Business and Business Environment Report: GM Analysis and PESTLE

This report provides a comprehensive analysis of General Motors' business environment. It begins by examining different types and purposes of organizations, including public, private, and voluntary sectors, along with their legal structures. The report then evaluates the size and scope of these organizations, focusing on the National Health Service, General Motors, and Oxfam. It delves into the relationships between different organizational structures, such as production, finance, marketing, and human resources, highlighting their interdependencies. A PESTLE analysis is conducted to assess the political, economic, social, technological, legal, and environmental factors affecting General Motors. Furthermore, a SWOT analysis is presented to evaluate the company's strengths, weaknesses, opportunities, and threats. The report also discusses the interplay between internal strengths and weaknesses and external macro factors. The conclusion summarizes the key findings and insights derived from the analysis.

BUSINESS &
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................1
P1 Analyse different types and purposes of organisations; public, private and voluntary
sectors and legal structures..........................................................................................................1
P2 Evaluate the size and scope of a range of different types of organisations...........................3
P3 Relationship between different organisational structures......................................................4
P4 PESTLE analysis of General motors.....................................................................................5
P5 Swot analysis of General Motors...........................................................................................7
P6 Strength and weaknesses with external macro factors ..........................................................8
CONCLUSION..............................................................................................................................10
References......................................................................................................................................11

INTRODUCTION
Business is an activity which is concerned with generating money by selling and
purchasing services and products. Business environment is considered as an aggregate of all
individuals, resources, entities and other related factors. In some case these aspects are not under
the control of organization but they possess considerable impact on the growth, performance,
survival and profitability of a firm (Hilton and Platt, 2013). This assignment is carried out in
respect with General Motors which is an America based multinational firm, situated in Detroit.
This company deals with vehicles and vehicles part. They also sell financial services. This report
includes different types, purpose and legal structures of organization along with this, their size
and scope is also mentioned. Also, relation between various organizational function along with
objectives and structure is discussed. This report also includes internal and external analysis
carried out in respect with considered company. At last, interrelation between macro and
internal factor is discussed.
P1 Analyse different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
Wealth of United kingdom is related with different kinds of organisation such as private,
voluntary and public. Purpose of different business varies so business owners prefers
organisational structure in accordance with their requirement. Mainly, there are three kinds of
organisations i.e. private, voluntary and public. There purpose and legal structures are mentioned
beneath:
Public sector: These organisations are owned and managed by the government. These
companies are concerned with the welfare of people within UK (Bharadwaj and et.al., 2013).
They provide facilities and services to people without charging any capital. Shares associated
with these firms are sold and traded freely to the citizens in UK. NHS is a public organisation in
United Kingdom which deliverers healthcare services worldwide.
Purpose of NHS:
 Main purpose of NHS is to provide necessary facilities and public services to the people.
 NHS utilize their resources in an optimized manner which provide benefits to the
different sections of society.
 To assist in financial growth by improving the quality of services.
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Legal structure:
 Local government: They regulate and control small geographic locations like town, city
and districts.
 State government: They defines the regulations and laws for a state. Their main task is
to provide facilities and services to citizens as per their requirements.
 Central government: They regulate and manage whole UK. Their main role is to
maintain law and order in the country (Berg and Kilambi, 2014).
Private sector: Main motive of these organisations is to generate maximum profit.
Private sector is managed and run either by an individual or group of people, which are
responsible for formulating policies and plans to achieve target within specified time. In this
research, considered company is General Motors which deals with vehicle and parts associated
with vehicle and machines.
Purpose of General Motors:
 To diminish wastage and improper utilization of material and resources which results in
enhancing overall productivity level of firm.
 Developing advanced and modern machinery.
Legal structure:
 Sole trader: It is a one person business. In these business, limited amount of funds and
finances are required. In this structure business owner is responsible for loss and profits
that the company faces.
