Business Environment Analysis: Types, Scope, and Departments Report

This report provides a detailed analysis of the business environment, encompassing different types of organizations across the private, public, and voluntary sectors. It explores their purposes, legal structures, sizes, and scopes. The report examines the relationships between various departments within an organization, using Skoda Auto as a case study to illustrate these connections. Furthermore, it delves into the impact of macro-environmental factors on business operations, including both internal and external analyses of Skoda Auto. The report also investigates how strengths and weaknesses interrelate with external macro factors, offering a comprehensive understanding of the business landscape. The document covers various aspects like private, public and voluntary sectors with their legal structures, size and scope of different organisations and the relationship between different departments of an organisation. Also the impact of macro and micro environment has been analysed. To analyse the impact of internal and external environmental factors, Skoda Auto has been selected as the organisation.

BUSINESS AND THE
BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Different types and purposes of organisation along with their legal structure......................1
P2 Size and scope of range of different type of organisations....................................................3
P3 Relationship between different departments of organisation.................................................5
TASK 2............................................................................................................................................6
P4 Macro environmental factors that impacts upon business operations...................................6
P5 Internal and external analysis of Skoda Auto. ......................................................................9
P6 How strengths and weaknesses interrelates with the external macro factors......................11
CONCLUSIONS............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment encompasses all those factors that can impact upon the
effectiveness of the organisation (Deese, and et. al., 2017). They are either internal or external.
Thus, it is essential to plot the impact of these forces before executing any business operation.
This examination will help in effective development of the products or services. Further, these
factors may vary as per the type, scope, range, and purposes of organisation. This report will
cover different sectors in which entities run along with their legal structure. Also, roles and
responsibilities of different departments of an organisation will be studied. Further, impact of
macro and micro environment will be analysed.
In order to analyse the impact of internal and external environmental factors, the selected
organisation is Skoda Auto. The company belongs to auto-mobile industry under private sector.
The cited firm is further a global name in the industry and hence, it is significant to analyse
business environments and functions of different departments for effective management.
TASK 1
P1 Different types and purposes of organisation along with their legal structure.
Private Sector organisations: This is the largest sector and companies working under this
category focuses on earning maximum profit with the minimum possible resources. Such type of
organisations are completely owned by individuals who are liable for all the business operations.
There may be board of directors of the firm who manages it or they can either be completely
managed by an individual person (Dijkman, and et. al., 2016). Despite of the fact that these
entities earns for themselves, it should be recognised that they share maximum part in growth of
GDP of the nation. The key competitors of the selected organisation work under this sector only.
The legal structure of this sector comprises of following: Sole Traders: This type of business is generally carried by an individual and its family.
These organisations are generally started with a small investment. A single ownership
helps in reducing work conflicts and other issues. However, this should be noted that its
owners are liable for all the profits, losses or risks associated with the company. Partnership: In this method of business, two/more persons or entities that shares same
goal partners with each other. This is a less risk method as losses and risks are divided
into the partnered parties.
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 Private Limited Companies: This is the most effective business structure that is widely
used by most of the organisations. Joint-stock companies have their own legal identity. It
can be abbreviated as Pvt. Ltd. and there are various shareholders in this. Public Limited Companies: Public limited companies are the larger form of the Pvt. Ltd.
firms. These are also known as PLC. Generally, such organisations are governed by the
board of directors. Co-operation: This method is quite different from the other mentioned above. In this the
organisations belonging to public sector are converted into those entities that belongs to
private sector. In the past few years, this privatisation has been observed on a larger array
due to various government imposed laws (Eling, and Schaper, 2017).
 Franchising: The present trend of internationalist has raised eh number of organisation
that are undergoing this business structure. In this method, global market expansion is
carried out by hiring regional people for the business contract. Some major examples that
highly supports franchising are Subway, McDonald's etc.
Public Sector organisations: This sector is completely governed by the central, local or regional
government. All businesses of the organisations belonging from this sector are managed by
mentioned administrative.
