Business Environment Analysis Report: JP Morgan, Module 1 Assessment

This report delves into the intricacies of the business environment, examining its impact on organizations and their operations. It begins by defining the business environment and its significance, followed by an analysis of different types of organizations, including public, private, and voluntary sectors, along with their respective purposes and legal structures. The report then explores the size and scope of organizations like the Bank of England, JP Morgan, and UNICEF. A key focus is placed on the relationship between various organizational functions and how they contribute to achieving organizational objectives and structure, including functional and matrix structures. The report also examines the positive and negative impacts of the macro environment on business operations, followed by an internal and external analysis of JP Morgan, using SWOT and PESTLE frameworks. This includes identifying strengths, weaknesses, and their interaction with external factors. The report concludes with a summary of findings and the implications for businesses operating in a dynamic environment. References are provided to support the analysis.

Business and the
business environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types and purpose of organizations .......................................................................1
P2 Size and scope of a range of different type of organizations.................................................4
TASK 2............................................................................................................................................5
P3 Relationship between different organizational functions and how they link to
organizational objectives and structure.......................................................................................5
TASK 3............................................................................................................................................8
P4 Positive and negative impacts the macro environment has upon business operations..........8
TASK 4..........................................................................................................................................10
P5 Internal and external analysis of specific organization in order to identify strengths and
weaknesses................................................................................................................................10
P6 How strengths and weaknesses interrelate with external macro factors..............................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
.......................................................................................................................................................14

INTRODUCTION
Business environment is a combination of internal and external factors which directly
influence overall activities of organization and its operational as well. Thus, it is important for
management to make appropriate system and technologies to implement entire business activities
in effective manner. With the help of this firm can easily attain set goals and objectives. As
business environment is dynamic in nature so that it continuously change (Al-Saleh and
Mahroum, 2015). For reduce the negative impact of changing business environment, company
needs to effectively execute its activities and improve their performance level at market place.
Mainly, it provide opportunities to business to attain success in market and at the same time also
enhance their productivity level. Present report is based on JP Morgan, is an American
multinational banking corporation in UK. Company provide financial and banking services to
their customers as per their requirements. This report discussed about different type and purpose
of organization with its size, scope and legal structure. Along with this various function of
organization is also mentioned in this assignment. At last, SWOT and PESTLE analysis of the
company is also discussed here.
TASK 1
P1 Different types and purpose of organizations
As per current scenario, environment of the businesses are continuously change as per
market trends. It defines various opportunities to the firms to consider innovative ways to attain
profitability level. Along with this, in market place, different type of organizations are operate
their business such as public, private and voluntary. All are having their specific purpose for
executing their activities with the purpose of improving economic condition of the nation. In this
context, for attaining success manager needs to understand purpose of the company so that they
can easily make their positive performance level (Bah and Fang, 2015). There are three type of
organization like, public, private and voluntary this can be understood by following description:
Private organization:
This type of business organizations are operate and managed by private person and group
of people. Along with this, they also invest their money in the business to evaluate their
operations. By this, company can easily generate more revenue and also improve their growth
level. The main aim of private business organization to increase their profitability level by
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delivering quality products and services to large number of customers. This will help company to
sustain in market for longer period of time (Botha, Kourie and Snyman, 2014). In addition of
this, primary, secondary and tertiary are the three forms in which private company execute their
business activities to serve their quality products and services for providing better satisfaction to
the customers.
Furthermore, primary sector refer to the agriculture business which provide raw material
for another business organization. On the other side, secondary companies are manufacture
products with the purpose for satisfying customers needs and wants. Tertiary sector cover
warehousing, banking, advertising and many more. As they work for providing services to
customers.
JP Morgan is a private bank which operate their activities in financial sector. In this
company provide banking services such as investment banking, assets management, brokerage,
securities services to large number of people. Along with this, company operate their business
with the purpose of increasing their profitability level at market place by delivering better
services.
