Business and the Business Environment Report

This report provides an in-depth analysis of the business environment, focusing on different types of organizations, their sizes, and scopes. It includes a detailed examination of Unilever as a case study, exploring the interrelationships between various organizational functions and the impact of macro environmental factors. The report utilizes PESTEL and SWOT analyses to assess the external and internal factors affecting business operations, concluding with recommendations for effective management strategies.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1: Different types of organisations............................................................................................1
P2: Size and scope of various types of organisation...................................................................3
TASK 2............................................................................................................................................4
P3: Relationship between various organisational functions........................................................4
TASK3.............................................................................................................................................7
P4: Positive and negative impact of macro environment............................................................7
TASK 4............................................................................................................................................8
P5: Internal and external analysis to strength and weaknesses...................................................8
P6 Interrelation of internal and external macro factors.............................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is known to be buying and selling of product and services. It is an important
aspect of any organisation that required effective environment were they can able to operate their
activities easily. Business environment is the combination of internal and external factors that
affect company operational situations like demand and supply, customer employees and
regulations. Unilever is the largest consumer good manufacturing company of United kingdom
that set a huge example of business for other companies (Ahmed, Aamir and Ijaz, 2011). The
project report consist of various types of organisations with respect to external environment. That
explains vision and mission of various organisation. It contains functions or positive and
negative impact of business on macro environment. All the information that are related to
organisation are evaluated and on that basis various recommendation and suggestion is being
provided.
TASK1
P1: Different types of organisations
Organisation is a group of people that are having particular objectives like a business or
government institution. Every organisation like Unilever which have well management structure
that determines relationship among various activities and members. Nature, scale and medium of
business are the basic factors which is used to determine different forms of internal
organisations. There are various types of organisation that exist in environment those are
basically categorised into three parts: Private, public and voluntary organisation.
Private sector organisation: These types of businesses are owned and operated by individual
separately. It is for profit businesses that are not owned or managed by regulatory body. A
several variety of legal structure that are there for private sector organisation, which depend on
the judgement where they are having legal domain name (Aterido, Hallward-Driemeier and
Pagés, 2011). It includes various sectors like: Sole traders, Partnerships, companies (Private and
private) and franchises.
Purpose of Private organisations:
 Profit Maximization: Under this organisation where both private and public companies
overlap. In a private company, profit motive is the main objectives of organisations.
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 Transparency in reporting: It have transparency in annual reports but it is restricted to
some of the key shareholders and can't be spread to public any more. Transparency in
reporting is limited to those over how the organisation does its business.
 Select correct organisation structure: Under the private sector it always have right kind of
structure for their particular business interest. It can be organised as corporation, limited
body etc. (Barnett and Salomon, 2012).
Public sector organisation: It refer to that body or government which are govern and controlled
publicly funded agencies institutions. These company make promotion so as to offer its share to
general public with the help of prospectus. It is based on task of supervision of guidance. It not
always known or clear that a particular organisation is included under this categories.
Purpose of Public Ltd
 Transformation of economy: Public sectors are transform the economy in such away that
it could be shift toward socialism. It must be expand not absolutely but it is relative to
private sectors.
 Help in redistribution of income and wealth: It is possible through increasing low level of
income while reducing it at initial stages.
 Source of capital formation: As it is operated by government body it have more chance of
getting capital in the form of grants. It help to determinants of rate of economic growth
and develop of income and wealth distribution in the way to gain from business
enterprises.
Voluntary sector organisation: It is the role of community sectors of social activity that are
undertaken or controlled by organisation that are not for profit motive. It is known as third
sectors in relation to public and private sectors.
Purpose of Voluntary sector:
 To serve People: As this is not operated by government or any other regulatory body. It is
controlled by non profit organisations with the motive to serve people without any kind
of profit motive thinking (Borio, Drehmann and Tsatsaronis, 2014). There are various
organisation who are working in various country and districts for the objective of socio
economic development of people in rural areas.
 These are based on political Social, religious or charitable purpose. It is main aim is to
dissemination and promoting sport, culture and arts or any other extra abilities of people
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those who want to use but can able to use because of not having any kind of support
behind them.
 It is responsible in achieving specific objectives through delivering tangible advantage to
our society (Chang, Hughes and Hotho, 2011).
