Impact of Business Environment on Organizational Objectives Report

This report provides a comprehensive analysis of the business and business environment, focusing on organizational structures, their purposes, and the impact of macro and micro environmental factors. The report examines private, public, and voluntary sectors, with Bentley Motors Limited as a case study. It explores the size and scope of different organizations, linking them to their objectives and analyzing the complexity of various business structures. The report also discusses the relationships among organizational functions like marketing, finance, human resources, and operations, and how they contribute to achieving business objectives. Furthermore, it assesses the positive and negative impacts of macro-environmental factors using the PESTEL model and evaluates internal and external factors through SWOT/TOWS analysis to influence decision-making. The report concludes with an evaluation of the impacts that both macro and micro factors have upon business objectives and decision-making.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types of the organisation and their purpose...........................................................1
P2. Size and scope of different type of organisations..................................................................3
M1. Different organisation's size, scope is linked with the objectives........................................4
D1. Analyse of complexity of various business structure and interrelationships of different
organisational functions...............................................................................................................4
TASK 2............................................................................................................................................4
P3. Relationship among different organisational function and their link to objective................4
M2. Advantages and disadvantages of interrelation among different organisational function
and its impact on the organisational structure..............................................................................6
TASK 3............................................................................................................................................6
P4. Positive and negative impact of the macro-environmental factors on the business..............6
M3. PESTEL model to support the analysis of macro environment within the organisation.....8
TASK 4............................................................................................................................................8
P5. Internal and external analysis in order to identify strengths and weaknesses.......................8
P6. Strengths and weaknesses interrelate with external macro factors........................................9
M4. SWOT/TOWS analysis influence decision making...........................................................11
D2. Evaluation of the impacts that both macro and micro factors have upon business
objectives and decision-making.................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business and business environment are interrelated with each other. This why because
business environment is the combination of all internal and external factors that have ability to
effect the business in both the way negatively and positively (Andersson, Forsgren and Holm,
2015). Business is a kind of organisation that is related to the making money by selling or
producing the products and services to the customers. Main aim of the business is to earn more
and more revenue. The project report contains detailed information about the various type of the
organisation, their scopes and impact of macro and micro environment on the business. To
understand in detail about different aspect of project report, Bentley motors limited company is
selected that is the parent organisation of the Volkswagen group. It is a British company that
manufacture and sells the luxury cars.
TASK 1
P1. Different types of the organisation and their purpose
Business environment consists various kind of organisations which have different size,
nature and objectives. All kind of the organisations have one unique purpose and that is to gain
maximum profit and for this they make their policies, structure and strategies. Herein, public,
private and voluntary sectors organisations discussed below with their purpose:
Private sector organisation- These are the organisations which do not offer their shares
to the public for buying. These kind of companies may issue some shares for their stakeholders
and shareholders but these kind of shares can not trade in the public exchanges. In addition these
companies implement under the control of individuals or group of individuals. Bentley motors
company is a kind of private sector company that deals in the luxury cars and established in
1998.
Purpose- The main purpose of these sector organisation is to gain maximum profit at
lower cost. In addition, these type of companies do not wants to earn profit only for themselves
but also for their different shareholders (Beatty, Samuelson and Abril, 2018).
Legal structure-
 Partnership- It is a kind of agreement between two or more parties to manage a
business with an objective to earn and share profit. As well as share the losses in
adverse situation.
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 Sole proprietorship- These type of organisations are run by an individual traders
who take important decisions at own risk. In this, the area of business covers
small area.
 Limited company- Limited companies are those companies in which their
members have the limited liabilities. They becomes responsible only till the
amount of capital which they invested.
Public sector organisation- Public sector organisations are the kind of companies which
can offer their shares to the public for buying. These kind of companies usually work for the
public services. They have partially objective of the profit. The example of these kind of
organisation is NICE( National institute for health and care excellence). It is a public sector
company that is established in the UK.
Purpose- The main objective of these kind of organisation is to provide health and care
services to the general public (Brown, 2018). They do not focus majorly on the profit. In
addition, some companies works for removal poverty and to provide employment to the skilled
persons.
Legal structure-
 Central government- It means control over the companies keep in the hand
of central government.
 State government- In this all decisions and management is done under
control of particular state government.
 Local government- Local government follows the rules and regulation in
the companies which are determined by the above governments.
