Business Environment: Organizational Analysis, Functions, and Impacts

This report provides an analysis of the business environment, focusing on different types of organizations such as public (National Health Service), private (Primark), and volunteer (British Red Cross) sectors. It examines their size, purpose, structure, and scope, and how these elements connect with their objectives. The report also explores the interrelationships between organizational functions, their impact on business structure, and the positive and negative impacts of macro-environmental factors, using Primark as a case study and applying the PESTLE model. Furthermore, it includes an internal and external analysis of the business environment, highlighting strengths, weaknesses, and their influence on decision-making through SWOT analysis. Desklib provides a platform for students to access this and other solved assignments for academic assistance.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................1
TASK 1........................................................................................................................................................1
P1. Explain different types and purposes of organisations......................................................................1
P2. Explain the size and scope of a range of different types of organisations........................................3
M1. Analyze how the size, structure, and scope of various organizations link to the objectives of the
business and with the products and services offered to public by the organization................................5
TASK 2........................................................................................................................................................6
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure...................................................................................................6
M2 Analyze the advantages and disadvantages of interrelationships between organizational functions
and the impact that can have upon organizational structure with examples from your chosen
organization.............................................................................................................................................6
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples...............................................................................................................7
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro environment
within your selected organization............................................................................................................9
P5 Conduct internal and external analysis of your selected organization in order to identify its
strengths and weaknesses......................................................................................................................10
P6 Explain how strengths and weaknesses interrelate with external macro factors of the business
environment it operates..........................................................................................................................11
M4 Apply appropriately SWOT analysis and justify how they influence decision-making in your
selected organization.............................................................................................................................11
CONCLUSION..........................................................................................................................................12
REFERENCES..........................................................................................................................................13

LIST OF FIGURES
Figure 1: NHS logo......................................................................................................................................2
Figure 2: Primark store................................................................................................................................2
Figure 3: British Red Cross logo.................................................................................................................3
Figure 4: Porter's five force model..............................................................................................................8
Figure 5: Pestle components......................................................................................................................10

LIST OF TABLES
Table 1: SWOT analysis of Primark..........................................................................................................10

INTRODUCTION
Business has influence of the environment in which it is operating. Business environment impact the
business for producing, pricing, marketing, competition, sales and sustainability. Present report will be
discussed various types of organization in which National Health Service, Primark and British Red
Cross will be discussed as public, private and volunteer organizations respectively. The organizations
will be discussed for their type, size, purpose, structure and scope and how organizations can link these
things with their objectives. Report will also focus on the interrelationship of organizational functions
and goals and objectives to achieve the benefits and understand the impact on structure of business.
Various positives and negative impacts of macro environmental factors will be discussed in context of
Primark along with implementation of PESTLE model. Internal and external business environment audit
will be discussed along their impacts on the decision making process of the organization.
TASK 1
P1. Explain different types and purposes of organisations
Organization can be defined as the group of peoples for a particular purpose or objective. Various types
of government departments and business are example of an organization where operations and activities
are organized for defined goals. Organizations can be differentiated on the basis of following sectors:
Public sector
Organizations in public sector are managed and controlled under the governmental activities and
policies. Such organization are capable in financial terms and trade freely in stock exchange. In
comparison of other sector, it can be considered as largest sector which is committed to quality and
services to community rather than to achieve profitability (March, 2013). National Health Service is a
public sector organization committed for the betterment of health of community.
Purpose: Public sector organization has purpose to work for the welfare of people regarding health,
finance, banking, rights, employment and other services. For example, NHS has purpose to provide the
professional and standard medical services to the people in economic price and helps to establish the
health standards in country for betterment in services.
Legal structure: NHS like public organizations has vertical legal structure whereas funds and controls
and driven from the governmental bodies. The organizational control in under the professionals those
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can further lead the team of doctors and health service providers to ensure the smooth services (About
NHS, 2018).
Figure 1: NHS logo
Private sector
These organizations are normally aligned to generate profitability whereas entire control and
management is handled by owners. Such organizations are aligned to business development and
outcomes and have impacts of competition and market dynamics for sustainability. They are also limited
in investment and expansion in comparison of public sectors.
