Business Environment, Organizational Structures: Halifax Bank Report

This report provides a comprehensive analysis of Halifax Bank's business and its environment. It begins with an introduction to business environments and then examines the different types and purposes of organizations, including private, public, and voluntary enterprises, along with their respective legal structures. The report differentiates between profit, non-profit, and non-governmental organizations, as well as micro, small, and medium-sized enterprises. It explores the interrelationship of different organizational functions and then delves into environmental analysis using the PESTEL framework and Porter's Five Forces model. Furthermore, it conducts a VRIO analysis to identify the company's strengths and weaknesses, culminating in a SWOT analysis to highlight opportunities and threats. The report concludes with a summary of the findings and references relevant sources.

Business and Business
Environment

Table of content
INTRODUCTION...................................................................................................1
SECENERIO AND ACTIVITY 1..........................................................................1
Different types and purposes of organisations with their legal structures...................................1
Difference between profit, not profit and non governmental organizations................................3
Difference between micro, small and medium sized enterprise..................................................3
Interrelationship of different organisational functions................................................................5
SECENERIO AND ACTIVITY 2..........................................................................6
Macro environment analysis by using PESTEL framework.......................................................6
Micro environment analysis by using Porter;s five force model.................................................8
VRIO analysis of company in term of find out strengths and weaknesses.................................8
SWOT analysis of the company to highlight its strengths, weaknesses, opportunities and
threats...........................................................................................................................................9
CONCLUSION......................................................................................................10
REFERENCES......................................................................................................11

INTRODUCTION
Business and business environment indicates to the environment of a business in which a
company its business activities and operations. It can be the surroundings that is connected to all
the components and elements that either influence or create impact on the working and
functioning of a firm. Moreover, it is an essential factor to an organisation to determine its
environment as it offers a prominent insight to organisations in relation to these aspects because
it help in maximising the scope of development when comes to formation of strategies and
operations (Alsaad, Mohamad and Ismail, 2017). In context of it, the report is supported to
Halifax Bank which is a British banking brand operating company. It was incorporated in 1853
and headquartered in West Yorkshire, UK. In this relation, the written document will covers
effective insight on business environment, explanation of size and scope of firm and interrelation
among its different business functions that are connected to organisational structure. Along with
this, it also undertakes utilisation contemporary examples in order to present different
components that create favourable and unfavourable impact upon the business function of the
firm. In addition to it, internal analysis also discussed along with interrelation with external
analysis.
SECENERIO AND ACTIVITY 1
Different types and purposes of organisations with their legal structures
Organisation can be explained as a unit of organised people that has a common motive
and accountability to accomplish all over objectives of a venture. Majorly, there are three types
of companies which have different purpose and legal structure that are private, public and
voluntary enterprises (Explain the different types, size and scope of organisations, 2020).
Private company- It can be explained as any individual, partnership, corporation and agency
that is not a public company and the motive of it to earn profit. These kind of companies are
responsible to take their decision own-self and they have not any kind of government
involvement (Ayatse, Kwahar and Iyortsuun, 2017). Halifax Bank is the example of this kind of
firm that is a UK based banking company.
Purpose of Halifax- The major motive of respective company to offer quality and
effective financial products and services to customer and becoming the first bank for customers.
1

Legal structure- Some of particular legal structure that is followed by diverse
organisation to carry on its business actions and operations (Cepel and et. al., 2018). The legal
stricture of private sector company can be acknowledged by following mentioned points:
Sole proprietorship- In this legal structure, an individual operates the us8iness of the
entire company and is the single owner of the firm. The owner as limited freedom over business
determinations and the risk and treat is high ion such companies. Sole proprietorships are easy to
set up and usually only need a small influx of initial asset. It is common for SMEs to assume a
sole proprietorship status during the initial period of their operations. Business overheads are
usually minimal due to the small size of the enterprise, but if the business is unable to make a
profit and keeps accruing debt, the owner is exclusively liable for any outstanding debts. The
main advantage of sole proprietorship is that this kind of business can be start with fewer
amounts and an individual can operate and set up this business simply. The main drawback that
is faced by person is difficulty in raising investment capital to start business. There is no business
write offs.
Partnership- It can be mentioned as an agreement or contract that can be take place
among two or more people that work together to accomplish the set business objectives. It is
essential to point of that not all partnerships have unlimited liability, limited liability partnership
are now becoming highly common. The advantages are that it is easy to start and profits and
losses both are wear by parterners. The main limitation o this kind of business is that there are
instability, unlimited liability, lack of harmonery and limited fund to operate business.
Limited liability companies- These kinds of enterprises have different owners and
revenue that are generated from these companies are segregated among all the owners. When
companies are formed, they must have a constitution that will assist the shareholders and director
regulates their relationship. The main benefits of this business that there is no restrictions on the
number of members and company has flexible structure. The drawback of this business is that it
consume more cost in comparison to sole proprietorship and pay more tax in compare to limited
liability company.
Public company- it refers to those organisations that are governed by national authorities of
countries an motive of them to provide services to the community and society (Explain the
different types, size and scope of organisations, 2020). The main purpose of them is not earn
2