Voluntary sector organisation- These are the organisations which work for
development of the society and to improve the life standard of general public. They do not focus
on earning the profit. In addition these are run without the integration of the government. For
example Amnesty international is a kind of organisation that focus on protecting the human
rights.
Purpose- The purpose of voluntary sector organisation is to serving the public. Specially
to those which are poor. It includes many charity, donation entities.
Legal structure-
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 Association- Association is a group of people which works together for common
purpose. It operates according to the government rules and regulation.
 Trusts- Trusts are the kind of group that does not require a membership structure.
New members can add on without any procedure.
 IPS(Industrial and provident society)- These kind of structure do not run for
the profitability and if profit incurs then they spend it for the development of
society and industry.
P2. Size and scope of different type of organisations
In the current business environment scenario there are many kind of organisations which
are different in the size and have multi-pal objectives. There are some type of organisation like
micro, small & medium and large etc (Côrte-Real, Oliveira and Ruivo, 2017). In addition all the
organisations have to follow the pre- set rules and regulation about the members, capital etc.
These four types of organisations are mentioned below along with their objectives:
Micro- Micro organisations are those organisations which have a very small business
area. These type of organisations have maximum number of employees till nine. In addition their
balance sheet shows turn over of less then £ 2 million.
Scope- The main scope of these kind of organisation is to maintain themselves in the
competitive business environment. They do not focus to serve the society and they majorly
concentrate on earning individual profit.
Small & medium- These kind of organisations includes partnerships, sole proprietorship
etc. Small and medium sized companies are needed to have minimum workforce of 50 members
which can not exceed 250. They are owned by a group of people, these can not be run by an
individual.
Scope- The scope of small& medium organisations is to increase their work area so that
they can earn maximum profitability. Basically, these kind of organisations are limited to a
particular country. They do not expand their business at the global level, due to small capital
structure.
Large- As the name assists, these kind of organisations are large in the size. It requires
huge amount of capital to implement as well as there should be more then 250 members. In the
case if an organisation do not have required members then it can be considered as the small or
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medium entity. Basically, large organisations operates big operations and transactions. Bentley
motors limited is large sized organisation which deals in selling of luxury cars.
Scope- Large companies have the scope of earning maximum profit on the cost which
they invest. As well as they complete their responsibilities towards different area of business
environment. Additionally, these kind of organisations operates their operations at the
international level. This is possible due to their large scale capital and area of business. This is
the main scope of these organisations to deal their operations at the global stage.
M1. Different organisation's size, scope is linked with the objectives
In the business environment there are many kind of organisation which are different from
each other in the terms of size, scope and structure. Eventually, organisations determines the
objectives, products and services as per their size of organisation. If organisation is small then
their objective will only to survive in the competition. On the other hand if organisation is large
then they will think large and try to maximise their profitability. They focus on the increasing
their market area across the border (Falkner, 2017). For example Bentley motors limited is a
large company and they are oriented towards maximum profitability and growth. They do not
afraid of competitors. So it is all about the size and scope of companies that impact their
objectives, products and services.
D1. Analyse of complexity of various business structure and interrelationships of different
organisational functions
Each business structure is different from other and have complexity as per the nature.
Like private sector organisations have then complexity of issue of shares, they can't offers shares
for the public. While public sector businesses suffers from the issue of too much involvement of
the government which impacts their general functions. Same as in the voluntary structure,
companies like Amnesty international works only for serving the public, therefore their
employees feel difficult to sustain without proper profits. On the other hand, all the
organisational functions are interrelated with each other. Like functions of public and private
sector companies interrelate with each other. For example Bentley motors limited and NICE
company both have equal function of serving the public by providing the best services. As well
as Voluntary organisations like Amnesty international is interrelated with the NICE company
because both of these companies are involved in improvement of the society (Hillary, 2017).
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TASK 2
P3. Relationship among different organisational function and their link to objective
Organisational functions are important to implement different activities in a proper way.
Various organisations have multi-pal functions. There are many kind of function like marketing,
finance, human resource and operational department. The Bentley motors limited applies these
functions which are directly linked up with their objectives. Herein, the description of different
functions and their interrelation with objectives are mentioned below:
 Marketing- Marketing is the function which is related to the presenting and
promoting the products and services of the companies to increase the sells. This is
very important function which is linked up with the organisational objectives.