Public Sector organisations: This sector is completely governed by the central, local or regional
government. All business operations of the organisation belonging from this sector are managed
by mentioned administrative. Their major aim behind the business is the welfare of the people of
the country. The source of funds for them are the revenue, taxes, etc. they take from the general
public. Some examples of this type of organisation are visitor information centres, road and
building departments, etc. (Kljucnikov and et. al., 2016). Legal structure for the private sector
organisation is as follows: Public Co-operations and nationalised industries: The aim of these companies is to
provide general public with the basic service such as roads, electricity, parks, etc. Funds
to these companies are provided by the central government. Local authorities: These are segregated administrative bodies over a sector. They plays a
major role in the development of overall nation. Example: Regional government.
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 State Services: In this legal structure, the business is controlled by the state government.
Some common services provided by them includes defence, education, health and care,
etc.
Voluntary Sector organisation: Organisation that works under voluntary sector are non-profit.
They works on various social causes. Their aim is to prevent, promote and preserve the selected
social cause. Campaigns for these challenges are then organised by them. Some common causes
for which these organisations works are education, poverty, heritage sites protection,
empowerment, etc. For funds these organisation raises some charity events. Legal structure of
voluntary sector organisation is as follows: Trust: Trusts are relatively inexpensive and simple form of voluntary organisations.
These are managed by an individuals known as trustee. Also, sometimes there is a board
of directors that controls the activities of organisation. Unincorporated association:Unincorporated association is quite similar to the trusts in
which the activities are managed by both the trustees and board of directors, Also, it is
an inexpensive type of formation. Company limited by guarantee: In this voluntary sector legal structure, the business
operations are solely managed by the directors.
 Charitable incorporated organisation: This is the modified form of business structure.
Organisations following this method of business are to be abide with the constitution.
Further, they are governed by the charity commission (Mukherjee and et. al., 2016).
P2 Size and scope of range of different type of organisations.
There exists different type of organisations which also varies in perspectives of their size
and scope. For all three sectors, namely private public and voluntary, an organisation will be
selected and then the size and scope will be discussed for gaining understanding.
Size and Scope of Private sector organisation: Skoda Auto
About: The selected entity is a global brand in auto mobile industry. It is a Czech manufacturer
established in 1895. The company was gradually privatised after 1991 and later, in 200 this
company become a completely owned adjunct of Volkswagen group.
Mission: The objective of the firm is to become leading player in the manufacturing industry by
growing its roots worldwide.
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Size: The area covered by the entity is largest of the other two belonging from public and
voluntary sector. However, it should be recognised that the number of employees in the firm are
less than that of the national health service. There are around 23000 people working in the
selected company (Deese, and et. al., 2017). .
Scope: Skoda has a widespread business and an effective international roots. However, there are
some places such as America, Hong Kong, Macau, etc. where the entity does not have a branch.
The company thus ave scope to grow there too.
Size and Scope of Public sector organisation: National Health Service
About: The chosen entity is publicly funded national healthcare system. The organisation is
serving the people of England from past 69 years. The parent company of this entity is
Department of Health. This business group operates in the entire nation and its' purpose is to
render basic health services to the public of the country.
Mission: The aim of the entity is that all people of the nation can avail the health services. Also,
the mission incudes that all the people of the country are provided with equal opportunities to
access the basic health and well-being services.
Size: The size of the selected entity is larger of the one belonging from voluntary sector.
However, the company selected from the private sector has larger area than it. The company is
serving the people of entire country and there are around 1.4 million employees working,
Scope: The scope of the entity is to cover every possible part of UK and rendering health and
well-being to people of all community (O’Brien and et. al., 2017).
Size and Scope of Voluntary sector organisation: 2Way Development
About: 2Way development is a UK based social enterprise that offers meaningful tailor-made
volunteering placements abroad in the field of international development. The company was
established in 2003. Unlike other voluntary sector organisation, this entity does not relies on the
funds and charities.
Mission: The mission of the selected organisation is to render employment to the every people
belonging from communities. They are focussed on organising skilled voluntary placements that
benefits communities. Also, they aims on rendering deserving and skilled employees to the
companies.
Size: It has been observed that around 100-200 people are yearly gets employment by the 2Way
development organisation (Potts and et. al., 2016).