 Partnership: In this structure two or more than two people associate together to manage
business efficiently (Schaltegger Lüdeke-Freund and Hansen, 2012). Each individual is
accountable for the profit, loss and debts of their own shares.
 Private limited company: It is a kind of Joint-stock company where business posses
separate legal recognition from the owners. Usually, these companies are family run and
small businesses that are managed and owned by shareholders.
 Public limited company: In this structure business is owned and managed by board of
directors. They run business on the behalf of shareholders. These shareholders vote on
issues that are related with company.
Voluntary sector: These organisations are managed by the group of people which works
together for a specific cause or purpose. Usually, they provide facilities and service to
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community without considering their personal benefit (Ballard, and et. al., 2012). Oxfam is a
voluntary organisation which aims to carter the needs of poor and marginalised people in UK.
They also provide relief and facilities to those people which are victims of natural disasters.
Purpose of Oxfam:
 Providing facilities and services to marginalised and poor people.
 Their main motive is poverty alleviation and providing basis needs to helpless people.
 Spreading awareness and educating people about their rights through organizing
campaigns.
Legal structure:
 Association: In this structure, a group of individuals band together to achieve a specific
objective or target without considering any personal merit.
 Trust: This structure doesn't require any membership. Random people can come forward
and work together as a team against any cause.
P2 Evaluate the size and scope of a range of different types of organisations.
Main kind of organisations are public, private and voluntary. These organisations have different
aims and objectives so they carry out their operations in accordance with their requirements
(Werbach and Hunter, 2012). The scope and size of these organisations are also different which
are mentioned beneath:
National Health Service:
Size: It is a large public organisation which employs around 1.55 million population.
Qualified staff of NHS comprises of 16023 doctors, 31496 general practitioners, 20234 medical
and dental staff.
Scope: Organisation put main focus on expanding their framework of services providing
by them. They are enhancing quality and structure of their patient safety system,effectiveness of
their treatment and equity in providing benefit to all people. Also, they impact on improving
public health perspective on health services.
General Motors
Size: More than 180,000 are employed under General motors. Company is manufacturing
vehicles in 37 countries. Total number of locations where company is serving their facilities are
396.
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Scope: They can provide products in low cost to attract more number of customers. By
generating new innovative products and providing affordable pricing range to their consumers
company can increase competitive advantages (Vitale, 2011). Also, they can provide their
services in more geographical locations.
Oxfam
Size: Company is having 19 alliance of organisation and are serving in more than 90
countries. They have their headquarter in England.
Scope: Their main motive is to eradicate poverty and injustice. They help citizens who
are having lack of resources and are basically staying in famine and drought zones. Oxfam have
implemented various strategies to combat against causes of famine, flood and drought. They can
extend their services in more needed areas.
P3 Relationship between different organisational structures
Organisational structure is a process of assigning roles, power and responsibilities and
also refers to controlling various business operation to achieve specific goals and objectives of an
organisation (Janita and Miranda, 2013). In this context, it is essential for General Motors to
know the importance of inter-related functions of an organisation and how they helps an
organisation in improving their overall performance.
(a) Production and finance
The major function of production department of General motors is to produce products
and services in accordance with customers needs and requirement, whereas the major task of
finance department is to make General Motors financially stable in a business environment. In
this context, production and finance department of General Motors are inter-related because for
manufacturing a particular products and services funds are required, which are managed by
finance department. So this inter-relation will helps in achieving organisational objectives and
also in making efficient organisation structure.
(b) Marketing and finance
Marketing and finance plays a vital role in achieving organisational objective in a
competitive business environment. The work of marketing is to promote and advertise products
and services of an organisation in a business market, whereas finance department gives more
emphasis on arranging funds to increase profits of an organisation. In this context, marketing and
finance department is inter-related in General Motors as funds are essential for promoting and
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advertising products and services. So both marketing and finance works together to achieve a
common goal and in making organisational structure competitive.
