Comprehensive Analysis of General Motors' Business Environment

This report provides a comprehensive analysis of General Motors' (GM) business environment, covering various aspects of its operations. It begins with an introduction to the business environment and provides an overview of GM as a public company. The report explores different types of organizations, including public, private, and voluntary sectors, highlighting their purposes, legal structures, and scopes. It examines the relationship between organizational functions, such as marketing, finance, sales, production, and human resources, and how these functions relate to organizational objectives and structure. A PESTLE analysis is conducted to identify positive and negative macro-environmental factors impacting GM's business, including political, economic, social, technological, legal, and environmental factors. Furthermore, a SWOT analysis assesses GM's internal strengths, weaknesses, opportunities, and threats. The report concludes by interrelating the strengths and weaknesses with external macro factors, providing a holistic view of GM's position in the market. The report uses examples like Dyson and Oxfam to compare different types of organizations. Overall, the report provides a detailed overview of the business environment and how various factors influence the operations of General Motors.

Business and business
environment

Table of content
INTRODUCTION..........................................................................................................3
LO 1................................................................................................................................3
P1 Different kinds of organizations.........................................................................3
P2 Size and scope of different types of organizations.............................................5
LO 1................................................................................................................................6
P3 Relationship between different organizational functions and how they relate to
organizational objectives and structure...................................................................6
LO 3................................................................................................................................8
P4 Identification of positive and negative macro environment on business
environment.............................................................................................................8
LO 4................................................................................................................................9
P5 Assessment of internal and external strengths and weaknesses of a company. .9
P6 Interrelation of strengths and weaknesses with external macro factors...........10
CONCLUSION............................................................................................................10
REFERENCES.............................................................................................................11

INTRODUCTION
Business environment can be defined as a sum of all the internal and external
factors which collectively influences the functions and activities of a business
orgnasiation.It includes factors like customers, suppliers, competitors, laws and
regulations, government, employees, investors etc. The present project report is about
the General Motors which is giant automobile multinational company based in
Detroit, Michigan, United States. It is publicly traded company and is listed on
NYSE, S&P 500, 100 Component. The report will highlight various kinds of business
organization, their size and scope. It will also include how different organizational
functions interrelate with each other. Further, a PESTLE and SWOT analysis will be
conducted for analyzing the impact of internal and external factors on the functioning
of the company.
LO 1
P1 Different kinds of organizations
Several kinds of business organization exists in the business environment. These
include public, private and voluntary sector organizations which are different in terms
of their purpose and legal structures. These are as follows:
Public companies:
These are those companies whose shares are traded freely in the capital market by
the general publicly. It is listed on one or more recognized stock exchange for raising
capital by selling its shares.
Purpose: The purpose of public companies is to enhance and maximize the value of
its shareholders. In other words, the purpose is wealth maximization by increasing
profits and delivering value to the customers (What are the objectives of a public
limited company, 2018).
Legal structure: The legal structure of plc is such that it have a separate legal identity
from its owners. It requires minimum of £50000 as paid capital. Further, it needs at
least two directors and one company secretary for its Incorporated. The profits of such
company are subject to corporation taxes.

Example: GM is a public company whose shares are freely traded by people in the
capital markets. The purpose of company is boost the value of business for its
shareholders.
Private companies:
These are such organizations whose shares are not traded on stock
exchange.These companies cannot raise capital from capital market by selling its
shares to general public. It is smaller in size as compared to public companies. The
liability of members or owners in such company is limited up to amount of share they
hold in the business.
Purpose: The purpose of private company is to earn higher profits for its owners by
selling its goods and services. The goal is rather profit maximization then wealth
maximization.
Legal structure: Being a limited company, it is a separate entity from its owners
which means that directors of company are not personally liable for the acts of the
company. Further, it does not have to meet enormous legal requirements like in case
of public company such as minimum paid up capital. Moreover, it require at-least one
director and company secretary is not mandatory (Calabrese and et.al., 2018).
Example: Dyson company is a private company which designs and produces
household appliances like bag-less vacuum cleaners, air purifiers,hand dryers etc.
Voluntary organizations:
These are such organization which comes into existence for serving the society
and work for the benefit of social welfare. The money raised by such companies or
organizations are always use for a specific cause or it can be said that whatever the
money is made from society is reinvested back into the society.
Purpose: The main motive of this kind of organization is to serve the society. It does
not work for the profits or maximizing the wealth for its owners rather it uses the
earned money in the social welfare.
Legal structure: The structure of a voluntary organization is set out in the
constitution. There are basically three types of voluntary association such as
unincorporated association, company limited by guarantee and a trust (Beatty,
Samuelson and Abril, 2018).
Example: Oxfam is an organization which belongs to voluntary sector in the United
Kingdom. This organization mainly emphasizes on eliminating global poverty. It is
one of a major non profit organization which is involved in various operations.