Every organisation makes different marketing strategies to achieve the
competitive advantage. The Bentley motors limited company implements this
function for advertising their cars. It helps them in increased sells because this
informs the new and existing customers about the features of luxury cars. Due to
this function, company gets good revenue by selling maximum unit of cars.
 Finance- This is a kind of function which plays an important role in the context
of managing different financial activities. It allocates the fund as per the
requirement of business activities. In the absence of this organisation can not run
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their other functions effectively. The Bentley motors limited manage their
activities on the basis of this function (Lee and Shin, 2018). It helps them in
making financial plans for future which shows the link of financial function with
the company's objectives.
 Human resource- Human resource includes all the human beings in the
organisation including all the employees and management team. This function is
very crucial for performing the organisational activities. If companies do not have
sufficient human resource then it will be difficult to implement the strategies. In
addition, it is necessary that human resource should be skilled and talented
because without this resources are worthless. The Bentley motors limited
manages their human resources according to their skill and talent in the different
activities. This right allocation helps them in earning profit which is their
objective.
 Operational department- It is a kind of department which is involved in putting
the plans into the actions. This is an important function of all the organisation
because it makes the maximum utilisation of the all available resources. In
addition, it manages all the operational activities of the organisation. The Bentley
motors limited use this function in the manufacturing of the luxury cars. It enables
the better utilisation of resources. In addition, it also helps them in producing the
cars at lower cost so that they can achieve the higher revenue and that's the goal of
company.
M2. Advantages and disadvantages of interrelation among different organisational function and
its impact on the organisational structure
Organisational functions are interrelated with each other and these impacts to the
organisational structure. This interrelationship is very crucial for the companies because it has
both the aspects negative and positive. The advantage of this is that it brings coordination among
all the organisational functions and saves the time in implementing different plans. In addition it
makes possible use of resources like The Bentley motors limited takes the advantage of
interrelation these functions. On the other hand, this relation among functions sometimes create
the complexity in the organisation and due to this it can result in the loss. As well as it becomes
difficult to manage (Pearson, 2017). Though, it impacts the organisational structure positively.
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Like in The Bentley motors limited company they use the interrelation of different functions and
it builds their structure more strong and stable.
TASK 3
P4. Positive and negative impact of the macro-environmental factors on the business
Macro environment covers all the external factors which effect a business in both the way
positively and negatively. This impact can be analysed with the help of PESTEL analysis. The
Bentley motors limited company has some favourable and adverse impact of the macro
environment that is described below as PESTEL analysis:
PESTEL analysis- It is a kind of analytical tool which analyse the all external factors
that can impact a business. Herein, the different parts of this tool are mentioned below:
Political factor- This factor includes the various kind of government policies and
regulation which have significant impact on the business. The Bentley motors limited company
stuck by the UK governments policies.
 Positive- Government of UK remain stable mostly times and due to this above
company can operate their business functions easily.
 Negative- There are many restriction in the import and export of the cars which
impacts the company negatively. Due to this their cost becomes high by many
taxes in import-export.
Economical factor- Economical factor is related to the economic changes that can effect
the companies. It includes interest rates, material costs etc. The above selected company affects
due to this factor which is described below:
 Positive- Economic environment of the market is stable and oriented towards the
company's profit. They are satisfied with the economic rates like interest rate etc.
 Negative- Sometimes changes in the economical factor can decrease the income
level of the public and it can reduce the sell of cars of the company.
Social factor- This factor includes all the factors regarding to the public. Including
customer's need and demand, various demographic changes, culture, education level etc.
 Positive- The Bentley motors limited company offers the expensive cars because
of high income level of their customers. It helps them in generating the maximum
revenue as well as it satisfy the need of rich customers (Ross, 2016).
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 Negative- Due to continuous changes in the customer's demand it becomes
difficult to manage the balance between demand and supply for the company and
customers move towards other brand.
Technological factor- Technological factor includes the changes in the technology,
research and development and automation. This factor has dual impact on the The Bentley
motors limited company which are following:
 Positive- It helps the company to implement advanced techniques in the car
manufacturing that can satisfy the need of the customer.
 Negative- More changes in the technology can increase the cost of manufacturing
as well as it becomes tough to implement all new techniques in the cars.
Environmental factor- It includes all the environmental factors like climate changes,
carbon footprint and recycle changes. These are not in the control of the company. It impacts the
company in following way:
 Positive- Company is implementing CSR( Corporate social responsibility) model
that helps them in sustainability in the market.