(c) Human resource department and finance
The major task of human resource department is to make workforce of an organisation
effective and efficient in a business market. On the other hand, finance department works on
making an organisation financially stable (Wheelen and et. al., 2017). In this context, human
resource department of the chosen organisation General Motors, guides and support their
workforce for achieving their goals and objectives and also in creating healthy and efficient work
environment. These initiatives by human resource will lowers employees turnover rate that
simultaneously gives benefits finance department.
According to the present report, inter-related functions will helps General Motors in
achieving their organisational objectives and also in making their organisational structure
productive.
P4 PESTLE analysis of General motors
PESTLE analysis helps a company in examine aspects like social, technological,
political, environmental, legal and economical factors (Ullah and Lai, 2011). This helps General
Motor in gaining competitive advantage. Also, this analysis helps in identifying whether working
and investing in a company is advantageous or not.
Political: These factors have a long term impact on the productivity level of the
company. General Motors operates in the field of Auto manufacturing so they need to follow the
safety rules regulated by government. Along with it, company needs to consider tax, custom
duties, quotas and surcharges of the nation in which company is preparing to expand its
presence. If these aspects are not given consideration, company may have to pay heavy amount
of fines.
Positive impact: Laws and Trade norms helps company in deciding if it is profitable to
invest in a particular country or not.
Negative impact: Failing of rules and regulations results in increased costs and penalties.
Economic factors: Company gets affected because of the fluctuation in fuel prices. To
avoid these issues they need to find some alternatives such as Hybrid manufacturing. This will
helps the company in dealing with issues like hike in price of fuel and fluctuation in the price of
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steel (Prins and Cybercrime, 2011). Export and import regulations associated with a nation also
posses a great impact on the economic growth of General Motors. Company needs to follow
these economic aspects with appropriate consideration so that revenue and market share of GE
can be maintained.
Positive impact: Company needs to follow these economic aspects with appropriate
consideration so that revenue and market share of GE can be maintained.
Negative impact: Inconsistency in currency rates provides competitive advantage to rival
international firms.
Social factors: The social and cultural factors affects the macro environment of the
chosen organisation General Motors. It helps General Motors in influencing its consumers and
employees in a business market. This factor helps an organisation in increasing their demand and
in developing their overall growth in a dynamic business environment. The positive and negative
impact of social factors is explained below:
Positive: The major positive impact of social factors in General Motors is that, it
increases their demand of electric vehicles and self driven vehicles. This factors also improves
growth of General Motors and helps them in gaining competitive advantage.
Negative: Convenient transportation fee will decrease demand of General Motors, which
leads to affect its overall growth.
Technological Factors: In this context, PESTEL analysis will helps General Motors in
identifying how technological factors affects its outcomes and macro-environment. It will helps
the chosen organisation to implement new technologies in their operation to be competitive in
business market. The positive and negative impact of technological factors are:
Positive: This factor will helps General Motors in increasing fuel efficiency in their auto-
mobiles. It will also helps in proving new cars with new technology in a business market.
Negative: This factor also increases competition for General Motors, which leads in
investing more to be competitive.
Environmental Factors: These factors can affect supply, product usage and availability
of resources of General Motors. In this context, it is essential for General Motors to manage
ecological balance, which leads in promoting their overall growth in a competitive business
environment. Its negative and positive impacts is explained below:
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Positive: These factors helps General Motors in solving transportation problems of their
customers related to external factors and it can also improve its brand image by performing
social responsibility.
Negative: In this context, company gives more emphasis on addressing ecological
concerns, which leads in decreasing performance of of General Motors.
Legal Factors: This factors describes how legal factors influence business activities of
General Motors. The imposed laws and legislations on auto-mobile industries leads General
Motors to identify opportunities and threats in its macro-environment. The positive and negative
impact of legal structure is explained below:
Positive: Legal factors help in improving product development of General Motors by
expanding regulation on auto-mobile safety.
Negative: These factors create a restrictive working environment in General Motors and
also in other organisation working in a same segment.