Purpose: Main motive of private sector is to earn profit, establish brand image, server customers and
relationship management for sustainability. For example, Primark has services and products in clothing
industry (About Primark, 2018).
Legal structure: Primark has up to down legal structure in which owner is the most liable decision
maker in organization whereas influence is also drawn from the governmental policies and regulations.
Legal structure is aligned to the regulations defined for business in country.
Figure 2: Primark store
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Non-profit/ Volunteer sector
Red Cross is a finest example of volunteer organization because the organization has vast services for
community to save lives and there is no orientation for profitability. Non-profit organization are
designed and managed in favour of community for betterment on specific issues (Bryson, 2018). For
example, Red Cross provides blood bank across country to save lives and promote togetherness.
Purpose: Such organizations have purpose the serve the community against some specific issues.
Various charity and volunteer organizations are also supported and funded by government as well as
community.
Legal structure: Such organizations are normally free from the taxation and other constraints. However,
they also imply the legal rules and regulations to achieve the objectives (About British Red Cross, 2018).
Figure 3: British Red Cross logo
P2. Explain the size and scope of a range of different types of organisations
Following are some of the example organizations from all the sectors so that their size and scope can be
discussed along with major objectives and functions:
Primark- private sector
It is an Irish private limited organization operating in multinational environment for cloth retailing. The
organization has own stores and products to reach the customers and earn the profit. The organization
has fashion products and online store to reach the global set of customers. In term of size, the
organization has 325 own stores to serve the customers for economic and fashionable cloths as with
team of 68,000, the organization has objectives to deliver the economic products direct from designers.
The organization has scope to reach the developing countries and enhance the sales for higher
profitability (About Primark, 2018). The organization has scope to compete in market for lower price
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products and higher quality. The organization has goal and objectives to promote the sales directly to
customers so that annual profitability can be raised to 10% and internal operational cost can be reduced
to 5%.
National Health Services- public sector
NHS is a public sector organization well known for the health care services, products and research. The
organization also has work for the establishment of the standards and quality for other organization. The
organization has funding and control from the governmental bodies. With a team of 1.4 million
employees and 211 child clinical commissioning groups, the organization has expansion across United
Kingdom. The organization also has 1600 NHS hospitals to serve the community. The organization has
scope to enhance the services and establish the standards towards the free services and support to
individual in country (About NHS, 2018). Main goals and objectives of organization are to enable
everybody for better health and care and need individual’s clinical needs.
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British Red Cross –Volunteer sector
The organization has non-profit services as the largest blood bank. Organization has services to
community and promotes awareness to help each other to save lives. Size of the organization can be
determined as the team of 15,000 volunteers across country those are continuously growing to enhance
the services. The organization has scope to promote dignity toward the lifesaving approaches and enable
individual to help others for blood requirements (About British Red Cross, 2018). The organization has
scope to reach the more number of people through the social events and awareness whereas objectives of
the organization are to promote the dignity and empower individual to save lives.
M1. Analyze how the size, structure, and scope of various organizations link to the objectives of the
business and with the products and services offered to public by the organization
Organizational objectives and strategies are directly connected to the size and structure of the
organization. For example, a public sector organization has a wide and horizontal structure for easy
execution of the operations those are determined at senior management level. Also the organizational
structure has expansion to the more number of customers as the organization has objectives to meet the
requirements of community for betterment. At other side, objectives to reach and support more number
of customers for effective services, a public organization has large size (Pulver, 2012). Scope of the
organization has root in the governmental control and support to enhance the services and products. For
example, NHS organization provides services and products in medical and clinical area to reduce the
cost of health care on individual in country.
In same manner, private organization has goals and objectives according to size and structure. A
vertical structure is follow to penetrate the market whereas a horizontal business approach is used to
achieve sustainability. For example, Primark can use horizontal expansion in size and structure to
achieve the objectives with more number of customers. At other side, products and services from a
volunteer organization has impact of size and structure on the services to community (Hamilton and
Webster, 2015). A charity organization can serve the community for specific purpose and might be
limited to structure and size, which is also due to lack of capital and support.