Purpose of JP Morgan:
The main purpose of JP Morgan is to provide quality and reliable banking services to its
customers. For this company understand customers requirement before providing them services.
This will help in increasing their profitability level and at the same time also accomplished their
positive image at market place.
Legal structure of company:
Sole proprietorship: It is known as sole trader in which business that is owned and run by
the one person. Along with this, there is no legal distinction with owner and its business entity
(Bryman and Bell, 2015). In this all the activities are control by one person because entire
decisions are taken by the business owner. It also refer to a person who are responsible for its
debts and losses as well. Advantage: One of the main advantage of sole proprietorship is that all the decisions and
judgement are taken by the one person which may help in saving time and cost of the
business.
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 Disadvantage: Due to less funds, owner of the company face issues at the time of making
their firm reputation in market. This will directly affect on the quality of the business
activities.
Partnership: It is another structure of private company which is controllable by two or
more than people. In this all the partners are sign an agreement for binding all the individuals in
partnership deed. By this partners are responsible for performing their duties (Cai and Yang,
2014). In addition of this, company have limited amount of capital which help in organizing
activities for attaining profitability at market place. Advantage: The main benefit of partnership is that two person who are organize business
is better than one. By this they easily establish their business with sufficient funds. Along
with this, company can easily change and expand their business activities in different
situation. With the help of this, business can easily enhance their market share and also
reach their customers. This will contribute in increasing profitability and sales as well. Disadvantage: Judgement take more time because all the members are different
experience. This will directly impact on business activities.
Limited company: This type of firm includes limited liability as per their investment amount. In
this context two two type of company are limited by share and liability. Advantage: The main advantage of this company in which members are limited
functioning in the business which help reduce the risk within the company.
 Disadvantage: It is complex for company to raise funds because owner to the business
have less control as compare to partnership and sole trader.
Public organization:
This type of business organization are controllable by the local or central government.
One of the main aim of this type of companies is to increase job opportunities to local people
with the purpose of improving living standard of the people (Chen and et. al., 2014). This will
contribute in enhancing economy condition of the country. In this Bank of England is example of
public organization. As it is public bank in UK which provide financial services to public and
another financial institution.
Purpose of company:
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The main purpose of Bank of England is to provide money to another banks and reserve
gold as a safe and also raise funds (Crane and Matten, 2016). Along with this they also serve
personal banking services to workers in which they easily enhance their living standard.
Legal structure of public company Central government: In this, UK government implement various rules and regulations
which is shared by state and central agencies. As all the functions are help administration
department to operate their business. State government: Under this, separate unit of government functions which provide
control to education institutions for improving the economic condition.
 Local government: It is refer to the public administration which contribute in enhancing
economic condition of local part. In this, the main purpose of implementing policies to
make better economy growth.
Voluntary organization
This type of industry operate their business for developing social welfare of society.
Mainly, it is not regulated by the legal authorities (Foss and Saebi, 2017). It also known as non-
profit organization as the main aim of this type of company is to increase social welfare by
providing advantage for the society.
Unicef (United Nations Children's) is a voluntary organization in which they provide
unique programs to children's for determining their rights. They also work for development of
children's and their mother to improve their living standard. Along with this, company also
provide food and health care services to children's.
Purpose of Unicef
The main purpose of company is to provide rights to the children's and also provide them
various development programs for their betterment.
P2 Size and scope of a range of different type of organizations
Every business organizations having their their size and scope in market place in which
they provide better products and services to people with the purpose of providing them
satisfaction (De Massis and Kotlar, 2014). In this context, public, private and voluntary are
different firms that operate their business for enhancing economic growth. Size, scope of
organizations are as follows:
Bank of England:
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 Scope: Bank of England is operate their activities by providing banking services to the
public as per their requirements. Along with this, bank also tackled two main areas like
monetary stability and asset purchase facility (Hair and et. al., 2015). The main aim of
this bank is to provide services to people for improving their living standard.
 Size: Bank of England is a central bank of UK which was established in 1694. In which
the main purpose of this company is to provide personal banking services to the public.