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Scope: There are various people still left from getting employment as per their skills and
abilities. The chosen company thus have a large scope in this context.
P3 Relationship between different departments of organisation.
In order to understand the relationship between the different departments that works in
the organisation, Skoda Auto is undertaken. The functions of aesthetic units of the selected entity
are as follows:
 Human Resource department: Human resource department of an entity plays a major
role in achieving business goals and objectives. This unit of a company maintains
communication between different departments. Besides this, recruitment of effective
candidates is also performed by it. People of the organisations are it's key assets and
requires attention. In context to Skoda, the company has increased the ranks of
employees in 2016. This raised the motivation level of workforce. This in turn will
enhance the productivity of the business. It has been further observed that the company
has revised the HR practices and strategies to achieve their business objectives. Further,
they hire effective and deserving candidates possessing calibre to meet the organisational
demands from the business (Roigé and et. al., 2017).
 Purchasing Department: The major role of this department is cost-optimisation. The
business which is majorly associated with the manufacturing and production requires raw
material in large quantity (Eling, and Schaper, 2017). Hence, companies should have
effective purchasing department that can reduce the cost. In context to Skoda, the entity
belongs to auto-mobile industry that needs raw materials such as metals, scraps, etc. in
abundant quantity it is necessary that the purchasing section optimise the cost. This will.
help in reducing the operational cost of the company.
 Research and development: This department of organisations also plays major role in
assuring appropriate production of the product. Their role is to examine the rising needs
and demands of the consumers. This analysation is than presented to the production
section of the company where the products are developed as per the expectations of
customers. Further, this unit also uses the process of benchmarking ion which the
effective techniques used by other entities are identified and implemented in the own
company.
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 Production and logistic department: The car industry is highly dependent of the recent
trends and development. This additions to match the technologies has become a key
reason for production. For this, organisation are required to undertake an effective market
research so that production can be carried in right direction. Production department of the
Skoda is the strongest. For example: Generation of new-generation Skoda SOPERB has
gathered attention of large number of people. This development has made the company to
pace (Yadav and et.al., 2016).
 Sales and marketing department: After production of right products and services they
do required an effective marketing so that their sales can be increased. Further,
organisations required effective sales departments that can earn maximum profit for the.
The role of sales and marketing sections of a company is to make people aware of the
development of the organisation. In context to Skoda, the entity has recoded total
1,126,477 deliveries to the customers with cooperation of Volkswagen. On the other
hand, the selected company used various techniques for the marketing such as various
campaigns, TV ads with celebrities, social media marketing, etc.
It should be further recognised that all these departments are highly connected top each
other. Their processes are based on the outcomes of other section. Henceforth, Skoda should
develop effective communication between these departments so that transparency in the
operations can be maintained for work effectiveness. Other than these there is also social media
department present in the Skoda that work effectively to achieve the business goals. This
segment of the business entities plays the role of enhancing the sales of the products. Various
strategies and tactics are played by them in order to do so. In context to Skoda, there are total
23000 employees that works in different departments. it is essential for all of them to maintain
effective relations between departments.
TASK 2
P4 Macro environmental factors that impacts upon business operations.
Despite internal factors which are controllable there exists some other external or macro
factors too that cannot be controlled by the entities. Organisations can only develop effective
strategies to cope-up with these factors. In order to analyse them, the tool commonly used is
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PESTLE analysis. It covers the overall elements that may impact on a business environment. For
the selected company, this is as follows:
PESTLE Analysis of Skoda:
Political Factors: In this section, the political factors that can impact upon the business
environment are examined. This feature helps in identifying the extent at which the government
can influence over the operations of organisation. The major political factors on which
businesses does relies are its stability, policies imposed by the existing government, etc. Political
conditions are the most unpredictable thing. Also the frequent changes the running political party
highly impacts the proper functioning of the entities. In context to the chosen firm that operates
in global market has to face varied political situation. They might or might not be in favour with
it. The instability of political conditions in the countries where the cited firm do function will
harm the overall effectiveness. There are some nations whose political variations impacts on the
entity. For instance: The recent political instability in Pakistan leads to variations in the policies
that harmed the economy which has created troubles for the Skoda and other companies
operating there (Barbero, and Puig, 2016).
