HND Business - Business and Business Environment Report Analysis

This report provides a comprehensive analysis of the business environment, focusing on various types of organizations, including private, public, and voluntary sectors. It examines the size and scope of different organizations, using case studies of STEMCOR and British Steel Corporation (BSC) to illustrate key concepts. The report explores the different functions within organizations, such as production, human resource management, research and development, and finance, and how these functions interrelate to achieve organizational goals. It also analyzes the macro-environmental factors that impact business operations, evaluating the strengths and weaknesses of the cited firms and assessing the link between internal and external factors. The report emphasizes the importance of understanding the business environment for strategic planning and sustainable growth. It also discusses the legal structures under which these organizations operate and their objectives. The report highlights the significance of functions like production, HR, research and development, and finance in achieving business goals. Finally, it also describes the interrelationship between these functions and the overall organizational structure to achieve the set objectives.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis of various kinds of organization.........................................................................1
P2 Evaluation of size and scope of different organization.....................................................2
P3 Explanation of different functions of organizations and interrelation with goals.............4
TASK 2............................................................................................................................................6
P4 Analysis of various macro environmental factors that impact on business operations.....6
P5 Evaluation of strengths and weaknesses of cited firm......................................................7
P6 Assessment of link between internal and external factors. ..............................................9
CONCLUSION..............................................................................................................................11

INTRODUCTION
Business environment is one of the key significant elements that clearly the influence of
internal and external environment on the operations of business in an industry. It is also
considered as the major constraints that an business enterprise should analyse in order to
formulate strategies for the expansion of business and achievement of sustainable growth and
development (Craig, and Campbell, 2012). In this report, analysis of different type of business
organization is done top determine the difference in their vision, mission and objectives of
regulating business operations.
Along with this, it will also define the size and scope of two multinational firms operating in two
different sectors. There are some key functions of multinational firm are also analysed which
will determine their interrelationship with the organization structure. Apart from this, there are
some key macro environmental factors are explained that provide an understanding about the
challenges that which an business enterprise has to face in competitive business environment.
TASK 1
P1 Analysis of various kinds of organization
Business environment is recognised as the combination of internal and external factors
that define the opportunities for the different firms to gain its desired goals and objectives at
international level (Sekaran and Bougie, 2016). Research of topic has determined that there
mainly three different types of organization prevailing in the business environment of every
country like private, public, voluntary organization. These organizations have their own
importance and regulate their business with different vision, mission and objectives which are as
follows:
 Private organizations: Those business enterprises which operates their business with a
most specific aim of achievement of more and more profitability by utilizing the
resources from the country. It will also be considered as the organization that are owned
and regulated by private individuals or partnerships firms by investing their own capital
(Zott, Amit and Massa, 2011). In this context, Analysis Stemcor is taken in to
consideration which is steel trading organization in UK has 145 business units across the
45 different countries around the world. The main purpose of the firms is to enhance their
market share in steel industry as compared to other organization. It has also achieved a
continuous growth in the steel industry by offering quality of products like Long tubes,
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pipes and stainless steel etc. Along with this, it has also offered various services like steel
trading, shipping, stock holding, finance and raw materials.
 Public organization: International business firms that regulates there business operations
with an aim of satisfying the needs of people and achievement sustainable profitability by
creating various innovations in products and services (Halbert and Ingulli, 2011). These
business enterprises are owned by private entrepreneurs, government and public. In
present context, British steel corporation is a major public sector organization which is
originated in 1967 with an aim to achieve provide d quality of steel products and services
to the people in UK like stainless steel pipes, long tubes and other steel equipments etc.
 Voluntary organization: These business enterprises are generally developed and
regulated with an aim of satisfying the social needs and resolving the problems of people
rather than maximizing the profits or increasing the market share. Further, these are also
considered as social business institutions which are owned by some individuals or social
groups of society and develop unique products and services to satisfy the needs of people
and provide them various opportunities of employment and growth.