P2 Size and scope of different types of organizations
Basis Public company
(General Motors)
Private company
(Dyson company)
Voluntary
organization
(Oxfam)
Scope The scope of public
company is wider
than privately held
company. It
operates at large
level and employs
large number of
people. For
example, GM
operates worldwide
and has an
employee strength
of 173000.
Private company is
relatively smaller
in size and it is the
reason that it have
few shareholders.
The limit in UK is
50 shareholders.
Dyson company
have about 12000.
Voluntary
organsiations are
hard to define in
terms of scope and
size. It is becasue
some large
charitable trust
with proper logos
and names while
others are very
small which have
narrow scope.
Oxfam is one of the
biggest charity
organization that
operates on wider
level.
Objective The motive of
General Motors is
to maximize the
wealth of its
shareholders.
The purpose of
Dyson company is
increase its returns
and profits for its
owners (Crane and
et.al., 2019).
The objective of
Oxfam is to serve
for the betterment
of society in the
form of eliminating
global poverty.
Size Larger in size and
conducts its
business on large
scale. It
manufacture
vehicles in more
It is relatively
smaller than GM
and operates on
smaller level.
The size of Oxfam
is very large and it
operates
worldwide.

than 37 countries.
LO 1
P3 Relationship between different organizational functions and how they relate to
organizational objectives and structure
Organizational structure refers to a system which defines the hierarchy within an
business organization.This structure stipulates the role, responsibilities, authorities,
responsibility of each of the member of a company(Hamilton and Webster2018).
There are different kinds of organization structures such as divisional, functional,
hybrid which are adopted by business organization in accordance with its business
requirements.
General Motors utilizes its organizational structure for supporting its managerial
decisions. Company’s organizational structure includes:
 Regional segments
 Business divisions
 Corporate Functional segments (Geissdoerfer, Vladimirov and Evans, 2018)
An organizational has different organizational functions which are segregated
into various departments. A close integration is required between these organizational
departments for the purpose of effectively carrying out the routine activities of the
business.
Marketing & Finance: These departments are interrelated in the sense that
marketing department is the one which is responsible for carrying out advertisement
and promotional campaign, market research etc., for which funds are required.
Arrangement of those resources from the most reliable cost effective sources is the
duty of finance department. It assigns the needed resources to marketing department
for meeting their business requirements.
Sales & Marketing: These both departments are concerned with the development of
new markets and increasing sales. For example, marketing department searches for
every possible opportunities for expanding the operations, creates awareness in that
new market, induces people to try out their products (Aydiner and et.al., 2019). It
makes the platform ready for sales team to just interact and convince customers to buy

their products. Both works in close integration for the purpose of attaining the
objectives of GM.
Production and Marketing: These both are interrelated since marketing department
is the one which have direct interaction with the customers and know their
requirements and expectations. This information becomes the basis for production
department, according to which it undertake its production activities and
manufactures goods and services which are of expected quality, design and price.
Human resource & other departments: Human resource is responsible for fulfilling
the staff needs of the entire organization. Overall development of an employee also
lies in the hands of HR by the way of providing appropriate training and development
opportunities. All the other department gets the most suitable and skilled workforce
because of HR, since it searches for such potential candidates which can undertake
organizational duties with utmost efficiency and contribute in attaining organizational
objectives (Adegbite and et.al., 2018).
Advantage : Integration and inter-relatedness is necessary because a product which is
capable of meeting the expectations of target audience is possible only when all the
functional departments works in close integration. Further, interrelation ensures that
customers gets the most satisfactory products and services through which the aim of
company could be attained which is - customer satisfaction.
Disadvantage: Sometimes integration between different functions becomes
challenging due to lack of effective communication system. Moreover, personal
interests of each different department clashes with each other. This hampers the
organization in achieving its goals and objectives.
LO 3
P4 Identification of positive and negative macro environment on business
environment
Macro factors such as economic, political , legal etc., significantly affects the
operations of General Motors. Below is the pestle analysis which is a technique used
for assessing the impact of macro environmental factors on the business activities of
company:
Political: Political factors such as stability of government in major markets in