Along with this, it is also privately owned and controllable by stakeholders,
JP Morgan: Scope: JP Morgan is private company as they needs to become largest and leading bank
in over the world. In this manager of the company also make as well as keep funds for
increasing their market share and at the same time also create strong customers base.
 Size: JP Morgan is large size organization because it operate their activities on over the
globe. As they provide financial services to the customers with the purpose of rising their
funds and revenue as well (Holliman and Rowley, 2014).
Unicef: Scope: It is a voluntary organisation which work for children's development by providing
unique programs to promote health and well-being healthcare services. The main aim of
this company to provide betterment to society and improve economic condition of the
nation.
 Size: United Nations Children's funds is work for providing rights to children's. Mainly, it
was established by United Nations General Assembly in 11 December 1946. Along with
this, they also operate their activities in approx 190 countries for protecting children's
rights.
TASK 2
P3 Relationship between different organizational functions and how they link to organizational
objectives and structure
An organisational structure is a system which outlines various activities or tasks thus to
attain firm's goals and objectives. It also encompasses with aligning roles and responsibilities to
employees as per their skills and competencies (Hamilton and Webster, 2015). Organisational
structure also signifies how information flow from level to level at workplace. It defines a
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particular hierarchy at workplace and provides a roadmap as how firm will attain market growth
and success. There are two main types of organisational structure, such as -
 Functional organisational structure – It also known as bureaucratic organisational
structure. In functional organisational structure, employees are grouped as per the area of
specialisation (Homburg, Wilczek and Hahn, 2014). Such people are managed or
supervise by functional manager expertise in same field who is focused on optimal
utilisation of human resources so as to attain organisational objectives. Organisational
chart of functional structure represents president, vice president, finance department,
marketing & sales department, HR department etc. Here, each departmental head is liable
to function according to their roles and specialisation.
 Matrix organisational structure – In this organisational structure employees have to
report more then one managers. Matrix organisational structure is a composition of
projectized and functional organisational structure, here skill and knowledge level is
shared between functional and project department. For example – JP Morgan, employees
who working is functional department will report their project manager as well as
department manager. Although, matrix organisational structure can be seen in
multinational companies where staff members can be relocated as per the requirements
(Lee and et. al., 2015). The framework is more dynamic then other organisational
structure as it permits employees to readily communicate over the boundaries, generate a
good and cooperative working environment.
From these above organisational structures, JP Morgan follows matrix organisational
structure because its efficiency is higher. It delivers a sense of job security to employees, tend
them to be loyal and perform in well being manner. As same as every organisation, JP Morgan
also has various departments which support to execute company's operations and practices in
systematic manner. Human resource, finance, marketing, R&D, customer service etc.
departments formulated in an organisation which are interrelated with each other thus to obtain
high competitive edge. Following is given different departments involve in organisational
structure of the company, such as -
Human resource department - An effectively and efficiently running HR department of
the company enables to meet its needs by managing valuable resources (Khan and Quaddus,
2015). In JP Morgan, the prime role of human resource managers is to demonstrate workforce
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availability and their skills in order to accomplish any task or activity. The person is also liable to
recruit and select well skilled and qualified who enables to meet performance targets of the
company (O'Boyle, 2014). Another most important role of HR department is to manage healthy
and positive employee relations by applying various tactics and strategies.
Finance department – The division is responsible for managing cash inflows and
outflows are workplace as well as ensuring that whether or not firm have enough funds available
to accomplish daily operations. Finance department of the JP Morgan prepare an annual budget
thus to identify how much amount will be spend in different working activities. Further critical
responsibility of financial managers is to account for and track receivables, i.e. outstanding
invoices and further actions. Along with this, finance department also gather financial
information of the company in order to make forecasting and further decisions related with
growth and development.
Marketing & sales department – The division has responsibility to grow revenues, raise
market share and ensure firm viability at marketplace. Marketing department develop marketing
strategies and policies in line to obtain firm's goals and objectives (Oriesek and Schwarz, 2016.