Apart from this, continuous growth of internal business environment has provided major
opportunities to the private and public sector organization to increase their profitability and
expansions of business operations. By introducing various policies and making agreements with
other countries, government of UK has also increased the growth and development of firms in
every sector ( Wirtz, Schilke and Ullrich, 2010). There are various agreements Like NAFTA and
ASEAN has been made to remove the trade blocks for the firms so that they can provide better
products and services to people a competitive price.
P2 Evaluation of size and scope of different organization.
In competitive business environment, different organization regulate their business in
market with their own vision, mission and objectives that are to be accomplished by them in
particular time. In this context, international steel business firms STEMCOR also has wide
business operations and achieved a continuous growth by providing quality products and services
to the people.
 Objectives of public organization: The main goals of these enterprises towards
regulation of business in international market is to achieve success and increase the
growth and development of industry.
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 Vision: Analysis of BSC has determined that they are operating their business with a
Vision statement To become most successful organization in steel industry across the
countries and provide high quality products and services to influence customers.
 Mission: The authorities of BSC has formulated a important mission of expansion of
business in other countries in which they don't have existence like China, India etc. They
have an aim to develop their plant in these countries in the span 5 years.
 Size and scope: After the privatization of economy, BSC has achieved a strong brand
performance in market and established its business units in UK and also has its
partnerships with the other steel companies in other countries at international level
( Zikmund and et.al., 2013). It has 200 partly owned subsidiaries and a manpower of
268,500 employees.
 Legal structure: BSC also operates their business in different legal structure across the
countries like partnership, joint venture for particular product, cooperative etc.
Objectives of Private organization:
The main aim of private multinational firms is to maximize profits and increase its
market growth rate. In this context, STEMCOR is also private organization which has achieved a
high growth and revenue of around US$10 billion in year 2016.
 Vision: It is analysed that the vision of STEMCOR is “To be recognised as world class
leaders in structured steel and known for a ability to deliver any project, to the highest
possible standard.
 Mission: As ambitious innovative leaders in a demanding and continuous developing
industry by using their own strengths and resources to build the competencies required to
deliver the structure to future.
 Size and scope: Stemcor is global market brand of steel industry which current has its
existence in around 45 countries with 145 business units. It is leading independent service
provider in steel corporation that plays a vital role by performing the task of intermediary
between its customers and suppliers.
 Legal structures: From the analysis, It has been recognised that the STEMCOR is
operating its business in across 145 countries with different legal structures like
Partnership with other companies, Business ownership and Joint venture for some
specific projects etc.
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Objectives of Voluntary organization:
It has been recognised that these enterprises regulate there business with an objective to
improve the condition of people in society by providing them employments and develops various
policies to introduce new products and services that satisfy the needs of people and resolving
there problems.
P3 Explanation of different functions of organizations and interrelation with goals.
As per the above Study, for the regulation of business at international market, there are
various functions that organization should perform in order to manage their business activities
and achieve the desired mission and objectives (David, 2011). These significant functions will
provide a direction to firms and provide ideas to implement various innovations in order to
capture the market and face the challenges. In this context, BSC has also applied some key
important functions in their organization that are interlinked with there organizational structure.
These significant functions are as follows:
 Production: It is the most important function that provides support to firm by developing
quality products at specified time to complete various projects. In present scenario, BSC
also has around 200 production units in different countries which has the capability to
develop around 90% of steel making capacity of UK (Wheelen and Hunger, 2011) . By
increasing the production capacity the BSC has achieved an ability to complete the
demand of steel in the future. It has also developed various strategies to increase the
demand by providing quality products like pipes, Tubes and special steel products etc.
 Human resource management: It is also the most important function that has to be
performed by business organizations to manage their workforce at workplace. It is also a
part of every organization's hierarchy and performs various activities to retain qualified
employees at workplace. In this context, managing employees at workplace is also tough
task for the BSC but it has developed a HR department whose main function is to manage
the workers currently existing in its steel plants across countries (Ahlstrom, 2010 ). It also
plays a crucial role in hiring qualified employees at workplace to resolve the problems.