 Negative- Due to more changes in the climate impact the company's sell. As well
as manufacturing process produce pollution that effect the health of public.
Legal factor- This includes various legal terms like various laws and acts and legislation
that can impact the company in following way:.
 Positive- If company follows all the rules and regulations then it benefits the
company in satisfying their employees and customers.
 Negative- Due to many laws and legislations, company has to fulfil the all
because in the absence of this many conflicts may arise.
M3. PESTEL model to support the analysis of macro environment within the organisation
PESTEL model is a kind of model which has all the factors that represent the entire
macro environment. This is why because it includes many factors like political, economical,
social, technological, environmental and legal. All these covers the area of the macro
environment (Stacey, 2016). If company use this model then it automatically analyse the macro
environment. Same as in the the Bentley motors limited company they used PESTEL model
which covered their all macro environment. In addition due to this analysis they enabled
themselves to see their position in the external environment.
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TASK 4
P5. Internal and external analysis in order to identify strengths and weaknesses
Organisations performs distinct operations in the internal as well as external environment.
The business environment is scanned for determining and forecasting the developments to
influence the success. The internal and external analysis helps in deciding the future of the
business. The managers of the Bentley motors limited uses SWOT analysis for analysing the
internal and external factors. SWOT analysis is a combination of Strengths, weaknesses,
opportunities and threats of the organisation. Strengths and weaknesses are the part of internal
analysis where as opportunities and threats are the part of external analysis. The description of
each analysis is as follows:
 Strengths: these are the features which provides an advantage to any business over
others. After the internal analysis it has been found that Bentley motors limited provides
heritage products in the market which are very expensive as well as high quality products
with are different from the competitors. The company is very popular for the exclusive
use of the promotional techniques for providing information related to the products or
services. Providing exclusive products in the market builds a brand image of the selected
organisation. The chosen firm has good product portfolio of different beautiful cars
which impresses and attracts the potential customers. The managers performs the
operation in such a manner which makes the employees along with customers feel special
(Storey, 2016).
 Weaknesses: These are the characteristics which places any organisation in the
disadvantage position in the competitive market. All the businesses face some or the
other weakness and Bentley motors limited is no different. They produces high standard
products which requires long waiting for the customers and dissatisfied many of them. It
leads to increase in attrition rate of customers and decrease in profits of the organisation.
The sustainability of growth is not as high as required because of serving services to
niche market segment only. The marketers are not able to tap the emerging countries due
to providing services in limited countries only.
 Opportunities: This includes various elements or situations which helps in exploiting the
resources to achieve goals. Various opportunities are available and grabbed by the
selected firm such as providing environmental friendly products. Such business adopts
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the promotional techniques of sponsorship events for increasing the brand image. It also
acquires the lower brands to provide services in the emerging markets. They also merges
with different organisations to deliver their services in various countries to get higher
returns.
 Threats: These are the elements which causes troubles to the organisations. Bentley
motors limited is facing a massive competition due to promotional techniques which
hamper its growth. The government of different countries changes law at different time
period which leads to work in uncoordinated manner with the laws and organisational
tasks. Changes in the economy also acts as big threats for the selected business to sustain
in competitive environment.
P6. Strengths and weaknesses interrelate with external macro factors
The internal and external factors are inter related with each others (Brown, 2018). Both
the factors have direct link with each other which increases the risk of macro factors in the
business operations. The strengths and weaknesses of Bentley motors limited are inter related
with the external macro factors. The description of the interrelatedness is as follows:
 Strength-opportunity Plan: It is an internal aspect which is analysed by the SWOT
evaluation of the respective entity. The managers clearly understand the strengths and
grabs opportunities for smooth functioning of all the activities. The company is very
popular for the exclusive use of the promotional techniques such as sponsorship events
for providing information related to the products or services for increasing the brand
image. The business has good product portfolio of different beautiful cars which
impresses and attracts the potential customers which helps in providing environmental
friendly products.
 Strength- threats Plan: Such aspect helps in understanding the strengths to overcome
the threats. The managers performs the operation in such a manner which makes the
employees along with customers feel special which helps in overcoming the threat of
performing work in coordination with the laws and organisational tasks. Providing
heritage products in the market which are very expensive as well as high quality products
helps in facing the massive competition to increase its growth.
 Weaknesses-opportunities Plan: this plan is used to convert the weaknesses into
opportunities (Tregear, 2015). The owner of selected business faces the weakness of
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