The person is also responsible for conducting market research and analyse market trends and
customers' needs so as to increase functional areas. Marketing departments plan various
campaigns and develop communications in order to promote new products and services as many
people can know about it. In JP Morgan, marketing department create e-mail marketing
programmes and generate an effective promotional content which enables to capture customers'
eye.
Production and operation department – The unit is liable for transforming input into
output. Within the process of production, production department ensure to improving efficiency
of goods and services thus to meet production targets set by management of the company. It
focuses on improving quality and value of products so as to obtain customers' satisfaction and
maintain their interest. By considering JP Morgan, operational unit identifies effective ideas for
reducing wastage and production costs.
Therefore, it can be said that all these departments in JP Morgan interact with each other
and thus to implement an effective business model which ensure to obtain firm's goals and
objectives (Prajogo, 2016). As the referred company is following Matrix organisational structure
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thus all departments are can easily interact with each other and determine best solution of
problems. It helps corporation to get high competitive edge in a certain time period.
TASK 3
P4 Positive and negative impacts the macro environment has upon business operations
In this over dynamic business environment, different factors are presented outside the
firm and affect on its operations in direct or indirect manner. It is fundamental for management
to have sufficient knowledge about such components and develop business strategies accordingly
(PESTLE Analysis of JP Morgan, 2017). Evaluation of macro environmental factors can be done
through PESTLE analysis as it provides detailed information about all external factors. Below is
defined these factors with their positive and negative impact on business entity, such as -
Political factors- These elements has a vast impact on profitability and survival of a
business organisation. JP Morgan provides financial services across the world thus to operate
their successfully, the firm is required to adhere policies and rules of countries in which it
operates. Political factors involves – laws and regulations, taxation policies, duties, import and
export rules, VAT rates, employment policies etc. UK government has developed Banking
regulations, i.e. Financial services and Markets Act 2000 that must be followed by all financial
institutions.
 Positive impact- Due to political stability in UK, organisations can easily survive at there
because there is no change in laws and regulations for long run.
 Negative impact- Change in policies of taxation in UK put negative impact on the
organization overall performance.
Economic factors: This factors is also important for company to make their process
appropriate but at the same time also negatively affect on overall performance. As the dimension
in the financial sector may be urbanization rate, financial crisis, population growth and many
more. Mainly these type of factors will help to evaluate as well as design the economic policies
for improving the economic condition of the nation (Reim, Parida and Örtqvist, 2015). In this
context JP Morgan has to deal with all type of factors which help in improving growth level of
the economy.
 Positive impact: JP Morgan can easily provide financial services on those countries
which is strong in finance. In this they easily exchange rates easily.
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 Negative impact: Recession in nation is directly affect the overall sales of finance
services in negative manner which reduce the profitability level of the company.
Social factors: It is also important for company to implement within their activities
before providing services to the customers (Wagner, Beimborn and Weitzel, 2014). In addition
of this, changing in culture of trading country is main aspect in which JP Morgan need to
evaluate all the big competitors like Bank of America and many more. By understanding social
cultural values of customers is help in improving performance level of the company.
 Positive impact: In this well educated people of country is easily understand the benefits
of finance which help in use of financial services which positive affect the entire business
activities.
 Negative impact: UK culture is believe in living their life with high level as it reduce the
of uses of financial use of company because customers taste and continuously change as
per market trends.
Technological factors: As per current scenario, technologies are develop each and every
day which help company to make overall work activities smooth and easier. In addition of this,
advance technologies are help in improving positive brand image of the company at market
place. By implementing this company can easily promote their campaigns with the purpose of
make people aware towards JP Morgan financial services. In this, company also improve their
services by using various methods such as credit cards, effective payment ways.
 Positive impact: By using advance technologies company can easily increase customers
awareness towards its services. This will contribute in making positive brand image.
 Negative impact: Implementing new technology is more expensive for the company that
impact on its profitability level.