P2: Size and scope of various types of organisation
Private sector organisation: The amount of capital invested by individual and group in
a business and carry a hope that it will be revert back in future. Because the motive of private
organisation is to earn maximum profit for the business. The size and scope are depend on the
nature and size of business. It include various sectors like sole trader, partnership etc. those are
having single ability of gain maximum profit and sales for the purpose to increase business
growth and development in a environment because of this the market growth rate of the company
will also be increased.
One of the store named Iceland which is known for various items like for example,
meats, dry things, and in several meat. They are offering 2% to people of UK. Mission statement
of provide cheep and economical cost to its merchandise and administrations. With having full
amount of faith in delivering satisfaction to them. Vision of the company is to provide product
and services to its customers at a reasonable costs so that it will make decision about using
product and provide some improvement in it. In-spite of that it will be helpful in discourse of
their rivals in commercial industry as well as increase in their goodwill.
Public sector organisation: These are primary associate with their requirement by
offering best services which are crucial for the business as well as society. The mission of these
organisations are based on serving the globe and make them aware about what is best suitable for
the growth and development of organisation. Vision of London transport is make business with
accomplice industry and shareholders. They can secure and rely on the movement of transport
goods from one destination to other. They are an administrative body that involve for street
routes, rail system, flight and other means of transportation. They are approx. 11.6 million
spending plan in which 40% they received through fares (Chavis, Klapper and Love, 2011). Rest
amount they get from regulatory bodies, monetary advantage as well as control cost to save extra
freight.
Voluntary sector organisation: It is known as third sector. As it is non profit
organisation which is not control and owned by government. It always plug gap in market among
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both public and private transferred among their individual entity. Mission of this sectors are to
serve them and provide security to their lives and additionally by eliminating line or gap in
countries.
Scope of all above mentioned sectors:
 Local level: These types of business entity are functioned at local level. Different areas
are covered by delivering services in regional areas. All organisation can be set up to
performer their role in increase growth rate or creating employment opportunities at local
level.
 National level: Many business are business that are operating nationally and are
expanding its branches in entire nation. The market growth rate are divided into domestic
and national level and profit is earn maximum at different business (Dong, Wu and Hou,
2009).
 International level: These type of business which are operated out side the boundaries of
the countries. It will easy to get more profit from outside because of huge market segment
captured by companies.
Size and scope of business organisations are sum up with business goals and its aim. It is
not co ordinates with target of company, it will be difficult to manage functions if they are not
perform effectively and efficiently sectors has not being able to serve. The best example of non
profit organisation are NGOs because they are rely on funds which they received through gifts
and charity. There are almost 3.5 million NGOs are operating globally. Profit can not be shared
or transferred among their individual entity. Mission of this sectors are to serve them and provide
security to their lives and additionally by eliminating line or gap in countries.
TASK 2
P3: Relationship between various organisational functions
Unilever is a multinational association that identify and best known for its retail locations
and providing products and services around the globe (Edquist, 2010). Under that various
department are divided into hierarchical positions that are indicated by development, position
and in addition to commitment of delivering superior products to its customers. The strategic
level involves in taking appropriate decision about growth and creating brand with appropriate
quality.
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There are various objectives with relation to Unilever those are mentioned below:
 To remove those business which are not profitable for the business.
 They need to extend their business which will assist them to render development as well
as advancement of product and services offered by Unilever.
 Director of organisation are always thinking to provide best quality of product that can
satisfy to their customers,
 At the same time the stakeholders are can not be ignore because they are also invlove in
success of product and the company. They are motivated through getting sufficient profit
out of sales and overall market growth.
 It important aims is to cater commodity and services of every sort, under on umbrella to
their purchasers.
 They need to decrease waste with the aim to reduce cost of expenses those are incurred
through excessive amount.
Different functions of organisations:
every department involve in delivering quality features and products to its customers or
individuals so that they can be achieve their set target. For this, in Unilever are a few offices and
each of them have common aims and objectives in relation to each other (Grimpe and Kaiser,
2010).
There are various sort of it, which are talked about as follow:
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Illustration 1: Organisational structure of Unilever
From mentioned diagram the organisational structure of Unilever explain various segment or
department that are involve in delivering and producing product and services to it client and
customers. The department consists of general manager in operations which includes:
 Human resources: It is responsible for managing and controlling all the department. The
objectives of this department is to overcome the losses and prepare plan for growth and
expansion of the company.
