David Game College - HND Business and the Business Environment Report

This report provides a comprehensive analysis of the business environment, focusing on the operations of AstraZeneca. It begins by defining business and its environment, then explores different organizational structures including public, private, and voluntary sectors, and their respective advantages and disadvantages. The report delves into the legal structures within the private sector, such as sole traders, partnerships, and limited companies, with specific reference to AstraZeneca's structure. It examines organizational size, scope, and how these align with business objectives. The complexities of various business structures, including hierarchical, functional, divisional, and hybrid models, are discussed, alongside the interrelationships between different organizational functions like IT, HR, production, and finance. The report also assesses the macro environment's impact on AstraZeneca, incorporates a SWOT analysis, and suggests actions for firm growth. Overall, the report offers a detailed understanding of the business environment and its implications for AstraZeneca's success.

Business and the Business
Environment
TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................
Task 1...............................................................................................................................................
Section 1..........................................................................................................................................
2. Organizational structure, size and scope of business and their alignation with business
objective...........................................................................................................................................
3. Complexities of different type of business structures and the relevance of the
interrelationship of different organization function.........................................................................
Section 2..........................................................................................................................................
1. Macro environment impact on AstraZeneca Business................................................................
2. SWOT analysis............................................................................................................................
3. Actions for firm’s growth..........................................................................................................
CONCLUSION..............................................................................................................................
REFERENCES..............................................................................................................................

INTRODUCTION
Business can be defined as activities that emphasizes on selling and purchasing of
product and services and it need health environment for fruitful result. AstraZeneca is of well
known pharmaceutical company in United Kingdom and well known for its innovation. Firm
presently is in end process of developing process of COVID vaccine. There are three types of
business sector in any country namely, public, private and voluntary as discussed in report.
This organisation further divided according to scope, size etc. It also explains relationship
between different function of the firm and way in which it linked with objective & structure.
Report discuses about internal and external factor that effect on growth of firm. It also
explains about action that company can take to overcome from this barrier.
Section 1
Different types and purpose of organisation
Public sector – Public sector organisation is one which is owned and operated by the
government and these generally exist at three levels such as national or federal, regional or
state and lastly at local or municipal level. Some example of public sector organisation are
education, electricity, fire service, healthcare etc (Bouckaert, Peters. and Verhoest, 2016).
The purpose of these type of organisation is to provide the best service at any cost and also
optimum utilization of scarce resources to maximize country’s productivity. The public
sector organization in UK is National Pharmacy Association. They provide goods and
services for the betterment of the community and society. The finance for these type of
organization comes from taxes.
In public sector organization there are separate finances of the business and the personal
finance of the members and issues shares to the public which have the value of at least
£50,000 prior to initiating their trading. Advantage – Provides economies of scale, protection
of public interest, helps in quicker decision making.
Disadvantage – It creates financial burden, misuse of powers, consumer interest is
ignored, sometimes difficult to manage, political pressures.
Private sector – Private sector organisation is one which is owned, controlled and
managed by private individuals or enterprises. These enterprises are driven by profits and
financed by private money from shareholders and also by bank loans. The main purpose of
these type of organization is profit maximization of profits by finding the right balance
between their sales volume, selling price and cost of production etc. The private sector

organization are not run by government but run by individuals and companies with the
objective to earn profit. The private sector organization are funded through friends, family,
bank loans, angel investor, venture capitalists. The organizational structure of Astra Zeneca
is public limited company which comes under Multinational Corporation. A multinational
corporation is one which is registered and operated in more than one country at a time. There
are some characteristics of the legal structure of Astra Zeneca such as it has very large assets
and turnover, several network of branches, the control is with the home country. Capital-
intensive technology is used to achieve substantial growth and offer good quality and reliable
pharmaceutical products etc.
Advantage – Greater opportunities for promotions, more profits, external environment
stability.
Disadvantage – fewer resources, lack of transferability of shares.
Voluntary organisation – Voluntary organization are those organization whose primary
purpose is to create social impact rather than profits. It is also called not-for-profit sector and
the money raised should be invested back into the community or the organization
(Tomczak,2016). Some example of voluntary sector is charities, foundations, community
groups, social welfare organization etc. It consist of three aspect which are an unincorporated
association, a trust and a company limited by guarantee. The members have limited liability
partnership and has the separate legal personality form the company. The organization has
risk of personal liability.
Advantage – Gaining public trust and recognition, tax relief, no equity investment.
Disadvantage – less earnings, too high expectations of the public
Legal Structures in the Private sector-
A legal entity of private limited company is that when it consider its own rights,
organizational finances which are separated from owner’s finances. Basically, private
enterprise should be consider the personal liability in context of personal assets protection. In
this way, it help for minimising the risk, threat on event of failure of business.
Sole trader-
Sole trader is an individual person who can run their business and self-employed. It is
always keep all enterprise profits after they have paid tax on them. In general, an individual
person who are responsible for any kind of losses or profit in the business makes. Normally,
the owner of enterprise is boss and worker, they can employ other or assign particular tasks in