Legal factors: UK government make various legal rules and policies like consumers
protection law, safety law and many more. All these are should be implement by JP Morgan to
make their positive image at market (Weiss, 2014). Along with number of rates are such as fixed
interest rates, loan amounts, saving interest are help in improving their activities.
 Positive impact: By considering all the policies JP Morgan easily increase their
profitability.
 Negative impact: Change in any kind of laws impact negatively on the performance of
the company so that JP Morgan have to understand all the legal rules.
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Environmental factors: JP Morgan needs to analyse the effects of environment so that
they can easily attain high market share and make environment eco-friendly.
 Positive impact: By using natural resources company can easily maintain the safe
environment and also reduce the any kind of harm on environment.
 Negative impact: In case JP Morgan fail in following policies of environment may
negatively impact on overall image of the company.
TASK 4
P5 Internal and external analysis of specific organization in order to identify strengths and
weaknesses
It is important for business organization to evaluate the current strengths and weaknesses
of the JP Morgan at market place. For this company conduct SWOT analysis:
Strengths:
 JP Morgan is operate their business in around 50 countries in which they provide their
financial services at global level. The main strength of this company is that they giving
facilities to different customers and businessmen (Wetherly, 2014).
 Along with this, JP Morgan has strong liquidity and capital ratio which help them in
making position at market place.
 JP Morgan has 5 different segments like asset management, commercial banking,
cooperate firm is also a strength of the company.
Weaknesses:
 JP Morgan is a big organization but the management of the company is very weak as it
reduce the profitability level of the firm at market place.
 In addition of this, fluctuation in market is also a weakness because it change the policies
of the company which negatively affect the entire activities.
 Less awareness of the customers towards the financial services is reduce the fund and
image as well.
Opportunities:
 The main opportunities for JP Morgan is that they expand their business in which they
grab customers attention towards its services. In addition of this, JP Morgan also tries to
increase their funds by approx 6%.
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 By increasing use of credit cards market, JO Morgan as opportunities to increase their
sales by providing online services to its customers.
Threats:
 Change in governmental bodies are major threat for company as JP Morgan may fail in
implementing all the rules.
 Financial crisis is also a threat which drop value of economy as it reduce the sales and
productivity of the company.
P6 How strengths and weaknesses interrelate with external macro factors
For making better decision it is important for JP Morgan to evaluate the relation of
strength and weakness with macro factors. As it help in improving the overall performance of the
company at market place.
Political: JP Morgan operate their business as per government rules and regulations
which help in improving the performance of company. This is consider as a strength of the
company through which company make their brand image competitive (Yusuf and et. al., 2014).
Economic: In this fluctuation in inflation rates and changing currency is main weakness
that directly affect the decision making process of the company. In addition of this, recession
also impact on sales and profitability level of the company.
Social: As per current scenario, customers needs and wants are continuously change thus
it is important for JP Morgan to evaluate the customers needs before developing their activities.
This will help in improving performance level of the company and at the same time also also
make effective decision.
Technology: New and advance technologies are take place in business organization as it
provide opportunities to the JP Morgan to enhance the profitability level at market place. This
consider as a strength for JP Morgan to enhance their productivity level at market place.
All the factors are directly affect the decision making activities. Thus manager of JP
Morgan have to implement all these factors to enhance their positive brand image at market
place. In addition of this, firm also grab future opportunities to make their positive brand image
as compare to its rivals.
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CONCLUSION
From the above mentioned report it can be concluded that business environment is a set
of internal and external factors which directly influence business in positive and negative
manner. Thus, company needs to implement all the activities in effective manner for improving
overall performance of the company. This will contribute in attaining success at market place. In
addition of this, different functions also help in developing positive brand image. For capturing
larger market share, it is vital for business organization to manage both internal and external
factors before implementing their activities. As it help in reducing the chances of arising issues at
workplace. By this firm attain set goals and objectives in appropriate time frame.
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Online
PESTLE Analysis of JP Morgan. 2017. [Online]. Available
through:<http://marketingdawn.com/pestle-analysis-of-jpmorgan/>.
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