profit instead of they work for fulfilling public needs. BBC is an example of these kinds of
companies.
Purpose of BBC- The basic purpose of BBC is to offer essential data and news
prevailing across the globe to population.
Legal structure- The companies who are including as public organisation are followed
all the rules and regulation that are imposed by national authorities upon them. The legal
structure of BBC mentioned as beneath:
Central government- These kinds of ventures are incorporated and governed by central
authorities of UK. It has different benefits like protecting business from tyranny, dispersing
power, increasing citizen participation and increasing effectiveness of the business. The
drawbacks are supposedly protecting slavery and segregation, increasing inequalities among
states etc.
State government- In this legal framework, business activities and operations is operated
and owned by state government of that state in which the respective company performing its
business activities and operations. The main advantage of it is that it supports the business in
operating business state level and help by framing favourable polices. The drawback is that they
charge different taxes to operate business in state.
Local government- These firms are established under nation or legal & government
framework of municipality.
Voluntary company- These kind of enterprises are known as non profit company because the
main motive of these king of companies is to develop the living standard of the local people.
They are not work for earning profit instead of it they carry out its business activities for
development of society (Eling and Schaper, 2017). Charity commission of England and Whales
is an effective example of these kind of companies. These NGOs are controlled by national by
trust committees and financed by charities to perform their activities. These companies are
worked for social welfare and CSR activities so large companies also financed a small portion
for these kind of activities.
Purpose of Voluntary firm- The major motive of respective company is to provide help
to those people who are required and help in fulfilling their basic needs and necessities.
Legal structure- Charity Commission of England and Wales is supported to a
commission that established in 2007 that analyse effects on the relationship with regulator and it
3

can frustrate n intention to accomplish a favourable outcome (Fabuš, 2017). The legal framework
of this company is as under:
Trust- These kind of companies and enterprises are operated by trust deed and there is no
legal structure in these kind of organisation sectors.
Charitable company limited by guarantee- It can be explained as a limited liability
company which is established and registered within company house.
Difference between profit, not profit and non governmental organizations
Profit- It indicates to those sectors that are administrated and owned by independent
organisations and not by national authorities. The main motive of them to earn high profit with
the help of their business activities and operations. It operate their business with different
products and service like Halifax Bank offer banking products, insurance and investment
services.
Non-profit- These kind of firms are managed and controlled by national authorities of
the company. It works to serve different services to community and social population. For
instant, BBC deals with offering broadcasting services.
Non-governmental- Those firms that make their focus on a particular cause or a social
problem are known as non-governmental companies. It perform their operation for the welfare of
the society not for gaining profit (Faghih and et. al., 2018). For example, Charity Commission of
England and Wales deals with offering charity to old age home, orphanage and many more.
Difference between micro, small and medium sized enterprise
Basis Micro Enterprise Small
Enterprise
Medium
Enterprise
Large
Enterprise
Meaning It indicates to those
business
organisations that
operate their
business less than
10 employees and
sells product to a
local market. The
It mention to
companies which
run their business
firm with the
contribution of
maximum 50
employees
(Gaganis,
These companies
operate their
business with 250
numbers of
employees and
the purpose of
providing
employment to
It indicates to that
companies whose
business is run by
more than 250
workers. The
main motive this
kind of business
is creating job
4