Economical Factors: These factors does relies ion the financial stability of country. Major
elements under this category that harms the business are the exchange rates, currency rate,
growth rate, interest rate, GDP, etc. Countries which posses any ineffective parameter of these
mentioned ones that it harms the international companies. In context to Sods, the economical
condition of the home country is highly favourable for its business growth. However, it should
be recognised that the cited firm also businesses in other countries where financial situation may
or may not be strong. Hence, Skoda is suggested to develop effective strategies that can help in
dealing with the lows.
Social Factors: These factors covers the social and cultural forces that may influence over
business. According to this, customers do rely on various elements for buying behaviour. These
element includes class, colour, region, culture,etc. The selected entity is thus required to develop
products as per the needs and demands of varied group of people. However, it should be
recognised that the cited firm should possess an understanding of different cultures where it foes
exists. This knowledge is important in development of appropriate product (Bhowmick, and
Prasad, 2017).
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Technological Factors: In the present era, it has become crucial for businesses to add recent
trends and developments to survive in the market. This is the major issue in front of the selected
company. The auto-mobile sector is growing tremendously in context to technological
innovations. This is thus exerting a great pressure on the selected firm (Kljucnikov and et. al.,
2016). These developments brought new concepts in the market and to match that influence,
selected organisation is also required to bring them. This in turn leads dual cost expenses, firstly
in development of new product and other with depreciation of existing assets.
Legal Factors: This factor of PESTLE analysis renders its influence to both the internal and
external operations of a firm. There are various business laws that should be followed by he
organisation working in any sector. This legislation may limit the use of element that are
essential forth development of business and its value (Mukherjee and et. al., 2016). However,
they are mandatory to be abide by the entities for balanced and sustainable development. In
context to the present case, Skoda is suggested to implement all the employees related laws in
the internal business environment. Further, legislation for the manufacturing, production,
environment, etc. are also required to be fulfilled.
Ecological Factors: The influence of the ecological factors has been raised due to reductions of
the raw materials and fossil fuels. Also, the pollution and other environmental issues that are
rising are key rationale behind considering this factor. The present era demands foe the
sustainable development. the selected organisation thus pay attention on this. For this, it is
required to follow all the legislations framed for the environment. Also, company is needed to
reduce the consumption of raw materials. In addition to this, they should pay attention of the
development of auto-mobile that runs with bio-fuels (Brito, and Harkiolakis, 2017).
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P5 Internal and external analysis of Skoda Auto.
In order to analyse both the internal and external factors that may impact upon the
selected organisation, tool that can be used is SWOT analysis. This helps in identifying the
strengths and weaknesses along with the external factors opportunities and threats. The
abbreviations stands for the strengths, weaknesses, opportunities and threats. The parameters to
measure the internal environment are the strengths and the weaknesses whereas the external
environment can be measured using the opportunities and the threats. SWOT analysis of
SKODA is s follows:
SWOT Analysis of Skoda:
Strengths:
 The organisation has a wide range of products.
 Production process of the entity is appreciable.
 SKODA has a good brand recognition.
 Advertising and branding techniques used by the selected firm are effective.
 The interior of the SKODA cars is spacious.
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Illustration 1: Elements of PESTLE analysis
Source: Heckroodt, 2014

Weaknesses:
 There is a high level of competition in the auto-mobile sector.
 The existence of selected firm is weak in the emerging economies.
Opportunities:
 SKODA can collaborate with other auto-mobile entities for development of a new
product.
 Company can also develop cheaper variants and hybrid cars (Deese, and et. al., 2017).
 Organisation can also merge the raw material providers with them
Threats:
 The auto-mobile industry has rapid technological innovations.
 The global market of the entity is in threat due to intense competition from international
car manufacturers.
 Ecological laws for new hybrid fuelled cars.
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Illustration 3: Element of SWOT analysis
Illustration 2: Element of SWOT analysis
Sources: Why Use SWOT Analysis? 2017