P5 Swot analysis of General Motors
To achieve success and growth in business world, every organisation needs to identify
their strength and opportunities. They needs to eliminate their weaknesses and threats to achieve
their desired results (Weiss, 2014). This will helps them in improving their overall productivity
along with increment in market shares and profit margins.
Strength Weakness
 Company has strong position in US
automotive sectors and industry
 Company emphasize on Sustainable
and environment friendly policies
which allows them to generate eco-
friendly vehicle.
 GE has several underfunded pension
obligations which affects the finances
of the company.
 They have limited market presence in
under developed and developed
nations.
 Company has limited business
diversification.
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opportunities Threats
 Reduction in price of fuel results in
high demand for SUVs and Pickup
trucks.
 Increased demand of alternative
automotive vehicles and hybrid
electrics.
 Strict and complex government
policies.
 Company operates globally and have
currency exposure in most of the
transactions. Fluctuation in currency
results as a demerit.
P6 Strength and weaknesses with external macro factors
External factors that are mainly uncontrollable in nature and affects working and
functioning of an organisations are known as macro factors. They include some factors like,
political conditions, legal factors, natural forces, economical and demographic factors
(Avramenko, 2012). There are some specific factors for example, competitor and changes in
rates, taste and government rules and regulations. Macro environment influence entire business
economy. In relation to this,some strength and weakness are discussed below which are
interrelated with external macro factors of General motors:
Political factors: One of most important external factors, political factor of a country in
which government draws their rules and laws.
Strength: Political factor help General motors to lay their comprehensive path of plans
under suitable government zones. Company can evaluate all political aspects and shape their
social thinking and implement suitable business policies. With help of this factor general motor
can take advantage of effective demand and supply market structure.
Weaknesses: Political forces often acts as an barrier in implementing marketing
strategies. General motors need to observe all political situation before entering into new
production process. Different government forces can affect company to expand their business in
new geographical locations.
Economic Factors: It includes economic scenario of any particular region. It is basically
a mixed economy where there are both types government and private sector company can
regulate their business.
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Strength: General motor can function their business very effectively in this market
because in this government has basically no right to have control over any market. GM have
benefit to perform their businesses activities in wider range of market sector. Moreover, they
have benefit to take their own important decisions.
Weaknesses: There can be a threat to General motors in this form of market because in
this company is authorized to make their own price range especially relating to their products.
Hence, their competitors can low their product prices to take more competitive advantages.
Social factors: This factor includes taste and preferences of people in a society of any
particular region or country.
Strength: By gaining proper knowledge of population taste and preferences in specific
targeted area General motors can enhance their productivity and profit margin. Having
significant data related to consumer preferences will provide more benefit to company to
increase their performance.
Weaknesses: It can become very hard to learn about population in a specific area for
General motors if there are any mixed population. Because in this condition every individual is
inhabited with different kinds of taste, preferences, culture and lifestyle. Hence, company have to
make rights decisions and approaches to connect with consumers without hurting their
sentiments relating to unique clusters.
Technological factors: It includes all those technological factors that influences
activities of organisation. For example, availability of computer, internet connectivity and
security in cryptography.
Strength: By conducting various research on use of technologies in any specific location
General motors can increase their connectivity with their costumers if effective way and can also
enhance production. They can implement user- friendly technology in any particular region and
make plans according to that to develop strategies relating to communications and campaigns.
Weaknesses: With the use so many technological developments it can become so hard
for General motors to expense large amount of money to function them in regular manner. It can
also increase level of competition and enhance stressful working condition.
CONCLUSION
In this report, it has been conclude that business is concerned with activities related to
buying and selling of various goods and services. There are many factors in business
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environment which affect business internal and external performance. It have been analysed that,
by conducting SWOT analyses business firm can learn about their strength and weaknesses and
then can take effective measures to overcome them. PESTAL survey will help an organisation
attain sufficient amount of information to perform their business in different market segments.
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References
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Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
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