Further, it has been recognised that managers of the organization all provide more focus
towards retention of key performers at workplace and provide them various benefits to
resolve the problems. Apart from this, with continuous changes in business environment,
HR department also plays a significant role in reducing the cost of company by providing
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various innovative ideas and measures. For ex maple: HR department of BSC provides
assistance to managers related to reduction of cost of hiring employees etc.
 Research and development: International business firms provides great significant to
research and development in order to increase the performance and strategic position of
firm. In BSC, research demand plays a significant in analysing the demand for steel in
future and provides a forecast to firm about the needs of resources in future to accomplish
the demand. It is responsible to analyse the growth rate of firm in international market as
compared to its rival firms.
 Finance: One of the most significant function which is performed by the organizations to
keep the record of all its expenses and cost in order to determine the rise in profitability
of firm in international market (Needle, 2010). In this, finance department of BSC is
responsible to keep record of all the expenses incurred by firms in its plants to develop
the products and services. It will provide all the information to top level management by
developing an annual report for each financial year. It is also considered as major part of
the organization structure of cited firm that will helps them in generating financial
resources from the investors and provide appropriate budget for each and every activity
to be performed at workplace.
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In addition to this, the organization chart of BSC defines it the flow of authorities and
responsibilities between the employees working at every level in organization. In this context, it
has analysed that the organization a matrix organization structure is developed by business firm
that provides them supports in accomplishing the work in effective time and achievement
predefined objectives at workplace (Ashby, 2012 ). By developing this structure they have able
to develop a proper coordination between all the departments at workplace. Various functions
have been performed by every department in the organization by taking coordination support of
each other. Research and development department in organization coordinate with finance
department and provide them forecast and reports of needs of financial resources to accomplish
the requirement. It also provides a report to Human resource department about the requirement
of qualified employees in future to perform the key operational task and manufacturing steel
products. Along with this, production departments also coordinate with the research department
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Illustration 1: Matrix organization structure
(Source: Matrix Organizational Chart, 2017)

to get information about the amendments that are required to be done in products in order to
increase the sale of products in market. Therefore, it has been recognised that all the departments
in organization structure of BSC work together to accomplish with an aim to achieve the
common goal of organization and accomplishment of various projects in specified time duration.
TASK 2
P4 Analysis of various macro environmental factors that impact on business operations.
PESTLE analysis is based on the approach which define the (political, economical,
social, technological, environmental aspects in the organisation.
Political:- The political aspects will affect the industry or the entire organisation. It includes the
policy offered by the British government (CGA, 2010 ). The main objective is to introduce
political polices and strategies that fill the gap between the demand and supply of steel. It helps
to maximize the production as under the destined policy of government.
In this policy the specific incentives are created for the sector of steel. These incentives
are like, imports on zero duty, provide land and infrastructure related policies which is is
essential for steel sector. On the other hand, the macro environment the political negatively affect
the strategic planing of businesses includes- changes in tax rate, changes in political policies and
programmes, changes in international trade system.
Economical:- It relates to the analysis of economy, steel industry is booming industry. The
direct investment of foreign are taking interest in investing in British steel corporation. It helps to
fill the gap between the demand and supply of steel s in the entire society other area, the
organisation face number of economic issues like reduction of liquidity and issue related to
investment return (Wang and Ellinger, 2011 ). The industry faces infrastructure and other
economic issues in the development of steel industry.
Socio- Culture:- It refers to the analysis of society, culture etc. On the societal aspect the
enlargement of steel industry provide permanent and large number of employment and improve
the working conditions. But the negative aspect is ,the permanent employees of steel industries
faces huge amount of health problems and these steel corporations are not providing the health
care and safety facilities. They are not providing compensation for the employees harm and no
any kind of allowances.
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Technical- It refers those techniques which are providing for the production . Changes in
technologies will help to development of skill and technical knowledge of employees. In the
positive aspect the growth of international markets and improving the operation and productivity.
The negative impact is, there is no any kind of innovation in technologies and
machineries of production of steel (Teece, 2010 ). The fluctuation in energy will negatively
affected in productivity. The outdated machineries and technology are using like, basic arc,
induction and electric furnace are old. This will create a negative impact on productivity and
quality of steel products.