 Information Technology(IT): It is responsible for managing and monitoring of various
support and transformation of products and payment those are made by customers (Helms
and Nixon, 2010).
Production Department: The production department is associate with manufacturing of
product according to the demand of the customers. And control cost and expenses that are
incurred while production process. It is categorise as :
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 Site: It is associated with the location of plant were product have been transformed into
final goods and reached in the market.
 Product planning: The department is looks after how to develop a product an ideas
emerge into that time.
 Material planning: Raw materials are being asked from the supplier to be produce goods.
Quality Department: It is known for checking product after they are manufactured by
applying various measures and techniques. It includes Deputy managers, quality team and other
persons those are associated with them.
Sales team: It is group of people who are going to sale products of Unilever in the
market after doing complete survey of product demand that are arises in future. It includes
expense management, measure and deign of a product, quotation and marketing etc.
R and D department: It is responsible for development of research of new product and
its development mechanism. It is associated with production of new product it designing and
implementation of new pictures of output.
Procurement: To control and preserve the product those are kept in stocks. It includes
accounting and recording of new product those are produce recently (Jung, Kim and An, 2011).
It play important role in protecting the company from going in losses through apply new
methods and techniques.
TASK3
P4: Positive and negative impact of macro environment
Any of Business environment is influence through external factors of the company those
are uncontrollable. It is very hard to decide each components. It is base for administrator to break
down its effect since it can be influenced by other factors those are affected by the external
environment. In the event Unilever needs to determine various parts which can be influences
definitely in those condition the company need to have PESTEL analysis. It is that company
which can be utilized by firm. The process given facility to compass all factors into more broadly
sense. It will help in improvement of both outside and inside strategies of making valuable
decision regarding growth and development. The analysis explains complication of companies
that are faced and many external factors that Unilever must avoid.
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 Political factors: It is said to be regulatory restriction and guidelines that are to be
followed by Food and drug administration. It include all those restriction that are
associated with import and export, or trade laws in the success of Unilever in going
forward.
 Economic factors: The state of economy involve that consumers are less to take chance
to but expensive products. Unilever is offering quality products those are in more
demand. Consumer product are directly affect because of external environment. If the
products are not in demand then it would affect the profit of the company (Kolios and
Read, 2013).
 Social factor: These factor is totally based on the basis of the image of the company.
There are so many brands which are used by the Unilever plc opt. The cited firm has
decided to concentrate on emerging a sound brand and reputation. They covers issues
related to the social and environmental components
 Technological factors: The Unilever plc is opting so many products which are required
to concentrates on the personal care and well- being, the cited firm assist the firm to feel
and look good, while also enjoying the life they deserve. While their marketing,
specially on assisting women feel their best from the inside out.
 Environmental factors: Unilever promotes sustainable and renewable resources. Their
product are design as safe that could harm the environment.
 Legal factor: The company also needs to analyse the legal factor before going to frame
any strategy for the company. The company also need to assess various laws and
legislation for making any decisions.
TASK 4
P5: Internal and external analysis to strength and weaknesses
Unilever can utilize SWOT investigation to identify its qualities and performance in
coming future. It can impact decision making process directly or indirectly. Unilever is a top
most retail multinational site in UK and their products and administrations are wide. They need
to view an ever increasing number of customers by providing them appropriate commodity and
services. To generate more profit they need to deal with online customers by providing product
and service online. There are various resources which are essential for each company for their
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advancement and development. It can incorporate financial, human, intangible and physical
resources. The objectives and aims of organisations can be achieved through used those
mentioned aspects. The new rivalry can assist them to take upper hands in managing resources
of the company.
Strengths:
 Finance is the main strength of Unilever which include strong, cash reserve to meet the
outstanding debts. Global purchasing keep control in cost down. It also include
international rate of currency exchange (Miller, Yablonovitch and Kurtz, 2012).
 Marketing: Products of Unilever are available to all most every part of the country.
Because of that it has captured wide areas in market share.
Weaknesses:
 The main weakness is in relation to the lack of innovation as there are chances that
product may be copied so innovation should be made at regular interval.
 The labour that is required in the processing is expensive so by that the overall cost of the
product will increase.
Opportunities:
 The main opportunity is that it can use the automatic manufacturing process by which the
time and cost both will be saved which can further be used in the expansion process of
business.
 As it deals in consumer products so can expand the business by launching new products
in the same stream and also by diversifying in the other sector by bringing international
employees who have great experience.