proper manner. Sometimes, it is also earning a lot of profits which compare with other and
take more advantage in marketplace.
Partnership-
A business partnership is kind of legal relationship that is most often formed by
written agreement between one or more individual’s enterprises. One or two partners are
trying to invest more money in their business and also generating more profitability in
marketplace.
Limited company (Private limited and Public limited)-
A limited company is consider as general term for type of enterprise organization
wherein owner assets and income are separated or distinct from actual income of enterprise.
Limited company can be categorised into both public limited as well as private limited.
What is AZ? – It’s a Public Limited company.
AstraZeneca has a hybrid organisational structure but is changing their organizational
structure by creating therapy area-focused Research and development. AZ is type of public
limited company in which provide the best quality of product as well as service to their
consumers. public limited is mainly focused on giving the best options where they can easily
fulfil all essential need of consumers.
Organizational structure, size and scope of business and their alignation
with business objective
AstraZeneca has a hybrid organisational structure but is changing their organizational
structure by creating therapy area-focused Research and development units that are
responsible for discovery through late-stage development (Ahmady, Mehrpour. and
Nikooravesh, 2016).
They are also planning to include mirrored commercial units for biopharmaceutical and
oncology.
Hierarchies are removed and employees are grouped into teams made up of people
possessing different abilities.
Business objective of AstraZeneca
The main objective of AstraZeneca is driving the growth through successful innovation and
commercial excellence and maximizing profitability by managing costs and scaling
efficiently (Morgan. and et.al., 2018). Also impacting and improving the whole patient
journey from disease prevention and screening diagnosis and treatment to rehabilitation.

AstraZeneca’s prioritize launching a steady flow of speciality care products, balancing
the company’s historic strength etc.
Rebuilding the R&D engine through innovation and distinctive science supported by co-
location of teams.
To achieve their objective they also put patients at the first place and doing the right thing,
guiding the decision-making in the organization and foster a unified AstraZeneca culture in
the purview of their scope.
How the structure, size and scope are reflected in company’s objectives
Public sector Private sector Voluntary sector
Size The size of public
enterprise is that
when 5.39 million
People are employed
in public sector. A
very good example
of public sector
organization is
National Pharmacy
Association
The size of private sector in
UK is growing at a faster rate
and the public sector is little
bit shrinking. The
contribution of private sector
to GDP in UK is 83.65%.
AstraZeneca was fourth
largest in the world at the
time of merger in 1999. It has
around 59,700 employees
and is ranked 8th among its
top 10 competitor.
As per survey there
are around 165,800
voluntary
organization in UK.
A very good
example of
voluntary
association in UK
is The National
Trust.
Structure The structure of
public sector is
considered as
divisional because it
has been categorised
or assign the
particular employee
on the basis of their
skills, ability.
The structure of private
organization is hierarchical
where perform the business
tasks in step by step manner.
The structure of
public sector is
considered as
divisional because
it has been
categorised or
assign the particular
employee on the
basis of their skills,
ability.