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TASK 2
P3 Explain the relationship between different organizational functions and how they link to
organizational objectives and structure
Primark as a large chain of supermarket stores for fashion products has multiple functions to achieve the
goal. For example, the organization has goal to enhance the number of sales to 10% with minimization
of operational cost to 5% then organization has following major functions aligned to goals and
objectives:
Marketing: Primark has to promote brand value as well as products in market to increase the sales and
generate effective revenue. Organization has function of marketing in local and global market through
the use of physical and online advertising mediums. Therefore, the organization has to understand the
need of marketing to achieve the goal of more number of sales as organization has to attract the
customers and has to manage the relationship with more number of customers (Krajewski et al, 2013).
With effective marketing to target group of customers, it is complex to achieve the business objectives.
Human resource management: In order to serve the customers effectively and handle the performance
in internal operations, organization as need of skilled and capable human resources those are further
managed and controlled to achieve to objectives of sales. Organization has function to select, recruit and
retain the quality employees in organization to meet the objectives and serve the customers effectively
(Stone, 2013). Without proper utilization and management of human resources, organization cannot
manage the profitability and reduction in operational cost.
Finance: Capital works as fuel for business and therefore, Primark has to control and manage the
finance in effective manner. Allocation and distribution of finance and optimization of the investment
are based on the availability and capabilities in finance (Jeston and Nelis, 2014). Therefore, business has
impact of financial strength and return scopes on the business objectives.
M2 Analyze the advantages and disadvantages of interrelationships between organizational functions
and the impact that can have upon organizational structure with examples from your chosen organization
Various organizational functions like marketing, human resource management, administration and
finance management need to be interrelated to operate effectively. Interrelationship of the functional
areas of Primark has following major advantages and disadvantages on organization:
Advantages
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 Interrelationship helps to establish the communication and data sharing among the employees.
Therefore, organization has effective management of work through the segmentation of business
functions and goals.
 It helps the organization to manage the performance and productivity of the functional units for
the desired level of outcomes. Organization as benefits to manage the interrelationship as it can
help to utilize the resources best according to their skills and capabilities (Krajewski et al, 2013).
 Interrelationship of functional units in organization can provide more clear and concise
information about the functions whereas each function is managed separately to support the
business goals and objectives in effective manner.
Disadvantages
 However, organization has to manage the collaboration and data access among the functions as it
is complex to manage the requirements and demands of the functions at core of business.
 There is additional cost and time is required to manage the resources and requirements of the
functions in business as it delivers the distribution in business rather than centralization.
Impact on organizational structure
Various functions in business can distribute the workload and responsibilities so that operations can be
accomplished with proper monitoring and quality in outcomes. It also helps to distribute the resources,
assets and role and responsibilities for easy management and controlling so that overall structure of the
organization becomes flexible and expandable for more benefits (Cavusgil et al, 2014). It helps to
modularize the structure for effective outcomes.
P4 Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples
Primark organization has various positive and negative impacts on the business those impacts further for
customer services, product quality and sustainability in market. Organization can use porter’s five force
model to understand the positive and negative impacts of macro environmental factors:
Threats or risk of new entrants in the market
Organization has extreme pressure of new entrants in business because the industry has adequate
requirements of the cost and time along with capabilities. At other side, ecommerce like solutions have
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enabled to come into industry in fast manner. Therefore, organization has to manage the product quality
and services along with lower prices to retain the business (E. Dobbs, 2014). Therefore, new competitors
and entrant in market have negative impact on business to deliver the quality services and reach more
number of customers.
Bargaining power of purchasers
Industry has high competition and customers are moving toward the quality products within their price.
Therefore, organization has pressure to push the business for economic products also. However, higher
quality is a trade mark for business to overcome the issue of cost and retain the customers in business
(Porter and Heppelmann, 2014). Uniqueness is another feature which has positive impacts on purchasers
for buying relationship with organization.
Figure 4: Porter's five force model
Bargaining power of suppliers
Primark has effective relationship with suppliers and designers for raw or prepared material. Therefore,
the organization has less influence of them to push the business. Suppliers in business are also receiving
their benefits on time with additional services so that they are supporting business for more effective
quality and services. It has impact positively on growth of Primark.
Threat from substitute services or products
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