Threats:
 Due to the patent constraint there may be reduction in innovation and other competitors
can use this opportunity.
 There are lot of regulations that are made in relation to consumer protection which create
the pressure and it is difficult for the company to comply with them (Business and the
environment. 2017).
P6 Interrelation of internal and external macro factors.
In the business for the consideration of internal factors SWOT analysis is undertaken and
in order to test external factors PESTEL analysis is conducted in which all the components will
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be considered. Both the external and internal factors are interrelated as they will be affecting
each other. The strengths that will be identified will be helpful in removing the weaknesses and
also the opportunities can be encashed by using them. There are various legal regulation required
to be complied and if not than the business will be affected as goodwill will be reduced. Social
factors will also affect the production of the company as product will be required to be made
according to the taste and status of the consumers so they are also related (Pestle and Colvard,
2012).
The advanced technology will also be used so that innovative and new products can be
developed by which demand will be increased and also the market share. The operations of
Unilever will be affected by the change in interest rates and inflation as funds will be available at
high rates so by this the cost will be increased which will affect the profitability of the company
in adverse manner. So by all these points it can be said that macro and micro environment are
dependent on each other.
CONCLUSION
From the above mentioned report it can be concluded that in the environment there are
various types of organisations and all have different purposes and scopes. There are various
factors that affect the functioning of the company so it is required that they are identified. This
has been found that it can be achieved with the help of SWOT and PESTEL analysis and then
corrective measures will be taken so that objectives of business can be identified.
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REFERENCES
Books and Journals:
Ahmed, I., Aamir, M and Ijaz, H.A., 2011. External factors and entrepreneurial career intentions;
moderating role of personality traits. International Journal of Academic Research. 3(5).
Aterido, R., Hallward-Driemeier, M and Pagés, C., 2011. Big constraints to small firms’ growth?
Business environment and employment growth across firms. Economic Development
and Cultural Change. 59(3). pp.609-647.
Barnett, M. L and Salomon, R. M., 2012. Does it pay to be really good? Addressing the shape of
the relationship between social and financial performance. Strategic Management
Journal. 33(11). pp.1304-1320.
Borio, C., Drehmann, M and Tsatsaronis, K., 2014. Stress-testing macro stress testing: does it
live up to expectations?. Journal of Financial Stability. 12. pp.3-15.
Chang, Y.Y., Hughes, M and Hotho, S., 2011. Internal and external antecedents of SMEs'
innovation ambidexterity outcomes. Management Decision. 49(10). pp.1658-1676.
Chavis, L.W., Klapper, L.F and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Dong, M., Wu, C and Hou, F., 2009. Shortest path based simulated annealing algorithm for
dynamic facility layout problem under dynamic business environment. Expert Systems
with Applications. 36(8). pp.11221-11232.
Edquist, C., 2010. Systems of innovation perspectives and challenges. African Journal of
Science, Technology, Innovation and Development. 2(3). pp.14-45.
Grimpe, C and Kaiser, U., 2010. Balancing internal and external knowledge acquisition: the
gains and pains from R&D outsourcing. Journal of management studies. 47(8).
pp.1483-1509.
Helms, M. M and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of
academic research from the last decade. Journal of strategy and management. 3(3).
pp.215-251.
Jung, H. S., Kim, Y and An, J. A., 2011. Effects of the Internal and External Factors of Small
and Mediumsized Corporations on Green Management Performances through the
Establishment and Utilization of Information Systems and Building Relationships for
Information and Knowledge.
Kolios, A and Read, G., 2013. A political, economic, social, technology, legal and environmental
(PESTLE) approach for risk identification of the tidal industry in the United Kingdom.
Energies. 6(10). pp.5023-5045.
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Miller, O. D., Yablonovitch, E and Kurtz, S. R., 2012. Strong internal and external luminescence
as solar cells approach the Shockley–Queisser limit. IEEE Journal of Photovoltaics.
2(3). pp.303-311.
Pestle, W. J and Colvard, M., 2012. Bone collagen preservation in the tropics: a case study from
ancient Puerto Rico. Journal of Archaeological Science. 39(7). pp.2079-2090.
Online
Business and the environment. 2017. [Online]. Available through:
<https://www.imperial.ac.uk/environmental-policy/msc/msc-environmental-
technology/options/business-and-the-environment/>. [Accessed on 1st July 2017].
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