Scope Scope of public
business is to provide
the better facilities
with appropriate
price whereas
individual can use
services.
Scope of private business to
increase the profitability as
well as productivity. To
provide the better product as
well as service but gained
more revenue in the
marketplace
Scope of voluntary
sector is to provide
the better facilities
and service for
community welfare
Business
objective
The main objective
of public sector is to
provide services to
the community and
also creating
employment.
The main objective of
private sector is cut cost in
their processes and become
more efficient and learn
profits. Also to enhance the
technological advancement
in the business.
The main objective
of voluntary
organisation is to
provide social
service and to
ensure proper
health and well-
being of the public.
Complexities of different type of business structures and the relevance of
the interrelationship of different organization function.
Hierarchical structure – In this type of organization structure there is one supervisor under
which employees are grouped. The groups are made based on the following factors like
function, geography and product etc. it has pyramid shaped organizational chart and the chain
of command goes from top level to lower level.
Advantage – gives each employee a speciality, creates camaradie between employees, clear
reporting relationship.
Disadvantage – slow down innovation, employees at lower level feel lack of ownership,
departmental goals are given more priority than the whole.
Functional structure – In this type of organization employees are organized as per
their skills and employees with similar skills are put into a particular department.
Advantage – enhances specialization, easily scalable in any type of company, allows
employees to focus on roles (Williams, 2020).
Disadvantage – difficulty in interdepartmental communication, creates silos within
organization.

Divisional structure – In this type of organization there are various divisions and
each divisions have their own marketing, finance, sales, IT teams. This structure is best for
large organization
Advantage – increases flexibility, dynamic functioning, promotes autonomy and customized
approach.
Disadvantage – wastage of resources, communication interruption.
Hybrid structure – It is also called matrix organizational structure and looks like a
grid and people with similar skills are grouped together for a particular project.
Advantage – dynamic approach, encourage employees to diversify their skills.
Disadvantage – departmental conflicts may arise, can change frequently than other structures.
AstraZeneca has a hybrid organizational structure which means it combines two or more
structures. As AstraZeneca has a dynamic work environment therefore hybrid structure is
best suited to this company. The company can get functional expertise in terms of working
groups. The employees get diversification of the projects and because of this their skills sets
broadens up. But sometimes there are chances of occurring conflicts and the reporting
relationship are also ambiguous.
Interrelationship between different organizational functions
IT and HR function – As in the organization IT department is responsible for
communication and maintaining networks and records and HR department is responsible to
hire right person at right job. In AstraZeneca IT department helps in maintaining proper
record of the potential candidates that are related to pharmacy and also keep a proper record
of medicines which they manufacture such as Atacand, Crestor, Lokelma and many more and
HR hires suitable candidate who can operate IT, computers.
Production and finance – Production department of AstraZeneca is responsible for
producing all the pharmaceutical products and drugs such as Atacand, Crestor, Lokelma and
finance department is responsible to arrange monetary resource for the production
department. Production department needs finance to buy material such as hydroxypropyl
cellulose, polyethylene glycol, lactose, corn starch, carboxymethylcellulose calcium,
and magnesium stearate, sodium zirconium cyclosilicate, a potassium binder and produce the
drugs. And finance department needs funds which comes from the increased production and
ultimately making profits.

Section 2
1. Macro environment impact on AstraZeneca Business
There are number of factors that influence growth of the organisation political
situation of the country, economical crisis etc. PESTLE tool is used by firms to analyse such
kind of situation and frame policy accordingly.
Political
United Kingdom is one of political is stable country but BREXIT has impact on its
stability. Consequently there are 3 Prime Minister Changes in the country which leads to
change in industrial policy (Morgan and et.al., 2018). Pharmaceutical industry export most
of raw material from Europe side but after exit of Britain from European Union, increase
tariff and custom duties. However, COVID has affected life of human being in the country
which leads to increase in conjunctions of medicines and gives opportunity to various
companies.
Positive
AstraZeneca market increases because company is in the race of making COVID
vaccine. It also increased interest of different investors in the world and increase fame of the
organisation.
NHS and other types of facilities need medicine support and hence new government
encourage company to provide best quality product & services.
Negative
Firm export most of raw material from Europe side but after BREXIT increases cost
of it which decreases profit share of the company. Company also import various kinds of
vaccines in different countries of European Union but because of Britain’s exit from it,
decrease opportunity in expansion.
Certification of British government are very strict which affect firm’s business reaching to
customers and increasing market share in time of globalization
Economical
United Kingdom is one of economic stable country but after BREXIT commodity
prices increases with decrease customer capacity to purchase it (Fuller and et.al., 2016).
However, government is determined to decrease corporate tax and support local Organisation
in the country. COVID highly affected on employment sectors and large number of people
unemployed in Britain.