annual turnover of
these kind of firm
less than EUR 2
million.
Pasiouras and
Voulgari, 2019).
The annual
turnover of this
business is EUR
10 million.
the people who
are rejected by
large
organisation. The
annual turnover
of medium sized
companies are
EUR 50 milion.
options from
individuals and
earning profit.
Market share The market share
in context of these
kinds of companies
is about to nil
because the
business is running
only for earning
livelihood.
In these forms of
enterprises the
share of market is
low and less.
The business of
this category
focus on market
share less than
large companies.
The main motive
of large
companies to
capture large
market share.
Sustainability It highly
concentrates on
survival of the
business in
particular sector.
The level of
survival and
sustainability is
not high because
these firms are
small in size
(Gorla, Chiravuri
and Chinta,
2017).
They are little
concerned about
sustainability and
survival in
comparison to
micro and small
companies.
They do not make
concentration on
sustainability
because they
already cover a
large market.
Profit share and
growth
It contain low
profitability
because they
operate business
for fulfilling their
This kind of
company has
little profit but
more than micro
compazznies.
It consist profit
and growth
because they
operate their
business at large
These kind of
companies
mainly focus on
profit and growth
or development
5

daily basis needs
of food, clothing
shelter etc.
level in
comparison to
micro and small
or they also
provide
employment to
people.
of the business
(Hamilton and
Webster, 2018).
Size
Scope
These kind of
business re
operated by with
the help of less
than 10 people and
the annual turnover
of these firm are
no more than EUR
2 Million.
They have no
scope because this
firm established
only for surviving
their living.
The size of this
business is less
than 50 and the
yearly turnover
of these
companies is
maximum EUR
10 million.
They have less
scope because
they employ
those people who
work for
surviving their
living of life.
These businesses
are run by
maximum 250
individual and the
annual turnover
of them is EUR
50 million.
The scope these
firms are large in
comparison to
small companies
because they
provide
employment to
those people who
are selected by
large organisation
and work for
gaining profit.
This kind of
businesses is
operated by more
than 250
employees. The
turnover of them
are high because
the motive of
them earning
profit.
They have large
scope because the
motive of them is
earning profit and
provide
employment to
the people of all
over the globe.
6

Interrelationship of different organisational functions
Marketing and Research & Development function- These both functions are interrelate with
each other because they both make their contribution in running the business of the company in
term of accomplishing the business aims and objectives. In Halifax Bank, the marketing function
of the company use its marketing tools and channels to create awareness about the products and
services of the company, like new insurance products etc., in the market. With the help of this
make their contribution in achieving business of maximising customer base. Whereas R&D
division conduct marketing research to get information about the needs and demands of
customers and in this process this function utilise marketing channels. So that it can provide
accurate and deep information about consumer’s interest. When the company have information
about clients need then it develops and produce financial products and services as per their
requirement. It will help in achieving the sales objective of the firm.
Human resource and Finance department- These both functions are also interconnect with
other and contribute in growth and development of the company. At the time of filling the vacant
position of finance function by organising recruitment and selection process, the HR manager of
Halifax Bank conduct recruitment activity to recruit skilled and talent candidates that are suitable
for the vacant position. For this use different method of hiring and selection so that they ire fresh
talent and knowledgeable person who help in accomplishing the business objectives like
maximising revenue and market share of the company (Kasemsap, 2018). Apart from it Finance
function is also provide fund to organise recruitment process and provide notification about
vacant position to applicants through using social media tools and designing job description.
With the assistance of it finance function makes contribution by providing fund so that the
activities of selection process can be conducted in effective manner. It will also help in attaining
business objective of respective company because when the firm have skilled workface then it
can easily achieve its set goals in granted time duration.
Types of organisation structure based on its scope and size:
Matrix structure- In it, reporting relation can be set up as a group instead of traditional
hierarchy. In these kind of organisational structure employees have dual reporting relationships
basically to both a functional administrator and a product manager (Kopnina and Blewitt, 2018).
The management of Halifax bank can follow this structure because it is the subsidiary of Lloyds
7

banking group plc. So the company has wide scope and size and employees report their work to
their superior then they report to head of respective banking group.
Hierarchical structure- In this kind of organisational structure, workforce are grouped
with each employee having individual supervisor. This team is categorised on the basis of
components like functions, geography and product. The size of organisations that adopt such
framework like BBC and in it, grouping is done according to nations. This company has large
scope as it is a well know brand and company and customers are well known with it.
Therefore, the CEO of the company connects with president and commercial
administrator and gives order to employees to achieve aims and objective. The administrator
share this message to different business function of the firm as per need that help in completing
work in granted time duration. The main motive of managing this plan of action is effective flow
of work with efficacious communication in the company. The objective of the companies is link
to the business objective because when the firm accomplish its aims and goals then it help in
developing the size and scope of the company in term of increasing customer base, sales, profits
and productivity.
For example, Human resource management is effectively interrelate with other functions
of the company so that the firm can operate in effective manner and accomplish its set
objectives. By hiring skilled and qualified employees for all function of the firm, this makes
contribution in attaining the objective and making development. Along with this, it os effective
and the interest of the establishment are well served and it generates a personal accountability ,
where the lines of administration are clear can be considered as an benefits but from a diverse
point of view, the transmission of knowledge slows down, collaboration and coordination of
determination devising which may appear can be presumed as a drawbacks.
The aim also based on the scope of customers served by company. On is the demand the
consumer requires at the national extent. The other is the objective set by business firms when
dealing with consumers at the global extent. It is the place to mention that this difference in the
size and scope of the several banking sector companies is reducing with smaller organisations
doing their best to develop faster and reach their larger rivalry. In the business world, this is
completed by increasing additional capital. For instant, as per KY News reported in October
2019 that fintech company Revoult was looking to pick up $1.5 billion of the major capital they
operate and hired JP Morgan to facilitate this. The fundraising will be among 5 and 10 million
8