which company operates is an opportunity for GM since there will be favourable
polices and rules and regulations for the automobile industry. However, the
international markets have aggressive tax rates, it could adversely impact the
company’s operations (Gheibi and et.al., 2018).
Economical: Interest rates, GDP, inflation rate, purchasing power, employment
rate are some economical factors which affects the functioning of a company. For
example, emerging economies such as China, Brazil are opportunity for GM to mark
its position in such market and become a market leader. However, increasing inflation
rates around the world is threat for company for which company needs to make
provisions so that it can face this threat with less complexities.
Social: Changing lifestyle, more demand for electric vehicles and increase
demand for environmental friendly vehicles are some social factors which could
affect the operations of GM. For example, there is a great demand for electric cars
which is an opportunity for company while ever changing preferences of customers
and creating innovative products involves huge costs which is a threat.
Technological: Technological advancements such as increased efficiency in
automobile is an opportunity for company since more people would be able to afford
the vehicles (Kumar and Maqbool, J., 2018). However, technology does not remain
constant, it keeps on changing which is potential threat for GM since, implementation
of new technology in very short span would be a cost affair for company and reduce
its profitability.
Legal: Stricter regulations imposed by international markets is a serious threat for
GM. However, compliance of all needed legislation would help the company in
avoiding any kind of legal interruptions and would aid it in enhancing its image in
global market.
Environmental: Increased concern over the quality of air and environmental in
general has provided the GM with abundant opportunity to develop something very
innovative through which it meet the expectations of being environment friendly
company. This would ultimately enhance the financial performance and brand
confidence.

LO 4
P5 Assessment of internal and external strengths and weaknesses of a company
SWOT analysis is tool through which internal strengths and weaknesses of a
company could be assessed. Below is the SWOT analysis of GM:
Strengths:
 The company enjoys stability in its earnings and depicts sound financial
performance over the years.
 It has very large customer base around the world and it enjoys strong sales
growth in global market.
 One of the major automobile company in Chinese market.
Weaknesses:
 It has completely recalled its products which shows weakness in manufacturing
process.
 Less diversification which has increased its business risks
 It is experiencing dip in the global market share.
Opportunities:
 Entering into emerging economies.
 Increased demand for electric cars around the world.
 Technological advancements
 Higher degree of business diversification(Teece, 2018)
Threats:
 High risk of increase in inflation rate.
 Stiff competition from other global brands.
 Restrictive policies relative to automobile industry around the world.
P6 Interrelation of strengths and weaknesses with external macro factors
Strengths and weaknesses of a company is linked to external macro factors which
are analyzed by the way of PESTLE analysis. It was seen from the SWOT analysis
that General Motors have strong financial performance over the years which is linked
to the fact that there are many opportunities available in the emerging markets of the
world especially China. Further, the company have extremely large customer base

which is linked to the factors which are political and economical, technological.
Political stability enhances the company’s operations, economical factor such as good
purchasing power has helped the company in widening its customer base and
technological advancements such as rise in fuel efficiency have made vehicles quite
affordable to people (Quanjin and et.al., 2019). Moreover, weakness of GM such as
lack of diversification is linked to legal factors which involves strict regulations that
restricts the business in making diversification.
CONCLUSION
From the above project report, it can be summarized that business environment is
a collection of all the internal and external variables which have the capabilities of
affecting the operations of a business organization. It was observed in the report that
are various kinds of organizations such as public, private and voluntary which are
different from one another in terms of their legal structure, size, scope and objective.
Moreover, it was concluded that interrelationship between organizational departments
is necessary for the purpose of delivery the products and services which exactly meets
the demand of the target customers.

REFERENCES
Books and Journals
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Teece, D.J., 2018. Business models and dynamic capabilities. Long Range
Planning, 51(1), pp.40-49.
Calabrese, M and et.al., 2018. From mechanical to cognitive view: The changes of
decision making in business environment. In Social Dynamics in a Systems
Perspective (pp. 223-240). Springer, Cham.
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal
environment. Cengage Learning.
Crane, A and et.al., 2019. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Geissdoerfer, M., Vladimirova, D. and Evans, S., 2018. Sustainable business model
innovation: A review. Journal of cleaner production, 198, pp.401-416.
Aydiner, A.S and et.al., 2019. Business analytics and firm performance: The
mediating role of business process performance. Journal of Business Research, 96,
pp.228-237.
Adegbite, O.E and et.al., 2018. The organisation business environment.
In Organisational Adaptations (pp. 11-26). Springer, Cham.
Kumar, G. and Maqbool, J., 2018. Financial technology in the automobile industry.
Gheibi, M and et.al., 2018. Controlling air pollution in a city: A perspective from
SOAR‐PESTLE analysis. Integrated environmental assessment and
management, 14(4), pp.480-488.
Quanjin, M and et.al., 2019. Filament Winding Technique: SWOT Analysis and
Applied Favorable Factors.
Online
What are the objectives of a public limited company.2018. [online]. Available through
<https://bizfluent.com/list-6810569-objectives-public-limited-company-.html>