Positive
Decreasing corporate tax by Britain government can help AstraZeneca in providing
medicines at low price and hence increased numbers of customers. COVID has increase
market share of the company as its vaccine in final stage. It also increases Goodwill of the
organisation.
Infrastructure continuously improved in United Kingdom which can help firm in reaching to
customer on time as well as decrease cost of transportation
Negative
Increasing inflation and unemployment rate leads to declining in its customers and
also rising tariff of raw mater affected on growth of the firm.
Labour cost and other facilities related to them in United Kingdom is high which decrease
firm’s profit share
Social
Rising population of the country as with different lifestyle has impact on their health.
AstraZeneca provide product relating to various diseases according to changing trends in the
country such as firm is determined to provide COVID vaccine. However, large number of
people now started focusing on exercise and health consciousness and hence decreases
chances of heath which impact on its market.
Positive
Company’s product can be purchased by growing population and also its COVID
vaccine able to improve its financial situation.
Large population of country has improper routine as well as increasing work load increase
chances of various diseases and it can become create opportunity for firm to provide drug
services accordingly.
Negative
Increasing Health awareness among people effect on firm’s product consumption
level which decreasing its market share.
Increase Yoga and other form of exercise culture in country can improve health index of
country and hence it can decrease profit share of AstraZeneca as large number of people do
not need medical facility.
Technological
United Kingdom is one of technological advance country and hence pharmaceutical
industry keep update their system and able to increase quality, efficiency and productivity of

work. AstraZeneca is one of biggest medicine & vaccine manufacturing firm in the country
hence it make quick changes in its system.
Positive
Advance technology increase output of the firm with quality of product and hence
firm able to increase customer satisfaction level. It also improves supply chain management
and hence product can be delivered timely.
Negative
Change in system and process require large amount of money and hence increase
financial burden on the firm which can be used for expanding business. Training and
development programs also needed for it and hence time effective.
Environment
Pollution in United Kingdom continuously increases which effect on health of many
people. AstraZeneca provided various Types of tablets for overcoming from diseases form by
such kind environment effect.Raw material of company comes from different farmlands but
because of changing environment many crops effected and hence increase cost of agriculture
supply.
Positive
AstraZeneca provide various kind of medicine for environment born disease and
hence able to increase its revenue which supports growth of the firm. Company also
contribute in environment protection by its CSR activities.
Negative
Pollution destroy various places agriculture, it increase price of raw material which
impact on purchasing capacity of the customers.
Legal
Government has passed various kinds of laws and regulation for Pharmaceutical
industry. There are number of laws introduce in the country to protect workers at work-
station such as Act related Employment, wages. Equality etc (Ding and et.al., 2018). This law
are implemented by AstraZeneca which increase its good will and workers loyalty.
Positive
It help firm in increasing loyalty of workforce which positively impact on quality,
efficiency and productivity.
Negative
Increase financial burden on the firm and hence decrease chances of expansion of
business.

2. SWOT analysis
It is use by the firm to understand various positive and negative side and the way in
which it impact on growth of the firm.
Strength
Company is well known for its innovation and creativity and ranked first in it which
help in providing best quality services at low price. Company highly invest in developing
various kinds of vaccines and medicines that can help in growth off the firm. Presently
AstraZeneca is one of leading organisation in developing COVID vaccine and it attracts large
number of investors. Company’s product purchase in different part of world and hence
increase improves its financial performance.
Weakness
Company has bad public relation which highly effected on its image and remains in
various controversies. There are experiments relating to drugs failed which effect increase
financial pressure on the firm (Remneland Wikhamn and Styhre, 2019).
AstraZeneca has number of challenges related to leadership as well as management and it
effecting growth of organization in expanding business in different part of country (SWOT
and and PESTLE, 2020). Supply chain management need to be improved for delivering
product & services in different part of globe.
Opportunities
AstraZeneca is financially very strong and there are many countries where it can
expand business using this money (Willigers, 2020). It is in final stage of making corona
virus vaccine which improves its image and hence collaborating in different countries, it can
able to increase market share.
Increasing number of internet user can help firm in expanding business by attracting them
with product as well services of AstraZeneca. It can support firm’s E-commerce business and
also reaching to customers timely. Investing in promotion of product on different online
platform will become strength for the company to reach to customers which are in different
part of world (Fern Fort University, 2020).
Threats
High completion level is the most common threat! Increasing inflation and
unemployment rate can decrease capacity to purchase AstraZeneca’s product and services
(Viña and et.al., 2019).