Environment:- The environmental analysis is encouraging in steel sectors mainly. It helps to
create unfavourable environment in steel industry. The industries are introducing eco- friendly
systems and reduce the co2 gas in production of steel. That directly create an positive impact in
the pollution control environment. But on a negative way, it is more costly as compare to
traditional way of producing steel.
Legal:- British government are introducing different kind of rules and regulations in steel
industry. In this particular industry the government is paying more attention for the development
of steel industries (Buller and McEvoy, 2012). Nowadays they are providing new health safety
issues act that provide the incentives and compensation to the workers and labour. The negative
impact of these regulations and rules of British government the decision making polices affected
in negative way.
P5 Evaluation of strengths and weaknesses of cited firm.
In order to analyse to the current strategic position and opportunities to expand business
in international market there are some capabilities of firm are analysed that provide them
supports towards analysing the requirement of strategies in order to increase the sale of products
and services (Claver-Cortés, Pertusa-Ortega and Molina-Azorín, 2012). In this context, TOWS
analysis of British steel corporation is taken in to consideration in order to determine its
capabilities and opportunities to increase its strategic position in market.
TOWS analysis is considered as a tool that is used to identify, compare and select various
strategies and plans to accomplish the resources effectively in order to achieve the sustainable
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growth in market. It is not considered as the same of SWOT analysis as it is strategies generation
and selection.
Threats: These are considered as problems
and challenges which are faced by the firm in
the international towards regulation of business
operations.
 Continuous fluctuations in the currency
has provided a major threat to British
steel corporation as the cost of raw
material will increase in the market and
it will provide major impact production
and services as well as raise the prices
of products and services (Lee, Olson
and Trimi, 2012 ).
 Continuous rise in technology has also
provided a challenge to firms in steel
industry by developing new machinery
and equipments that will helps in
developing new products and services.
 Steel industry is continuous growing
market in which there is rapid increase
in demand of products and services.
There are many competitors of British
steel corporation that develops various
strategies to capture the market their
market.
Opportunities: These are analysed as the
various chance which is available for the firm
to increase its business operations and helps
them to attain various business objectives.
 Continuous rise in economic growth
rate has also increased the opportunity
of firm to develop new products and
increase its financial position and sale
of products in market.
 Introduction of free trade agreement by
the government by developing trade
relations with other countries has
provided an opportunity to BSC to
supply its products and services to the
customers and subsidiaries in other at
low rate of taxes (Martín-Tapia,
Aragón-Correa and Rueda-Manzanares,
2010).
 Continuous rise in demand of steel
products and services has also provided
various directions to firm to expand its
production and meet the demand in the
future.
 Rise in financial position of firm has
made its positive reputation among the
people and shareholders that will
beneficial for them to gain financial
resources for completing the future
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projects.
Weaknesses: These are considered as some
weak points that organization has to overcome
in order to achieve all its goals.
 Weak marketing policies of the firm
has provided major impact on the sales
of products and services of BSC.
 Increase in labour turnover is
considered as major weaknesses for
the firm to maintain the quality in its
products and services as well as
accomplishment of projects in specific
time duration.
Strengths: These are considered as capabilities
of firm that he has achieved to by regulating its
business effectively in previous years. It will
provide them benefits in increasing customers,
brand reputation, profitability and strategic
position in market.
 Superior quality of products are
delivered by firm to its consumers.
 Strong brand equity in market as well
as large of subsidiaries about to 200
across countries (Shigang, 2010 ).
 Qualified and efficient workforce of
around 268,500 employees.
 Strong financial position in market as
compared to other rivals.
 Rise in annual turnover of around $10
billion in 2016.
SO strategy: Firms can introduce its business ventures with other companies and should take
various projects that provide high profits. They will also develop new products and services by
analysing its competitors and increase the demand by making positive efforts for adding new
attributes in existing products.
ST strategy: Cost of operational activities can be reduced by making effective plans and policies
and use of advanced technology equipments in production. It will also support in reducing the
prices products and services offered by firm.
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