dollars. Revolut became the most valuable starting up of fintech in the UK between fitntech in
February 2020, after funding reached more than three times its value. This happened after the
company announced that it had dialled $500 million from a group o investprs led by the
American technology Crossover Ventures.
SECENERIO AND ACTIVITY 2
Macro environment analysis by using PESTEL framework
PESTEL Analysis is a framework that is used by an organisation to determine the impact of
external factor. In context of Halifax Bank, the PESTEL framework of respective firm is as
under:
Political- The banking sector is greatly regulated according to the government regulations in
the nation where company operate its business. Halifax operates its business in diverse countries
and work as per the policies of government (Kuula and Haapasalo, 2017). The business of this
company affect when the national authority of UK makes change in its taxation policy. Due to
Brexit in term of maximising them. Then create unfavourable impact upon respective company.
The government of some nations are stable which create positive impact on the business
operations of this Bank. Due to Brexit, inflation is arisen and the firm make increment in its
interest rate.
Economical- The economic risk and uncertainty of a UK exit from Europe poses a
significant challenge to many banks including Halifax Bank. This factor also impacts the
business operations of Halifax Bank in favourable and unfavourable manner (Lim, 2017). For
example, when the changes are occurred in currency it affects, it highly affect the British
economic condition in negative manner. Brexit also create unfavourable consequences for
capital, operations and regulations. Change is interest rate due to Brexit is another factor that
affects the economic condition of Halifax.
Social- It consist different factor like changes in consumers’ needs, lifestyles, income etc.
then it affect the business operation of a company. For instant, in context of Halifax Bank, in
UK interest of people are changed and saving, investment and wealth management product and
services. This creates favourable impact on business of respective company. But due to Brexit
situation of inflation occurred in economic system due to which company also increase its
9

interest rate that create negative impact because customer will not ready to raise fund and they
can switch to another firm.
Technological-This factor consist different components like advance technology, artificial
intelligence, research & development in technology. For example, the company use digital
technology and mobile capabilities to develop and making difference in their offering while
remaining are investing in fraud prevention, cyber risk, IT security etc. This create positive
impact on the firm because with the help of this technology company aware its customers about
its product and make improvement in their experiences. But if the company will not use high
security in its technology then it can be negatively affect organisation in term of data theft and
information hacking etc. By adopting different security technology and software like Firewell
and secure socket layer encryption can used by the firm to provide protection data for cyber risk.
Environmental- Halifax recognises the current trends in customers and national authorities
demanding businesses to minimise their carbon foot print. In context of it, the management of
respective company committed to minimising its own carbon foot print by misnaming energy
consumption primarily through sustainable improvement funding and carbon (Quinlan and et. al.,
2019). This creates favourable impact on company because the firm work for environmental
safety and consider it as an important factor. Covid19 is an environmental factor that highly
affects the business of the company in negative manner. Due to this issue the nation affect in
UK. This will create negative impact over the economic system of the company as well as
environmental factor like climate of the workplace. This will strongly influence the banking
industry which in turn accepts non-essential business support evaluates as removing some of a
charge for Euro payments and cash withdrawals inside Halifax, changes to assist protect their
consumers and their accounts as starting to notice extra check when shopping and banking online
and paying someone new, double-check personal details whether match and response if they do
not.
Legal- It refers to those laws and legislations that are formulate by the national authorities of
the country. If the national authorities make changes in its legislation then affect the business of
Halifax Bank because it operate globally. For example, in current time most of countries free
trading of goods and services. So with the help of it organisations can easily run their business
which positively affects the company. Apart from this, if the national authorities of countries
make strict law regarding trading and others then it negatively influences business of respective
10