to achieve a
common objective of the organization. The ways in which these department work together in
Marks and Spencer are discussed below –
Human resource and marketing- the marketing department is responsible for managing the
advertising, promotional, sales part of the business. They analyse the market trend and further
promote their products and services accordingly in the market. Where on the other hand the
human resource department in the organisation is responsible for managing the employees and
recruiting the new employees and organisation. They manage all the aspects of employees such
as payrolls and organisational culture (Hamilton and Webster, 2018). HRM and marketing is
however interconnected as the human resource department hires people who can work in the
marketing department so that the organisation can better promote their products and services in
the market. They ensure that the right skilled people are being selected in the marketing
department who have potential to grow the product and services to ten folds in the market.
Human resource department is also responsible for managing the payrolls of the marketing
department and further marketing department is also responsible for circulating the templates end
banners that human resource department has prepared full recruitment and other processes of
business.
Marketing and sales- These are very two interrelated departments and they work hand in hand in
order to accomplish the advertising and promotional part along with making sales in the
business. Marketing department is it responsible for promoting the products and services did the
companies producing so that the sales department of the organisation can make good amount of
sales which will generate revenue (Belas and et. al., 2019). An efficient marketing plan made by
the marketing team of Marks and Spencer would help in establishing a good sales figure in the
current financial year and therefore the performance of these two department are closely
interrelated. The goals and objectives of these two department are also almost same as both of
these department want to reach as much as audience possible with their campaigns.
R&D and production- In Marks and Spencer the R&D department is responsible for the
searching about the different new types of products and services which the company can offer in
the market. This department ensure did the new service and product that the company is thinking
of offering in the market is worth investing or not. They work on different aspects which helps
the company in estimating the performance of the new product that they are thinking of
8

launching in the market. The production department on the other hand is responsible for making
and manufacturing the exact product that the company is looking to offer the customers. Once
the R&D department of the organisation make sure that the product that the company is offering
is overall good in every aspect then further the production team continues the operation to
manufacture the particular product. Therefore, these two department has to work closely with
each other and their activities are highly interdependent (Srakar and Verbič, 2018).
Human resource and finance- The finance department of the company responsible for
managing the funds an allocation of those funds. The financial aspects of the company are
covered by this department; they prepare different types of financial accounts along with proper
allocation of these funds into different departments. Financial department finances the activities
of human resource department and therefore they evaluate the funds that this department requires
in order to function smoothly during the financial year. Whereas on the other hand human
resources department is responsible for hiring new financial candidates in the company so that
they can well manage the funds of the company.
CONCLUSION
From the above report it can be concluded that there are several types of organisation that
exist in the environment, majorly there are three types of structure in the environment that is
public, private and voluntary. All of these types of organisation has different type of legal
structure and scope. All of these organisation works on different set of purposes in environment
and hence their objective also differs. The organisation is impacted by the internal and external
business environment. These two environment impacts the operations of the business in different
manners, the internal factor is done by the organisation by identifying the strengths, weaknesses
and such other factors. The external factor in the organisation is determined with the help of
PESTLE Analysis where every major factors and their impacts on the operations are analysed
and evaluated. The internal and external factors are also interrelated in terms of their impact on
the business.
PART 2
9

10

This analysis covers the six major external factors that impact the business, this six factors are
discussed below in context of Marks and Spencer. These factors are somehow related with the
company and impact the operations in a direct or indirect manner.
Political factors- These factors are related with the government and the policies that they make
in the country. The free trade policy in the United Kingdom is one of the major factor that
impacts the operations of Marks and Spencer. Through this policy of free trade, Marks and
Spencer is able to import foreign products which they can sell in their stores in which they can
managed to earner good amount of profit margin (Sumiati and Pramono, 2019). Through this the
company get positively impacted as the profitability of the organisation is increased. Apart from
this the company also gets negatively impacted from some of the policies that are followed in the
country, one such example is Brexit. The change in European Union policies negatively
impacted add the trade regulations and tariffs in the country are highly increased.
Economic factors- These are the factors that are somehow related with the economy of the
country in which the business is currently operating. The whole industry of retailers based on the
economic factors off United Kingdom. Marks and Spencer is a premium brand and the other
companies huh stealing away a good amount of market share from the business with their budget
clothing stores which negatively impact the business. The positive impact is that times when the
economy of the country is booming it will benefit the business in terms of profitability and
growth.
Social factors - These are the factors that considers the market trend, culture, demographics and
other aspects of the society. Marks and Spencer is a retail clothing store and hence social factors
highly impact the operations of the business. A sudden change in the taste and behaviour of the
consumer is negative for the business as their current inventory becomes void and they are
required to shift they are required to shift their change according to the new market trend. The
positive impact that the market trends and society have on the businesses that if the organisation
is able to cope up with the new market trends then the organisation can highly benefit from the
change.
Technological factors - This refers to the change and innovation in terms of the technology that
the company is using in their different operations like production, marketing and other such
important activities. The organisations that are able to adopt the new innovations in their
operations can survive and sustain in the environment for a longer period of time (Akpoviroro
11

and Owotutu, 2018). Technology that the company is currently using India different operations
highly impacts the overall business. Marks and Spencer really gets positively impacted if they
are able to adopt new set of innovations in the technology in the production and distribution
process. Selling of clothes another fashion products on their websites and application would
increase customer satisfaction which will directly impact the sales of the business. If Marks and
Spencer is unable to adopt to the new technology And this will negatively impact the business as
the other competitors will capture the current market share of the company by implementing the
new innovations.
Legal factors- This refers to the laws and legislation that are there in the country in terms of the
industry in which the company is currently operating. The government has made major laws that
the company is required to follow while operating their operations in the country. These laws are
made in terms of the quality, safety, and other important guidelines that the organisation is
required to follow. Further they have also introduced different types of customer support laws
which helps in establishing an environment in which environment in which the customers can’t
be cheated. The organisation is required to maintain the health and safety standards and if the
organisation is unable to maintain these standards then they may face legal obligations against
them which will negatively impact the image of the business.
Environmental factors - the organisation has some moral responsibility against the society and
the environment in which they operate their business. Marks and spencer is required to maintain
an environment friendly business where their operations does not impact the environment in
whatsoever with. The production units of the company must be established in a way in which the
environment is not negatively impacted (Onyshchenko and et. al., 2020). The organisation must
contribute in the process of reducing the carbon emission along with making recyclable
packaging material so that the environment can be sustained.
12